Economics - Theses, Dissertations, and other Required Graduate Degree Essays

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The introduction of competition to China's petroleum sector: a policy analysis

Author: 
Date created: 
2008
Abstract: 

The Chinese market for petroleum has been controlled by three dominant companies since 1998. The circumstances have however, changed since China’s inclusion in the WTO as policy makers now desire a more competitive market. The goal of this paper is to analyze the different economic factors that pose impact on the Chinese petroleum market as the market shifts from monopoly environment to the new competitive market. Observations will be made on the few dominant firms and their role in shaping a big, albeit problematic market. To do this, the profit level for these firms will be compared with similar companies elsewhere. Aside from the dominant firms, China also faced a problem regarding gasoline shortage in recent times. Foreign investment also played a big part in the history of the market. A brief overview of Russia’s petroleum industry as well as some of its distinctive characteristics will also be discussed.

Document type: 
Thesis
File(s): 
Senior supervisor: 
S
Department: 
Dept. of Economics - Simon Fraser University
Thesis type: 
Project (M.A.)

Examining the great moderation hypothesis for Canada

Author: 
Date created: 
2008
Abstract: 

A number of studies have documented a reduction in the volatility of the growth rate of US GDP since the mid-1980s. This reduction has been called “the great moderation.” In this paper I investigate the possibility of a great moderation in Canada and find evidence of a moderation beginning in the third quarter of 1981(1981:3). A decomposition of the variances and covariances of the components of GDP indicates that a fall in the variance of the interest-rate sensitive components accounts for the . Using a structural VAR model, I find evidence of a reduction in the response of output and the inflation rate to monetary policy shocks after 1981:3. Counterfactual experiments demonstrate that monetary policy has not become less effective. The main finding is that more stable monetary policy accounts for the drop in volatility of output.

Document type: 
Thesis
File(s): 
Senior supervisor: 
G
Department: 
Dept. of Economics - Simon Fraser University
Thesis type: 
Project (M.A.)

Learning and monetary policy

Author: 
Date created: 
2008
Abstract: 

This thesis studies implications of different learning mechanisms in various monetary environments. In Chapter 2, adaptive step-size algorithm (Kushner, Yin 2003) is used to model time-varying learning and is studied in the environment of Marcet, Nicolini (2003). The resulting model gives qualitatively similar results to MN and performs quantitatively somewhat better based on the criterion of mean squared error. This model generates increasing gain during hyperinflations that matches findings in Cagan (1956), Khan (1977). An agent behaves cautiously when faced with sudden changes in policy, and is able to recognize a change in regime after acquiring sufficient information. Chapter 3 analyzes the effects of social learning in New Keynesian model described in Woodford (2003). The question is whether the economy will converge to a rational expectations equilibrium under this more realistic learning dynamics. A key result from the literature in this version of the model is that the Taylor Principle governs both the uniqueness and the expectational stability of the rational expectations equilibrium when all agents learn homogeneously using recursive algorithms. The finding is that the Taylor Principle is not necessary for convergence in a social learning context. This paper also contributes to the use of genetic algorithm learning in stochastic environments. Chapter 4 studies cheap talk announcement in an agent-based dynamic extension of Kydland-Prescott model. The government choose inflation announcement and actual inflation and updates its decisions using a model of individual, evolutionary learning (Arifovic, Ledyard 2004). Private agents use naïve and more sophisticated inflati on forecasts and switch between them based on their payoffs. Agents and government can coordinate on Pareto-superior outcomes with positive fraction of naive agents. However, the economy does not stay there. It exhibits recurrent fluctuations in announced and actual inflation as government repeatedly builds up and exploits the proportion of believers. Outcomes with higher fraction of naive forecasters have higher average welfare of agents and government. When cost of sophisticated forecast goes up, the proportion of naive believers goes up. When nonbelievers update slower, naive believers are more likely to disappear. Therefore, quick and accurate sophisticated forecasters ensure positive number of naive agents.

Document type: 
Thesis
File(s): 
Senior supervisor: 
J
Department: 
Dept. of Economics - Simon Fraser University
Thesis type: 
Thesis (Ph.D.)

Markets and complexity

Date created: 
2008
Abstract: 

This paper extends the model developed in “Complexity and Competition” (Gale and Sabourian, Econometrica 2005). In that paper, decentralized finite markets are treated as extensive-form matching and bargaining games. In these games there are many inefficient outcomes supported by subgame perfect equilibria. GS introduce an equilibrium refinement in which players maintain an aversion to complexity and show that such a refinement eliminates non-competitive outcomes. We admit more general environments and show that whether an aversion to complexity eliminates inefficient equilibria in this class of market games depends on supply and how valuations are distributed. There are many markets whose complexity averse equilibria preclude efficiency and there are many finite markets that have no simple subgame perfect equilibria. These results hold when the definition of complexity developed in GS is generalized to include a richer class of Markov partitions of the strategy space.

Document type: 
Thesis
File(s): 
Senior supervisor: 
A
Department: 
Dept. of Economics - Simon Fraser University
Thesis type: 
Project (M.A.)

