The political economy of inequality and growth: Essays on sovereign debt, democracy and saving

This dissertation addresses three issues in the political economy of growth literature. The first study empirically tests the hypothesis that income inequality influences the size of a country's sovereign debt for a sample of developing countries for the period 1970–1990. The argument examined is that governments tend to yield to popular pressures to engage in redistributive policies, partially financed by foreign borrowing. Facing increased risk of default, international creditors limit the credit they extend, with the result that borrowing countries invest less and grow at a slower pace. The findings do not seem to support the negative relationship between inequality and sovereign debt, as there is evidence of increases in multilateral, countercyclical flows until the mid 1980s in Latin America. The hypothesis would hold for the period 1983–1990. Debt flows and levels seem to be positively correlated with growth as expected. ^ The second study empirically investigates the hypothesis that pronounced levels of inequality lead to unconsolidated democracies. We test the existence of a nonmonotonic relationship between inequality and democracy for a sample of Latin American countries for the period 1970–2000, where democracy appears to consolidate at some intermediate level of inequality. We find that the nonmonotonic relationship holds using instrumental variables methods. Bolivia seems to be a case of unconsolidated democracy. The positive relationship between per capita income and democracy disappears once fixed effects are introduced. ^ The third study explores the nonlinear relationship between per capita income and private saving levels in Latin America. Several estimation methods are presented; however, only the estimation of a dynamic specification through a state-of-the-art general method of moments estimator yields consistent estimates with increased efficiency. Results support the hypothesis that income positively affects private saving, while system GMM reveals nonlinear effects at income levels that exceed the ones included in this sample for the period 1960–1994. We also find that growth, government dissaving, and tightening of credit constraints have a highly significant and positive effect on private saving. ^

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.^

Lender Liability: The Legal and Management Effects on the Hospitality Industry

With the savings and loan crisis and the tail end of a recession at hand, the '90s are bound to be a difficult decade for the financing of hospitality operations through borrowing from commercial lenders. The authors discuss one of the least known dangers associated with borrowing, lender liability. The issue is discussed from both a legal and managerial perspective.

Designing Choice Sets to Exploit Focusing Illusion

Focusing illusion describes how, when making choices, people may put disproportionate attention on certain attributes of the options and hence, causing those options to be overvalued. For instance, in deciding whether or not to take out a loan, people may focus more on getting the loan than on its small and dispersed costs. Building on recent literature on focusing illusion in economic choice, we theoretically propose and empirically test that focusing illusion can be advantageously exploited such that attention is put back on the ignored attributes. To demonstrate this, we use hypothetical loan decisions where people choose between loans with different repayment plans to finance a purchase. We show that when adding a steeply decreasing-installments plan to the original choice set of not borrowing or borrowing under a fixed-installments plan, the preference for the fixed-installments plan is lessened. This is because preference for the fixed-installments plan shifted towards not borrowing. We discuss potential applications of our results in designing choice sets of intertemporal sequences.

Essays on Banking Competition

I study local shocks to consumer credit supply arising from the opening

of bank-related retail stores. Bank-related store openings coincide with

sharp increases in credit card placements in the neighborhood of the

store, in the months surrounding the store opening, and with the bank

that owns the store. I exploit this relationship to instrument for new

credit cards at the individual level, and find that obtaining a new

credit card sharply increases total borrowing as well as default risk,

particularly for risky and opaque borrowers. In line with theories of

default externality, I observe that existing lenders react to the

increased consumer borrowing and associated riskiness by contracting

their own supply. In particular, in the year following the issuance of a

new credit card, banks without links to stores reduce credit card limits

by 24-51%, offsetting most of the initial increase in total credit

limits.

“Newter”-ing the Nicodemite: Reception of John Calvin’s Quatre sermons (1552) in Sixteenth-Century England

This dissertation examines the publication history of a single work: John Calvin’s 1552 Quatre sermons de M. Jehan Calvin traictans des matières fort utiles pour nostre temps, avec briefve exposition du Pseaume lxxxvii. Overlooked for both its contribution to Calvin’s wider corpus and its surprising popularity in English translation, successive editions of Quatre sermons display how Calvin’s argument against the behavior of so-called “Nicodemites” was adapted to various purposes unrelated to refuting religious dissimulation. The present study contributes to research in Calvin’s anti-Nicodemism by highlighting the fruitfulness of focusing on a discrete work and its reception. Borrowing a term (“Newter”) from John Field’s 1579 translation of Quatre sermons, this study’s title adumbrates its argument. English translators capitalized on the intrinsic malleability of a nameless and faceless opponent, the Nicodemite, and the adaptability of Quatre sermons’ genre as a collection of sermons to reshape—or, if you will, disfigure—both Calvin’s original foes and his case against them to advance various new agenda. Yet they were not the first to use the reformer’s sermons this way. They could have learned this from Calvin himself.

