Essays on investment, growth and income distribution

In this dissertation, I examine both theoretically and empirically the relationship between stock prices and income distribution using an endogenous growth model with social status impatience.^ The theoretical part looks into how status impatience and current economic status jointly determine time preference, savings, future economic status, stock prices, growth and wealth distribution in the steady state. This work builds on Burgstaller and Karayalcin (1996).^ More specifically, I look at (i) the effects of the distribution of status impatience levels on the distribution of steady state assets, incomes and consumption and (ii) the effects of changes in relative levels of status impatience on stock prices. Therefore, from (i) and (ii), I derive the correlation between stock prices, incomes and asset distribution. Also, the analysis of the stack market is undertaken in the presence of adjustment costs to investments.^ The empirical chapter looks at (i) the correlation between income inequality and long run economic growth on the one hand and (ii) the correlation between stock market prices and income inequality on the other. The role of stock prices and social status is examined to better understand the forces that enable a country to grow overtime and to determine why output per capita varies across countries. The data are from Summers and Heston (1988), Barro and Wolf (1989), Alesina and Rodrik (1994), Global financial Database (1997) and the World Bank. Data for social status are collected through a primary sample survey on the internet. Twenty-five developed and developing countries are included in the sample.^ The model developed in this study was specified as a system of simultaneous equations, in which per capita growth rate and income inequality were endogenous variables. Additionally, stock price index and social status measures were also incorporated. The results indicate that income inequality is inversely related to economic growth. In addition, increase in income inequality arising from higher stock prices constrains growth. Moreover, where social status is determined by income levels, it influences long run growth. Therefore, these results support findings of Persson and Tabellini (1994) and Alesina and Rodrik (1994). ^

Selecting a college or university: A study of students and their parents

This case study investigated the decision-making process of high-achieving high school students and their parents in selecting a college or university. The conceptual framework that guided this study included theoretical and empirical research framed around a three-phase model of college choice. Parental influence dominated the first phase of this model. The search phase, which was the second and the most crucial one, included financial considerations related to this decision, admissions considerations during the search phase, the psychology of decision making, and advertising strategies for teenagers. Once students completed the search phase they developed expectations of the institutions they considered prior to making the final decision. The study employed qualitative methods using individual interviews with students and their parents. ^ Six high-achieving high school seniors from a South Florida high school and their parents were selected to participate in this study. Of these students, four were female and two were male. Participants were individually interviewed on two separate occasions over a three-month period. Students and their parents were interviewed separately, with one exception, during the first set of interviews and together during the second. The data obtained from these interviews were transcribed and these transcripts were coded, categorized, analyzed, and sorted into major themes and submitted to interpretive analysis. ^ In-depth descriptions of participants' experiences during the decision-making process are described in the study. Financial factors—which included the cost of college, the socio-economic status of the family, and scholarship possibilities—drove the selection process for these students and their parents, most of whom reported their family incomes between the lower-middle to upper-middle class range. All of these students took advantage of the Bright Futures Scholarship Program, other scholarship opportunities, and the lower tuition costs of in-state public institutions. The effectiveness of recruitment techniques, such as brochures, campus visits, the development of college Web sites, and the overall impact of Internet resources, was assessed by the researcher. ^ As these students had progressed through the search phase, they developed perceptions of potential institutions as they were assisted by those around them. The value of familiarity with institutions and the use of heuristics were quite evident in the final analysis of this study, based on what the students communicated about how their knowledge of and comfort in these institutions affected their decisions. Parental influence played an important role in the selection process for the students in this study as the parents clearly directed the process, by the constant advice they gave their children and by the financial limitations they communicated to them. ^

The structure of games

Computer Game Playing has been an active area of research since Samuel’s first Checkers player (Samuel 1959). Recently interest beyond the classic games of Chess and Checkers has led to competitions such as the General Game Playing competition, in which players have no beforehand knowledge of the games they are to play, and the Computer Poker Competition which force players to reason about imperfect information under conditions of uncertainty. The purpose of this dissertation is to explore the area of General Game Playing both specifically and generally. On the specific side, we describe the design and implementation of our General Game Playing system OGRE. This system includes an innovative method for feature extraction that helped it to achieve second and fourth place in two international General Game Playing competitions. On the more general side, we also introduce the Regular Game Language, which goes beyond current works to provide support for both stochastic and imperfect information games as well as the more traditional games.

