long term intergenerational persistence of human capital an empirical analysis of four generations most previous studies of intergenerational transmission of human capital are restricted to two generations how parents influence their children in this study we use a swedish data set that links individual measures of lifetime earnings for three generations and data on educational attainment for four generations we find that estimates obtained from data on two generations severely underestimate long run intergenerational persistence in both labor earnings and educational attainments long run social mobility is hence much lower than previously thought we attribute this additional persistence to dynastic human capital the influence on human capital of more distant family members than parents

effects of oil price shocks on the stock market performance do nature of shocks and economies matter the main focus of this study is to examine how oil price fluctuations influence the performance of stock markets this study used the causality approach developed by toda and yamamoto 1995 to explore the causality between oil prices and stock prices in the long run and their short term impact the generalized impulse response functions were applied to the monthly data in the period from january 1997 to july 2013 in this study to capture the different characteristics of oil refining exporting and importing three asian economies were examined the results indicate that the manner in which a market reacts to hikes in oil prices varies between different markets and periods this depends on differences in the oil characteristics of the economy and the nature of the shock in oil prices

on the impacts of oil price fluctuations on european equity markets volatility spillover and hedging effectiveness the objective of this paper is to investigate the volatility spillovers between oil and stock markets in europe as not all industries are expected to be equally affected by oil price changes we conduct our study at both the aggregate as well as sector levels empirically we make use of a recently developed var garch approach which allows for transmissions in volatilities in addition we analyze the optimal weights and hedge ratios for oil stock portfolio holdings based on our results on the whole our findings show significant volatility spillovers between oil price and sector stock returns and suggest that a better understanding of those links is crucial for portfolio management in the presence of oil price risk

jumps and stochastic volatility in crude oil futures prices using conditional moments of integrated volatility we evaluate alternative models of the volatility of commodity futures prices based on high frequency intraday data from the crude oil futures markets for the october 2001 december 2012 period these models are implemented with a simple gmm estimator that matches sample moments of the realized volatility to the corresponding population moments of the integrated volatility models incorporating both stochastic volatility and jumps in the returns series are compared on the basis of the overall fit of the data over the full sample period and subsamples we also find that jumps in the returns series add to the accuracy of volatility forecasts

democracy and macroeconomic performance in underdeveloped countries an empirical analysis in this study the author examines how inflation and economic growth differ in more and less democratic regimes and in new and mature democracies the analysis is based on a panel research design featuring annual data from a large sample of underdeveloped countries and two way fixed effects regression analysis the author s central finding is that more democratic countries have higher inflation and slower growth than less democratic countries inflation apparently is higher than more democratic countries mainly because they have higher fiscal deficits and faster wage growth this higher inflation marginally reduces economic growth in these countries the author also finds that new and mature democracies do not have significantly different inflation and growth rates the findings suggest that unrestrained political participation and the resulting demands placed on state officials undermine democratic performance

does family income matter for schooling outcomes using adoptees as a natural experiment one would expect that family income is an important positive factor in children s school attainment however evidence is often tainted by the lack of control for parental ability since at least a portion of ability is transferred genetically to children this paper uses a sample of adopted children and offers genetically unbiased estimates we further correct for biases arising from unobserved parenting qualities and from parents differentiation between their own birth and adopted children family income still has a significant effect it implies that high ability children in low income families face binding credit constraints that society may wish to relieve

income inequality and health lessons from a refugee residential assignment program this paper examines the effect of income inequality on health for a group of particularly disadvantaged individuals refugees our analysis draws on longitudinal hospitalization records coupled with a settlement policy where swedish authorities assigned newly arrived refugees to their first area of residence the policy was implemented in a way that provides a source of plausibly random variation in initial location the results reveal no statistically significant effect of income inequality on the risk of being hospitalized this finding holds also for most population subgroups and when separating between different types of diagnoses our estimates are precise enough to rule out large effects of income inequality on health

the impact of global oil price shocks on china s bulk commodity markets and fundamental industries this paper investigated the reaction of aggregate commodity market to oil price shocks and also explored the effects of oil price shocks on china s fundamental industries metals petrochemicals grains and oilfats we separated the volatilities of oil price into expected unexpected and negatively expected categories to identify how oil prices influence bulk commodity markets we contrasted the results between different periods and among classified indices in order to discover the significant changes in recent years and the differences at an industry level our results indicate that the aggregate commodity market was affected by both expected and unexpected oil price volatilities in china the impact of unexpected oil price volatilities became more complex after 2007 the metals and grains indices did not significantly respond to the expected volatility in oil prices in contrast to the petrochemicals and oilfats indices these results not only contribute to advancing the existing literature but also merit particular attention from policy makers and market investors in china

the headmaster ritual the importance of management for school outcomes a the role of school principals largely resembles that of corporate managers and the leadership they provide are often viewed as a crucial component for educational success we estimate the impact of individual principals on various schooling outcomes by constructing a principal school panel data set that allows us to track individual principals as they move between schools we find that individual principals have a substantive impact on school policies working conditions and student outcomes particularly students who attend a school with a one standard deviation better principal receive on average 0 12 standard deviations higher test scores despite having very rich background information on principals it is difficult to determine which principal characteristics that form the basis for successful school management we also find a somewhat mixed picture on what management style characterizes a successful principal we further show that the scope for principal discretion for better or for worse is larger in small schools in voucher schools and in areas with more school competition

