Author: kak11010

Article by PhD alumnus Rangan Gupta among the hottest in Journal of Economics and Business

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Elsevier recently announced that an article by Rangan Gupta (IDEAS) in the Journal of Economics and Business was among the most downloaded on its site. Tax evasion and financial repression was one of the chapters of his UConn PhD dissertation under the supervision of Prof. Zimmermann (IDEAS).

Using an overlapping generation model, Gupta studies how tax evasion interacts with financial repression, as expressed by a high reserve deposit ratio requirement in banks. Applied to southern European countries, he finds that a higher degree of tax evasion, resulting from lower penalty rates and higher corruption, produces in a social optimum higher degrees of financial repression. However, higher degrees of tax evasion, due to lower tax rates, tend to reduce the optimal degree of financial repression. Thus, there are asymmetries in the relationship between reserve requirements and tax evasion. More importantly, tax evasion and financial repression are positively correlated if and only if the change in the former results from an alteration in the penalty rate or the level of corruption.

Prof. Zimmermann gives plenary talk at Open Access conference in Geneva

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Prof. Christian Zimmermann (IDEAS) spoke last week at the sixth CERN Workshop on Innovations in Scholarly Communication (OAI6) in Geneva. This meeting assembles digital librarians from around the world as they discuss issues about the digital and open dissemination of research (open access).

Zimmermann’s talk discussed on how to engage a community in a research dissemination project by catering to the various incentives of its participants. By taking as example the RePEc Author Service he administers, he showed that one can push a major bibliographic project without any funding by letting everyone who benefits from it help out. This decentralization of the work has been critical to the success of RePEc.

Prof. Ross speaks on NPR

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Professor Ross (IDEAS) has just been featured on the Connecticut Public Broadcasting Network as he spoke about the regulation overhaul announced by President Obama. He strongly supported the proposal to increase the oversight and regulation of large “Too Big to Fail” non-bank financial institutions and to make the Federal Reserve responsible for regulating these institutions arguing that the Federal Reserve employs some of the best economists in the country. Ross has worked extensively on mortgage markets.

Article by Prof. Ross among most cited in Journal of Urban Economics

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Professor Ross (IDEAS) has just won the Journal of Urban Economics Highly Cited Author Award 2004-2008 for his article Redlining, The Community Reinvestment Act, and Private Mortgage Insurance (with Geoffrey Tootell) for being one of the 10 most cited articles between 2004 and 2008 in this journal. The paper finds that lenders respond to the Community Reinvestment Act by favoring borrowers who obtain Private Mortgage Insurance in low income neighborhoods. In past research, this paper had masked differencing in lending across neighborhood and suggests that previous research has underestimated the importance of neighborhood in mortgage lending decisions. The paper has been of interest and cited by researchers across many fields including Economics, Finance, Real Estate, Geography, and Public Policy.

Report examines impact of mass layoffs on workers’ long-term earnings

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From the UConn Advance:

For workers losing jobs due to mass layoffs in the current economic downturn, the bad news is that more people than ever are looking for work right now, making it the toughest job market in at least two decades.

But for those lucky enough to find another job, there is more bad news: they will likely suffer lower wages for many years compared to similar workers who are not laid off.

A new study (pdf) from UConn and the Connecticut Department of Labor shows how the business cycle plays a determining role in the extent of wage losses for workers let go in mass layoffs and plant closings.

The study finds that for workers losing jobs during a recession, the damage to their earnings can linger for years. By contrast, for workers who lose jobs as part of a mass layoff or plant closure in more favorable times, long-term earnings losses are negligible.

Kenneth Couch (IDEAS), an associate professor of economics in the College of Liberal Arts and Sciences, teamed up with researchers at the Connecticut Department of Labor, economist Nicholas Jolly (MA, PhD) and analyst Dana Placzek, for the study.

