F Goodness of Fit
In this appendix we provide further details on the goodness of fit.
Table 4 in the text showed that the predicted and observed discount distributions are also very similar, but the model tends to under-predict the median discount (86.7 vs 95 bps), as well as the fraction of borrowers paying the posted rate (i.e. 9.2% vs 12.7%). Figure 2 shows that the shortcomings can largely be explained by the fact that the predicted distribution of discounts is smoother than the empirical distribution. For instance, when we group discounts into 25 bps bins, the model accurately predicts the fraction of consumers receiving zero or very small discounts, suggesting that few consumers in the observed sample receive discounts between 0 and 12 bps. Similarly, the empirical distribution of discounts exhibits a large mass around 100 bps, and as a result the density is sharply decreasing between 0 and 50. This is consistent with some lenders using 100 bps as a focal point discount. The model does not have any such prediction. Instead, the model predicts a smoother decrease in the density between 0 and 50, and a less pronounced peak at 100 pbs.
deepening your understanding in structural estimation, with a special emphasis on financial institutions. To achieve the goal, this course consists with the following three components: (i) lectures on methodology (for two classes), (2) student presentations from the reading lists (roughly five classes), and (3) student presentations of their own research proposal.
Beyond being consistent with recent stock market evidence on merger synergies, several advantages of the revealed preference method are important to emphasize. First, because it does not rely on stock market data, our revealed preference method can be applied to mergers between two private entities when mergers and characteristics data for private-to- private mergers are available, expanding the potential scope of analysis and inference. In a similar vein, other authors have expressed interest in relaxing the dependence of merger value creation measures on stock market data. Maksimovic and Phillips ( 2001 ) suggest an alternative method for evaluating the value of mergers that does not rely on stock market information, by using productivity measures. More recently, Devos et al. ( 2009 ) produced estimates of merger synergies from Value Line forecasts, which depend more directly on fundamental value creation. Our method shares the advantage of these methods without requiring a reliable measurement of productivity or coverage by Value Line. Second, our structural model accounts for endogenous merger selection directly, which enhances confidence that the characteristics that drive merger values actually drive merger values, rather than a by-product of the merger selection process. Finally, our structural method allows for counterfactual exercises that are robust to changes in the policy environment. This feature of our structural exercise enables a more accurate forecast of merger activity than alternative methods to predict mergers.
Effectively, then, controlling the amount of cash settlement balances was a means for the Bank of Canada to inject liquidity into this market as needed. Liquidity and cash settlement balances are therefore used interchangeably throughout the text. In November 1999, this limit was around $200 million, which was distributed among the 15 LVTS participants at that time via a series of auctions that were also used for investing the Government of Canada’s cash holdings. In 2001, the Bank of Canada lowered the amount of liquidity to $50 million, and the system remained stable until the end of 2005. Starting in March 2006, faced with strong downward pressure on the overnight rate, the Bank of Canada implemented a low liquidity policy by reducing the required balance back to zero, thereby not allowing participants to an aggregate long position at the end of the day. This regime continued until mid-February 2007 when, on the eve of the financial crisis, the Bank of Canada joined other central banks in injecting liquidity into the banking system. Cash settlement balances were increased to $500 million. Figure 3 presents the cash settlement balances in LVTS at the end of each day between April 2004 and April 2009.
Backhouse & Medema (2009): “Economics is not deﬁned by a subject matter, but by its approach”
• その方法が「人の合理性に基づいた資源配分に関する学問」 • 人間 (生物) 行動のあらゆる側面が経済学の分析対象となる 現在の経済学における一つの課題: 合理性の仮定は現実的か？
In each period, the first part will be lecture given by the instructor, and the rest of the time will be used for practicing with the computer. The student will sometimes be asked to answer questions raised by the instructor, to discuss a topic, or to give a presentation.
5. Method of Assessment
b. Private saving = (Y-T)-C. Because Y is fixed and not affected by the change in taxes, Δ(Y-T) = -ΔT=-$100 billion (a decrease) Consumption falls by MPC∗Δ(Y-T) = 0.6 ∗$100 billion=$60 billion, and saving falls by (1-MPC) ∗Δ(Y-T)=0.4∗$100 billion=$40 billion.
c. National saving = Public saving + Private saving The change in national saving = the sum of the changes in public and private saving = $100 billion - $40 billion = $ 60 billion (an increase). d. Investment equals saving in equilibrium, so investment must rise by $60 billion.
1.8 Suppose that the production function is Cobb=Douglas type, Y = AK α L 1−α
, where 0 < α < 1. Proof the statements as follow. (2 points each)
1.8.1 The Cobb=Douglas production function satisfies the constant return to scale (規模に関して収穫 一定 ).
Many people say that if capital punishment is abolished, there will be more crime. That may be true, but my opinion is different. I think we should abolish capital
punishment for two reasons.
Firstly, capital punishment is a murder. No human should be allowed to kill another.