An Economic Approach to Evaluating the Impact of AML/CFT Regulations
By Caitlin McGough
This paper addresses the unintended consequences of AML/CFT regulations, seeking to provide an economic analysis of the drivers of de–risking and the broader consequences for the goal of financial integrity. Looking at qualitative data, this paper (1) concludes the problem of de–risking warrants a reconsideration of the enforcement approach and (2) recommends reorienting the banks’ payoff matrix by reducing the cost of compliance and regulatory risk associated with providing financial services to high–risk, low–profit customers. This paper culminates with the recommendation to consider tolerating “honest mistakes” on the part of financial institutions in order to achieve the goals of integrity and inclusion in the international financial system.
Advisor: Connel Fullenkamp | JEL Codes: G18 | Tagged: De-Risking, Financial Inclusion, Money Laundering, Terrorism Financing
Where Did The Liquidity Go? The Cost of Financial Regulation to Foreign Exchange Markets
By James Stevenson
In financial markets, the terms “bull” and “bear” markets are used to describe the cyclicality of asset prices. Similar to asset price cycles, there are cycles in regulatory scrutiny. Beginning in the 1980’s, regulatory scrutiny diminished, cumulating in the repeal of the Glass-Steagall Act in 1999, allowing commercial banks and securities firms to be housed under the same roof for the first time since the 1930’s. In the aftermath of the global financial crisis in 2008 and 2009, the tides have reversed on financial regulation. With the Dodd-Frank reforms in the United States, and similar regulation being signed into law around the world, it is unknown how new regulation will affect financial markets. Legislators wrote the new rules in hopes that they would create safer financial institutions, but at what cost?
Advisor: Connel Fullenkamp | JEL Codes: G1, G12, G18 | Tagged: Dodd-Frank, Financial Regulation, Foreign Exchange, Market Liquidity, Volcker Rule
Corporate Financial Distress and Bankruptcy Prediction in North American Construction Industry
By Gang Li
This paper seeks to explore the application of Altman’s bankruptcy prediction model in the construction industry by measuring its percentage accuracy on a dataset consisting of 108 bankrupt & non-bankrupt firms selected across the timeline of 1985-2013. Another main goal this paper is to explore the predictive power of an expanded variable set tailored to the construction industry and compare the results. Specifically, this measuring process is done using machine learning algorithm based on scikit-learn library that transforms a raw .csv file into clean vectorized dataset. The algorithm provides various classifiers to cross-validate the training set, which produces mixed statistics that favors neither variable set but provides insight into the reliability of the non-linear classifiers.
Advisor: Connel Fullenkamp | JEL Codes: C38, C5, G33, G34 | Tagged: Bankruptcy, Corporate, Discriminant Analysis, Distress, Machine Learning
The Impact of Macroeconomic Surprises on Mergers & Acquisitions for Real Estate Investment Trusts
By John Battinelli and John Reid
This paper examines the impact of various macroeconomics and real estate specific surprises on M&A transactions involving Real Estate Investment Trust. The 2008 financial crisis drastically affected merger & acquisitions activity, especially within the real estate market. The number of M&A transactions involving Real Estate Investment Trusts were very volatile during this period of economic turmoil and it appeared that several economic factors contributed to changing patterns in M&A activity. Our study uses time series data to draw a connection between REIT-related M&A activity and quantifiable factors. From or results we find there to be a relationship between the macroeconomic environment and REIT-related M&A activity.
Advisors: Connel Fullenkamp, Kent Kimbrough, Marjorie McElroy,
JEL Codes: G10, G14, G34 | Tagged: Macroeconomic Surprises, Mergers & Acquisitions, Real Estate Investment Trust
The Effects of Digital Media on Advertising Markets
By Bradford Lightcap and William Anthony Peek
This paper examines the viability of sustained advertising spending in an increasingly digital age. Beginning with print media and through the advent of television, the ad market has seen vast evolution in information consumption. The result has been a creative adaptability by advertisers to keep pace with said change. However, growth in ad spending has not significantly outpaced GDP growth, as documented in the Relative Constancy Hypothesis. RCH asserts that both ad spending and consumer expenditure as a percent of GDP remain steady over time. This paper focuses on whether the advertising claim holds up through the rise of the Internet. How this powerful medium may alter traditional advertising trends remains unclear. The answer could have implications for both advertisers and parties that rely on them
Advisor: Connel Fullenkamp | JEL Codes: L82, M3, M37, O39 | Tagged: Digital Media, Relative Constancy Hypothesis
The Senegalese Experience: Rethinking Fertility Theory for Highly Religious Societies
by Corinne S. Low
Abstract
Despite improvements, traditional fertility theory still remains unprepared to cope with developing countries, such as Senegal, where deep religious beliefs dictate a passive acceptance of natural fertility. Because of an unwillingness to use modern contraception, factors that can reduce fertility in these societies will be primarily factors that influence natural fertility. Particularly, my study finds that age at first marriage, cultural taboos against sex while breastfeeding, living with extended families, and extended periods of breastfeeding can all reduce family size. Education is found to increase fertility at low levels because it increases fecundity, but reduce fertility at higher levels. It also acts through a multitude of indirect pathways, clearly modeled for the first time in this paper.
Professor Connel Fullenkamp, Faculty Advisor
JEL Codes: J13, N97, Z12
