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#1466.

Charles Beach

A Useful Empirical Tool Box for Distributional Analysis

This paper offers a tool box of disaggregative measures of distributional change, including population shares, income shares, quantile mean incomes and relative mean incomes of different income groups. It highlights median-based measures along with quintiles and deciles. It also offers formulas for the measures’ standard errors and a common framework for statistical inference on these measures. Illustrating these tools with Census and LFS microdata, the paper…

#1465.

James G. MacKinnon

Fast cluster bootstrap methods for linear regression models

Efficient computational algorithms for bootstrapping linear regression models with clustered data are discussed. For OLS regression, a new algorithm is provided for the pairs cluster bootstrap, and two algorithms for the wild cluster bootstrap are compared. One of these is a new way to express an existing algorithm, and the other is new. For IV regression, an algorithm is provided for the wild restricted efficient cluster (WREC) bootstrap, which up to now has been computationally burdensome for large samples. These algorithms are remarkably fast because all computations are based on…

#1464.

Alex Stomper, Marie-Louise Vierø

Risk is Risk?

We analyze the relation between firms' exposure to exogenous business risk and their financing choices, based on a sample of firms for which we can measure such exposure. The results show that firms more exposed to exogenous risk use less debt financing. We also analyze the relation between the volatility of the firms' returns-on-assets, and their use of debt financing. The result is the opposite of that obtained for exogenous risk: we find a positive relationship between debt financing and the risk of firms. Overall, our results show that different types of risk are associated with…

#1463.

Saule.Baurzhan, Glenn Jenkins, alanisey

The Economic Performance of Hydropower Dams Supported by the World Bank Group, 1975–2015

This paper assesses the economic benefits of 57 World Bank Group-sponsored hydropower dam plant investments. Hydropower dams are among the main sources for producing electricity and the largest renewable source for power generation throughout the world. Hydropower dams are often a lower-cost option for power generation in Clean Energy Transition for addressing global climate change. Despite its conspicuous aspects, constructing hydropower dams has been…

#1462.

Glenn Jenkins, shahrzad.s1392

Estimation of the Potential Economic Welfare Gains to SACU from Trade Facilitation

Trade facilitation is important for the South African Customs Union (SACU) countries because the expansion of international trade is a priority to enhance their economic growth. Unfortunately, the high trade compliance costs facing importers and exporters operating in SACU are in conflict with this objective. This article aims to quantify the annual economic welfare gains that the member countries of SACU could realize from reforms that would reduce the…

#1461.

Allan Gregory, James McNeil, Gregor W. Smith

US Tax and Spending Shocks 1950-2019: SVAR Overidentification with External Instruments

An SVAR in US federal spending, federal revenue, and GDP is a standard setting for the study of the impact of fiscal shocks. An appealing feature of identifying a fiscal shock with an external instrument is that one can find the effects of that shock without fully identifying the SVAR. But we show that fully or almost fully instrumenting the SVAR allows one to overidentify the model by restricting the shock covariances to be zero. In this application the overidentifying restrictions are not rejected. Compared to the unrestricted case the restricted SVAR yields (a) greater precision in…

#1460.

Huw Lloyd-Ellis, Ardyn Nordstrom

Trade, poverty and food security: A survey of recent research and its implications for East Africa

We survey the latest research on the linkages between international trade, regional integration, poverty and food security in developing economies and draw out its implications for East Africa and future research. While there is now an extensive literature on the impacts of trade reform on poverty outcomes, research on the actual and potential effects of trade and regional integration on food security is much more limited. This reflects inconsistencies in the definition and measurement of food security, substantial data limitations, and the complexity of food systems themselves.…

#1459.

Antoine Noël, Amy H. Sun

Information Transparency of Firm Financing

We propose an information-based theory of capital structure to address the diversity of firm financing behavior and the variety of optimal financial contracts. Our model features nested information problems of adverse selection and agency cost. We prove the existence of a unique perfect Bayesian equilibrium with novel features: First, three types of optimal contracts arise endogenously, i.e., equity, transparent debt and opaque debt. Second, the unique equilibrium is either pooling on opaque debt or mixing with all three types of contracts. Third, partial capital structure irrelevance…

#1458.

Javier Hualde, Morten Ø. Nielsen

Truncated sum-of-squares estimation of fractional time series models with generalized power law trend

We consider truncated (or conditional) sum-of-squares estimation of a parametric fractional time series model with an additive deterministic structure. The latter consists of both a drift term and a generalized power law trend. The memory parameter of the stochastic component and the power parameter of the deterministic trend component are both considered unknown real numbers to be estimated and belonging to arbitrarily large compact sets. Thus, our model captures different forms of nonstationarity and noninvertibility as well as a very flexible…