Current PhD student Catalina Granda-Carvajal (advisor Prof. Zimmermann) has recently published an article in the International Economic Journal. The last issue of this journal features a selection of the papers presented at the conference ‘Shadow Economy, Tax Policy and the Labor Markets in an International Comparison: Options for Economic Policy.’ This conference was held in Germany at the University of Potsdam last April, where Granda-Carvajal participated with the paper entitled ‘The Unofficial Economy and the Business Cycle: A Test for Theories.’ In this paper, she attempts to establish how the features of the business cycle vary across countries with the size of the unofficial sector. Granda-Carvajal confirms that countries with a large shadow economy exhibit higher volatility in major macroeconomic variables such as output, consumption and investment. Also, she shows that unemployment tends to be more countercyclical, while employment and hours behave as more procyclical the smaller is the unofficial economy. She concludes that much more needs to be done in order to understand the implications of shadow activities on macroeconomic performance, as standard models of the shadow economy do not imply such behavior for aggregate variables.
Author: kak11010
Prof. Segerson edits book on pollution control
Prof. Segerson is the invited editor of a forthcoming volume on the Economics of Pollution Control, which is scheduled for publication in February 2011 by Edward Elgar Publishers. The book collects 26 previously published articles that provide a contemporary overview of this field. Rather than highlighting classic papers in the field, the volume focuses on more recent key contributions, highlighting advances in theory, models, and empirical methods that have occurred over the past ten to fifteen years. The included papers illustrate the wide range of contexts and ways in which the insights from economics in general, and environmental economics in particular, can inform current policy debates over pressing environmental issues. The volume is part of Elgar’s The International Library of Critical Writings in Economics series.
UConn reception at ASSA Meetings in Denver
Friends and alumni, please join us at the UConn reception at the ASSA meetings. It will be at the Denver Marriott Colorado Salons C & D on Saturday, January 8, 2011, between 7-8:30 pm.
Prof. Heffley speaks in Athens
Prof. Dennis Heffley recently participated in a keynote session at the 6th Pan-Hellenic Congress on Health Management, Economics, and Policy (Athens, Greece, December 15-18, 2010). The session, chaired by John Kyriopoulos (Professor and Director, Department of Health Economics, National School of Public Health, Athens), focused on efficiency in health care. Professor Heffley’s paper on “Location Choices of Health Care Providers” presented a theoretical framework for understanding the factors that potentially affect providers’ location decisions, as well as an empirical analysis of the distribution of general care dentists and dental specialists across Connecticut’s 169 townships. Other session participants included Tryfon Beazoglou (Professor, School of Dental Medicine, University of Connecticut Health Center), Nurhan Davutyan (Professor, Department of Economics and Department of Industrial Engineering, Marmara University, Istanbul), and Gareth Goddier (Chief Executive, Addenbrookes Hospital, Cambridge, England).
Senior featured on UConn Today
Margaret McCarthy, a double Honors major in Economics and Political Science (plus a minor in Human Rights) has recently been featured on the university-wide blog, UConn Today. While on a Summer internship at the US Department of State, she was quickly promoted to fill on an interim basis the country desk for Nicaragua.
She is also a stellar citizen while on campus. In 2009, she received an Oaklawn Foundation Scholarship for academic excellence, honors involvement, and leadership; she is also a member of several honors societies, including Phi Beta Kappa. This year, she was a finalist for a Marshall Scholarship. She is UConn’s administrative director for the Model United Nations. She is also a member of the Global Leadership Commission, a small group of honors students that invites global leaders on campus to speak.
More at UConn Today.
Prof. Segerson Serves on National Academy of Sciences Panel
Professor Kathleen Segerson has just finished serving on a panel of the National Research Council (NRC) of the National Academy of Sciences (NAS) charged with reviewing the Obama Administration’s draft revision of the federal “Principles and Guidelines” for water resources management. The Principles and Guidelines provide guidance to federal agencies involved in water project evaluation and planning and restoration. The Water Resources Development Act (WRDA) of 2007 mandated that these guidelines be revised to reflect current concerns, priorities and methods, and required that the proposed revisions be reviewed by the NAS. The revisions are intended, among other things, to ensure that the principles and guidelines embody the use of “best available economic principles and analytical techniques”. The Obama Administration issued a draft revision of the P&G document in December of 2009. A 13-member interdisciplinary panel was appointed by the NRC to review that draft and make recommendations for improvements. Segerson served as one of three economists on the panel. The panel’s report, which recommends significant changes to the proposed new guidelines as they relate to economic analysis, will be sent to the Obama Administration and released to the public on December 2.
Winter 2011 issue of The Connecticut Economy highlights the “Great Recession Cleanup”
With aftershocks from the Great Recession still reverberating, state officials are considering a mix of strategies to shore up Connecticut’s budget and steady its teetering economy. Several ideas that may help–taming tax expenditures, supporting community colleges, and fostering community development by reclaiming “brownfields”–are among the topics addressed in the Winter 2011 issue of The Connecticut Economy: A University of Connecticut Quarterly Review.
