business cycle analysis with a markov switching model this article explores the hamilton markov switching model through an analysis of the business cycles of eight developed market economies forecasting and specification tests suggest only marginal improvements over linear autoregressive models yet filtered and smoothed conditional probabilities indicate turning points in business cycles that closely correlate with turning points from traditional methods tests regarding the asymmetry of business cycles reject the null of symmetry for most countries

energy growth long term relationship under structural breaks evidence from canada 17 latin american economies and the usa abstract we study the relationship and the causal link between electric power consumption epc and gross domestic product gdp both per capita for 17 countries in latin america canada and the usa considering that many of these economies underwent important economic crises in the last three decades we therefore model the epc gdp relationship through a vec specification that allows for structural breaks along with a robust testing methodology of causal links based on the concepts of weak and super exogeneity rather than granger causality evidence favorable to the growth hypothesis epc gdp is found for eight countries while data of three countries support the conservation hypothesis gdp epc for three countries evidence is favorable to the neutrality hypothesis but should be considered with caution as for the remaining five countries the evidence is not conclusive

management buyouts evidence on taxes as a source of value this paper estimates the value of tax benefits in 76 management buyouts of public companies completed in the period 1980 to 1986 the median value of tax benefits estimated at the time the buyout company goes private has a lower bound of 21 and an upper bound of 143 of the premium paid to pre buyout shareholders the estimated value depends on the rate buyout debt is repaid and the tax rate applied to the interest deductions the paper also presents evidence on the actual taxes paid and debt repayment rates by these companies after the buyout the results in this paper suggest that tax benefits are an important source of the wealth gains in management buyouts

ten little treasures of game theory and ten intuitive contradictions this paper reports laboratory data for games that are played only once these games span the standard categories static and dynamic games with complete and incomplete information for each game the treasure is a treatment in which behavior conforms nicely to predictions of the nash equilibrium or relevant refinement in each case however a change in the payoff structure produces a large inconsistency between theoretical predictions and observed behavior these contradictions are generally consistent with simple intuition based on the interaction of payoff asymmetries and noisy introspection about others decisions

candidate reputations and the incumbency effect abstract a major shortcoming of the classical median voter model is that its central prediction convergence of platforms to the median voter s ideal is seldom observed one reason is that the classical model neglects the importance of voter expectations as a determinant of votes here we associate voters expectations about candidates with past as well as current candidate pronouncements and assume that incumbents whose actions are consistent with their reputations are perceived as less risky than challengers in equilibrium candidates choose distinct platforms typically neither adopts the median voter s ideal point either candidate may win depending on how well the incumbent s reputation reflects current voter tastes and how relatively risky the electorate perceives the challenger to be

merger failure and merger profitability the focus of the paper is the effect of merger proposals on the expected profitability of the bidder and the target we illustrate how an unsuccessful bid may increase the profitability of the target but reduce the profitability of the bidding firm relative to the profitability of the firms before the merger offer the profitability of a merger proposal is lowered due to learning from rejection we use our theoretical model to explain empirical work on this issue theoretical work on the profitability of takeovers has rarely focused on the problem of unsuccessful merger proposals or tender offers this is unfortunate because the decision that is generally available to a firm is not whether it should merge with another firm but rather whether it makes a merger proposal or tender offer in this paper we contend that failure to take account of this may bias estimates of the profitability of takeover attempts the focus of the paper is the effect of merger proposals on the expected profitability of the bidding firm and the target firm we describe a theoretical model to show how an unsuccessful bid may increase the profitability of the target but reduce the profitability of the bidding firm relative to the profitability of the firms before the merger offer this is independent of any effect of potential future takeovers on the value of the firm consequently the profitability of a merger proposal will be lower than in the absence of any effect conditional on rejection the assumption causing this result is that a target firm has private information about its profitability which is not available to the bidding firm assume that there is uncertainty about the profitability of the target and that the bidder offers x dollars for the target the target accepts if its profits from not being merged are less than x and is rejected otherwise hence the response of the target to a merger proposal reveals information on the competitiveness or profitability of the target we further assume that the two firms the bidder and target compete in a duopolistic market and play a cournot game in quantities if a merger does not occur therefore we are restricting attention to horizontal mergers in the equilibrium of our model bidding firms that suffer rejection of their we would like to thank peter cramton norman ireland alvin klevorick and james mirrlees and two anonymous referees for helpful comments this is true for e g salant switzer and reynolds 1983 davidson and denekere 1983 perry and porter 1985 and grossman and hart 1980

energy consumption and economic growth an empirical study of the electricity consumption in saudi arabia abstract this study employs the time varying parameters vector autoregressive tvp var model with stochastic volatility to examine inter temporal dynamics between saudi arabian real gdp oil non oil electricity consumption and co2 emissions levels for 1971 2010 the results show that the tvp var model is of use for examining the dynamics of the relationship between electricity consumption real gdp and co2 emissions moreover an analysis of time varying impulse responses of real gdp oil non oil electricity consumption and co2 emissions to structural shocks suggests that responses depend on the magnitude of structural volatilities of real gdp oil non oil electricity consumption and co2 emissions shocks indeed we find that the observed high volatility of electricity consumption in the1970 s and 1980 s is likely to have persistent negative effects on oil gdp levels and co2 emissions and positive effects on real non oil gdp levels the observed high and low volatility of oil gdp levels positively affects electricity consumption and co2 emissions however highly volatile non oil gdp levels are likely to affect electricity consumption and co2 emissions positively these findings imply that energy policies must consider high and low volatility regimes of real gdp electricity and co2 emissions shocks and time varying patterns of the relationships between real gdp electricity consumption and co2 emissions

the ethical challenge of management buy outs as a form of privatisation in central and eastern europe there has been a growing debate about the ethics of management buy outs mbos one possible criticism of the mbo is that it serves the interests of incumbent management at the expense of shareholders in this paper we develop the general arguments concerning the ethical aspects of the mbo to include other forms of buy out beyond going privates and apply the analysis to mbos as a mode of privatisation in central and eastern europe cee mbos are justified in this context postperestroika as a means of incentivising economic activity by giving managers an ownership stake in former state enterprises the actual mode of privatisation though raises issues of social justice and the criticism that mbos are at the expense of the broader social good the ethical problem for the cee is to balance the economic gains of a move to markets with the ethical risks to the agents of these markets

