Clean Growth: Emissions taxes and endogenous technological change
By Daniel Cook
This paper studies the long-run effects of imposing a tax on the emissions from energy usage. We impose an endogenous tax on polluting emissions from energy use in a model where energy firms can do R&D in order to clean up their energy product. The model is an extension of that developed by Peretto (2007), who found that imposing an exogenous tax on energy could cause a long-run increase in welfare, because labor originally employed in energy production would be reallocated toward productivity enhancing R&D in manufacturing. In this paper, the emissions tax once again causes labor to be reallocated away from energy production to final goods production and R&D, but some of that R&D is emissions reducing rather than productivity enhancing. This dampens the positive long-run welfare effect, because it reduces the impact of the tax on manufacturing firms. The model does not include any preference for environmental quality: were such a preference included, the effect on welfare could instead be positive.
Advisor: Pietro F Peretto
Risky Business: The Effect of Family Income on Teen Risky Sexual Behavior
By Caitlin McLaughlin
Risky sexual behavior can have profound consequences for a teen’s physical wellbeing, mental health, and future economic success. We explore this topic by examining the relationship between total household income and risky sexual behaviors including the use of birth control, number of sexual partners, age at first intercourse, and the contraction of STDs. Our results show a significant negative correlation between income and unprotected intercourse among females that increases for teens with higher test scores. We then examine if and how household income affects the chosen mode of contraception. Results suggest that income does play a significant role in a teen girl’s decision of whether to use the birth control pill or a less expensive alternative.
Advisor: Marjorie McElroy
Output and the Composition of Government Spending in India
By Ashni Parekh
This paper uses a Cobb-Douglas production function to analyze the role of government spending in the Indian economy and tries to determine how different categories of spending affect growth outcomes. Government spending is hypothesized to influence output and growth through two channels, by affecting the level of TFP and the level of output, and by influencing the growth rate of TFP. The model assumes that TFP is a function of levels of government spending and time. Using annual aggregate data for India from 1961-2002, it is found that government spending depresses per capita GDP. Increasing health and agriculture spending leads to a decrease in output, while increasing infrastructure and education spending improves output. The estimates using data from industries were similar and the growth effect of government spending was found to be negative.
Advisor: Kent Kimbrough
The Informational Content of Implied Volatility in Individual Stocks and the Market
By Andrey Fradkin
We examine the informational content of historical and implied measures of variance through an evaluation of forecasts over horizons ranging from 1 to 22 days. These forecasts use heterogeneous autoregressive (HAR) regressions which are constructed with high-frequency data. Our results show that the t and forecasting ability of models based on historical realized variance (RV) increases with the addition of implied volatility in the regression model. We find that robust regression is better than OLS in forecasting RV outside of the estimation sample. The paper evaluates data from individual equities and the S&P 500.
Advisor: George Tauchen
Why the Apple Doesn’t Fall Far From the Tree: Individual Parent’s Resources and Child Outcomes
By Amanda K Jones
Contemporary issues of son-preference and infanticide in developing countries have encouraged extensive research into how gender bias in the allocation of parental resources affects the child(ren). Disparities in child physical health outcomes have received particular focus. Growing evidence from both developing and developed countries suggests mothers invest more in girls than boys, while fathers more in boys than girls. Following Duncan Thomas’s convention in his 1994 piece on parental resources and child height, this paper updates the examination of the impact of parental education level on child health. We reject the unitary model as a description of household behavior and use individual parents’ education as a measure of bargaining power. This study evaluates approximately 1800 subjects aged 20 to 26 in the U.S. using the 1997 National Longitudinal Survey of Youth data set. Preliminary results indicate that gender-preference in the allocation of household resources persists, depending on education level and race. High school completion and the linear measures of education, specifically among whites, demonstrate a tendency for mothers to favor their daughters and fathers, their sons. When parental education is highest by this indicator, the data show positive impacts on both female and male youth height. When controlling for heterogeneity across households, the results are mixed, suggesting the possibility that individual parental education is no longer a good measure of bargaining power in the household.
Advisor: Marjorie McElroy
To Work or Not to Work? Labor Supply Decisions of Russia’s Disabled
By Aleksander Andreev
By some estimates, almost 6% of Russians are officially disabled. The Russian government has announced the rehabilitation of disabled individuals into the labor force as one of its goals. This paper investigates labor supply decisions of Russia’s disabled using data from the cross-sectional NOBUS dataset. Particular emphasis will be made on differences in disability and employment trends across various strata of the Russian population. The paper concludes that Federal disability pension policy does not substantially disincentivize employment. A key finding is that employment decisions are based primarily on health status, family dynamics, and local opportunities.
Advisor: Charles Becker
Does Capital Control Policy Affect Real Exchange Rate Volatility? A Novel Approach Using Propensity Score Matching
By Adam Gross
Propensity score matching is a statistical technique recently introduced in the field of economics, which researchers use to assess the treatment effect of policy initiatives. In this study I use propensity score matching to analyze the treatment effect of capital control policy on real exchange rate volatility. I find the treatment effect of adopting relatively liberal capital controls is a decrease in real exchange rate volatility. This is the first empirical study to provide insight into the causal relationship between capital controls and real exchange rates, which may be crucial to macroeconomic policy decisions for emerging economies such as China.
Advisor: Craig Burnside | Tagged: Capitol Controls, Propensity Score Matching, Real Exchange Rate, Treatment Effects