Essays on international lending and increasing returns to scale

Standard economic theory suggests that capital should flow from rich countries to poor countries. However, capital has predominantly flowed to rich countries. The three essays in this dissertation attempt to explain this phenomenon. The first two essays suggest theoretical explanations for why capital has not flowed to the poor countries. The third essay empirically tests the theoretical explanations.^ The first essay examines the effects of increasing returns to scale on international lending and borrowing with moral hazard. Introducing increasing returns in a two-country general equilibrium model yields possible multiple equilibria and helps explain the possibility of capital flows from a poor to a rich country. I find that a borrowing country may need to borrow sufficient amounts internationally to reach a minimum investment threshold in order to invest domestically.^ The second essay examines how a poor country may invest in sectors with low productivity because of sovereign risk, and how collateral differences across sectors may exacerbate the problem. I model sovereign borrowing with a two-sector economy: one sector with increasing returns to scale (IRS) and one sector with diminishing returns to scale (DRS). Countries with incomes below a threshold will only invest in the DRS sector, and countries with incomes above a threshold will invest mostly in the IRS sector. The results help explain the existence of a bimodal world income distribution.^ The third essay empirically tests the explanations for why capital has not flowed from the rich to the poor countries, with a focus on institutions and initial capital. I find that institutional variables are a very important factor, but in contrast to other studies, I show that institutions do not account for the Lucas Paradox. Evidence of increasing returns still exists, even when controlling for institutions and other variables. In addition, I find that the determinants of capital flows may depend on whether a country is rich or poor.^

Stream dissolved organic matter bioavailability and composition in watersheds underlain with discontinuous permafrost

We examined the impact of permafrost on dissolved organic matter (DOM) composition in Caribou-Poker Creeks Research Watershed (CPCRW), a watershed underlain with discontinuous permafrost, in interior Alaska. We analyzed long term data from watersheds underlain with varying degrees of permafrost, sampled springs and thermokarsts, used fluorescence spectroscopy, and measured the bioavailabity of dissolved organic carbon (DOC). Permafrost driven patterns in hydrology and vegetation influenced DOM patterns in streams, with the stream draining the high permafrost watershed having higher DOC and dissolved organic nitrogen (DON) concentrations, higher DOC:- DON and greater specific ultraviolet absorbance (SUVA) than the streams draining the low and medium permafrost watersheds. Streams, springs and thermokarsts exhibited a wide range of DOC and DON concentrations (1.5–37.5 mgC/L and 0.14–1.26 mgN/L, respectively), DOC:DON (7.1–42.8) and SUVA (1.5–4.7 L mgC-1 m-1). All sites had a high proportion of humic components, a low proportion of protein components, and a low fluorescence index value (1.3–1.4), generally consistent with terrestrially derivedDOM. Principal component analysis revealed distinct groups in our fluorescence data determined by diagenetic processing and DOM source. The proportion of bioavailable DOC ranged from 2 to 35%, with the proportion of tyrosine- and tryptophan-like fluorophores in the DOM being a major predictor of DOC loss (p\0.05, R2 = 0.99). Our results indicate that the degradation of permafrost in CPCRW will result in a decrease in DOC and DON concentrations, a decline in DOC:DON, and a reduction in SUVA, possibly accompanied by

The Structure of Games

Computer Game Playing has been an active area of research since Samuel’s first Checkers player (Samuel 1959). Recently interest beyond the classic games of Chess and Checkers has led to competitions such as the General Game Playing competition, in which players have no beforehand knowledge of the games they are to play, and the Computer Poker Competition which force players to reason about imperfect information under conditions of uncertainty. The purpose of this dissertation is to explore the area of General Game Playing both specifically and generally. On the specific side, we describe the design and implementation of our General Game Playing system OGRE. This system includes an innovative method for feature extraction that helped it to achieve second and fourth place in two international General Game Playing competitions. On the more general side, we also introduce the Regular Game Language, which goes beyond current works to provide support for both stochastic and imperfect information games as well as the more traditional games.