A Fast Literature Search Engine based on top-quality journals, by Dr. Mingze Gao.
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Results 463 resources
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Existing studies establish a strong cross-country correlation between incomeand democracy but do not control for factors that simultaneously affect bothvariables. We show that controlling for such factors by including countryfixed effects removes the statistical association between income percapita and various measures of democracy. We presentinstrumental-variables estimates that also show no causal effect of incomeon democracy. The cross-country correlation between income and democracyreflects a positive correlation between changes in income and democracyover the past 500 years. This pattern is consistent with the idea thatsocieties embarked on divergent political-economic development paths atcertain critical junctures.
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We construct a model to study the implications of changes in political institutionsfor economic institutions. A change in political institutions alters thedistribution of de jure political power, but creates incentives for investments inde facto political power to partially or even fully offset change in de jure power.The model can imply a pattern of captured democracy, whereby a democraticregime may survive but choose economic institutions favoring an elite. Themodel provides conditions under which economic or policy outcomes will beinvariant to changes in political institutions, and economic institutions themselveswill persist over time. (JEL D02, D72)
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As the number of bank failures increases, the set of assets available for acquisition by surviving banks enlarges but the total liquidity available with surviving banks falls. This results in "cash-in-the-market" pricing for liquidation of banking assets. At a sufficiently large number of bank failures, and in turn, at a sufficiently low level of asset prices, there are too many banks to liquidate and inefficient users of assets who are liquidity-endowed may end up owning the liquidated assets. In order to avoid this allocation inefficiency, it may be ex-post optimal for the regulator to bail out some failed banks. We show, however, that there exists a policy that involves granting liquidity to surviving banks in the purchase of failed banks, which is equivalent to the bailout policy from an ex-post standpoint. Crucially, this liquidity provision policy gives banks incentives to differentiate, rather than to herd, makes aggregate banking crises less likely, and thereby dominates the bailout policy from an ex-ante standpoint.
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We explore the cross‐sectional pricing of volatility risk by decomposing equity market volatility into short‐ and long‐run components. Our finding that prices of risk are negative and significant for both volatility components implies that investors pay for insurance against increases in volatility, even if those increases have little persistence. The short‐run component captures market skewness risk, which we interpret as a measure of the tightness of financial constraints. The long‐run component relates to business cycle risk. Furthermore, a three‐factor pricing model with the market return and the two volatility components compares favorably to benchmark models.
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We study whether the effects on registered manufacturing output of dismantlingthe License Raj—a system of central controls regulating entry and productionactivity in this sector—vary across Indian states with different labor marketregulations. The effects are found to be unequal across Indian states with differentlabor market regulations. In particular, following delicensing, industrieslocated in states with pro-employer labor market institutions grew more quicklythan those in pro-worker environments. (JEL J50, L52,L60, O14, O15, O25)
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We develop a model in which a firm can devote effort either to increasing sales growth, or to improving per‐unit profit margins. If the firm's manager cares about the current stock price, she will favor the growth strategy when the market pays more attention to growth numbers. Conversely, it can be rational for the market to weight growth measures more heavily when it is known that the firm is following a growth strategy. This two‐way feedback between firms' strategies and the market's pricing rule can lead to excess volatility in real variables, even absent any external shocks.
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We report evidence that Bitnet adoption facilitated increased research collaboration between US universities. However, not all institutions benefited equally. Using panel data from seven top engineering journals, Bitnet connection records, and institution ranking data, we find that middle-tier universities were the primary beneficiaries; they benefited largely by increasing their collaboration with top-tier schools. Furthermore, we find that the magnitude of this effect is greatest for co-located pairs. Thus, the advent of Bitnet – and likely of subsequent networks – seems to have increased the role of middle-tier universities as producers of new knowledge in the national innovation system. (JEL D85, I23, O31, O33)
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