Nonlinear mixture autoregressive model: economic applications

The aim of this dissertation is to model economic variables by a mixture autoregressive (MAR) model. The MAR model is a generalization of linear autoregressive (AR) model. The MAR -model consists of K linear autoregressive components. At any given point of time one of these autoregressive components is randomly selected to generate a new observation for the time series. The mixture probability can be constant over time or a direct function of a some observable variable. Many economic time series contain properties which cannot be described by linear and stationary time series models. A nonlinear autoregressive model such as MAR model can a plausible alternative in the case of these time series. In this dissertation the MAR model is used to model stock market bubbles and a relationship between inflation and the interest rate. In the case of the inflation rate we arrived at the MAR model where inflation process is less mean reverting in the case of high inflation than in the case of normal inflation. The interest rate move one-for-one with expected inflation. We use the data from the Livingston survey as a proxy for inflation expectations. We have found that survey inflation expectations are not perfectly rational. According to our results information stickiness play an important role in the expectation formation. We also found that survey participants have a tendency to underestimate inflation. A MAR model has also used to model stock market bubbles and crashes. This model has two regimes: the bubble regime and the error correction regime. In the error correction regime price depends on a fundamental factor, the price-dividend ratio, and in the bubble regime, price is independent of fundamentals. In this model a stock market crash is usually caused by a regime switch from a bubble regime to an error-correction regime. According to our empirical results bubbles are related to a low inflation. Our model also imply that bubbles have influences investment return distribution in both short and long run.

Economic evaluation of forest policy programs.

XVIII IUFRO World Congress, Ljubljana 1986.

Public and private technical assistance programs for non-industrial private forest landowners in the southern United States.

XVIII IUFRO World Congress, Ljubljana 1986.

Vain hätapua? : Taloudellinen avustaminen diakoniatyön professionaalisen itseymmärryksen ilmentäjänä

Financial Help Alone? Financial help as an exponent of professional diaconal work One essential form of helping people in the Evangelical Lutheran Church s diaconal work is providing economic aid. It can be seen as work which is in accordance with the spirit of the Church Order (4:3). One of the tasks of diaconal work, determined by the Church Order, is to help those whose distress is the greatest and who have no other source of help. This financial support has become a permanent and essential working method, which has also created tension of various kinds. Financial support has been criticized, especially when the support has been used to fill a gap in the social services provided by the government. It has been argued that diaconal work has been forced to take on responsibility for tasks that belong to the welfare state. The tensions involved in the financial support of diaconal work do not only concern the patching up and supplementing of the deficiencies in the welfare state s services but also the question of diaconal workers self-understanding of financial support and how it relates to their professionalism. In this thesis, I examine the experiences and visions diaconal workers have concerning financial support in their work with clients. The viewpoint of my work is the diaconal workers own experiences and interpretations of the meaning of financial support in customer service. In the articles of my thesis, I examined the meanings that diaconal workers gave to financial support in the aspects of work motivation, empowerment, expertise and tensions. The research material of my articles consists of three different data, which are theme interviews from diaconal workers, a survey from diaconal workers of Espoo and a diaconal barometer of 2009. I have analysed the theme interviews and the survey using qualitative content analysis. The results of my articles showed that diaconal workers motivation in tasks concerning economic aid was sustained by the nature and spiritual aspects of support activities. Work that supported empowerment through financial assistance meant influencing the client s personal life, community and local ties and structural circumstances of the surrounding society. Diaconal workers expertise in financial support work can be characterised as horizontal, which means that the expertise was built on acknowledging the client s dignity, the uniqueness of the client s life situation and listening to the client s own voice. Diaconal workers were also experts in community and area-based work. The tensions in financial support work are linked to its unofficial and undefined role in the field of social welfare and the inability of other aiding parties to respond to their duties. The results of my thesis on the experiences and visions of financial support reveal that it is multilateral and multidimensional. Diaconal workers used financial support to help the clients, taking into account their individual, communal, social and spiritual context. The professionalism of this financial support is reflectively related to the client s need of help and the spontaneity and unexpectedness of the situation. Support work was deeply bound to diaconal workers experiences of spirituality as the basic value in their work, the foundation of their idea of humanity and their method of helping others. In different tasks of financial support diaconal workers balanced between traditional, individual client work based on caritas and working methods which are based on supporting the individual s empowerment and active citizenship, as in postmodern social work. Diaconal workers experiences of financial support illustrated the transition or turning point in the professionalism of diaconal work, which involves finding one s own, stronger and clearer professional identity than earlier with respect to other helpers in society. Creating a unique identity is part of the empowerment process of diaconal work, in which it must define its professional role by itself. In postmodern pluralism and the fragmented context of diaconal activities, the question arose as to whether the spiritual traditions and traditional values of diaconal work support the modifications and adaptations needed in new, unpredictable situations. Diaconal work is said to be fast to react, able to predict changes and adapt to those changes. To preserve its sensitive reactive ability, also in the complex postmodern world, it must retain its own views and orientations. Otherwise, the distinctive values and traditions of diaconal work might sustain static diaconal work, employee-centeredness and a smug attitude when defining beneficiaries and needs, which highlights the paternalism of diaconal work. Such paternalism may complicate the progress of working methods which are based on empowerment and citizenship.

Income inequality in the process of economic development : An empirical approach

This thesis studies the effect of income inequality on economic growth. This is done by analyzing panel data from several countries with both short and long time dimensions of the data. Two of the chapters study the direct effect of inequality on growth, and one chapter also looks at the possible indirect effect of inequality on growth by assessing the effect of inequality on savings. In Chapter two, the effect of inequality on growth is studied by using a panel of 70 countries and a new EHII2008 inequality measure. Chapter contributes on two problems that panel econometric studies on the economic effect of inequality have recently encountered: the comparability problem associated with the commonly used Deininger and Squire s Gini index, and the problem relating to the estimation of group-related elasticities in panel data. In this study, a simple way to 'bypass' vagueness related to the use of parametric methods to estimate group-related parameters is presented. The idea is to estimate the group-related elasticities implicitly using a set of group-related instrumental variables. The estimation results with new data and method indicate that the relationship between income inequality and growth is likely to be non-linear. Chapter three incorporates the EHII2.1 inequality measure and a panel with annual time series observations from 38 countries to test the existence of long-run equilibrium relation(s) between inequality and the level of GDP. Panel unit root tests indicate that both the logarithmic EHII2.1 inequality measure and the logarithmic GDP per capita series are I(1) nonstationary processes. They are also found to be cointegrated of order one, which implies that there is a long-run equilibrium relation between them. The long-run growth elasticity of inequality is found to be negative in the middle-income and rich economies, but the results for poor economies are inconclusive. In the fourth Chapter, macroeconomic data on nine developed economies spanning across four decades starting from the year 1960 is used to study the effect of the changes in the top income share to national and private savings. The income share of the top 1 % of population is used as proxy for the distribution of income. The effect of inequality on private savings is found to be positive in the Nordic and Central-European countries, but for the Anglo-Saxon countries the direction of the effect (positive vs. negative) remains somewhat ambiguous. Inequality is found to have an effect national savings only in the Nordic countries, where it is positive.