In this issue’s guest commentary, Joan McDonald, Commissioner of the Connecticut Department of Economic and Community Development (DECD), evaluates the state’s economic strategic plan in light of projected state budget deficits of $3 billion or more for each of the next three fiscal years. “Clearly, we in government are in uncharted waters,” McDonald says. “Business-as-usual is not an option for Connecticut.” The commissioner will attend the December 8th press briefing (Connecticut Center for Advanced Technology in East Hartford, 9:30-11:00 AM) and take questions from the media.
Community colleges have long provided a training ground for displaced workers and an inexpensive backstairs route to more advanced degrees, notes Quarterly Executive Editor Steven Lanza. Prodded by the Great Recession, this fall, a record 58,000 students enrolled in Connecticut’s 12 community colleges, a 5.7 percent jump over Fall 2009. “Little wonder,” writes Lanza in an article that highlights the earnings gains from greater educational attainment, “that amid a troubled economy… policy makers are taking a fresh look at the prospects, promise and payoffs of community colleges.”
Connecticut “spends” several billion dollars a year by not collecting all the taxes it could. Through “tax expenditures” (TEs), the state forgives many taxes, provided would-be taxpayers pursue state-favored goals or purposes. For example, sales taxes are exempted for clothing purchases under $50, with the goal of helping the poor—although non-poor buyers of such clothing also benefit. Quarterly co-editor Arthur Wright examines whether state officials might find some sizable extra revenues among all the TEs, widely scattered throughout the tax code, to help balance state budgets over the next three years.
For the past decade, returning brownfield properties to productive use has been a key component of Connecticut’s “smart growth” strategy. An interdisciplinary group at UConn, the Center for Transportation and Livable Systems (CTLS), recently conducted a survey of Connecticut’s 299 known brownfield sites, noting that redevelopment has been slow. “Sound, effective policies offer a chance to simultaneously rejuvenate inner cities, contain sprawl, reduce commuting costs and improve environmental quality,” the CTLS study suggests.
In a related study, Quarterly co-editor Dennis Heffley reports that the cost of brownfields, in terms of reduced property values, may approach $3,000 per home in affected towns. “Aggregating these costs across homeowners… could yield a total loss that would justify efforts to remediate these sites, especially if the improved property values also generated additional local tax revenue and alleviated the pressure on state government to supplement local tax collections,” Heffley writes.
In other articles, the editors and contributors to the Quarterly:
- Report the latest data and forecasts of jobs, unemployment, housing prices and permits for the four largest market areas in the state.
- Provide tables, charts and commentary on labor market activity.
- Forecast that the state’s economy looks becalmed, making for very slow growth in jobs and state GDP.
- Map trash disposal and recycling spending in 2008 for each of Connecticut’s 169 cities and towns in the Quarterly’s centerfold.
For free access to this and earlier issues of The Connecticut Economy, dating back to 1993, see: cteconomy.uconn.edu.
Recent graduate stars in reality show
Tristan Couvares, a 2008 Economics B.A., was recently the main subject of a new reality show, ControlTV. He is followed all day, as usual for a reality show, but viewers can influence what he is to do during the day through online votes.
ControlTV is created by Seth Green and Matt Senreich, who are also involved in other ventures such as Robot Chicken.
Prof. Zimmermann elected senior fellow of RCEA
Prof. Zimmermann has recently been elected a senior fellow of the Rimini Center for Economic Analysis (RCEA), a private, non-profit international organization dedicated to independent research in Applied Economics, Theoretical Economics and related fields. It is located in Rimini (Italy) where some of the founding trustees and scholars have special ties. The RCEA is the outcome of collaboration between Canadian economists, Italian economists and a group of eminent trustees from academia, banking, government and industry. Research at the RCEA is conducted to enlighten scientific and public debate on economic issues, and not to advance any economic, political and social agenda. The RCEA scholars are drawn from Canada, Italy and other countries, have experience in academia and/or government and may hold different points of view on economic, political and social issues.
Prof. Zimmermann is already a research fellow at the IZA Institute for the Study of Labor in Bonn (Germany) and a research network fellow at CESifo in Munich (Germany).
New slate of PhD students going on the job market
Tao Chen: (Advisor: Tripathi)
My research on econometrics is both theoretical and applied. The theoretical part focuses mainly on microeconometrics and functional data analysis. The applied work is within the fields of labor and urban economics.
Paramita Dhar (Advisor: Ross)
My dissertation examines two different questions about housing and location choice. In the first essay, I apply a difference-in-difference model to capture the causal effect of school quality on house prices by looking at houses located on school district boundaries in Connecticut. The rest of the dissertation deals with detailed spatial analysis of the nature of housing discrimination in the context of multiple minority groups in Los-Angeles using Housing Discrimination Study (2000).