oil price shocks and their short and long term effects on the chinese economy a considerable body of economic literature shows the adverse economic impacts of oil price shocks for the developed economies however there has been a lack of empirical study of this kind on china and other developing countries this paper attempts to fill this gap by answering how and to what extent oil price shocks impact china s economy emphasizing on the price transmission mechanisms to that end we develop a structural vector auto regressive model our results show that an oil price increase negatively affects output and investment but positively affects inflation rate and interest rate however with the differentiated price control policies for materials and intermediates on the one hand and final products on the other hand in china the impact on real economy represented by real output and real investment lasts much longer than that to price monetary variables our decomposition results also show that the short term impact namely output decrease induced by the cut of capacity utilization rate is greater in the first one to two years but the portion of the long term impact defined as the impact realized through an investment change increases steadily and exceeds that of short term impact at the end of the second year afterwards the long term impact dominates and maintains for quite some time

the impact of parental income on early schooling transitions a re examination using data over three generations abstract this paper applies new semi parametric techniques to estimate the effects of parental income on the probability of being held back in elementary school in france we use information on grandparents past socioeconomic status and parents education level to separate the parental income effects from the effects of the unmeasured determinants of children s performance at school that are correlated with parental income when considering the probability of being held back in elementary school we find that the effects of parental poverty are much larger than the effects of a child s sex or age age within his her class or of the parents education level our findings suggest that policy decisions that increase income transfers to relatively poor families have a potentially very large impact on children s early performance at school

considering macroeconomic indicators in the food before fuel nexus abstract a structural vector autoregression svar model along with a direct acyclic graph is employed to decompose how supply demand structural shocks affect food and fuel markets the results support the hypothesis that fundamental market forces of demand and supply are the main drivers of food price volatility increased biofuel production may cause short run food price increases but not long run price shifts decentralized freely operating markets will mitigate the persistence of any price shocks and restore prices to their long run trends the main policy implications are that oil gasoline and ethanol market shocks do not spillover into grain prices which indicates no long run food before fuel issue in the short run grain prices can spike due to market shocks so programs designed to blunt these price spikes may be warranted

the origins of intergenerational associations lessons from swedish adoption data we use unique swedish data with information on adopted children s biological and adoptive parents to estimate intergenerational mobility associations in earnings and education we argue that the impact from biological parents captures broad prebirth factors including genes and prenatal environment and the impact from adoptive parents represents broad postbirth factors such as childhood environment we find that both pre and postbirth factors contribute to intergenerational earnings and education transmissions and that prebirth factors are more important for mother s education and less important for father s income we also find some evidence for a positive interaction effect between postbirth environment and prebirth factors

rich dad smart dad decomposing the intergenerational transmission of income we construct a simple model consistent with becker and tomes that decomposes the intergenerational income elasticity into the causal effect of financial resources the mechanistic transmission of human capital and the role that human capital plays in the determination of fathers permanent incomes we show how a particular set of instrumental variables could separately identify the money and human capital transmission effects using data from a 35 percent sample of swedish sons and their fathers we show that only a minority of the intergenerational income elasticity can be plausibly attributed to the causal effect of fathers financial resources

like grand parent like child multigenerational mobility across the eu abstract this study shows that the multigenerational transmission of inequality in most of the 28 eu countries is higher than what a parent to child paradigm would suggest while a strand of the literature claims that this is due to a direct grandparental effect economic historian gregory clark argues that multigenerational mobility follows a markovian process in his view not only are previous estimates severely attenuated by an errors in variables problem but persistence is also constant across time and space using a unique retrospective survey containing information on three generations of european citizens we provide suggestive evidence against such a universal law of mobility while estimates based on measurement error models show that persistence is indeed as strong as clark suggests there are cross country differences furthermore for a few eu countries we cannot reject the hypothesis of a direct grandparental effect overall there is no single data generating process to describe multigenerational persistence that fits all eu countries 2

oil price shocks and european industries abstract we investigate the impact of oil price shocks at the industry level in the euro area for the period 1983 2007 we use different oil price specifications and use dynamic var models and multivariate regression to investigate how 38 different industries respond to oil price shocks we pay specific attention to the asymmetry of the industries responses regarding oil price increases and decreases we find that the impact of oil price shocks substantially differs along the different industries we find that the significance of this result also differs along the various oil price specifications the results are quite robust to the way in which we model the problem

metal volatility in presence of oil and interest rate shocks abstract this study uses three two factor volatility models of the garch family to examine the volatility behavior of three strategic commodities gold silver and copper in the presence of crude oil and interest rate shocks the results of the standard garch models suggest that gold and silver have almost the same volatility persistence which is greater than that of copper the cgarch estimates indicate that the short run transitory component of volatility converges to zero much faster for copper than for gold and silver in this sequence however the permanent volatility component demonstrates equally strong persistence in the long run for all three metals the egarch results suggest that the leverage effect is present and significant for copper only implying that gold and silver can be good investment in anticipation of bad times past oil shock does not impact all three metals similarly monetary policy and to leaser extent the oil shocks have calming effects on precious metals but not on copper if the t bill rate is used crises such as the 2003 iraq war heighten metal volatility these results have implications for derivatives valuations using gold as a reserve asset risk analysis and for the commodity exporting countries and commodity producing firms