Three essays on money and banking

Author: 
Date created: 
2008
Abstract: 

The dissertation consists of three studies on money and banking in the presence of uncertainty. In the first paper, agents face uncertain future liquidity needs and the bank is formed to provide liquidity insurance to depositors. The bank holds cash reserves to meet depositors' liquidity needs and as an insurance against uncertain return on the bank's assets. The paper analyzes the effect of inflation on banking crises. The main result is that when the bank has access to a stable foreign currency, inflation has a threshold effect on the incidence of banking crises: higher inflation reduces the likelihood of crises when inflation is below the threshold; the reverse occurs when inflation exceeds the threshold. This result appears to be broadly consistent with available evidence. The second paper is an experimental study about depositors' behavior under a demand deposit contract when they face uncertainty over other depositors' actions; and investigates whether bank runs can occur as the result of pure coordination failures. It is found that bank runs can occur as a result of pure coordination failures, but only when coordination is difficult. I compare the experimental results and the simulation results from a learning algorithm modified from Temzelides (1997), and find that learning offers a good approximation to observed lab behavior. In the third paper, agents face uncertainty over future preferences. The paper takes the mechanism design approach and studies the essentiality of multiple currencies - which act as substitute for the missing record-keeping technology - in the presence of limited commitment and private information about the realization of preferences. When money balances are concealable, a single money is sufficient to solve the problem of limited commitment, and can deal with the private information problem if agents are patient enough; in which case, money balances serve as a preference signalling device. When agents are sufficiently impatient, a second money is essential and allows agents to signal their preferences by holding different monetary portfolios all giving rise to the same total money balances.

Document type: 
Thesis
File(s): 
Senior supervisor: 
D
Department: 
Dept. of Economics - Simon Fraser University
Thesis type: 
Thesis (Ph.D.)

A gravity analysis of China’s export growth

Author: 
Date created: 
2008
Abstract: 

In the past decade, China experienced rapid growth in its export trade. This paper explores the major factors affecting China’s exports. This paper conducts a gravity analysis based on the export of goods from China to 30 OECD countries between 1999 and 2005. The empirical results indicate that the traditional explanatory variables, GDP per capita and population, have strong and significant effects on China’s export trade, while physical distance and remoteness have negative effects as expected. Moreover, the empirical results also demonstrate that trade cooperation applies significantly positive effects on the export trade. Two other explanatory variables, regional economic organization APEC (Asian Pacific Economic Cooperation) and the exchange rate, do not significantly affect China’s exports.

Document type: 
Thesis
File(s): 
Senior supervisor: 
S
Department: 
Dept. of Economics - Simon Fraser University
Thesis type: 
Project (M.A.)

Merger Enforcement guidelines in Japan: Does Japan need the efficiency defence?

Author: 
Date created: 
2008
Abstract: 

Over the past two decades there has been a dramatic increase in merger activity in Japan. In response, the Japan Fair Trade Commission (JFTC) published guidelines to inform stakeholders how it implements the merger provisions of the Anti-Monopoly Law (AML). Recently the JFTC has incorporated an expanded efficiency defence available to merging parties. This research provides a critical appraisal of the JFTC’s efficiency defence guidelines. It begins with a review of the development of the AML. This is followed by a description of the recent changes in the type and level of merger activity in Japan. The theoretic foundations for different welfare standards underlying an efficiency defence are explained. The JFTC’s efficiency defence guidelines are set out and are contrasted with relevant guidelines in other countries. Finally, the JFTC’s efficiency defence guidelines are critically evaluated in terms of the need for such a defence, and the workability of the rules.

Document type: 
Thesis
File(s): 
Senior supervisor: 
R
Department: 
Dept. of Economics - Simon Fraser University
Thesis type: 
Project (M.A.)

Assessing CDOs under alternative copulas

Author: 
Date created: 
2008
Abstract: 

Synthetic collateralized debt obligations are popular vehicles for trading portfolios of credit risks. We present a copula based Monte Carlo simulation procedure for pricing them. Using the Gaussian copula of joint default times, we assess the risks of CDOs and their sensitivity to model parameters. Joint defaults are rare; many studies suggest Gaussian copula has limited ability to capture extreme events. We use the copula to assess the risks of misspecifying tail dependence. The choice of copula is shown to significantly affect tranche prices.

Document type: 
Thesis
File(s): 
Senior supervisor: 
R
Department: 
Dept. of Economics - Simon Fraser University
Thesis type: 
Project (M.A.)

Aboriginal secondary education: Non completion and returns

Author: 
Date created: 
2008
Abstract: 

I use 2001 Canadian Public Use Microdata Files (PUMF) Census data to assess two dimensions of Aboriginal educational attainment: (1) what proportion of Aboriginals fail to complete high school; and (2) what is the return to different levels of education for Aboriginals. I find that Aboriginals, for certain age groups, are two times more likely than non Aboriginals to leave high school before completion. Further, I find that in terms of high school completion within the Aboriginal population, registered Indians fare worst, band members better, those with self reported Aboriginals identity better still, and those with Aboriginal ethnic ancestry perform the best. I also find that the returns to high school education are higher for Aboriginals than for the white control group, and that this return varies significantly by Aboriginal group, gender, and census metropolitan area.

Document type: 
Thesis
File(s): 
Senior supervisor: 
S
Department: 
Dept. of Economics - Simon Fraser University
Thesis type: 
Project (M.A.)

The Role of Inflationary Finance with Distortionary Taxes

Author: 
Date created: 
2004
Abstract: 

This paper examines the role of inflationary finance together with the presence of distortionary taxes as a welfare-maximizing policy package. I derive an overlappinggeneration model with a linear production function and a fixed required reserve ratio for the model economy under various scenarios. The results illustrate that unless the distortionary tax system is not well-formulated, inflation tax is undesirable with other distortionary t axes. The computation also found that i ncome tax and inflation t ax are almost perfect substitutes to each other. Furthermore, three comparative static studies are carried out that show, ceteris paribus; government purchases and reserve requirement are negatively correlated with optimal inflation rate, whereas productivity is positively correlated with optimal inflation rate.

Document type: 
Thesis
File(s): 
Department: 
Department of Economics - Simon Fraser University
Thesis type: 
Project (M.A.)