explaining patterns of candidate competition in congressional elections the low probability of defeating incumbent members of congress deters potentially strong rivals from challenging them yet almost all incumbents are challenged usually by opponents who lack previous experience in office and run underfinanced ineffectual campaigns but if strong challengers are deterred from challenging incumbents why are not weak challengers who have even less chance of unseating an incumbent the model developed in this paper indicates that there is a simple reason why weak candidates choose to run against incumbents they do so in order to maximize their probability of getting elected to congress together with the findings of previous researchers the results of our analyses of congressional primary data from 1980 through 1984 provide strong support for the major hypotheses derived from our model

political motivations and electoral competition equilibrium analysis and experimental evidence we study both theoretically and experimentally the complete set of nash equilibria of a classical one dimensional majority rule election game with two candidates who might be interested in power as well as in ideology but not necessarily in the same way apart from obtaining the well known median voter result and the two sided policy differentiation outcome the paper uncovers the existence of two new equilibrium configurations called one sided and probabilistic policy differentiation respectively our analysis shows how these equilibrium configurations depend on the relative interests in power resp ideology and the uncertainty about voters preferences the theoretical predictions are supported by the data collected from a series of laboratory experiments as we observe convergence to the nash equilibrium values at the aggregate as well as the individual levels in all treatments and the comparative statics effects across treatments are as predicted by the theory

rational expectations analysts forecasts of earnings and sources of value gains for takeover targets abstract value gains to target firm shareholders in takeover bids may be due to potential synergy between bidder and target and or potential target restructuring based on new information released by the bid since these two models have different implications for the anticipated earnings of the target as a stand alone entity analysts earnings forecast revisions afr for the target during the bid may provide evidence for the new information hypothesis for 326 uk targets of takeover bids during 1987 1993 we estimate analysts earnings forecast revisions using the institutional brokers estimate system ibes and relate them to bid premia paid to target shareholders analysts revise their forecasts significantly up on bid announcement for failed especially failed hostile bids the earnings forecast revision and bid premium are more positively correlated than for successful and friendly bids this is consistent with the rational expectations behaviour of target shareholders modelled by grossman and hart s j grossman o d hart bell journal of economics 11 1 1980 42 s j grossman o d hart journal of finance 36 1981 253

primaries and candidate polarization behavioral theory and experimental evidence do primary elections cause candidates to take extreme polarized positions standard equilibrium analysis predicts full convergence to the median voter s position with complete information but behavioral game theory predicts divergence when players are policy motivated and have out of equilibrium beliefs theoretically i show that primary elections can cause greater extremism or moderation depending on the beliefs candidates and voters have about their opponents in a controlled incentivized experiment i find that candidates diverge substantially and that primaries have little effect on average positions voters employ a strategy that weeds out candidates who are either too moderate or too extreme which enhances ideological purity without increasing divergence the analysis highlights the importance of behavioral assumptions in understanding the effects of electoral institutions

markov switching causality and the money output relationship the causal link between monetary variables and output is one of the most studied issues in macroeconomics one puzzle from this literature is that the results of causality tests appear to be sensitive with respect to the sample period that one considers as a way of overcoming this difficulty we propose a method for analysing granger causality which is based on a vector autoregressive model with time varying parameters we model parameter time variation so as to reflect changes in granger causality and assume that these changes are stochastic and governed by an unobservable markov chain when applied to us data our methodology allows us to reconcile previous puzzling differences in the outcome of conventional tests for money output causality

the causality relationship between energy consumption and gdp in g 11 countries revisited abstract this paper explores whether energy conservation policies can be implemented in countries with the same level of development that is is restraining energy consumption without compromising economic growth feasible in all industrialized countries a new granger non causality testing procedure developed by toda and yamamoto 1995 journal of econometrics 66 225 250 is applied to re investigate the relationship if any between energy consumption and income in 11 major industrialized countries the results clearly do not support the view that energy consumption and income are neutral with respect to each other except in the case of the united kingdom germany and sweden where a neutral relationship is found bi directional causality in the united states and uni directional running from energy consumption to gdp in canada belgium the netherlands and switzerland are found this indicates that energy conservation may hinder economic growth in the latter five countries further the causality relationship appears to be uni directional but reversed for france italy and japan which implies that in these three countries energy conservation may be viable without being detrimental to economic growth

asymmetric oil shocks and external balances of major oil exporting and importing countries this study investigates the effects of oil price shocks on three measures of oil exporters and oil importers external balances total trade balance oil trade balance and non oil trade balance we employ three second generation heterogeneous linear panel models and one recently developed non linear panel estimation technique that allows for cross sectional dependence with respect to 28 major oil exporting countries an increase in oil prices leads to an improved real oil trade balance although it is detrimental to non oil and total trade balances this finding might be due to the expenditure effect arising from increases in proceeds from oil exports a decrease in oil prices is found to be beneficial for both total and oil trade balances in these oil exporting countries forty major oil importers seem to be increasingly shielded from positive oil shocks over the 1970s and 1980s however they must worry about oil price declines a decline in oil prices has a negative impact on both total and real oil trade balances resulting from increased oil imports in emerging economies hence a decline in oil prices is beneficial to oil exporters due to the quantity effect outweighing the price effect while for oil importers a stable oil price is more desirable than a price decline these results are important to take into account if we are to gain a full understanding on the magnitude of the trade and macroeconomic effects of oil price changes and what the policy responses should be

a literature survey on energy growth nexus abstract this paper provides a survey of the recent progress in the literature of energy consumption economic growth and electricity consumption economic growth causality nexus the survey highlights that most empirical studies focus on either testing the role of energy electricity in stimulating economic growth or examining the direction of causality between these two variables although the positive role of energy on growth has become a stylized fact there are some methodological reservations about the results from these empirical studies a general observation from these studies is that the literature produced conflicting results and there is no consensus neither on the existence nor on the direction of causality between energy consumption electricity consumption and economic growth as a policy implication to avoid from conflicting and unreliable results the authors may use the autoregressive distributed lags bounds test two regime threshold co integration models panel data approach and multivariate models including new variables such as real gross fixed capital formation labor force carbon dioxide emissions population exchange rates interest rates etc thus the authors should focus more on the new approaches and perspectives rather than by employing usual methods based on a set of common variables for different countries and different intervals of time

does acquisition of a cooperative generate profits for the buyer the dairyworld case this article examines the takeover of a cooperative dairyworld by an investor owned firm saputo that was not previously present in the industry determines if this takeover generates greater returns for the investor owned firms iof and on the basis of this evidence makes some inferences about the behavior and performance of cooperatives and iofs the empirical evidence strongly supports the conclusion that saputo s stock price rose with its takeover announcement this outcome is consistent with a number of explanations including that saputo was unaffected by hubris a factor often suggested as the reason that many firms overbid when they undertake acquisitions dairyworld s poor liquidity and capital shortage problems as well as a limited number of suitors may have weakened its bargaining position in its dealings with saputo the observed increase in saputo s stock price is also consistent with the possibility that by taking over a cooperative saputo was able to decrease competition and thus increase its profits a fruitful area for future research would be a rigorous theoretical and empirical determination of the impact that these various factors have on acquisition profitability such analysis is required before inferences about the behavior and performance of cooperatives and iofs can be fully answered