trends in intergenerational income mobility previous studies of recent u s trends in intergenerational income mobility have produced widely varying results partly because of large sampling errors by making more efficient use of the available information in the panel study of income dynamics we generate more reliable estimates of the recent time series variation in intergenerational mobility our results which pertain to the cohorts born between 1952 and 1975 do not reveal major changes in intergenerational mobility

natural resources aid and democratization a best case scenario natural resources and aid give dictators revenue to maintain power attempts are being made therefore to funnel these resources away from nondemocratic governments and toward their citizens using formal analysis and building on existing theories of democratization i analyze the effects of such institutional solutions when they function perfectly the best case scenario the models show that even with institutional safeguards these resources diminish chances for democratization in addition to their practical importance the results have an important theoretical implication the political resource curse may not be due to dictators use of these resources but simply to their existence in nondemocracies

the transmission of inequality across multiple generations testing recent theories with evidence from germany this article shows that across multiple generations the persistence of occupational and educational attainment in germany is larger than estimates from two generations suggest we consider two recent interpretations first we assess gregory clark s hypotheses that the true rate of intergenerational persistence is higher than the observed rate as high as 0 75 and time invariant our evidence supports the first but not the other two hypotheses second we test for independent effects of grandparents we show that the coefficient on grandparent status is positive in a wide class of markovian models and present evidence against its causal interpretation

the reductionist gamble open economy politics in the global economy international political economy ipe should transition to third wave scholarship because open economy politics oep which dominates current american ipe scholarship can generate inaccurate knowledge oep can produce inaccurate knowledge because it studies domestic politics in isolation from international or macro processes this methodological reductionism is often inappropriate for the phenomena ipe studies because governments inhabit a complex social system as a result the political choices that oep strives to explain are typically a product of the interplay between domestic politics and macro processes when oep omits causally significant macro processes from empirical models the models yield biased inferences about the domestic political relationships under investigation although scholars tolerated such errors when the gains from oep were large these errors are less tolerable now that oep has matured consequently the field should transition toward research that is nonreductionist problem driven and pluralistic

the intergenerational effects of compulsory schooling this article attempts to improve our understanding of the causal processes that contribute to intergenerational immobility by exploiting historical changes in compulsory schooling laws that affected the educational attainment of parents without affecting their innate abilities or endowments we examine the influence of parental compulsory schooling on children s grade for age using the 1960 1970 and 1980 u s censuses our estimates indicate that a 1 year increase in the education of either parent reduces the probability that a child repeats a grade by between 2 and 4 percentage points

shocking behavior random wealth in antebellum georgia and human capital across generations does the lack of wealth constrain parents investments in the human capital of their descendants we conduct a nearly fifty year followup of an episode in which such constraints would have been plausibly relaxed by a random allocation of substantial wealth to families we track descendants of participants in georgia s cherokee land lottery of 1832 in which nearly every adult white male in georgia took part winners received close to the median level of wealth a large financial windfall orthogonal to participants underlying characteristics that might have also affected their children s human capital although winners had slightly more children than non winners they did not send them to school more sons of winners have no better adult outcomes wealth income literacy than the sons of non winners and winners grandchildren do not have higher literacy or school attendance than non winners grandchildren this suggests only a limited role for family financial resources in the formation of human capital in the next generations in this environment and a potentially more important role for other factors that persist through family lines

why there should be no political foreign aid curse summary this paper considers the causality underlying the so called political aid curse which proposes that foreign aid like oil should hinder democracy using a theoretical model which identifies repression and appeasement as the primary alternatives to democratization it argues that aid revenue should not produce a political curse because it is less fungible more conditional and less constant than state oil revenue making it difficult for recipient governments to use their aid to fund either repression or appeasement using several different measures associated with repression and appeasement the statistical results show that aid cannot be associated with any of these dependent variables

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

income distribution and macroeconomics this paper analyzes the role of wealth distribution in macroeconomics through investment in human capital it is shown that in the presence of credit markets imperfections and indivisibilities in investment in human capital the initial distribution of wealth affects aggregate output and investment both in the short and in the long run as there are multiple steady states this paper therefore provides an additional explanation for the persistent differences in per capita output across countries furthermore the paper shows that cross country differences in macroeconomic adjustment to aggregate shocks can be attributed among other factors to differences in wealth and income distribution across countries

does privatisation of vocational rehabilitation improve labour market opportunities evidence from a field experiment in sweden this paper analyses if privatisation of vocational rehabilitation can improve labour market opportunities for individuals on long term sickness absence we use a field experiment performed by the p

dynamics of oil price precious metal prices and exchange rate this study examines the co movements and information transmission among the spot prices of four precious metals gold silver platinum and palladium oil price and the us dollar euro exchange rate we find evidence of a weak long run equilibrium relationship but strong feedbacks in the short run the spot precious metal markets respond significantly but temporarily to a shock in any of the prices of the other metal prices and the exchange rate furthermore we discover some evidence of market overreactions in the palladium and platinum cases as well as in the exchange rate market in conclusion whether there are overreactions and re adjustments or not investors may diversify at least a portion of the risk away by investing in precious metals oil and the euro policy implications are provided

