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Exogenous Shocks (exogenous + shock)
Selected AbstractsExogenous Shocks or Endogenous Constructions?INTERNATIONAL STUDIES QUARTERLY, Issue 4 2007Crises, The Meanings of Wars This symposium addresses the role of wars and crises as mechanisms of international change. Over the past two decades, the international system has undergone a number of remarkable transformations, from the end of the Cold War to the emergence of an ongoing "War on Terror," and from the collapse of statist development models to the emergence of a contested,if evolving,neoliberal "Washington Consensus." This volatility exceeds any underlying shifts in economic structures or the distribution of capabilities, and raises important questions regarding the roles of agency, uncertainty, and ideas in advancing change. In this introduction we examine the role of wars and economic crises as socially constructed openings for change. We attempt three things: to critique materialist approaches in the security and political economy issue areas, to outline the distinctive contribution that an agent-centered constructivist understanding of such events offers, and to offer a framework for the study of such events, one which highlights an expanded range of elite-mass interactions. [source] Accounting Choices and Risk Management: SFAS No. 115 and U.S. Bank Holding Companies,CONTEMPORARY ACCOUNTING RESEARCH, Issue 2 2002Leslie Hodder Abstract This paper provides evidence that regulatory contracts affect firms' accounting choices and risk-management decisions. Specifically, we investigate whether an exogenous shock to regulatory risk induced by Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" (SFAS 1993), encouraged U.S. banks to deviate from portfolio and risk benchmarks when they adopted the standard. Because we cannot observe relevant benchmarks, we model portfolio and risk decisions as functions of macroeconomic and firm-specific factors using data from a period when regulatory capital was immune to SFAS No. 115 accounting. We examine a sample of 230 publicly traded banks and find that (1) irrespective of adoption timing, banks classified too few securities available for sale (AFS) relative to estimated benchmarks; (2) weaker banks that adopted the standard early classified far more securities as AFS relative to benchmarks; (3) banks altered the size of their securities portfolios along with the levels of interest-rate risk and credit risk as regulatory capital decreased; and (4) the level of interest-rate risk on banks' loan portfolios increased at the time of SFAS No. 115 adoption. We also explore the 1995 Financial Accounting Standards Board (FASB) amnesty when firms could "readopt" SFAS No. 115. We find that banks used the 1995 FASB amnesty to undo strategic initial SFAS No. 115 adoption decisions. Taken together, our findings suggest that SFAS No. 115 caused some of the accounting and economic consequences predicted by bankers, analysts, and academics. [source] Policy decisiveness and responses to speculative attacks in developed countriesEUROPEAN JOURNAL OF POLITICAL RESEARCH, Issue 6 2009KYUNG JOON HAN Why are some countries able to defend their currencies when there are speculative attacks, while others fail to do so and devalue their currencies? This article suggests that intragovernment factors as well as government-legislature relations should be considered because many of the policy responses to speculative attacks do not require legislative acquiescence, so that intragovernment attributes will have more substantial effects on the policy responses than those of government-legislature relations. This article suggests that cleavages within government and its instability have a negative effect on decisiveness. Data regarding speculative attacks in developed countries from the 1970s to the 1990s and the Heckman selection model show that governments with many veto players and with less durability have had difficulty in defending their currencies in the face of speculative attacks. The article also finds that governmental institutional effects can be constrained by central bank independence. The effects become substantially smaller and statistically insignificant when central banks are very independent. The overall results imply that policy indecisiveness induced by some political factors makes governments less able to adopt a new policy equilibrium that is necessary to respond to an exogenous shock such as speculative attack. [source] Beef safety shocks and dynamics of vertical price adjustment: The case of BSE discovery in the U.S. beef sectorAGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 3 2007Sayed H. Saghaian This article addresses the dynamic impact of the 2003 Bovine Spongiform Encephalopathy discovery on the U.S. beef sector. Time series analysis and historical decomposition with weekly feedlot, wholesale, and retail beef price series is used to address the dynamics of price adjustment and causality along the U.S. beef marketing channel. The results show price transmission is bidirectional, determined