Kevin Sylwester
Why does income inequality lower economic growth as reported in Clarke
(1995)? This paper considers public education expenditures as a potential
link from income inequality to economic growth. I find that countries
with a higher degree of income inequality devote more resources to public
education. Although the effect of past education expenditures upon
growth is positive, the contemporaneous effect upon growth is negative.
With a large cost of supporting a public education system; these findings
may explain the lack of a large, positive effect from the growth of human
capital upon economic growth as reported in the empirical literature.
(O4, O2)
Margie A. Tieslau and Robert H. Rasche
This paper presents substantial evidence in support of the existence
of long-run money demand functions and uncovered interest parity in Canada
and the U.S. using quarterly data from 1950 to 1996. We also uncover
evidence of cross-country influences running not only from the U.S. to
Canada, but, also, from Canada to the U.S. Our approach offers advantages
over other attempts to assess these phenomena by analyzing them as part
of a system and by allowing for differing short- and long-run dynamics
in the system. (E41, C32)
Dipak Ghosh, Swarna D. Dutt and Leland V. Gustafson
In this study we re-examine the validity of the Fisher hypothesis under
both the fixed and floating exchange rate periods for Canada and the United
States. First the non-stationarity of inflation and interest rate
series is examined, followed by an examination of the structure of cointegration
between them. This is conducted using the null of cointegration approach
which is more powerful than classical tests and can distinguish between
unit and near unit root processes. The Fisher hypothesis is accepted
for Canada, but the evidence in favor of the Fisher hypothesis for the
United States is mixed. (F41, F42)
Zahid Iqbal, George Yorke, and Aigbe Akhigbe
This paper investigates cost efficiency of banks that laid off employees.
Using a stochastic frontier method, we find that these banks are more cost
efficient before the layoffs when compared to a group of nonlayoff banks.
Their cost efficiency, however, declines during the layoff period and does
not appear to improve within two years following the layoffs. Our results
are not consistent with the general notion that bank layoffs improve cost
efficiency. (G21, G34, C13)
Tammy A. Rapp, Michael E. Parker and Michael D. Phillips
The stock market and foreign exchange rate markets are interrelated
due to the similar fundamentals which determine the movement in the two
respective markets. Applying the efficient market hypothesis, these
two markets should be jointly efficient. If the markets are jointly
efficient, then no long term comovement should exist between a stock market
index and a foreign exchange rate index. The existence of a long
term relation is tested by use of cointegration tests and common serial
correlation feature tests. If no cointegration exists and if no common
serial correlation feature exists, then we would not be rejecting joint
efficiency of the two markets. Using the S&P 500 stock index,
the Wilshire 5000 index, and the NASDAQ index to proxy stock market indexes
and using a trade weighted foreign exchange rate index for the United States,
the empirical results of the cointegration and common feature tests support
the joint efficiency of the two markets. (G14, G15, F3)
Bahman Bahrami
This paper uses data from a random national sample of faculty, ages
56 and older and examines factors influencing faculty members' early retirement
decisions. A variety of factors, such as age, uncapping of the retirement
age, other sources of income, early retirement incentives, social security
income, preference for leisure, teaching effectiveness, presence of spouse,
and types of degree offered by institutions have a significant influence
on faculty members' early decisions to retire. An understanding of
these factors and their effects on faculty early retirement decisions can
help administrators and other officials in their human resource planning
process. (J26,J22)
Brian W. Sloboda
This paper presents an empirical study of the costs of high school
dropouts on the region of southern Illinois. The region has experienced
the problem of lagging economic development in comparison with its northern
Illinois counterparts. A multiple regression model and a nonparametric
regression model are used to examine the impact of high-school dropouts
on the region. Given the results of these methods, the
results will be compared to determine which approach provides the best
empirical approach to this problem. (C14, J0)