intergenerational mobility in norway 1865 2011 there are large differences in intergenerational mobility between countries little is known however about how persistent such differences are and how they evolve over time this paper constructs a data set of 835 537 linked father son pairs from census records and documents a substantial increase in intergenerational occupational mobility in norway between 1865 and 2011 the increase is most pronounced in non farm occupations the findings show that long run mobility developments previously described for the us and uk are not necessarily representative for other countries and that high mobility in a given country today need not reflect high mobility before industrialization

regression toward mediocrity in economic stature this paper provides estimates of the correlation in lifetime earnings between fathers and sons intergenerational data from the national longitudinal survey are used earlier studies conducted for the united states report elasticities of children s earnings with respect to parent s earnings of 0 2 or less suggesting extensive integenerational mobility these estimates however are biased downward by error contaminated measures of lifetime economic status estimates presented in this paper correct for the problem of measurement error and find the intergenerational correlation in income to be on the order of 0 4 this suggests considerably less intergenerational mobility than previously believed jel j62

estimating the effects of information surprises and trading on stock returns using a mixed jump diffusion model i present a methodology that uses the mixed jump diffusion model for stock returns to estimate the separate effects of information surprises and strategic trading around corporate events using simulation techniques i show that for events with multiple announcements spread over a long time the estimators derived from the mixed jump diffusion model are more powerful compared to the traditional cumulative abnormal return estimators the new methodology is used to study the separate effects of information surprises and strategic trading associated with blockholdings and subsequent targeted repurchases i find that for more than 93 percent of the firms in our sample the mixed jump diffusion model is statistically superior to the pure diffusion model in describing stock returns more important i find a statistically significant negative effect due to trading while the average effect around announcements is statistically insignificant in contrast the standard cumulative abnormal return is not statistically different from zero article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

intergenerational income mobility in the united states social scientists and policy analysts have long expressed concern about the extent of intergenerational income mobility in the united states but remarkably little empirical evidence is available the few existing estimates of the intergenerational correlation in income have been biased downward by measurement error unrepresentative samples or both new estimates based on intergenerational data from the panel study of income dynamics imply that the intergenerational correlation in long run income is at least 0 4 indicating dramatically less mobility than suggested by earlier research copyright 1992 by american economic association

the evolution of social mobility norway during the twentieth century we document trends in social mobility in norway using intergenerational income elasticities the associations between the income percentiles of fathers and sons and brother correlations the results of all approaches suggest that social mobility increased substantially between cohorts born in the early 1930s and the early 1940s father son associations remained stable for cohorts born after world war ii while brother correlations continued to decline the relationship between father and son income percentile ranks is highly non linear for early cohorts but it approaches linearity over time we discuss increasing educational attainment among low and middle income families as a possible mechanism underlying these trends

intergenerational mobility in the very long run florence 1427 2011 we examine intergenerational mobility in the very long run across generations that are six centuries apart we exploit a unique dataset containing detailed information at the individual level for all people living in the italian city of florence in 1427 these individuals have been associated using their surnames with their pseudo descendants living in florence in 2011 we find that earnings elasticity is about 0 04 much higher than predicted by traditional models of intergenerational mobility we also find an even stronger role for real wealth inheritance and evidence of persistence in belonging to certain elite professions our results are confirmed when we account for the quality of the pseudo links and when we address the potential selectivity bias due to the differential survival rates across surnames we argue that the quasi immobility of pre industrial society and the positional advantages in the access to certain professions might explain in part the long lasting effects of ancestors socioeconomic status

how citizens participate in macroeconomic policy international experience and implications for poverty reduction summary many developing and transitioning countries have difficulty sticking to sound macroeconomic policy international donors are pushing recipient countries to forge a public consensus on macroeconomic policy as a means to enhance sustainability and impacts on the poor finance and budget officials central bank staff and economic policymakers however often assume that citizens cannot understand or contribute to macroeconomic policy yet the poor often do not trust the government to make the right decisions for them how can citizen participation help bridge this gap based on a review of international experience the paper explores this question and identifies how development administrators can employ civic participation in macroeconomic policy the discussion highlights where citizens have the greatest options for participation and notes the impacts participation can have on fostering policies and outcomes that target poverty reduction 2003 elsevier science ltd all rights reserved

the political economy of imf lending in africa why has imf lending achieved such poor results in africa is it because the fund imposes the wrong conditions or because it fails to enforce them analysis of monthly data on 53 african countries from 1990 to 2000 shows that the imf s loans for reform contract lacks credibility because donor countries intervene to prevent rigorous enforcement countries that have influence with developed country patrons as measured by u s foreign aid membership in postcolonial international institutions and voting profiles in the un are subject to less rigorous enforcement shorter program suspensions they have more frequent program suspensions because they violate their conditions more often the imf will have to become more independent in order to become an effective champion of reform

a theory of intergenerational mobility we study the link between market forces cross sectional inequality and intergenerational mobility emphasizing complementarities in the production of human capital we show that wealthy parents i

intergenerational education mobility and the level of development abstract the main goal of this paper is to analyze the empirical relationship between economic development and intergenerational education mobility by exploiting large regional variation in the level of economic development across turkey we find that educational outcomes of daughters who grow up in more developed regions depend less on their parents educational outcomes we do not find evidence for a similar relationship between development and mobility for males moreover the development level of place of residence during childhood has a stronger positive association with intergenerational education mobility compared to the development level of place of residence during adolesence we find that regions that feature higher school availability greater level of social capital more favorable cultural attitudes toward women higher level of home resources and lower degree of educational inequalities also tend to feature higher degree of intergenerational mobility