through interaction between the different stages, and price adjustment is asymmetric with respect to both speed and magnitude. The results reveal a differential impact of the exogenous shock on producers and retailers, which leads to widening of price margins and points to imperfect price transmission, specifically at the retail level, with consequences for the efficiency and equity of the marketing channel. [EconLit citations: Q11, Q13]. © 2007 Wiley Periodicals, Inc. Agribusiness 23: 333,348, 2007. [source] Institutional Change and the Dynamics of Vice Presidential SelectionPRESIDENTIAL STUDIES QUARTERLY, Issue 3 2008MARK HILLER The influence of the vice presidency has expanded dramatically in recent years, yet scholars know surprisingly little about how presidential nominees choose their running mates and how the selection process has changed over time. This study argues that the confluence of two events,the McGovern-Fraser reforms of the early 1970s and the exogenous shock of George McGovern's ill-fated selection of Thomas Eagleton as his running mate in 1972,changed the factors driving running mate selection. Specifically, in the post-1972 era, presidential nominees have looked less to traditional incentives such as ticket balancing and more toward governing experience to help them in the general election and, if they succeed, in the White House. We test a model with empirical data from 1940 to 2004. [source] The Prospects for Foreign Debt Sustainability in Post-Completion-Point Countries: Implications of the HIPC-MDRI FrameworkDEVELOPMENT POLICY REVIEW, Issue 2 2008Jacinta Nwachukwu The Enhanced HIPC Initiative was launched in 1999 to reduce the Net Present Value (NPV) of foreign debt of the world's poorest countries to a sustainable threshold of 150% of their exports. This article applies a simple growth-with-debt model to 16 post-completion-point HIPCs to assess whether this goal will be met by 2015. Its somewhat optimistic base-case projections suggest that participation in the current Enhanced HIPC-MDRI initiative will only reduce the NPV of their total external debt to 176% of exports by this date. Sensitivity tests which expose these countries to adverse exogenous shocks help draw attention to policies that could ensure that they do not again accumulate unsustainable debt levels. [source] The governance and performance of universities: evidence from Europe and the USECONOMIC POLICY, Issue 61 2010Philippe Aghion Summary We test the hypothesis that universities are more productive when they are both more autonomous and face more competition. Using survey data, we construct indices of university autonomy and competition for both Europe and the United States. We show that there are strong positive correlations between these indices and multiple measures of university output. To obtain causal evidence, we investigate exogenous shocks to US universities' expenditures over three decades. These shocks arise through the political appointment process, which we use to generate instrumental variables. We find that an exogenous increase in a university's expenditure generates more output, measured by either patents or publications, if the university is more autonomous and faces more competition. Exploiting variation over time in the ,stakes' of competitions for US federal research grants, we also find that universities generate more output for a given expenditure when research competitions are high stakes. We draw lessons, arguing that European universities could benefit from a combination of greater autonomy and greater accountability. Greater accountability might come through increased reliance on competitive grants, enhanced competition for students and faculty (promoted by reforms that increase mobility), and yardstick competitions (which often take the form of assessment exercises). --- Philippe Aghion, Mathias Dewatripont, Caroline Hoxby, Andreu Mas-Colell and André Sapir [source] Activist Macroeconomic Policy, Election Effects and the Formation of Expectations: Evidence from OECD EconomiesECONOMICS & POLITICS, Issue 2 2000David Kiefer We examine the explanatory power of a political,business cycle theory in which governments practice short-run policy to lessen the impact of exogenous shocks. Governments have ideological objectives with respect to macroeconomic performance, but are constrained by an augmented Phillips curve. The most prominent version, the rational partisan model, incorporates forward-looking expectations. This model can be compared to a competing model based on backward-looking expectations. Alesina and Roubini's recent advocacy of the rational model uses OECD data. Our reconsideration of the same data, updated to 1995, suggests that the adaptive expectations version offers a better explanation than the rational one. [source] BANK CAPITAL REQUIREMENTS, BUSINESS CYCLE FLUCTUATIONS AND THE BASEL ACCORDS: A SYNTHESISJOURNAL OF ECONOMIC SURVEYS, Issue 5 2009Ines Drumond Abstract In order to survey the mechanisms through which the introduction of Basel II bank capital requirements is likely to