A Case Where Barro Expectations Are Not Rational

This note generalizes Feldstein’s (1976) criticism of Barro’s(1974) analysis for the case that the interest rate exceeds the growth rate. This is done by considering an economy in steady state where all agents hold “Barro expectations”: they believe that government debt must necessarily be repaid and therefore leave the present value of their income streams unchanged. In this scenario, a change in the mode of taxation affects the present value of disposable income in the private sector. This violates their Barro expectations

Barro's fertility equations: the robustness of the role of female education and income

Barro and Lee (1994) and Barro and Sala-i-Martin (1995) find that real per-capita GDP and both male and female education have important effects on fertility in their cross-country empirical studies. In order to assess the robustness of their results, their estimated models are subjected to specification and diagnostic testing, the effects on the model of using the improved Barro and Lee (1996) cross-country data on educational attainment of the population aged 15 and over are examined, and the different specifications used by Barro and Lee and by Barro and Sala-i-Martin compared. The results obtained suggest that their fertility equations do not perform well in terms of diagnostic testing, and are very sensitive to the use of different vintages of the educational attainment proxies and of the Summers-Heston cross-country income data. A robust explanation of fertility, to link with empirical growth equations, has, therefore, not yet been found; further work is required in this area

Pay, Performance, and Turnover of Bank CEOs

A new data set covers chief executive officers (CEOs) of large commercial banks over the period 1982-87. For newly hired CEOs, the elasticity of pay with respect to assets is about one-third. For continuing CEOs, the change in compensation depends on performance, as measured by stock and accounting returns. The sensitivity of pay to performance diminishes with experience, but the returns are not filtered for peer-group returns. Logit regressions relate the probability of CEO departure to age and performance, as measured by stock returns filtered for peer-group returns; CEO experience does not influence this relationship.Economic

Pay, Performance, and Turnover of Bank CEOs

We studied the relation of CEO pay and turnover to performance and characteristics of companies in a new data set that covers large commercial banks over the period 1982-87. For newly hired CEOs, the elasticity of pay with respect to assets is about one-third. As experience increases, the correlation between compensation and assets diminishes for about four years and then rises back to its initial value. We interpret these findings along the lines of Rosen's matching model, allowing for adjustments of compensation and bank assets and for possible dismissal of the CEO. For continuing CEOs, the change in compensation depends on performance as measured by stock and accounting returns. The sensitivity of pay to performance diminishes with experience, and there is no indication that stock or accounting returns are filtered for aggregate returns. Logit regressions relate the probability of CEO departure to age and performance. The relevant measure of performance in this context is stock returns filtered for average returns of banks in the same year and geographical region.

Change-Point Analysis of Asset Price Bubbles with Power-Law Hazard Function

We present a methodology to identify change-points in financial markets where the governing regime shifts from a constant rate-of-return, i.e. normal growth, to superexponential growth described by a power-law hazard rate. The latter regime corresponds, in our view, to financial bubbles driven by herding behaviour of market participants. Assuming that the time series of log-price returns of a financial index can be modelled by arithmetic Brownian motion, with an additional jump process with power-law hazard function to approximate the superexponential growth, we derive a threshold value of the hazard-function control parameter, allowing us to decide in which regime the market is more likely to be at any given time. An analysis of the Standard \& Poors 500 index over the last 60 years provides evidence that the methodology has merit in identifying when a period of herding behaviour begins, and, perhaps more importantly, when it ends

The impact of health on professionally active people's incomes in Poland. Microeconometric analysis

The outcome of the research confirms the occurrence of positive interaction between professionally active people's incomes and the self-assessed state of health. People declaring a bad state of health have incomes by 20% on average lower than people who enjoy good health (assuming that the remaining characteristics of the surveyed person are the same). In case of men, the impact of health state on incomes is slightly greater than in case of women.Wyniki badań potwierdzają istnienie pozytywnej zależności dochodów osób aktywnych zawodowo od stanu zdrowia mierzonego jego samooceną. Osoby deklarujące zły stan zdrowia osiągają dochody przeciętnie o 20% niższe niż osoby, które cieszą się dobrym stanem zdrowia (przy założeniu, że pozostałe charakterystyki badanej osoby są takie same). W przypadku mężczyzn zależność dochodów od stanu zdrowia jest nieznacznie silniejsza niż w przypadku kobiet

Exact Path-Integral Representations for the TT-Matrix in Nonrelativistic Potential Scattering

Several path integral representations for the $T$-matrix in nonrelativistic potential scattering are given which produce the complete Born series when expanded to all orders and the eikonal approximation if the quantum fluctuations are suppressed. They are obtained with the help of "phantom" degrees of freedom which take away explicit phases that diverge for asymptotic times. Energy conservation is enforced by imposing a Faddeev-Popov-like constraint in the velocity path integral. An attempt is made to evaluate stochastically the real-time path integral for potential scattering and generalizations to relativistic scattering are discussed.Comment: 6 pages, 2 figures. Contribution to the workshop "Relativistic Description of Two- and Three-Body Systems in Nuclear Physics", ETC*, October 19-23, 2009. v2: typo corrected, matches published version + additional reference

Military spending and economic growth in China: a regime-switching analysis

This article has been made available through the Brunel Open Access Publishing Fund.This article investigates the impact of military spending changes on economic growth in China over the period 1953 to 2010. Using two-state Markov-switching specifications, the results suggest that the relationship between military spending changes and economic growth is state dependent. Specifically, the results show that military spending changes affect the economic growth negatively during a slower growth-higher variance state, while positively within a faster growth-lower variance one. It is also demonstrated that military spending changes contain information about the growth transition probabilities. As a policy tool, the results indicate that increases in military spending can be detrimental to growth during slower growth-higher growth volatility periods. © 2014 © 2014 The Author(s). Published by Taylor & Francis