My examination of Quatre sermons opens by setting the work in the context of Calvin’s other writings and his political situation (Introduction, chapters one and two). Calvin’s unrelenting literary assault on French Nicodemism over three decades has long been recognized for its consistency and negativity. Yet scholars have tended to neglect how Calvin’s polemic against religious dissimulation could exhibit significant flexibility according to the needs of his context. Whereas Calvin’s preface promises simply to revisit his previous argument against participation in the Mass, his approach to Nicodemism in Quatre sermons seems adapted to accomplish goals beyond decrying false worship, offering a carefully-crafted apology for Calvin’s pastoral authority directed at his political situation. Repeatedly emphasizing God’s purpose to bless his children through the ministry of a rightly-ordered church, Quatre sermons marks a shift in Calvin’s anti-Nicodemite rhetoric away from purely negative critique, stressing instead God’s provision of spiritual nurture via political exile. Read in light of Calvin’s 1552 context, two audiences emerge: sermons ostensibly targeting believers in France who hid their faith also appear especially designed to silence Calvin’s foes in Geneva.

The remainder of the study examines the reception of Quatre sermons in the rapidly shifting religious and social contexts of Marian and Elizabethan England, where it appeared in more unique editions than any of Calvin’s writings besides the Institutio and the reformer’s 1542/45 Genevan Catechism. Calvin’s anti-Nicodemism has not been examined for its distinct contribution to the overall English reception of his thought. Five English versions of Quatre sermons appeared between 1553 and 1584—four of these under a Protestant queen, a situation quite different from the French context Calvin addressed. After situating Calvin’s position within the currents of Tudor Protestant anti-Nicodemism (chapter three), I place each of the five translations in its particular context, investigating prefaces, appendices, marginalia, and translation methods to discover how and why individuals used Quatre sermons (chapters four to six). Like Calvin in 1552, those who brought Quatre sermons to English readers were not primarily concerned with Nicodemism. Rather, the malleability of Calvin’s Nicodemite as polemical opponent and the flexibility of Quatre sermons as a sequence of discrete, interrelated parts made it popular with those eager to press Calvin into the service of a variety of diverse goals he could not have imagined, including turning his anti-Nicodemism against fellow members of the English church.

Adieu New York, bonjour Paris ! : l es enjeux esthétiques et culturels des appropriations du jazz dans le monde musical savant français (1900-1930)

Thèse réalisée en cotutelle avec l'Université Paris-Sorbonne et l'Université de Montréal. Composition du jury : M. Laurent Cugny (Université Paris-Sorbonne) ; M. Michel Duchesneau (Université de Montréal) ; M. Philippe Gumplowicz (Université d'Evry-Val d'Essonne) ; Mme Barbara Kelly (Keele University - Royal Northern College of Music) ; M. François de Médicis (Université de Montréal) ; M. Christopher Moore (Université d'Ottawa)

Student Loans : Empirical Evidence and Policy Implications (Working Paper 7)

This paper first summarizes the results of an empirical investigation of borrowing and repayment patterns of post-secondary graduates, then addresses a number of related policy issues, including i) the need for further research to generate the information needed to fully evaluate the student loan system, ii) the advantages of extending the assistance available for those facing problems with their debt burdens in the post-schooling period, iii) the need to increase borrowing limits, iii) the efficiency and equity advantages of providing assistance to post-secondary students through loans rather than the grants which many have been calling for, and iii) a proposal for revitalising the cash-strapped post-secondary system with infusions from both federal and provincial governments and students themselves of equal parts, the latter facilitated by the appropriate changes in the loan system (higher limits and more support for those who run into trouble with repayment).

Student Loans : the Empirical Record (Working Paper 6)

Student loan programmes have been the target of a good deal of attention in recent years and one important set of concerns has focussed on the levels of borrowing and the associated debt loads. This paper presents the results of an empirical investigation of borrowing and repayment patterns of four recent cohorts of post-secondary graduates based on the National Graduates Survey (NGS) databases. The paper should be relevant to those interested in access to post-secondary education and the well-being of students, the financing of the higher education more generally, and a range of related issues.

On a first-name basis: Englishization and naming in Flanders

Following and contributing to the ongoing shift from more structuralist, system-oriented to more pragmatic, socio-cultural oriented anglicism research, this paper verifies to what extent the global spread of English affects naming patterns in Flanders. To this end, a diachronic database of first names is constructed, containing the top 75 most popular boy and girl names from 2005 until 2014. In a first step, the etymological background of these names is documented and the evolution in popularity of the English names in the database is tracked. Results reveal no notable surge in the preference for English names. This paper complements these database-driven results with an experimental study, aiming to show how associations through referents are in this case more telling than associations through phonological form (here based on etymology). Focusing on the socio-cultural background of first names in general and of Anglo-American pop culture in particular, the second part of the study specifically reports on results from a survey where participants are asked to name the first three celebrities that leap to mind when hearing a certain first name (e.g. Lana, triggering the response Del Rey). Very clear associations are found between certain first names and specific celebrities from Anglo-American pop culture. Linking back to marketing research and the social turn in onomastics, we will discuss how these celebrities might function as referees, and how social stereotypes surrounding these referees are metonymically attached to their first names. Similar to the country-of-origin-effect in marketing, these metonymical links could very well be the reason why parents select specific “celebrity names”. Although further attitudinal research is needed, this paper supports the importance of including socio-cultural parameters when conducting onomastic research.