energy consumption and gdp causality relationship in g 7 countries and emerging markets abstract the causality relationship between energy consumption and income is a well studied topic in energy economics this paper studies the time series properties of energy consumption and gdp and reexamines the causality relationship between the two series in the top 10 emerging markets excluding china due to lack of data and g 7 countries we discover bi directional causality in argentina causality running from gdp to energy consumption in italy and korea and from energy consumption to gdp in turkey france germany and japan hence energy conservation may harm economic growth in the last four countries

markup pricing in mergers and acquisitions this paper studies the relation between the premiums in takeover bids involving exchange listed target firms from 1975 91 and the pre announcement stock price runups the evidence shows that the pre bid runup and the postannouncement increase in the target s stock price the markup are generally uncorrelated with little substitution between the runup and the markup the runup is an added cost to the bidder this finding has important implications for assessing the costs of insider trading it also raises interesting questions about the role of information from public capital markets in private takeover negotiations

corporate combinations and common stock returns the case of joint ventures the gain to stockholders from mergers is well documented however there is little evidence as to whether the source of the gain is due to synergy or management displacement merger is just one of an almost limitless variety of ways in which firms combine resources to accomplish some objective a joint venture is another in addition to being of interest as an independent phenomenon because the original managements of the parent firms remain intact under a joint venture investigation of wealth gains from joint ventures provides an opportunity to isolate the management displacement hypothesis from the synergy hypothesis as the source of gains in corporate combinations our results are 1 there are significant wealth gains from joint ventures 2 the smaller partner earns a larger excess rate of return while the dollar gains are more equally divided and 3 the gains scaled by resources committed yield premiums similar to those in mergers we are inclined to interpret our results as supportive of the synergy hypothesis as the source of gain from corporate combinations this paper is an empirical investigation of the common stock returns of u s companies that enter into joint ventures with other u s companies we consider joint ventures in the context of what is by now a burgeoning literature examining the security returns of companies involved in intercorporate mergers and tender offers 1 in this context our objective is to provide evidence as to the source of the well documented gains to stockholders of firms involved in mergers and tender offers in addition joint ventures are an interesting economic phenomenon in their own right they are undertaken by many of the largest u s companies involve billions of dollars in capital expenditures annually and are subject to considerable scrutiny in the popular press in this regard our analysis provides data on what is as yet a relatively unexplored area of economic activity 2 a corporate merger represents the joining together of all the resources of two companies under a single management to accomplish some set of objectives empirical studies have found that mergers generally result in significant increases in the total market values of the merging firms with the stockholders of the

valence politics and equilibrium in spatial election models spatial models of two party or two candidatecompetition almost never have pure strategy nashequilibria when the issue space has more than onedimension this paper shows that the introduction ofvalence issues can create conditions where equilibriaexist even in a multidimensional setting we derivesufficient conditions for the existence of equilibria and characterize the spatial locations of twocompeting parties or candidates when such equilibriaexist the party with the advantage on the valencedimension will generally take a moderate position onthe positional issues we consider the implications ofthese results for public perceptions of the parties incumbency advantages and realigning elections

candidate quality in a downsian model with a continuous policy space abstract this paper characterizes a unique mixed strategy nash equilibrium in a one dimensional downsian model of two candidate elections with a continuous policy space where candidates are office motivated and one candidate enjoys a non policy advantage over the other candidate we show that if voters utility functions are concave and the median voter ideal point is drawn from a unimodal distribution there is a mixed strategy nash equilibrium where the advantaged candidate chooses the ideal point of the expected median voter with probability one and the disadvantaged candidate uses a mixed strategy that is symmetric around it existence conditions require the variance of the distribution to be small enough relative to the size of the advantage

economic growth co2 emissions and energy consumption what causes what and where abstract this paper applies panel vector autoregression pvar along with a system generalized method of moment system gmm to examine the dynamic causal relationship between economic growth carbon emissions and energy consumption for 116 countries over the period 1990 2014 using multivariate model the empirical results from this study have established key relationships which have important policy implications first at the global and regional levels economic growth does not cause energy consumption second with the exception of the global and caribbean latin america economic growth has no causal impact on carbon emissions however economic growth has a negative impact on carbon emissions at the global level and the caribbean latin america third carbon emissions positively cause economic growth fourth energy consumption positively causes economic growth in sub saharan africa while it negatively causes economic growth at the global middle east and north africa mena asia pacific and caribbean latin america fifth energy consumption positively causes carbon emissions in mena but causes carbon emissions negatively in sub saharan africa and caribbean latin america lastly with the exception of mena and the global sample carbon emissions do not cause energy consumption the impulse response function shows evidence of environmental kuznets curve at the global scale and sub saharan africa the policy implications of this paper are discussed

strategic interaction and the statistical analysis of international conflict although strategic interaction is at the heart of most international relations theory it has largely been missing from much empirical analysis in the field typical applications of logit and probit to theories of international conflict generally do not capture the structure of the strategic interdependence implied by those theories i demonstrate how to derive statistical discrete choice models of international conflict that directly incorporate the theorized strategic interaction i show this for a simple crisis interaction model and then use monte carlo analysis to show that logit provides estimates with incorrect substantive interpretations as well as fitted values that can be far from the true values finally i reanalyze a well known game theoretic model of war bueno de mesquita and lalman s 1992 international interaction game my results indicate that there is at best modest empirical support for their model

toehold acquisitions shareholder wealth and the market for corporate control this study examines the valuation consequences of control related outcomes that fol low toehold acquisitions we find evidence that toehold acquisitions facilitate valueenhancing control transfers the types of control transfers not only include takeovers but also internal mechanisms such as proxy fights and management turnovers we find that toehold targets experiencing such control transfers exhibit an abnormal increase in share value while those not experiencing such control transfers exhibit an abnormal de crease in share value the results suggest that the positive valuation effect associated with toehold acquisitions reflects the expected benefits of subsequent control transfers

