Dr. Iikka Korhonen

Date and Time: March 16th, 2018, 3:00 - 4:30 pm

Room: A 101 in the Economics Building (Museum)

 

About the Speaker

Dr. Iikka Korhonen is the head of the Bank of Finland Institute for Economies in Transition (BOFIT). He received his doctoral degree from Helsinki School of Economics and Business Administration, majoring in economics. His research interests include exchange rates and inflation in transition as well as emerging market countries. In addition, he has published widely e.g. on the correlation of economic activity between different countries, as well as on the effects of oil prices on economic activities.

Prof. Steven J. Yamarik, PhD

Date and Time: January 17th, 2018, 10:00 - 11:30 am

Room: A 101 in the Economics Building (Museum)

Abstract

This paper examines the empirical relationship between economic freedom and corruption. We use a principal-agent-client model to identify the potential causal linkages between corruption and the components of economic freedom. We then estimate a twoequation system where freedom depends upon corruption and vice versa. Using a series of panel GMM estimators, we find that corruption lowers economic freedom, but that freedom does not significantly impact corruption. The result that corruption lowers freedom supports the “grabbing handing” theory of corruption where a non-benevolent government creates inefficient regulation and barriers of entry to create economic rents.

About the Speaker

Steve J. Yamarik is professor at the California State University Long Beach and research associate of our HenU Center for Financial Development and Stability. His research interests are economic growth and development, regional economics and international trade.

Prof. Dr. Zongwu Cai

Date and Time: December 26th, 2017, 2:30 - 4:00 pm

Room: A 101 in the Economics Building (Museum)

Abstract

Testing predictability of asset returns is a cornerstone issue in modern asset pricing and the related fields. It has been one of the hottest research topics in asset pricing field in the recent two decades. In this talk, I will combine several of my papers on testing predictability of asset returns and review the recent developments in this area. In particular, I will outline some future research topics in this area.

 

About the speaker

Dr. Zongwu Cai is the Charles Oswald Professor of Econometrics and a Professor of Economics at Department of Economics, The University of Kansas. Furthermore, he is a member of the Scientific Board of our CFDS. His research interests include econometrics, quantitative finance, risk management, data-analytic modeling, nonlinear and nonstationary time series, and their applications, and among others. His primary research focuses on developing and justifying econometric methodology and applications in economics and finance. His work has been published extensively in professional journals, including both leading econometrics and statistics journals: Journal of Econometrics, Econometric Theory, The Journal of American Statistical Association, and more.

 

Date and Time: October 20th, 2017, 2:00 - 3:30 pm

Room: A 101 in the Economics Building (Museum)

Abstract

We trace the rise of the so called oligarchs in post-Soviet Russia and examine their relationship to income distribution in Russia. When Russia moved to a market economy in the 1990s a new business elite evolved. Russia’s distinctive path towards market economy, among other factors, gave rise to the oligarchs who now control large parts of the economy and have a strong standing within politics and society.

Using a unique regional data set on the locations of oligarchs’ businesses across the Russian regions, we test Acemoglu’s (2008) proposition that oligarchic societies experience extreme income inequality. Our results show significantly higher levels of income inequality in regions with a higher presence of oligarchs.

 

About the speaker

Jarko Fidrmuc is holding the Chair of International Economics at Zeppelin University, Friedrichshafen, Germany. His main research areas are international economics, in specific empirical analysis of European Integration and globalization, analyses of economic cycles and theory of optimal currency area, and development of emerging economies in Eastern Europe and Asia.

Date and Time: December 20th, 2018, 10:00 am - 12:00 pm

Room: Meeting Room, 1st floor, Dongliuzhai (Old Campus)

 

Abstract

Incumbency advantage is the difference in the probabilities of remaining in versus losing office for an incumbents party. I show that incumbency advantage increases accountability of political parties. To do so, I develop a repeated probabilistic voting model with two parties that alternate in office. Parts of the electorate are forward-looking and vote according to their (probabilistic) party preferences, and parts of the electorate consider the amount of rent-seeking by the incumbent party when they make their voting decision between two parties. The model allows for two different sources of incumbency advantage. Preference-driven incumbency advantage occurs if the random distribution of party preferences is biased in favor of the incumbent party. Accountability driven incumbency advantage is the result of the strategic interaction between retrospective voters who want to limit rent-seeking activities and the parties. It is always intertwined with electoral punishment, the loss in likelihood of an election victory when an incumbent party does engage in rent-seeking above a threshold. I show that it possible to distinguish the effects of incumbency advantage and electoral punishment on the minimum level of rent-seeking that is sustainable in equilibrium. While there is no accountability without the presence of backward-looking voters and electoral punishment, additional external incumbency advantage leads to lower rents and increasing accountability. The larger the incumbency advantage, the more important it is for a party to win the next election. Consequently, the incumbent party is willing to give up more rent-seeking in return for a higher likelihood of being reelected. The positive effect of incumbency advantage on accountability somewhat counterintuitive because it is widely believed that parties and politicians are less likely to be voted out of office are less accountable. However, this belief would only be justified if only cases with a combination of large incumbency advantage and low degrees of electoral punishment were conceivable. While this is a typical combination for countries with some degree of electoral fraud and manipulation, for example Russia under Putin, it is unlikely to occur in functioning mature democracies. In addition to its substantive contribution, this paper also provides a straightforward model of probabilistic voting that can be applied to different settings in which different groups of voters have random turnouts.

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