foreign aid and statehood in africa has foreign aid destroyed state institutions in africa african states depend on development assistance to conduct basic government operations yet few of these states are well governed or effective at providing public goods the two trends mounting foreign aid and static or diminishing state performance raise an obvious question is aid dependency contributing to misrule and state failure in africa many critics argue the two phenomena are related i find they are not my analysis fails to show a negative association between aid receipts and two measures of democracy and economic freedom instead the evidence is consistent with a small positive relationship between aid and these indicators of state performance since the international community seems bent on reducing foreign aid an important issue is how african states can maintain and improve their performance with less foreign assistance

can poor countries lobby for more us bilateral aid summary this article explores if countries can lobby the us government for the allocation of us bilateral foreign aid we consider an informational lobby model where lobbying has two effects first a direct effect by informing us policymakers about their countries needs second an indirect effect on policymakers by informing them about common interests in economic or geopolitical terms the lobbyist thus influences the decisions about the allocation of aid resources we estimate the effect of the recipient country s lobbying agents in obtaining foreign aid the econometric results show that lobbying positively affects the amount of bilateral aid received

the effect of global oil price shocks on china s precious metals market a comparative analysis of gold and platinum abstract this paper investigated the impacts of global crude oil price shocks on china s precious metals market using the meliorated autoregressive conditional jump intensity arji model chan and maheu 2002 and the extended autoregressive moving average generalized autoregressive conditional heteroscedasticity arma garch gronwald 2012 based on the comparative analysis of gold and platinum markets the results showed that discrete jumps existed in the crude oil market considering the volatility clustering of oil returns the effect of oil price expected shocks on precious metals market was negative 0 7025 1 3341 due to the profitability of capital while that of unexpected shocks was positive 0 0211 0 0645 which can be explained by the adaptive expectation theory in terms of discrete jumps the impact of current jumps on precious metals market was significantly negative 1 4810 2 6775 according to the risk transmission theory and the responses tended to be characterized by overreactions in addition some evidence also suggested permanent volatility effects in china s precious metals market

comparative democracy the economic development thesis in comparative politics an established finding that economic development fosters democratic performance has recently come under challenge we counter this challenge with a dynamic pooled time series analysis of a major but neglected data set from 131 nations the final generalized least squares autoregressive moving averages estimates n 2 096 appear robust and indicate strong economic development effects dependent in part on the nation s position in the world system for the first time rather hard evidence is offered on the causal relationship between economics and democracy according to granger tests economic development causes democracy but democracy does not cause economic development overall the various tests would seem to advance sharply the modeling of democratic performance

oil price shocks and agricultural commodity prices abstract while the impacts of oil price changes on agricultural commodity markets are of great interest to economists previous studies do not differentiate oil specific shocks from aggregate demand shocks in this paper we address this issue using a structural var analysis our findings indicate that the responses of agricultural commodity prices to oil price changes depend greatly on whether they are caused oil supply shocks aggregate demand shocks or other oil specific shocks mainly driven by precautionary demand oil shocks can explain a minor friction of agricultural commodity price variations before the food crisis in 2006 2008 whereas in post crisis period their explanatory abilities become much higher after crisis the contributions of oil specific factors to variations in agricultural commodity prices are greater than those of aggregate demand shocks the results from an alternative svar confirm the robustness of our main findings

conditional jump dynamics in stock market returns this article develops a new conditional jump model to study jump dynamics in stock market returns we propose a simple filter to infer ex post the distribution of jumps this permits construction of the shock affecting the time t conditional jump intensity and is the main input into an autoregressive conditional jump intensity model the model allows the conditional jump intensity to be time varying and follows an approximate autoregressive moving average arma form the time series characteristics of 72 years of daily stock returns are analyzed using the jump model coupled with a generalized autoregressive conditional heteroscedasticity garch specification of volatility we find significant time variation in the conditional jump intensity and evidence of time variation in the jump size distribution the conditional jump dynamics contribute to good in sample and out of sample fits to stock market volatility and capture the rally often observed in equity markets following a significant downturn

does high income promote democracy the authors construct a statistical model with which to test whether the regularity that democracy is more commonly found among wealthy countries stems from a democratizing effect of high income or is due entirely to other factors such as the historical context various features of the institutional setting and simultaneity with the process of leadership change even after correcting for these many other influences the democratizing effect of income remains as a statistically significant factor promoting the emergence of democratic political institutions the authors go on to find that leaders risks of losing power rise during their time in office and that these risks are higher in more democratic countries the authors confirm the finding by burkhart and lewis beck that the democracy promoting effect of income is stronger among the european countries they suggest that high income has a more powerful democratizing effect among the southern european countries because it interacts with pressure from major trading partners to democratize this suggests a revaluation of policies designed to foster the replacement of authoritarian regimes by democratic ones through free trade

did aid promote democracy in africa the role of technical assistance in africa s transitions did foreign aid impede or catalyze democratization in africa in the 1990s we argue that after the cold war donors increased their use of technical assistance in aid packages improving their monitoring capacity and thus reducing autocrats ability to use aid for patronage to remain in power autocrats responded by conceding political rights to their opponents from legalizing opposition parties to staging elections we test our theory with panel data for all sub saharan african countries while other factors played pivotal roles in africa s political liberalization we find technical assistance helps to explain the timing and extent of africa s democratization