exploring the relationship between energy use and economic growth with bivariate models new evidence from g 7 countries abstract there is a rapidly growing literature on the interaction between energy use and economic development with many analysts drawing policy conclusions on the basis of granger causality tests that involve only an energy and an economic variable this paper attempts to demonstrate empirically that such studies although useful for certain applications may be of limited use for policy purposes after outlining theoretical and methodological issues associated with such approaches i apply bivariate energy economy causality tests for canada france germany italy japan the united kingdom and the united states using aggregate and sectoral data and three different modern econometric methods the results which are often contradictory or economically implausible illustrate explicitly that one should be cautious when drawing policy implications with the aid of bivariate causality tests on small samples i therefore underline the importance of utilizing as large sample sizes as possible and using multivariate models which are closer to economic theory accommodate several mechanisms and causality channels and provide a better representation of real world interactions between energy use and economic growth

electoral competition with third party entry in the lab abstract electoral competition between two vote share maximizing candidates in the context of the unidimensional spatial model leads to platform convergence both candidates end up proposing the ideal policy of the median voter downs 1957 palfrey 1984 famously argued that if third candidate entry is expected after the two main candidates choose their platforms the unique equilibrium is such that the two main candidates locate substantially far from each other by conducting a laboratory experiment we put this popular idea to test for the first time we allow entry to take place with four different probabilities and find that indeed the degree of polarization of the two main candidates platforms increases as third candidate entry becomes more likely to occur providing strong evidence in support of palfrey 1984 s formal results and underlying intuition

electrical energy usage over the business cycle causality from macroeconomic conditions to electrical usage overall and in the residential commercial industrial and other sectors is examined the paper shows that changes in macroeconomic conditions cause significant changes in electrical usage in the commercial and industrial sectors and overall in addition the paper shows that causality occurs at business cycle frequencies and that there are asymmetries over the business cycle an implication is that forecasts used to assess the probability of exceeding capacity constraints should incorporate forecasts of macroeconomic conditions asymmetries over the cycle and how the commercial and industrial sectors will respond to such changes

the market for interfirm asset sales partial sell offs and total liquidations abstract we investigate the valuation consequences of voluntary proposals to sell part or all of a corporation s assets for partial sell offs successful sellers and buyers reap statistically significant abnormal returns of 1 66 and 0 83 respectively unsuccessful sellers realize gains at the bid announcement of 1 41 that are lost at the offer termination in contrast proposals to liquidate the firm are associated with significant average abnormal returns of 12 24 we interpret these findings as evidence that asset sales are associated with the movement of resources to higher valued uses rather than as evidence of market mispricing before the divestiture announcements

the energy growth nexus in thailand does trade openness boost up energy consumption the nexus between trade openness and energy demand is hot topic of discussion among academicians and researchers and numerous studies are available in existing literature while investigating the nexus between trade openness and energy demand this paper explores the relationship between energy consumption trade openness and economic growth in case of thailand in doing so we have applied bayer and hanck cointegration approach to test whether the long run relationship exists between the variables our results confirm the presence of cointegration between the variables energy consumption stimulates economic growth trade openness adds in economic growth the causality analysis reveals that energy consumption granger causes economic growth and in resulting economic growth granger causes energy consumption trade openness and energy consumption are interdependent i e trade openness granger causes energy consumption and in return energy consumption granger causes trade openness this paper openness up new directions for policy making authorities in thailand to design a comprehensive energy and trade policies to sustain economic growth for long run

the relationship between energy and gnp further results this paper reexamines the casuality between gnp and energy consumption by using updated us data for the period 1947 1979 as a secondary contribution we investigate the causal relationship between energy consumption and employment applying sims technique we find no causal relationship between gnp and energy consumption we find further that there is a slight unidirectional flow running from employment to energy consumption economic interpretations of the empirical results are also presented

the rationale behind interfirm tender offers information or synergy this paper investigates the rationale behind interlirm tender offers by examining the returns realized by the stockholders of lirms that were the targets of unsuccessful tender offers and lirms that have made unsuccessful offers our results suggest that the permanent positive revaluation of the unsuccessful target shares documented by dodd and ruback 1977 and bradley 1980 is due primarily to the emergence of and or the anticipation of another bid that would ultimately result in the transfer of control of the target resources we also find that the rejection of a tender offer has differential effects on the share prices of the unsuccessful bidding firms depending upon whether the tender offer process results in a change in the control of target resources on the basis of these results we conclude that acquisitions via tender offers are attempts by bidding firms to exploit potential synergies not simply superior information regarding the true value of the target resources

the effect of poison pill securities on shareholder wealth abstract this paper examines empirical evidence about the effect of poison pill takeover defenses on shareholder wealth i find evidence that announcements of the most restrictive forms of the pill defense are associated with stock price declines also the most restrictive forms of the pill defense are associated with abnormally high rates of defeat of unsolicited tender offers although this evidence is consistent with managerial entrenchment the evidence implies that on average poison pill defenses have seemingly had only a modest effect on firm valuation

the pricing effects of interfirm cash tender offers the tools provided by option pricing theory are used to examine the wealth effects of interfirm cash tender offers the analysis provides evidence consistent with the synergy theory of corporate takeovers and has implications concerning the economic effects of regulations of cash tender offers the analysis further suggests that the market prices information uncertainty in a manner not captured by the standard capital asset pricing model the study introduces a technique for unbundling the prices of a primary asset and a contingent claim when only the prices of the combination are observed academics the business community and government regulators have focused considerable attention on corporate takeovers in this paper we extend the literature on takeovers in two ways first we utilize the tools provided by optionpricing theory to examine the wealth effects of interfirm cash tender offers this analysis provides some new evidence on the possible motivations for corporate takeovers second we examine the pricing of a target firm s common stock following an interfirm cash tender offer this examination suggests that the market prices information uncertainty in a manner not captured by the standard capital asset pricing model capm in addition to providing evidence on tender offers and asset pricing the study also introduces a technique for unbundling the prices of a primary asset and a contingent claim when only the prices of the combination are observed this technique has the potential to be used in other applications previous researchers have documented substantial wealth gains for target

a multivariate cointegration analysis of the role of energy in the us macroeconomy abstract this paper extends my previous analysis of the causal relationship of gdp and energy use in the usa in the post war period a majority of the relevant variables are integrated justifying a cointegration analysis the results show that cointegration does occur and that energy input cannot be excluded from the cointegration space the results are plausible in terms of macroeconomic dynamics the results are similar to my previous granger causality results and contradict claims in the literature based on bivariate models that there is no cointegration between energy and output