Read more in the UConn Advance

Recent PhD to publish in Games and Economic Behavior

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Recent graduate Nicholas Shunda (IDEAS), advised by Vicki Knoblauch (IDEAS), will publish the paper “Auctions with a Buy Price: The Case of Reference-Dependent Preferences” in the journal Games and Economic Behavior. The paper contributes to a theoretical literature on rationales for the hybrid selling mechanism known as an auction with a buy price. In an auction with a buy price, a seller provides bidders with an option to forgo the auction and transact at a fixed price. The most well-known example of an auction with a buy price is eBay’s “Buy-It-Now” feature. The paper demonstrates that sellers can enhance revenues by adding a buy price to their auctions if bidders evaluate auction and purchase outcomes on the bases of surplus and comparison to a reference point depending upon the auction’s reserve and buy price. In contrast to alternative explanations for auctions with buy prices, such as risk aversion and impatience, which predict bidding behavior that is independent of the auction’s parameters, bidders with reference-dependent preferences submit bids that vary directly with the existence and size of the auction’s reserve and buy prices, behavior extensively documented in laboratory and field experimental auctions.

Biplab Ghosh defends thesis, heads to Gustavus Adolphus College

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Biplab Ghosh recently defended his thesis under the advisorship of Prof. Dharmapala. His research interests lie in financial economics. His dissertation comprised three chapters, the first one tackles the theory that information asymmetry among investors leads to higher asset price volatility for firms. Testing this empirically, he finds that this is indeed the case, especially for small and illiquid firms, and those with a low book-to-market ratio. In the second chapter, he finds that higher firm level asset volatility leads to lower leverage. This can be viewed as a consequence of undiversified managers trying to reduce their own risk. And in the final chapter, he tries to explain the reason for the higher return of firms with high asymmetric information. It appears to originate with news about future cash flows rather than changes in the discount rate.

Ghosh will soon join Gustavus Adolphus College, a liberal arts college in Saint Peter, an hour from Minneapolis with about 2500 students. He will be teaching mostly finance courses in the College’s Department of Economics and Management.

CLAS faculty snapshot features Prof. Ross

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Stephen Ross (IDEAS) studies urban economics and how economic forces affect the lives of people in disadvantaged groups. One area he has studied closely is discrimination in mortgage lending. Another, which he began to track several years ago, is the subprime mortgage market. He saw a significant increase in risk in lending practices from 2004 to 2005 and 2006, when evidence mounted that risky loans were likely to lead to foreclosures.

Listen to the podcast of this snapshot.

Bill Lott to become interim department head

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Bill Lott will become Interim Head of the Department of Economics as of July 1, 2009. Dennis Heffley (IDEAS), who has served as Department Head for the past four years, recently announced that he would be stepping down from the position on June 30th and returning to full-time teaching and research. Jeremy Teitelbaum, Dean of the College of Liberal Arts and Sciences, subsequently announced that he would be appointing an Interim Head until a full search could take place.

Professor Lott is the Department’s senior member, having just completed his 40th year of service at UConn. Bill completed his PhD at North Carolina State University under the tutelage of prominent econometrician T. Dudley
Wallace, who later joined the Economics faculty at Duke. Lott regularly teaches Econometrics at the graduate level, as well as undergraduate courses in Mathematical Economics, Information Technology for Economists, and
Money & Banking. He and his colleague, Susan Randolph, have recently teamed up to conduct an analysis of the dispersion and growth of income inequality in Connecticut (see pdf). A follow-up paper on this subject is scheduled to appear in the Summer 2009 issue of The Connecticut Economy.

James Boudreau defends thesis, heads to University of Texas Pan American

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James Boudreau (IDEAS) defended his dissertation on Friday, May 1st 2009, the title of which is “Essays on the Analysis and Implications of Two-Sided Matching Markets.” In his work, performed with adviser Vicki Knoblauch (IDEAS), he uses both theory and simulation techniques to investigate the functioning of matching markets. These are markets such as the marriage market or the labor market in which partnerships are typically intended as long-term, so participants are especially concerned with who they end up with. His contributions include results on how preference characteristics can help or hinder both centralized and decentralized matching mechanisms, and how individual incentives in matching markets can influence macroeconomic phenomena such as unemployment and growth.

James, a Connecticut native, has been a UConn student since the Fall of 1999, receiving his BA, MA, and now his PhD in economics. During his PhD studies he has also been an instructor, teaching classes in both microeconomics and macroeconomics at the introductory and intermediate levels.

Unfortunately for us, James’ time at UConn has finally ended, but fortunately for him his experience with the world of economics has only just begun. Next Fall James will begin a tenure-track position as an Assistant Professor of Economics at the University of Texas Pan American. We wish him all the best.