DIPL 4555 Economic Aspects of International Relations

This course is an introductory course for economic aspects of international relations. Over the last two decades, globalization has had a huge impact on world economies and politics. Movement of goods, services, people and money across countries have increased. It is therefore imperative to understand the mechanisms behind these movements and their potential economic impact on individual countries\u27 economic development. Two key questions to be answered are why do countries trade with each other and how are the terms of trade decided. Of course, not only economics but social and political aspects of trade should also be considered. By the end of the semester, students should have acquired in-depth knowledge of basic applied economics and understanding of key concepts, models, theories, and debates involved in the study of sustainable development as well as interaction between politics and economics in the international system. Students should also have developed the skills to: collect, sort, and evaluate information; analyze complex situations and synthesize information

Subjective Financial Distress in the Formation of Consumer Confidence: Evidence from Novel Household Data*

Abstract In this paper we analyze the psychological and socio-economic determinants of consumer confidence using household level data. Even though the aggregate Consumer Confidence Index (CCI) is widely utilized by policy-makers in developed countries, there is still some concern that the index does not contain any information that is not already available in other economic measures. Our paper has two main objectives

Economic Aspects of International Relations

This course is an introductory course for economic aspects of international relations. Over the last two decades, globalization has had a huge impact on world economies and politics. Movement of goods, services, people and money across countries have increased. It is therefore imperative to understand the mechanisms behind these movements and their potential economic impact on individual countries\u27 economic development. Two key questions to be answered are why do countries trade with each other and how are the terms of trade decided. Of course, not only economics but social and political aspects of trade should also be considered. By the end of the semester, students should have acquired in-depth knowledge of basic applied economics and understanding of key concepts, models, theories, and debates involved in the study of sustainable development as well as interaction between politics and economics in the international system. Students should also have developed the skills to: collect, sort, and evaluate information; analyze complex situations and synthesize information

Income Expectations and Happiness: Evidence from British Panel Data

We analyze the impact of households' subjective current and future financial measures on their well-being by using three waves of a longitudinal data set-Understanding Society -from the UK. We use a fixed-effects regression method to get rid of individual heterogeneity, and find that even after controlling for some demographic characteristics, including equivalent household income, subjective measures of current and future financial well-being are still significant correlates of life satisfaction in UK households. The same results hold for income satisfaction and mental health. Our main contribution however is showing that positive surprises in financial expectations decrease the subjective well-being of the household's, and vice versa for negative surprises. This result shows that even though a household's expectations of its future financial situation may not be accurate, any unexpected shock regarding household income could be significantly correlated with subjective well-being

Credit card debt and consumption: evidence from household-level data

This research investigates the relationship between credit card debt and consumption using household level data. This is a departure from the previous studies which have used aggregate measures of consumption and general debt such as the Debt Service Ratio or total revolving credit. We use a detailed monthly survey of credit card use to impute credit card debt to respondents from the Consumer Expenditure Survey sample. In contrast to some earlier studies using aggregate data, we find a negative relationship between debt and consumption growth. Our work shows that a $1000 increase in credit card debt results in a decrease in quarterly consumption growth of almost 2%. Investigations are also made into effects of debt within different age categories and into the impact of expected income growth on the debt-consumption relationship.

Shadow price of working in the shadows: services industry evidence

In this paper, we use an exogenous policy variation in the labour market to determine the wage gap between formally and informally employed workers. For our purposes, informal employment' describes employees who are not officially registered with any social security scheme. We use self-reported employee registration status to identify such workers, but the choice of working unregistered is not exogenous. Nevertheless, through an amnesty that was extended to only some workers in the labour market, we reduce the endogeneity problem, enabling estimation of the wage gap between these two groups. Our two-stage least square estimates reveal that the hourly wage penalty of working in the shadows is as high as 59%, and the monthly salary penalty is around 66%. Moreover, the wage gap is higher (as high as 70%) for those working in the services sector, as unregistered workers in this sector tend to be low skilled and low educated, and the monitoring of this sector is more difficult. Our analysis contributes to the literature by using an instrumental variable to treat the endogeneity of workers' registration status. In addition, it shows that people working informally in the services industry receive a higher average wage penalty than other informally employed workers

What Determines Religious and Racial Prejudice in Europe? The Effects of Religiosity and Trust

This paper analyzes the effects of different dimensions of religiosity and trust on religious and racial prejudice in Europe. The sample is based on 37 European countries that are current or potential members of the European Union (EU). Using multi-level logistic regression modeling and the latest wave from the European Values Study data, we test the effects of both individual and country-level variables. Our results suggest that religious particularism is correlated with more religious and racial prejudice. Doctrinal belief and individual spirituality are both correlated with less religious prejudice only. Nonreligious individuals have the highest religious prejudice compared to members of religious denominations. Individual and country-level generalized trust, as well as trust in the EU, are all negatively correlated with religious and racial prejudice