governance and growth in sub saharan africa real income per head in much of sub saharan africa grew rapidly in the 1960s but faltered following the first opec oil price shock in 1973 74 and then stagnated or fell from the late 1970s to the early 1990s africa also saw a broad wave of authoritarian rule sweep the continent in the 1960s and early 1970s since 1990 however the african political landscape has experienced significant changes many in the direction of greater pluralism and democracy moreover where civil strife has been avoided africa has seen a broad tendency towards rapid growth for several years after 1995 this sequence of events suggests that political economy may offer useful perspectives on africa s growth record over the last several decades we begin with a summary of africa s growth patterns and the evolution of african political regimes we then examine models of authoritarian rule for insights into the conditions under which elites may sacrifice the general interest to extract rents and retain power or in which leaders may find ways of making growth enhancing policy politically acceptable it would be premature to conclude that africa s political reforms of the 1990s have helped to generate economic progress however we do believe that the increase in political pluralism in combination with greater unity among african aid donors bodes well for a continuation of africa s growth recovery

ethnic capital and intergenerational mobility this paper analyzes the extent to which ethnic skill differentials are transmitted across generations i assume that ethnicity acts as an externality in the human capital accumulation process the skills of the next generation depend on parental inputs and on the quality of the ethnic environment in which parents make their investments or ethnic capital the empirical evidence reveals that the skills of today s generation depend not only on the skills of their parents but also on the average skills of the ethnic group in the parent s generation

on the efficiency of the markets for gold and silver gold and silver have wide ranging utility from their use in art and jewelry to their use in the production of electronic equipment the holding of gold and silver has always been considered a great treasure within the last decade a new use has developed for these metals individual investors and portfolio managers have recently begun to view them as possible investment assets this paper examines the workings of the gold and silver markets from the investor s point of view the prices of goods are important in their allocation among competing uses and the same is true for gold and silver investors use the prices of the metals in making buy and sell decisions however the price changes for gold and silver permit these markets to be analyzed current theory maintains that market determined changes in price of investment assets result from a changing set of information and that given a competitive market system the price changes tend to move the markets toward equilibrium this is the essence of the efficient markets theory the purpose of this paper is to analyze the price changes for gold and silver to establish if the efficient markets theory can be applied to the markets for these metals this paper is divided into four sections and a conclusion the relationship between the gold and silver markets and market efficiency is ex

life cycle variations in the association between current and lifetime income replication and extension for sweden we apply haider and solon s generalized errors in variables model to swedish income tax data to produce estimates of the association between current and lifetime income our estimates demonstrate strong life cycle patterns this implies that the widespread use of current income as a proxy for lifetime income leads to inconsistent parameter estimates i e life cycle bias even when the proxy is used as the dependent variable estimates for comparable cohorts of swedish and american men demonstrate surprising similarities there are however significant gender and cohort differences in this association that lead to statistically significant and quantitatively meaningful differences in life cycle biases

measuring long term inequality of opportunity abstract in this paper we introduce a new family of rank dependent measures of inequality and social welfare consistent with the equality of opportunity eop principle the proposed framework can be used to measure long term as well as short term eop depending on whether we let permanent income or snapshots of income form the basis of the analysis furthermore it allows for both an ex ante and an ex post approach to eop there is long term ex post inequality of opportunity if individuals who exert the same effort have different permanent incomes in comparison the ex ante approach focuses on differences in the expected permanent income between groups of individuals with identical circumstances to demonstrate the empirical relevance of a long run perspective on eop we exploit a unique panel data from norway on individuals incomes over their working life span this allows us to examine how well analysis of opportunity inequality based on snapshots of income approximate the results based on permanent income

political sources of growth a critical note on measurement this note critically reviews the research on the link between political systems and economic growth empirical attempts to capture this patent relationship have been met with mixed success we conclude that the political variables used in these studies i e democracy and political instability do not adequately reflect the investors problem we suggest that a political variable that encompasses all kinds of potential discretionary state interventions would be more effective in explaining cross country differences in economic growth

grand advantage family wealth and grandchildren s educational achievement in sweden we study the role of family wealth for children s educational achievement using novel and unique swedish register data in particular we focus on the relationship between grandparents wealth and their grandchildren s educational achievement doing so allows us to reliably establish the independent role of wealth in contributing to long term inequalities in opportunity we use regression models with rich controls to account for observed socioeconomic characteristics of families cousin fixed effects to net out potentially unobserved grandparental effects and marginal structural models to account for endogenous selection we find substantial associations between grandparents wealth and their grandchildren s grade point averages gpa in the 9th grade that are only partly mediated by the socioeconomic characteristics and wealth of parents our findings indicate that family wealth inequality even in a comparatively egalitarian context like sweden has profound consequences for the distribution of opportunity across multiple generations we posit that our estimates of the long term consequences of wealth inequality may be conservative for nations other than sweden like the united states where family wealth in addition to its insurance and normative functions allows the direct purchase of educational quality and access