accentuate the procyclical tendencies of banking, this paper brings together the theoretical literature on the bank capital channel of propagation of exogenous shocks and the literature on the regulatory framework of capital requirements under the Basel Accords. We conclude that the theoretical models that revisit the bank capital channel under the new accord generally support the Basel II procyclicality hypothesis and that the magnitude of the procyclical effects essentially depends on (i) the composition of banks' asset portfolios, (ii) the approach adopted by banks to compute their minimum capital requirements, (iii) the nature of the rating system used by banks, (iv) the view adopted concerning how credit risk evolves through time, (v) the capital buffers over the regulatory minimum held by the banking institutions, (vi) the improvements in credit risk management and (vii) the supervisor and market intervention under Basel II. The recent events and instability in financial markets all over the world have led the procyclicality issue to enter the agendas of several political international,fora,and some measures to mitigate procyclicality are being put forward. The bank capital channel literature should now play an important role in evaluating their effectiveness. [source] Economic development and fluctuations in earnings inequality in the very long run: The evidence from Latin America 1900,2000JOURNAL OF INTERNATIONAL DEVELOPMENT, Issue 8 2008Valpy FitzGerald Abstract Latin America has the most unequal income distribution of any region in the world, yet its historical causes are poorly understood. This paper reports the first exploratory attempt to compute income distributions for the five leading Latin American economies for the whole 20th century. The methodology produces estimates of earnings dispersion for four skill groups over 1900,2000, which can be used to generate the familiar Gini coefficients. Large fluctuations in dispersion over time are found: countering claims of stability since the colonial past in the recent economic institutions literature; but supporting the findings of economic historians and development economists. An estimation model (reflecting the impact of international trade, labour quality and macroeconomic imbalances) explains the data reasonably well, with all three sets of drivers proving significant, although the measured effects are different across the five countries. The paper concludes that the skill composition of the workforce not only underpins long run trends in income distribution; but also conditions inequality fluctuations in response to exogenous shocks. Copyright © 2008 John Wiley & Sons, Ltd. [source] The phantom of liberty?: economic growth and the vulnerability of small statesJOURNAL OF INTERNATIONAL DEVELOPMENT, Issue 4 2002Harvey W. Armstrong This paper is concerned with the relationship between economic growth in small states and their vulnerability. A critical argument in much of the literature on small states, particularly small island states, is that their growth performance is greatly constrained by their vulnerability to exogenous shocks because of their size. These shocks include economic, political and environmental factors, which together dampen the long-run growth rate of these economies. The paper makes use of a global small state data set and appropriate quantitative techniques to test the relationship between growth and vulnerability using the results of Briguglio's Vulnerability Index. The results highlight some of the conceptual shortcomings in the analytical literature on small states, particularly islands, as well as suggesting that the Vulnerability Index is mis-specified. Copyright © 2002 John Wiley & Sons, Ltd. [source] ECONOMIC FUNDAMENTALS IN LOCAL HOUSING MARKETS: EVIDENCE FROM U.S. METROPOLITAN REGIONSJOURNAL OF REGIONAL SCIENCE, Issue 3 2006Min Hwang ABSTRACT This paper investigates the effects of national and regional economic conditions on outcomes in the single-family housing market: housing prices, vacancies, and residential construction activity. Our three-equation model confirms the importance of changes in regional economic conditions, income, and employment on local housing markets. The results also provide the first detailed evidence on the importance of vacancies in the owner-occupied housing market on housing prices and supplier activities. The results also document the importance of variations in materials, labor and capital costs, and regulation in affecting new supply. Simulation exercises, using standard impulse response models, document the lags in market responses to exogenous shocks and the variations arising from differences in local parameters. The results also suggest the importance of local regulation in affecting the pattern of market responses to regional income shocks. [source] A Macroeconomic Model with Hysteresis in Foreign TradeMETROECONOMICA, Issue 4 2001Matthias Gocke The continuous non-linear macro-hysteresis loop is approximated by a rhombus shaped path which therefore shows a closer affinity to the genuine concept of