Hamid Tabesh
This paper explores the impact of the black market exchange rate expectations on the demand for money in Iran. In the post-revolution era, Iran has imposed a great deal of restriction on the exchange market. The restrictions were so severe that in the period 1979-89, the nation basically was a closed economy. However, as the exchange market restrictions intensified, an active underground exchange market emerged in which key currencies in general and the U.S. dollar in particular, were exchanged several-fold higher than the official rate. The findings suggest that in the sample period 1959-94, demand for real cash balances has been significantly affected by the expected black market exchange rate. Further, the results of a cointegration test provide ample evidence that the expected appreciation/depreciation in the black market exchange rate, real income, and the rate of inflation jointly determine the demand for real M2-money in Iran. (E41)
D. F. Sheets and E. E. Topping
This paper examines the hypothesis that the quality of instruction influences observed mean test scores through its effects on both individual student performance and on class attrition rates. Since these effects are expected to display opposite signs, the level and dispersion of these scores are biased downward. It is shown that hypothesis tests based on simple mean test scores may yield unreliable and possibly misleading results. Data from classes in the principles of economics are employed to test the hypothesis. (A22, I21)
Patricia E. Graham and Linda M. Manning
Microenterprise development is built on provision of small loans to the poor, especially women, to alleviate poverty, and is currently promoted as a poverty-alleviation tool in developed countries. We survey the literature on microloan programs in developing countries and identify two general models, the minimalist microcredit approach and the integrated microfinance model. This framework is used to review the microloan program experience in developed countries to gauge its fit into the models. We find that there are lessons to be learned from developing countries, but considerable economic research is required for replication of programs in developed countries, and effective evaluation. (I30, O1)
Brooks B. Hull
Research by Lipford, McCormick, and Tollison and by Hull and Bold shows a negative relationship between church membership and crime rates. The results are important but do not employ the most recent available data. This paper reproduces Hull and Bold's results using more contemporary 1990 data by United States county. This paper also compares 1980 and 1990 county data. Results are consistent with the earlier research. County crime rates are significantly negatively related to county church membership share. Other factors affecting county crime rates include unemployment, poverty, expenditures on police, population density, and income. (K42, L39, Z00)
Bienvenido S. Cortes
This paper reexamines a 1999 study by Abrams, Clarke, and Settle (ACS) which finds that, for the 1950-80 period, state-level economic growth is positively and significantly related to financial depth but is not influenced by banking restrictions and fiscal policy variables. The study focuses on several empirical issues particularly endogeneity and multicollinearity problems. Correcting for these biases and applying a more parsimonious variant of ACS' model at the Kansas county level for 1980-97, I find that county income growth is associated not only with financial depth but also with changes in bank branching policy and tax burden. (O1, O2)
Wahhab Khandker and Abdulaziz Elfessi
The purpose of this study is to show that a Collaborative Learning Lab (CLL) component can be accommodated in a standard three-credit introductory microeconomics class without significantly reducing the course content. It also shows that adding an in-class CLL can be an effective alternative method of teaching microeconomics. The data provides convincing information that incorporating CLL into the class improves student learning. (A2, A22)
Bradley T. Ewing and Farooq Malik
Considerable attention has been given to examining the information content of the paper-bill spread in terms of predicting U.S. real economic activity. However, the results have been mixed. This paper examines the robustness of the paper-bill spread as an indicator variable of real output growth by studying Canadian data. This study uses the newly developed generalized forecast error variance decomposition technique [Koop, et al. (1996), Pesaran and Shin (1998)]. The results indicate that the information content of the paper-bill spread in Canada is non-trivial even when the performance of the U.S. economy is taken into account. Moreover, Canadian economic activity may not be tied directly to how well the U.S. is performing per se, but is instead significantly effected by unexpected changes to the growth rate of U.S. real output. (E0, G1)