Leshui He (Advisor: Langlois)
My dissertation departs from the standard property rights theory of the firm of Grossman, Hart and Moore and develops the interaction between the ownership of the firm and the ownership of the alienable assets. By defining the ownership of the firm following Alchian and Demsetz (1972), I create a theoretical framework allowing for independent allocations of the two ownership rights. Then I move on and utilize the multi-tasking agent model under this framework to run a level horse race among four alternative organizational forms. The model sheds lights on conditions under which human-capital owned firms can be optimal, and offers tentative explanations to the fact that firms usually collectively own alienable assets.
Nicoleta Iliescu (Advisor: Matschke)
In my job market paper (“US Lobby Activity and Antidumping Outcomes”), I investigate the impact of lobbying on the antidumping practices in the US. Currently, antidumping is the most heavily used temporary tariff measure both worldwide and in the US. Thus, it becomes an appropriate avenue of studying how political pressure shapes the level of protection some domestic industries receive. The empirical results I derive in the paper reinforce the hypothesis that the political clout plays an important role in granting trade protection through antidumping duties.
Nick Jolly (Advisor: Couch)
My dissertation focuses on the consequences of job displacement. The first paper from my dissertation, which was published in Research on Aging, shows that displaced workers experience larger earnings losses if they are older at the time of job loss. The second paper examines how earnings losses vary over different phases of the business cycle; the final paper examines how this type of involuntary job loss influences the inter-temporal movement of workers throughout the earnings and income distributions.
Steve Kuchta (Advisor: Miceli)
My dissertation examines the role patent term restoration plays in incentivizing pharmaceutical development and clinical trials behavior. The unique position of pharmaceuticals, who must spend portions of their patent term achieving regulatory approval, forces the effective patent life to balance more interests relative to the standard patenting story. A law and economics approach is utilized to expose the competing dynamics and thereby to provide theoretical foundations for the 1984 Hatch-Waxman Act. The modeling also informs current policy discussion regarding adding exclusivity protection to patent protection in the emergent biopharmaceutical industry.
Xiaoming Li (Advisor: Ross)
My dissertation examines the dynamics in the housing and mortgage markets. Specifically I attempt to identify the “true state dependence” from the “spurious state dependence”. In the first essay, I specify a linear probability model to test the neighborhood information externalities in mortgage underwriting. In the second essay, I propose an analytically bias-corrected fixed effects estimator that is robust to the incidental parameters bias for panel fractional response models. In the third essay, I apply the proposed bias-corrected estimator to empirically examine the impact of local housing markets on neighborhood mortgage underwriting.
Shalini Mitra (Advisor: Zimmermann)
My dissertation examines the channels through which volatility of key variables like output, employment, investment and consumption is affected – both at the firm and the aggregate level and their implications. I specifically consider degree of financial development of a nation, research and development expenditure of firms, and the presence of an informal sector.
Zinnia Mukherjee (Advisor: Segerson)
My research is in applied microeconomics. My dissertation essays deal with the design and evaluation of conservation policies, with a specific focus on protection of endangered species. In particular, the three essays analyze (i) the effectiveness of voluntary approaches and the role of background regulatory threat in mitigating stochastic bycatch, (ii) the welfare effects of unilateral bycatch policies in an open economy, and, (iii) the economic impact of the TED regulation (a major U.S. bycatch regulation) on the U.S. shrimp industry. Post dissertation, my research projects include (i) studying the spatial and temporal effects of marine hypoxia on Long Island Sound harvest and fishers’ behavioral responses to the phenomenon, (ii) analyzing the effect of political ideology on state level income inequality for U.S. states, and, (iii) examining the role of U.S. state laws on sexual crime and crime location choice of repeat offenders.
Michael Stone (Advisor: Miceli)
I present a theory which extends the traditional economic model of punitive damages by incorporating litigation costs. Incorporating litigation costs into the model provides a possible justification for punitive damage caps. At the optimum, caps balance deterrence against the cost of litigation. Empirical testing of the model is performed via Cox proportional and parametric hazard analyses, using a panel dataset from 1981 to 2007. The empirical results reveal a positive relationship between judicial and legal expenditures (a proxy for legal costs) and cap enactment, and a negative relationship between state GSP (a proxy for damages) and cap enactment. Cap enactment is also influenced by political ideology.
Parag Waknis (Advisor: Zimmermann)
In my dissertation, I explore the nature of optimal monetary policy under a Leviathan monetary authority. Such a monetary authority is a reality wherever governments rely heavily on seigniorage. In a model based on Lagos and Wright (2005), I characterize a Markov perfect equilibrium as well as equilibrium under reputational concerns for such monetary authority. While, there are multiple equilibriums in general, under certain conditions we can narrow down the set of equilibriums to one and show that it is characterized by higher inflation. I then add one more Leviathan central bank to the model to see if adding a competitive element implies a lower rate of inflation in equilibrium. I plan to use the insights from these models to analyze sub-national spending in developing countries like India. Understanding the policies of such central banks or governments is critical given today’s interdependent global policy environment.