parental income lifetime income and mortality this article studies the relation between parental economic resources and mortality later in life we use a data set on a cohort of individuals born in 1928 in the county of malmo in southern sweden which contains exceptionally detailed measures of parental household income from five years during the individuals childhood between 1929 and 1942 the data also contain very rich information on individual earnings throughout these individuals entire life cycle that allows us to construct a measure of lifetime earnings date and cause of death are obtained from national registers using cox proportional hazard models we find an inverse relationship between parental income and mortality also when controlling for individual lifetime income and when studying those with high education separately a competing risk analysis shows the relation between parental income and mortality to apply to cancer as the cause of death jel d31 i10 i12 j10

oil nontax revenue and the redistributional foundations of regime stability nontax revenues make up a substantial amount of government revenue around the world though scholars usually focus on individual sources of such revenue for example foreign aid and state owned oil companies using a theory of regime change that builds on recent models of the redistributional foundations of dictatorships and democracies i generate hypotheses regarding all nontax revenue and regime stability i argue that an increase in nontax revenue should be associated with less taxation of elites in democracies more social spending in dictatorships and more stability for both regime types i find support for all three of these hypotheses in a cross sectional time series analysis covering all countries and years for which the necessary data are available significantly i show that the particular source of nontax revenue does not make a difference they all act similarly with regard to regime stability and the causal mechanisms

development aid and growth in transition countries empirical studies normally analyze diverse and heterogeneous groups of countries producing very mixed evidence on the effectiveness of development aid in promoting growth we focus on whether aid promotes economic growth in transitional economies we find that aid on average has had a positive impact on growth for this specific group of countries this result is robust to samples estimators and the use of alternate instruments to address endogeneity aid effectiveness is not conditional on good policy and there is little evidence of non linear growth effects arising from aid

a characterization of oil price behavior evidence from jump models abstract this paper is concerned with the statistical behavior of oil prices in two ways it firstly applies a combined jump garch model in order to characterize the behavior of daily weekly as well as monthly oil prices secondly it relates its empirical results to implications of hotelling type resource extraction models the empirical analysis shows that oil prices are characterized by garch as well as conditional jump behavior and that a considerable portion of the total variance is triggered by sudden extreme price movements this finding implies that first oil price signals are not reliable and as a consequence both finding optimal extraction paths and decisions regarding the transmission to alternative technologies are likely to be compromised second this behavior is in stark contrast to the notion of deterministic trends in the price of oil

intergenerational wealth mobility and the role of inheritance evidence from multiple generations this study estimates intergenerational correlations in mid life wealth across three generations and a young fourth generation and examines how much of the parent child association that can be explained by inheritances using a swedish data set we find parent child rank correlations of 0 3 0 4 and grandparents grandchild rank correlations of 0 1 0 2 conditional on parents wealth grandparents wealth is weakly positively associated with grandchild s wealth and the parent child correlation is basically unchanged if we control for grandparents wealth bequests and gifts strikingly account for at least 50 per cent of the parent child wealth correlation while earnings and education are only able to explain 25 per cent

the effect of global oil price shocks on china s agricultural commodities abstract this paper studied the effect of global oil price shocks on agricultural commodities in china including strong wheat corn soybean bean pulp cotton and natural rubber we regarded oil price volatility process as a combination of continuous process and jump process we not only separated oil price shocks into positive and negative categories to identify different effects on agricultural commodities in continuous process but also investigated how jump behavior influenced these agricultural commodities we found that the oil price was characterized by volatility clustering and jump behavior at the same time oil price shocks had different effects on agricultural commodities in addition the shocks on most agricultural commodities were asymmetric only natural rubber was under influence of the jump intensity of the oil price in contrast to strong wheat corn soybean bean pulp and cotton

intergenerational income mobility among daughters new evidence on daughters intergenerational mobility in a framework that encompasses women not in the labor force using broader measures of economic status than just the women s own earnings is presented and the role of husbands earnings is highlighted a parallel analysis of sons mobility is performed intergenerational transmission of income status may be weaker for daughters than for sons but is still quite substantial assortative mating is an important element in the intergenerational transmission process

the more the merrier the effect of family size and birth order on children s education there is an extensive theoretical literature that postulates a tradeoff between child quantity and quality within a family however there is little causal evidence that speaks to this theory using a rich dataset on the entire population of norway over an extended period of time we examine the effects of family size and birth order on the educational attainment of children while we find a negative correlation between family size and children s education when we include indicators for birth order and or use twin births as an instrument family size effects become negligible in addition birth order has a significant and large negative effect on children s education we also study adult earnings employment and teenage childbearing and find strong evidence for birth order effects with these outcomes particularly among women these findings suggest the need to revisit economic models of fertility and child production focusing not only on differences across families but differences within families as well

electricity prices and fuel costs long run relations and short run dynamics the paper examines the long run relation and short run dynamics between electricity prices and three fossil fuel prices coal natural gas and crude oil using annual data for the u s for 1960 2007 the results suggest 1 a stable long run relation between real prices for electricity and coal 2 bi directional long run causality between coal and electricity prices 3 insignificant long run relations between electricity and crude oil and or natural gas prices and 4 no evidence of asymmetries in the adjustment of electricity prices to deviations from equilibrium a number of implications are addressed