causal relationship between energy consumption and gdp growth revisited a dynamic panel data approach abstract this paper uses the panel data of energy consumption and gdp for 82 countries from 1972 to 2002 based on the income levels defined by the world bank the data are divided into four categories low income group lower middle income group upper middle income group and high income group we employ the gmm sys approach for the estimation of the panel var model in each of the four groups afterwards the causal relationship between energy consumption and economic growth is tested and ascertained we discover a in the low income group there exists no causal relationship between energy consumption and economic growth b in the middle income groups lower and upper middle income groups economic growth leads energy consumption positively c in the high income group countries economic growth leads energy consumption negatively after further in depth analysis of energy related data the results indicate that in the high income group there is a great environmental improvement as a result of more efficient energy use and reduction in the release of co2 however in the upper middle income group countries after the energy crisis the energy efficiency declines and the release of co2 rises since there is no evidence indicating that energy consumption leads economic growth in any of the four income groups a stronger energy conservation policy should be pursued in all countries

corporate takeover bids methods of payment and bidding firms stock returns this study explores the role of the method of payment in explaining common stock returns of bidding firms at the announcement of takeover bids the results reveal significant differences in the abnormal returns between common stock exchanges and cash offers the results are independent of the type of takeover bid i e merger or tender offer and of bid outcomes these findings supported by analysis of nonconvertible bonds are attributed mainly to signalling effects and imply that the inconclusive evidence of earlier studies on takeovers may be due to their failure to control for the method of payment recent studies on corporate takeovers provide inconclusive results on the valuation effects of acquisitions on the common stock of bidding firms 1 substantial differences are reported between the studies that analyze acquisitions initiated as tender offers and those that confine their samples to merger proposals the existence of mixed empirical findings for the bidding firms makes it difficult to interpret existing evidence and to draw conclusions about the managers acquisition motivations nevertheless the reason for the substantial difference between empirical findings on mergers and tender offers still remains an unresolved issue it is observed however that mergers are usually common stock exchange offers whereas tender offers are usually cash offers given that different methods of financing a project have different signalling implications myers and majluf 39 the differential stock returns of bidders in mergers and tender offers may be due to the method of acquisition financing

electoral rules strategic entry and polarization abstract how does electoral rule disproportionality affect the structure of the party system i e the number and the policy platforms of the competing parties by studying a model where both party entry and platform choice are endogenous we are able to provide a unified theory an increasing electoral rule disproportionality exhibits a a first order negative effect on platform polarization b a second order negative effect on the number of parties as polarization decreases centrist parties are squeezed between other contenders and prefer not to enter and c an additional third order negative effect on polarization via the reduction of the number of parties we then conduct a laboratory experiment and strongly confirm the theoretical predictions of the model

the social construction of market value institutionalization and learning perspectives on stock market reactions this study advances a social constructionist view of financial market behavior the paper suggests that the market s reaction to particular corporate practices such as stock repurchase plans are not as financial economists contend simply a function of the inherent efficiency of such practices rather stock market reactions are also influenced by the prevailing institutional logic and the degree of institutionalization of the practice the theory first predicts that the emergence of the agency perspective on corporate governance in the mid 1980s represented a powerful new institutional logic that would lead the market to reverse its prior aggregate reaction to stock repurchase plans in the united states the paper then considers the potential for institutional decoupling of repurchase plans and develops competing hypotheses about how the market value of these policies might have changed as more firms formally adopted but did not implement the plans over time in contrast to a financial economic pers

a reexamination of analysts earnings forecasts for takeover targets abstract we examine analysts earnings forecasts for a sample of takeover targets and document that the announcement month forecasts are systematically revised upward supporting the hypothesis that a takeover announcement conveys favorable information about the target firm in addition we find that abnormal forecast revisions of future stand alone earnings are significantly greater for targets with low tobin s q ratios relative to targets with high q ratios lending further support to the information hypothesis finally we provide evidence that managerial resistance to the takeover does not destroy value our results are in direct contrast to pound 1988

this is what happened to the oil price macroeconomy relationship abstract many of the quarterly oil price increases observed since 1985 are corrections to even bigger oil price decreases the previous quarter when one looks at the net increase in oil prices over the year recent data are consistent with the historical correlation between oil shocks and recessions

a note on unsuccessful tender offers and stockholder returns recent research shows that unsuccessful tender offers may affect target share returns for two years past the offer s announcement this note examines target returns in the interim between the announcement and one year after the offer s withdrawal analyzing a recent sample of targets that did not get another bid in the year following a failed tender offer this study reaches two conclusions first all of an offer s premium disappears by the time failure becomes public second excess returns are zero in the post failure year an explanation that is based on the causes of the tender offers failures is presented previous research has shown that shareholders of firms acquired by tender offers realize significantly positive excess returns see bradley 3 bradley desai and kim 4 and dodd and ruback 6 early studies such as bradley 3 and dodd and ruback 6 indicated that failed offers raise share values permanently recently bradley desai and kim 4 challenged this view with a study of returns to firms that did not receive offers for a long time following a cancelled bid they discovered that though a withdrawn offer may favorably affect a target s share value for months after the offer the initial price increase disappears within two years of the announcement similar developments such as those of asquith 1 dodd 5 langetieg 8 and mandelker 9 marked the research on mergers this note extends the work of bradley desai and kim hereafter bdk by analyzing returns to target shares in the time between the date of offer and one year after the offer s failure and public withdrawal the tests focus on two key but not fully explored phases of a failed offer the time from announcement to withdrawal and the first year after that event the sample of failed offers is quite special because it contains only those whose targets received no other bid in the year after the offer s withdrawal as bdk emphasize and as asquith 1 shows in his study of mergers only such rare cases provide the opportunity for a precise evaluation of returns to targets of failing acquisition efforts

a model of candidate location when one candidate has a valence advantage that under some fairly weak assumptions for all levels of the valence advantage the advantaged candidate chooses a more moderate position than the disadvantaged candidate empirical studies of congressional elections by fiorina 1973 and ansolabehere snyder and stewart 2001 support this result d owns 1957 seminal work presents a puzzle for scholars of u s elections why do candidates not converge to the median voter one of the best explanations is that the candidates themselves have ideological preferences as calvert 1985 and wittman 1977 1983 have shown when candidates have such preferences and they are sufficiently uncertain about the preferences of the median voter then they do not converge although they may moderate their positions from their ideal point the basic version of the calvert wittman model however does not account for another basic fact of u s elections often one of the candidates has an advantage due to a nonpolicy factor such as incumbency greater campaign funds better name recognition superior charisma superior intelligence and so on stokes has dubbed such factors valence factors and he has noted their importance in u s elections stokes 1963 1992 1 in this article i extend the basic calvert wittman model by giving one candidate a valence advantage over the other i show that if the valence characteristics of the candidates are approximately equal then when a candidate s valence advantage increases this causes her to move toward the