hysteresis than conventional techniques via difference equations. This linearized model is applied to implement foreign trade hysteresis in a standard macroeconomic simultaneous equation model demonstrating the persisting consequences of only temporary exogenous shocks on national income, interest rate and the determination of the exchange rate. Since hysteresis in foreign trade is analysed in a macroeconomic framework, the feedback of hysteresis caused by exchange rate variations on the exchange rate itself can be illustrated. [source] Testing for Hysteresis in Unemployment in OECD Countries: New Evidence using Stationarity Panel Tests with Breaks,OXFORD BULLETIN OF ECONOMICS & STATISTICS, Issue 2 2006Mariam Camarero Abstract This paper tests hysteresis effects in unemployment using panel data for 19 Organization for Economic Co-operation and Development (OECD) countries covering the period 1956,2001. The tests exploit the cross-sectional variations of the series, and additionally, allow for a different number of endogenous breakpoints in the unemployment series. The critical values are simulated based on our specific panel sizes and time periods. The findings stress the importance of accounting for exogenous shocks in the series and support the natural-rate hypothesis of unemployment for the majority of the countries analysed. [source] Das Bündnis für Arbeit , Ein Weg aus der institutionellen Verflechtungsfalle?PERSPEKTIVEN DER WIRTSCHAFTSPOLITIK, Issue 4 2001Norbert Berthold Persistently high unemployment is still the most urgent problem confronting policymakers in many continental European countries. Policymakers were not idle but their activities often treated the symptoms rather than the real causes of the malaise in labor markets. A prerequisite for solving the unemployment problem is pushing for more competition in all markets, but in particular in the labor market. However, lack of competition allows insiders to capture rents, thus making them opposed to a rigorous competitive policy approach. It is often suggested that corporatism would be an alternative and possibly even superior solution, i.e., tripartist agreements involving unions, employer associations and the government. The paper argues that this is not the case. Rather, corporatism leads to even less competition and opens additional channels for externalizing the burden of adjustment to exogenous shocks on future generations and on taxpayers at large via the social security system. Globalization might in contrast help to overcome the problem because there are fewer rents to be captured by insiders, and more open goods and factor markets make labor demand more elastic, thus enforcing more moderate wage setting and more flexible wage structures. [source] The sex ratio and age-specific male mortality: Evidence for culling in uteroAMERICAN JOURNAL OF HUMAN BIOLOGY, Issue 6 2007Tim Bruckner While adverse conditions early in life reportedly predispose individuals to increased mortality in adulthood, controversy remains as to whether exogenous insults in utero, especially among male fetuses, induce similar cohort "damage" in populations. A rival theory postulates that exogenous stressors in gestation may "cull" frail male members of the cohort before birth, leaving a smaller but hardier cohort with improved survival. Recent tests, which use the sex ratio (i.e., the odds of a male live birth) as a gauge of insults inflicted upon cohorts in gestation, support the culled cohort argument. These tests, however, examined only aggregate male lifespan, thereby obscuring potential heterogeneity of both damaged and culled cohorts at specific ages over the life course. Using time-series methods, we explore associations between the sex ratio and cohort male mortality in infancy (before age 1), childhood (1,4 years), youth (5,19 years), adulthood (20,54 years), and old-age (55,79 years). We examine males born in Sweden (1751,1913), Denmark (1835,1913), and England and Wales (1841,1912). Our findings generally support culled cohorts in that male mortality across all ages fell below its expected value among cohorts in which the sex ratio dropped below its expected level. These findings suggest that exogenous shocks to gestation, as measured by a lower than expected sex ratio, may cull males in utero, leaving behind a less frail cohort over the entire life course. Am. J. Hum. Biol., 2007. © 2007 Wiley-Liss, Inc. [source] A Structural Model of Australia as a Small Open EconomyTHE AUSTRALIAN ECONOMIC REVIEW, Issue 1 2009Kristoffer P. Nimark This paper sets up and estimates a structural model of Australia as a small open economy using Bayesian techniques. Unlike other recent studies, the paper shows that a small micro-founded model can capture the open economy dimensions quite well. Specifically, the model attributes a substantial fraction of the volatility of domestic output and inflation to foreign disturbances, close to what is suggested by unrestricted VAR studies. The paper also investigates the effects of various exogenous shocks on the Australian economy. [source] | |||||||||||||