the effect of global oil price shocks on china s metal markets this paper investigated the impacts of global oil price shocks on the whole metal market and two typical metal markets copper and aluminum we applied the autoregressive conditional jump intensity arji model combining with the generalized conditional heteroscedasticity grach method to describe the volatility process and jump behavior in the global oil market we separated the oil price shocks into positive and negative parts to analyze whether oil price volatility had symmetric impacts on china s metal markets we further used the likelihood ratio test to examine the symmetric effect of oil price shocks in addition we considered the jump behavior in oil prices as an input factor to investigate how china s metal markets are affected when jumps occur in the global oil market in contrast to the existing research paying little attention to this issue our results indicate that crude oil price shocks have significant impacts on china s metal markets and the impacts are symmetric when compared with aluminum copper is more easily affected by oil price shocks

female labour supply human capital and welfare reform we estimate a dynamic model of employment human capital accumulation including education and savings for women in the united kingdom exploiting tax and benefit reforms and use it to analyze the effects of welfare policy we find substantial elasticities for labor supply and particularly for lone mothers returns to experience which are important in determining the longer term effects of policy increase with education but experience mainly accumulates when in full time employment tax credits are welfare improving in the u k increase lone mother labor supply and marginally reduce educational attainment but the employment effects do not extend beyond the period of eligibility marginal increases in tax credits improve welfare more than equally costly increases in income support or tax cuts

foreign aid responses to political liberalization this paper analyzes the impact of political liberalization on receipt of foreign aid it distinguishes different types of donors facing different constraints in rewarding democratization with foreign aid notably bilateral donors the world bank and the european commission based on a sample of 174 recipient countries from 1995 to 2009 the paper jointly examines short term dynamics and long term effects of sustained liberalization except for the world bank donors react to regime change bilateral donors are found to reward political liberalization in the second year after transition

world oil prices and agricultural commodity prices evidence from an emerging market abstract oil prices are thought to have direct effect on agricultural prices followed by an indirect effect through the exchange rate this paper examines the short and long run interdependence between world oil prices lira dollar exchange rate and individual agricultural commodity prices wheat maize cotton soybeans and sunflower in turkey to this end the toda yamamoto causality approach and generalized impulse response analysis for identification of the long and short run interrelationships are applied to the monthly data spanning from january 1994 to march 2010 the impulse response analysis suggests the turkish agricultural prices do not significantly react to oil price and exchange rate shocks in the short run the long run causality analysis reveals that the changes in oil prices and appreciation depreciation of the turkish lira are not transmitted to agricultural commodity prices in turkey hence our results support neutrality of agricultural commodity markets in turkey to both direct and indirect effects of oil price changes

the small blessing of foreign aid further evidence on aid s impact on democracy in an empirical contribution to the literature of foreign aid we estimate the impact of foreign aid on democracy in a panel of 93 developing economies during 1971 2010 we find that foreign aid promotes democracy with the result robust to different estimation methodologies and control variables and to instrumenting for foreign aid

intergenerational occupational mobility in great britain and the united states since 1850 abstract the us tolerates more inequality than europe and believes its economic mobility is greater than europe s though they had roughly equal rates of intergenerational occupational mobility in the late twentieth century we extend this comparison into the nineteenth century using 10 000 nationally representative british and us fathers and sons the us was more mobile than britain through 1900 so in the experience of those who created the us welfare state in the 1930s the us had indeed been exceptional the us mobility lead over britain was erased by the 1950s as us mobility fell from its nineteenth century levels jel j62 n31 n32 n33 n34

all in the extended family effects of grandparents aunts and uncles on educational attainment while a substantial body of research analyzes the relationship between family background and schooling the influences of extended family members have received little attention extended family members can affect schooling by serving as role models by sanctioning or encouraging particular patterns of behavior and by introducing adolescents to experiences and interactions not available through parents siblings or peers this paper shows that older extended family members aunts uncles and grandparents independently affect the schooling of their younger relatives this finding can shed light in many areas for example gender differences in relationships with extended family members may partly explain schooling differences among siblings extended family members may also account for intergenerational influences not directly tied to observed nuclear family characteristics in the policy arena countervailing extended family influences may lower achievement gains from programs that move adolescents to more advantageous neighborhoods and schools on the other hand if adult extended family members can improve adolescent choices nonparent adult mentors in programs such as big brothers big sisters may also provide effective guidance for teens

safety nets and index based insurance historical assessment and semiparametric simulation for northern ghana abstract this article considers index based safety nets aimed at assuring participants a minimum income at the village level set by a prespecified poverty line the participating villages collectively manage a pooled budget offering an index based per capita indemnity to the villages financed from a uniform per hectare premium possibly supplemented by an external subsidy the scheme involves implicit cross subsidies in favor of the poorest villages otherwise it focuses on covariate risk leaving it to mutual arrangements to deal with intravillage idiosyncratic risk its design is obtained from a risk minimizing model for the collective of villages with constraints of two kinds the first is the budget that ensures that payments receive adequate finances the second concerns the set of admissible schedules requiring that payments are triggered by a flexible function of only a few variables for this we propose a semiparametric form from kernel learning noting its capacity to combine a priori on the i

africa s overgrown state reconsidered bureaucracy and economic growth how close is the link between outsized states and economic stagnation in africa this article shows that african public bureaucracies are not as large as often portrayed that they have been getting smaller and that reducing their size alone has not bee n a prescription for economic revival to the contrary the countries with higher levels of public employment such as botswana and mauritius are apt to have the better economic records these findings suggest that a superabundance of public personnel is not in itself a major impediment to growth in africa too much attention has been paid to quantitative or first generation bureaucratic problems and too little attention has been given the second generation issues of bureaucratic quality