policy divergence in multicandidate probabilistic spatial voting existing models of multicandidate spatial competition with probabilistic voting typically predict a high degree of policy convergence yet in actual elections candidates advocate quite divergent sets of policies what accounts for this disparity between theory and empirical observation i introduce two variations on the basic probabilistic vote model which may account for candidate policy divergence 1 a model which incorporates candidate specific variables so that candidates may enjoy nonpolicy related electoral advantages or disadvantages 2 a model which allows nonzero correlations between the random terms associated with voters candidate utilities thereby capturing situations where voters view two or more candidates as similar on nonpolicy grounds i report candidate equilibrium analyses for each model which show far greater policy divergence than exists under the standard probabilistic vote model i then analyze the strategic logic which underlies these results

dynamics between energy output openness and financial development in sub saharan african countries abstractthis study aims to establish the connection between energy use economic output financial development and trade based on the panel data of 15 sub saharan african ssa countries during the period from 1983 to 2010 one full main panel and two subpanels were created by incorporating low income and middle income countries the panel cointegration test results indicate a long run relationship between the variables the mean group mg estimators show that energy consumption financial development capital and international trade have significant impacts on economic output in the case of middle income countries the granger causality analysis reveals that rising economic output leads to higher energy consumption but this is not true vice versa this means that energy conservation measures are unlikely to have adverse impacts upon economic output on the other hand there is a complementary relationship between financial development and energy consumption in this case energy conservation measures

do tender offers create value new methods and evidence abstract conventional techniques of estimating takeover value improvements measure only a fraction of the total gain and include revelation about bidder stand alone value to address these biases we develop the probability scaling method which rescales announcement date returns and the intervention method which uses returns at intervening events perceived value improvements are larger than traditional methods indicate we cannot reject the hypothesis that bidders on average pay fair prices combined bidder target stock returns are higher for hostile offers lower for equity offers and lower for diversifying offers these effects reflect revelation about bidder stand alone value not differences in gains from combination

management buyout proposals and inside information this paper explores stock price behavior surrounding withdrawn buyout proposals to determine whether managers proposal announcements reveal any information which is unrelated to the efficiency gains associated with completed buyouts on average firms whose managers withdraw buyout proposals do not sustain significantly positive stock price effects unless they receive subsequent acquisition bids in addition managers of firms with completed buyouts are no more likely to have access to inside information than managers who withdrew proposals i interpret this evidence as inconsistent with the notion that inside information commonly motivates management buyout proposals management buyouts occur when a group of investors including some incumbent managers buy all of a firm s outstanding common stock with the intent of taking it private critics of management buyouts argue that managers access to inside information allows them to time their proposals to expropriate the wealth of outside shareholders these opponents generally cite anecdotal evidence that favorable inside information motivates management buyout proposals 1 managers themselves suggest that their proposals are motivated at least in part by their information advantage 2 however assistant professor of finance texas a m university this paper is based on my univer

energy expenditure economic growth and the minimum eroi of society we estimate energy expenditure for the us and world economies from 1850 to 2012 periods of high energy expenditure relative to gdp from 1850 to 1945 or spikes 1973 74 and 1978 79 are associated with low economic growth rates and periods of low or falling energy expenditure are associated with high and rising economic growth rates e g 1945 1973 over the period 1960 2010 for which we have continuous year to year data for control variables capital formation population and unemployment rate we estimate that statistically in order to enjoy positive growth the us economy cannot afford to spend more than 11 of its gdp on energy given the current energy intensity of the us economy this translates in a minimum societal eroi of approximately 11 1 or a maximum tolerable average price of energy of twice the current level granger tests consistently reveal a one way causality running from the level of energy expenditure as a fraction of gdp to economic growth in the us between 1960 and 2010 a coherent economic policy should be founded on improving net energy efficiency this would yield a double dividend increased societal eroi through decreased energy intensity of capital investment and decreased sensitivity to energy price volatility

engineering and econometric interpretations of energy capital complementarity comment in a recent paper in this review ernst berndt and david wood provide a useful clarification of gross and net complementarity pointing out that energy and capital can be gross substitutes in a production subfunction and yet net complements in the aggregate production function using this theoretical proposition they attempt to reconcile the econometric findings of energy capital complementarity with other studies finding energy capital substitutability their reconciliation rests on the finding that those studies finding energy capital substitutability considered only capital k labor l and energy e by omitting materials m one obtains only a gross elasticity the net elasticity which allows for the additional substitution between the kle aggregate and m can indicate energy capital complementarity in fact klem studies generally find energy and capital complementarity the purpose of this comment is to question whether the net and the gross elasticity distinction provides such a reconciliation among the econometric results i agree that this explanation tends to reduce the disparity between the original berndt wood elasticity estimate and griffin gregory yet three independent sources of evidence suggest that the omission of m is not a sufficient explanation and probably not even a major explanation for the disparity of findings first the difference between the gross elasticity in a kle submodel and the net elasticity in a klem model depends critically on the elasticity of substitution between m and kle let us adopt the berndt wood notation and consider their mathematical example which demonstrates the possibility of gross capital energy substitutability as in the griffin gregory study with net capital energy complementarity

the effect of corporate divestments on shareholder wealth the uk experience this is the first known study of stockmarket reaction to u k sell off announcements earlier u s studies have found positive market reaction to sell off announcements various of these have aimed to relate the magnitude of marketreaction to factors such as price declaration completion of agreement and financial strength of divestor this study also explores the impact of the above factors and their inter relationships typical event study methodology is used in estimating the size of the unexpected market reaction the so called abnormal return separate analysis of sub samples is undertaken in this study to help enhance our understanding of market response to corporate sell offs examples of such sub samples are price no price groups and completion intention groups this analysis provides explanations for some of the seemingly contradictory u s study results a measure of financial distress namely the z score is introduced to explore the bankruptcy avoidance hypothesis we find a degree of financial distress prior to divestment to be inversely related to abnormal return a result consistent with market approval for such distress sales relative size of divested part to parent is also shown to be positively related to abnormal returns price declaration seems to be vitally important in generating positive market response announcements of completed sell offs along with the price is even more welcome by the market announcement of completed sell offs with undisclosed price seems to induce market uncertainty and thus negative abnormal returns announcement of intended sell offs with price disclosure as well as our overall sample results both provide statistically significant positive shareholder gains this latter finding is in harmony with u s studies

