Empirical essays in health and development economics

In the first essay, titled "Is Economic Transition a Health Hazard? Estimating the Short-term Effect of Income on Self-assessed Health in Russia: 1994--2000," I use data from the Russian Longitudinal Monitoring Survey to estimate the causal impact of income on self-assessed health status of adults. Accounting for the possibility of reverse causation and incidental association between health and income, as well as controlling for various socio-demographic characteristics, the results from both ordinary least squares and instrumental variables models suggest that the causal effect of income on health is negligible in the period under study. The second essay, titled "Health and Relative Income in Transitional Russia," presents evidence on the importance of relative income for individual health in Russia. Controlling for the absolute level of income, all relative income measures which are based on distances in incomes between individuals are found to be not significant. Using cross-sectional variations in the data, however, individuals' percentile ranks are positively correlated with health within relatively broadly defined reference groups. This result, generally consistent with previous studies on the importance of social ranks, suggests that increasing everybody's income equally may be inconsequential for health. Nevertheless, after controlling for individual heterogeneity, this study finds no evidence that any of the relative income measures is associated with individual health. In the third essay, coauthored with Eli Berman and titled "Fertility and Education in Radical Islamic Sects: Evidence from Asia and Africa," we find that fertility is significantly higher among families with members attending Islamic schools in all five countries. Returns to education are generally lower among these families, though that result is statistically significant in only two of the five samples, the ones with a more precisely defined indicator of Islamic education. These findings are consistent with the predictions of a club-good model of religious sects as well as with previous results for Ultra-Orthodox Jews in Israel and Anabaptist sects in North America, suggesting a common pattern of behavior across sects of different religions, as well as

In Search of a Dramatic Equilibrium

This papers estimates the equilibrium exchange rate for Armenia using three different approaches: the purchasing power parity (PPP) approach, the behavioral equilibrium exchange rate (BEER) approach, and the external sustainability (ES) approach. All three approaches suggest that the dram was overvalued by about 20–30 percent prior to the devaluation of the dram in March 2009.Exchange rate appreciation;Purchasing power parity;Fiscal sustainability;Economic models;exchange rate, real exchange rate, current account balance, equilibrium exchange rate, exchange rate misalignment, real exchange rate misalignment, terms of trade, effective exchange rate, real effective exchange rate, exchange rates, trade partners, trade partner, foreign exchange, export prices, exchange rate adjustment, nominal exchange rate, exchange rate regime, export share, external trade, exchange rate movements, transition economies, partner countries, nontradable goods, global competitiveness, political economy, real exchange rate movements, global supply, exchange rate level, import prices, transition countries, external position, de facto exchange rate regime, real exchange rates, output growth, real exchange rate dynamics, fixed exchange rate, balance of payments, open economy, real exchange rate appreciation, exchange rate dynamics, trade flows, current account deficit, neighboring countries

A New Keynesian Model of the Armenian Economy

This paper develops a small open economy dynamic stochastic general equilibrium (DSGE) model of the Armenian economy. The structure of the model is largely motivated by recent developments in DSGE modeling, with key extensions to incorporate specific structural characteristics of the Armenian economy. The resultant model can be used to simulate monetary policy paths and help analyze the robustness of policy conclusions. The paper tests the model’s properties on Armenian data, demonstrating that the main stylized features relevant for monetary policy making are well captured by the model.Inflation targeting;Monetary transmission mechanism;Inward remittances;Transfers of foreigners income;Exchange rate appreciation;inflation, exchange rate, real exchange rate, monetary policy, real interest rate, nominal exchange rate, real exchange rate appreciation, exchange rate movements, price level, terms of trade, inflation equation, exchange rate pass, exchange rate depreciation, exchange rate shock, price stability, real exchange rates, relative prices, nominal rate of return, monetary economics, real interest rates, inflation target, foreign currency, nominal exchange rate depreciation, exchange rate volatility, rate of inflation, aggregate demand, real exchange rate movements, real variables, higher rate of inflation, exchange rates, independent central bank, price of goods, rational expectations, macroeconomic stability, nominal interest rates, exchange rate flexibility, currency appreciation, inflation targeting regime, nominal interest rate, real exchange rate depreciation