5,063 research outputs found
Financial integration and financial development in transition economies : what happens during financial crises ?
This papers provides an empirical analysis of the role of financial development and financial integration in the growth dynamics of transition countries. We focus on the role of financial integration in determining the impact of financial development on growth, distinguishing "normal times" from periods of financial crises. In addition to confirming the significant positive effect on growth exerted by financial development and financial integration, our estimates show that a higher degree of financial openness tends to reduce the contractionary effect of financial crises, by cushioning the effect on the domestic supply of credit. Consequently, the high reliance on international capital flows by transition countries does not necessarily increase their financial fragility. This implies that financial protectionism is a self-defeating policy, at least for transition countries.Transition economies, financial integration, financial crises, economic growth, threshold effects.
Inference on Breakdown Frontiers
Given a set of baseline assumptions, a breakdown frontier is the boundary
between the set of assumptions which lead to a specific conclusion and those
which do not. In a potential outcomes model with a binary treatment, we
consider two conclusions: First, that ATE is at least a specific value (e.g.,
nonnegative) and second that the proportion of units who benefit from treatment
is at least a specific value (e.g., at least 50\%). For these conclusions, we
derive the breakdown frontier for two kinds of assumptions: one which indexes
relaxations of the baseline random assignment of treatment assumption, and one
which indexes relaxations of the baseline rank invariance assumption. These
classes of assumptions nest both the point identifying assumptions of random
assignment and rank invariance and the opposite end of no constraints on
treatment selection or the dependence structure between potential outcomes.
This frontier provides a quantitative measure of robustness of conclusions to
relaxations of the baseline point identifying assumptions. We derive
-consistent sample analog estimators for these frontiers. We then
provide two asymptotically valid bootstrap procedures for constructing lower
uniform confidence bands for the breakdown frontier. As a measure of
robustness, estimated breakdown frontiers and their corresponding confidence
bands can be presented alongside traditional point estimates and confidence
intervals obtained under point identifying assumptions. We illustrate this
approach in an empirical application to the effect of child soldiering on
wages. We find that sufficiently weak conclusions are robust to simultaneous
failures of rank invariance and random assignment, while some stronger
conclusions are fairly robust to failures of rank invariance but not
necessarily to relaxations of random assignment.Comment: 65 pages. 26 page supplemental appendi
On the Evolution of Collective Enforcement Institutions: Communities and Courts
Impersonal exchange has been a major driver of economic development. But transactors with no stake in maintaining an ongoing relationship have little incentive to honor deals. Therefore, all economies have developed institutions to support honest trade and realize the gains of impersonal exchange. We analyze the relative capacities of communities (or social networks) and courts to secure cooperation among heterogeneous, impersonal transactors. We find that communities and courts are complementary in the sense that they tend to support cooperation for different sets of transactions but that the existence of courts weakens the effectiveness of community enforcement. By relating the effectiveness of enforcement institutions to changes in the cost and risks of long-distance trade, driven in part by improvement in shipbuilding methods, our analysis also provides an explanation for the emergence of the medieval Law Merchant and its subsequent supersession by state courts.Institutions;Contract Enforcement;Communities;Courts;Social Networks;Law Merchant;Lex Mercatoria;Commercial Revolution
PREDVIĐANJE BANKROTA POMOĆU POLU-PARAMETARSKOG MODELA JEDINSTVENOG INDEKSA
Semi-parametric methods are virtually neglected in the bankruptcy prediction literature. This paper compares the logit model, as the standard parametric model for bankruptcy prediction, to the semi-parametric model developed by Klein and Spady (1993). Special care is devoted to the effect of choice-based sampling prediction accuracy. The choice of the sampling and estimation method lead to a similar trade offs. Using choice-based sampling and logit model leads to minimization of risk exposure. Samples unbalanced across groups and the semi-parametric method allow for better overall prediction accuracy and thus profit maximization.Polu-parametarski modeli su doslovno zanemareni u literaturi o predviđanju bankrota. Ovaj rad uspoređuje logit model, kao standardni parametarski model za predviđanje bankrota, sa poluparametarskim modelom kojeg su razvili Klein i Spady (1993). Posebna je pažnja posvećena efektu choice-based uzorkovanja na točnost predviđanja. Odabir metode uzorkovanja i procjene dovele su do sličnih balansiranja (trade offs). Korištenje choice-based uzorkovanja i logit modela dovodi do minimaliziranja rizika. Nebalansirani uzorci i polu-parametarska metoda omogućuju generalno bolju kvalitetu predviđanja te tako i maksimizaciju profita
Time Dependent Efficiency of Free Trade Agreements - The Case of Slovenia and the CEFTA Agreement
In international trade literature there is a common feature that the abolishment of barriers to trade leads to direct expansion of trade flows. Many empirical studies that simulate welfare effects of trade liberalisation explicitly make use of this direct tariff reduction – trade expansion mechanism. On the contrary, this paper explores panel data to analyse the timedependent efficiency of Free Trade Agreements (FTAs). It is shown that trade liberalisation per se needs time to become effective, and that immediately after the enforcement of the FTA the autonomous factors (such as domestic demand for particular import goods) are of great importance. Using an illustrative case of rapid expansion of Slovenian imports from other CEECs in the period 1993–1998, the paper demonstrates that the tariff reductions become effective in the second to third year after enforcement of the FTA. In addition, the relation between tariff reductions and trade expansions is non-linear, which reflects the time needed for new business connections to be established.
Contracting in the Absence of Specific Investments and Moral Hazard: Understanding Carrier-Driver Relations in U.S. Trucking
This paper considers functions of contracting other than the protection of relationship-specific investments and the provision of marginal incentives, and applies the theory to explain variation in the form of compensation of over-the-road truck drivers in the U.S. Specifically, we argue that contracts in this industry serve to economize on the costs of price determination for heterogeneous transactions. We show that the actual terms of those contracts vary systematically with the nature of hauls in a way that is consistent with the theory. By contrast, we find that vehicle ownership, which defines a driver's status as an owner operator or company driver, depends on driver, but not trailer or haul, characteristics.
Forecasting Macroeconomic Variables Using Diffusion Indexes in Short Samples with Structural Change
We conduct a detailed simulation study of the forecasting performance of diffusion index-based methods in short samples with structural change. We consider several data generation processes, to mimic different types of structural change, and compare the relative forecasting performance of factor models and more traditional time series methods. We find that changes in the loading structure of the factors into the variables of interest are extremely important in determining the performance of factor models. We complement the analysis with an empirical evaluation of forecasts for the key macroeconomic variables of the Euro area and Slovenia, for which relatively short samples are officially available and structural changes are likely. The results are coherent with the findings of the simulation exercise, and confirm the relatively good performance of factor-based forecasts also in short samples with structural change.Factor models, forecasts, time series models, structural change, short samples, parameter uncertainty
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