A new discussion paper by Guy Tchuente, KDPE 1607, July 2016
This paper considers the estimation of social interaction models with network structures and the presence of endogenous, contextual, correlated and group fixed effects. In network models, an agent's behavior may be influenced by peers' choices (the endogenous effect), by peers' exogenous characteristics (the contextual effect), and/or by the common environment of the network (the correlated effect) (see Manski (1993) for a description of these models).
A new discussion paper by Florian Gerth and Keisuke Otsu, KDPE 1606, September 2016
Nearly a decade has passed since the onset of the Great Recession. However, European countries have shown very little recovery. Economists collectively agree that the financial market turmoil initiated by the subprime loan crisis in the US is the source of the Great Recession. However, there is little consensus about the propagation mechanism through which the initial shock led to a steep and persistent drop in key economic variables...
A new discussion paper by Lanre Kassim, KDPE 1605, June 2016
Trade taxes are a major source of government revenue in Sub-Saharan Africa as these taxes are easier to administer compared to domestic taxes (See African Trade Policy, 2004). The advent of trade liberalisation, however, leads to a gradual decline in the revenue from trade taxes. If this drop in trade tax revenues is not offset by an increase in domestic tax revenues, then there is an inevitable decline in total tax revenues...
A new discussion paper by Miguel León-Ledesma and Alessio Moro, KDPE 1604, May 2016.
The possible tendency for the returns to investment in real capital to fall as economies develop has been a long-standing problem in Economics that already preoccupied classical economists. In standard models of economic growth, the concept of balanced growth path (BGP) implies that the real return on capital, the rate of growth of GDP, the capital-to-output, and investment-to-output ratios are all constant. In the data, this is consistent with the so-called “Kaldor stylized facts”. Models of growth that achieve BGP, thus, imply that the rate of return on capital is constant in the long run.