economic growth and energy consumption revisited evidence from linear and nonlinear granger causality the relationship between energy consumption and economic growth is considered as an imperative issue in energy economics previous studies have ignored the nonlinear behavior which could be caused by structural breaks in this study both linear and nonlinear granger causality tests are applied to examine the causal relationship between energy consumption and economic growth for a sample of asian newly industrialized countries as well as the u s this study finds evidence supporting a neutrality hypothesis for the united states thailand and south korea however empirical evidence on philippines and singapore reveals a unidirectional causality running from economic growth to energy consumption while energy consumption may have affected economic growth for taiwan hong kong malaysia and indonesia policy implications are also discussed

an experimental study of jury decision rules we present experimental results on groups facing a decision problem analogous to that faced by a jury we consider three treatment variables group size three or six number of votes needed for conviction majority or unanimity and pre vote deliberation we find evidence of strategic voting under the unanimity rule a large fraction of our subjects vote for a decision analogous to conviction even when their private information indicates a state analogous to innocence this is roughly consistent with the game theoretic predictions of feddersen and pesendorfer although individual behavior is explained well by the game theoretic model there are discrepancies at the level of the group decision contrary to feddersen and pesendorfer in our experiments there are fewer outcomes analogous to incorrect convictions under unanimity rule than under majority rule in the case of no deliberation we simultaneously account for the individual and group data using quantal response equilibrium

the effect of candidate quality on electoral equilibrium an experimental study when two candidates of different quality compete in a one dimensional policy space the equilibrium outcomes are asymmetric and do not correspond to the median there are three main effects first the better candidate adopts more centrist policies than the worse candidate second the equilibrium is statistical in the sense that it predicts a probability distribution of outcomes rather than a single degenerate outcome third the equilibrium varies systematically with the level of uncertainty about the location of the median voter we test these three predictions using laboratory experiments and find strong support for all three we also observe some biases and show that they can be explained by quantal response equilibrium

corporate acquisitions a theory of special cases a review of event studies applied to acquisitions mergers occur when an acquiring firm and a target firm s agree to combine under legal procedures established in the states in which the merger participants are incorporated a tender offer is an offer to purchase a proportion of the outstanding shares of the target firm at specified terms on or before a specified date those shareholders not tendering their shares retain an ownership interest in the firm the term acquisition is used in a generic sense to refer to any takeover economists especially those specializing in industrial organization have theories to explain the motivations for horizontal acquisitions and to a lesser extent vertical acquisitions however conglomerate acquisitions appear to present problems to some economists and governmental organizations the literature on mergers is replete with studies which evaluate the impact of acquisitions on the participants the original studies consider the impact of mergers on the risk of the resulting firm and on its profitability in investigating these isssues the pre and post acquisition behaviour of both bidders and targets is examined and there is an attempt to isolate and measure the impact of the acquisition from other events that affect the firm performance measures are based either on accounting data or on stock price reactions to the acquisition to identify acquisition specific influences comparisons of the merger sample to a non merger control group are used these studies are seriously compromised for the following reasons accounting data do not provide information on the expected long run impacts of the acquisition on the participants there are serious problems in defining a comparable control group and the comparison group does not provide information on how the specific firms would have performed without the acquisition this review focuses on those studies which utilize stock market data and measure the performance of merger participants over the acquisition period as

bank m a a market power story this paper analyzes capital market reactions to international bank m a we investigate the combined stock return patterns of targets bidders and their peers upon takeover announcement and closing or withdrawal we distinguish five common m a hypotheses and relate characteristic and mutually exclusive abnormal stock return patterns to each hypothesis the findings show that there are more investors who believe in gains through the exploitation of market power by the post merger entity than investors who believe in any of the other motives tested in the paper in a multinomial logistic model we show that patterns related to market power significantly concur with large relative target size intra industry mergers and increasing market concentration suggesting a substantial lessening of competition through m a

merger negotiations with stock market feedback do preoffer target stock price runups increase bidder takeover costs we present model based tests of this issue assuming runups are caused by signals that inform investors about potential takeover synergies rational deal anticipation implies a relation between target runups and markups offer value minus runup that is greater than minus one for one and inherently nonlinear if merger negotiations force bidders to raise the offer with the runup a costly feedback loop where bidders pay twice for anticipated target synergies markups become strictly increasing in runups large sample tests support rational deal anticipation in runups while rejecting the costly feedback loop

the causal link between energy and output growth evidence from markov switching granger causality abstract in this paper we empirically investigate the causal link between energy consumption and economic growth employing a markov switching granger causality analysis we carry out our investigation using annual u s real gdp total final energy consumption and total primary energy consumption data which cover the period between 1968 and 2010 we find that there are significant changes in the causal relation between energy consumption and economic growth over the sample period under investigation our results show that total final energy consumption and total primary energy consumption have significant predictive content for real economic activity in the u s economy furthermore the causality running from energy consumption to output growth seems to be strongly apparent particularly during the periods of economic downturn and energy crisis we also document that output growth has predictive power in explaining total energy consumption furthermore the power of output growth in predicting total energy consumption is found to diminish after the mid of 1980s

on the nature of equilibria in a downsian model with candidate valence abstract i analyze mixed strategy equilibria in a downsian model with two office motivated candidates in which one candidate is endowed with a sufficiently large valence advantage that a voter might prefer this candidate even if the voter strictly prefers the other candidate s policies there is a discrete one dimensional policy space and the preferences of the median voter are uncertain i show that there is a range of moderate policies with no gaps that are optimal for the advantaged candidate there is also a range of liberal policies with no gaps and a corresponding range of conservative policies with no gaps that are optimal actions for the disadvantaged candidate the upper and lower bounds on these ranges of policies vary in predictable ways with the size of the advantaged candidate s advantage

event study methodologies and the size effect abstract this study of 862 press recommendations demonstrates that the size effect can distort longer term performance measures and hence event studies relative to similar sized companies post publication performance is neutral however market adjustments the capm and market model with equally or capitalization weighted indexes all produce biased results event studies are most exposed to such bias when the measurement interval is long event securities differ systematically in size or weighting from the index constituents the size effect is large and or volatile and when capm type methodologies are used these distortions are avoided by explicitly controlling for size

energy income causality in oecd countries revisited the key role of capital stock abstract this paper applies a recent advance in panel analysis to estimate the panel cointegration and panel vector error correction models for a set of 22 oecd countries using annual data covering the period 1960 2001 we investigate the relationship between energy consumption and income using an aggregate production function and controlling for the capital stock as well as by exploring the dynamic directions of the causality among these three variables we firstly obtain solid and convincing evidence of a fairly strong long run equilibrium relationship among them secondly it is found that the capital stock is much more productive than energy consumption third it is observed that neglecting the impact of the capital stock on income tends to overestimate the effect of energy consumption finally the panel causality test shows bi directional causal linkages exist among energy consumption the capital stock and economic growth overall the findings reveal that the capital stock plays a critical role in realizing the dynamic relationship between energy and income

price movements as indicators of tender offer success this paper examines movements in the prices of target stocks as predictors of the ultimate success or failure of tender offers an empirical investigation of 100 cash tender offers during the years 1976 to 1981 leads to the conclusion that with few exceptions market prices are well calibrated i e the current target price during the offer period measures the expected discounted stock price at the conclusion date the market s probability predictions improve monotonically over time

energy consumption and economic growth in the usa evidence from renewable energy abstract recent debates about renewable energy consumption manifest two main expectations firstly renewable energy consumption should contribute to economic growth and secondly it should not cause damage on environment this study focuses on the first issue by applying toda yamamoto procedure and bootstrap corrected causality test for the us since empirical literature criticizes the toda yamamoto test which bases on asymptotic distribution the models consist of real gdp employment investment and kinds of renewable energy consumption only one causal relationship was found from biomass waste derived energy consumption to real gdp no causal relationship was found between real gdp and all of the other renewable energy kinds total renewable energy consumption geothermal energy consumption hydro electric energy consumption biomass energy consumption and biomass wood derived energy consumption that is using of energy from waste cause not only solving the dumping problems but also it contributes to real gdp for policy purpose the results of this study suggest that countries should concentrate on energy producing from waste as an alternative energy resource

an analysis of congressional career decisions 1947 1986 most previous research on congressional career decisions has focused on one of two binary choices between retiring and running for reelection or between running for reelection and seeking higher office but most of the time representatives face all three choices simultaneously employing a mother logit model we estimate the effects of relevant variables both on pairwise comparisons conditional probabilities and on the unconditional probabilities of choosing each one of these three alternatives probably most intriguing is our finding that a member s age has little or no effect upon the unconditional probability of running for reelection the interrelatedness of career options is seen particularly clearly in the case of incumbents who had been redistricted out of their seats when they had an opportunity to run for higher office they were likely to take it only when they lacked such an opportunity were they more likely than other members to opt for retirement

enjoying the quiet life corporate governance and managerial preferences much of our understanding of corporations builds on the idea that managers when they are not closely monitored will pursue goals that are not in shareholders interests but what goals would managers pursue this paper uses variation in corporate governance generated by state adoption of antitakeover laws to empirically map out managerial preferences we use plant level data and exploit a unique feature of corporate law that allows us to deal with possible biases associated with the timing of the laws we find that when managers are insulated from takeovers worker wages especially those of white collar workers rise the destruction of old plants falls but the creation of new plants also falls finally overall productivity and profitability decline in response to these laws our results suggest that active empire building may not be the norm and that managers may instead prefer to enjoy the quiet life

the price of government ownership a study of the domtar takeover abstract this paper presents an analysis of how government ownership of an enterprise may affect its profitability in august 1981 two quebec crown corporations announced that they had gained control of domtar a private canadian corporation upon receipt of this information the stock s market value dropped significantly over six trading days domtar s shareholders suffered cumulative abnormal returns of minus 25 percent which is equivalent to a reduction in market value of approximately 150 million much of this loss can be attributed to government control and the anticipated pursuit of non profit objectives

chinese management buyouts and board transformation we assess the extent to which chinese mbos of listed corporations enable a balance to be achieved between facilitating growth and supporting the interests of minority shareholders other than the buyout organization using novel hand collected data from 19 mbos of listed corporations in china a matched sample of 19 non mbos and the population of listed corporations we examine the extent to which boards of directors are changed to bring in executive and outside directors with the skills to grow as well as restructure a business we also examine the extent to which outside directors become involved in actions to develop the business rather than actions related to fostering the interests of all shareholders we find in fact little evidence that outside board members have the skills to add value to the mbo firms boards appear to focus mainly on related party transactions with some more limited attention to growth strategies outside directors do not seem to openly disagree with incumbent managers on the disclosure of their actions but may express their views and exert pressure behind the scenes

energy consumption income and carbon emissions in the united states abstract this paper investigates the effect of energy consumption and output on carbon emissions in the united states earlier research focused on testing the existence and or shape of an environmental kuznets curve without taking energy consumption into account we investigate the granger causality relationship between income energy consumption and carbon emissions including labor and gross fixed capital formation in the model we find that income does not granger cause carbon emissions in the us in the long run but energy use does hence income growth by itself may not become a solution to environmental problems

electoral rules and political selection theory and evidence from a field experiment in afghanistan voters commonly face a choice between competent candidates and those with policy preferences similar to their own this article explores how electoral rules such as district magnitude mediate this trade off and affect the composition of representative bodies and the quality of policy outcomes we show formally that anticipation of bargaining over policy causes voters in elections with multiple single member districts to prefer candidates with polarized policy positions over more competent candidates results from a unique field experiment in afghanistan are consistent with these predictions specifically representatives selected by elections with a single multi member district are better educated and exhibit less extreme policy preferences

oil and the macroeconomy when prices go up and down an extension of hamilton s results in an important paper hamilton 1983 demonstrated a strong correlation between oil price changes and gross national product growth in u s data however his study pertained to a period in which all the large oil price movements were upward and thus it left unanswered the question whether the correlation persists in periods of price decline moreover the price variable he used was somewhat distorted by price controls in the 1970s this note investigates whether hamilton s results continue to hold when the sample is extended to include the recent oil market collapse and the oil price variable is corrected for the effects of price controls particular attention is given to the possibility of asymmetric responses to oil price increases and decreases as suggested in the structural employment literature loungani 1986 davis 1987 hamilton 1988 like hamilton i based my investigation on the gnp equation in sims s 1 980b six variable quarterly vector autoregressive model

a theory of voting in large elections this paper provides a game theoretic model of probabilistic voting and then examines the incentives faced by candidates in a spatial model of elections in our model voters strategies form a quantal response equilibrium qre which merges strategic voting and probabilistic behavior we first show that a qre in the voting game exists for all elections with a finite number of candidates and then proceed to show that with enough voters and the addition of a regularity condition on voters utilities a nash equilibrium profile of platforms exists when candidates seek to maximize their expected margin of victory this equilibrium 1 consists of all candidates converging to the policy that maximizes the expected sum of voters utilities 2 exists even when voters can abstain and 3 is unique when there are only 2 candidates