New Chinese Words in 2014 – A Study of Word-formation Processes

随着社会的发展，尤其是互联网的发展，很多语言每年都涌现出了不少新词汇。词语是每个语言最基本也是最重要的组成部分，因此分析这些新词汇的结构特点以及构词法是很有意义的。这篇文章分析了2014年出现在中文里的新词汇和它们的构词方式，论文的目的是为了更好地了解中文词汇的发展和特点。本文以《2014汉语新词语》中公布的2014年出现的新词汇作为语料进行分析，发现了以下两个主要特点：第一，合成法，派生法，缩略法是2014年产生的新词汇的主要构词方式；第二， 百分之七十二的新词汇是多音节词（包含三个或者三个以上音节），而百分之八十的是名词。这些特点说明中文词汇现阶段的特点和发展趋势，跟传统的中文词汇有不同之处。

As Implicações do novo regime financeiro das autarquias locais no apuramento do endividamento do grupo municipal

Dissertação de Mestrado em Auditoria

Bitcoin mining is about to become a lot less profitable.

Imagine being told that your wage was going to be cut in half. Well, that’s what’s soon going to happen to those who make money from Bitcoin mining, the process of earning the online currency Bitcoin. The current expected date for this change is 11 July 2016. Many see this as the day when Bitcoin prices will rocket and when Bitcoin owners could make a great deal of money. Others see it as the start of a Bitcoin crash. At present no one quite knows which way it will go. Bitcoin was created in 2009 by someone known as Satoshi Nakamoto, borrowing from a whole lot of research methods. It is a cryptocurrency, meaning it uses digital encryption techniques to create bitcoins and secure financial transactions. It doesn’t need a central government or organisation to regulate it, nor a broker to manage payments. Conventional currencies usually have a central bank that creates money and controls its supply. Bitcoin is instead created when individuals “mine” for it by using their computers to perform complex calculations through special software. The algorithm behind Bitcoin is designed to limit the number of bitcoins that can ever be created. All Bitcoin transactions are recorded on a public database known as a blockchain. Every time someone mines for Bitcoin, it is recorded with a new block that is transmitted to every Bitcoin app across the network, like a bank updating its online records.

Essays in asset price bubbles

This thesis studies the field of asset price bubbles. It is comprised of three independent chapters. Each of these chapters either directly or indirectly analyse the existence or implications of asset price bubbles. The type of bubbles assumed in each of these chapters is consistent with rational expectations. Thus, the kind of price bubbles investigated here are known as rational bubbles in the literature. The following describes the three chapters. Chapter 1: This chapter attempts to explain the recent US housing price bubble by developing a heterogeneous agent endowment economy asset pricing model with risky housing, endogenous collateral and defaults. Investment in housing is subject to an idiosyncratic risk and some mortgages are defaulted in equilibrium. We analytically derive the leverage or the endogenous loan to value ratio. This variable comes from a limited participation constraint in a one period mortgage contract with monitoring costs. Our results show that low values of housing investment risk produces a credit easing effect encouraging excess leverage and generates credit driven rational price bubbles in the housing good. Conversely, high values of housing investment risk produces a credit crunch characterized by tight borrowing constraints, low leverage and low house prices. Furthermore, the leverage ratio was found to be procyclical and the rate of defaults countercyclical consistent with empirical evidence. Chapter 2: It is widely believed that financial assets have considerable persistence and are susceptible to bubbles. However, identification of this persistence and potential bubbles is not straightforward. This chapter tests for price bubbles in the United States housing market accounting for long memory and structural breaks. The intuition is that the presence of long memory negates price bubbles while the presence of breaks could artificially induce bubble behaviour. Hence, we use procedures namely semi-parametric Whittle and parametric ARFIMA procedures that are consistent for a variety of residual biases to estimate the value of the long memory parameter, d, of the log rent-price ratio. We find that the semi-parametric estimation procedures robust to non-normality and heteroskedasticity errors found far more bubble regions than parametric ones. A structural break was identified in the mean and trend of all the series which when accounted for removed bubble behaviour in a number of regions. Importantly, the United States housing market showed evidence for rational bubbles at both the aggregate and regional levels. In the third and final chapter, we attempt to answer the following question: To what extend should individuals participate in the stock market and hold risky assets over their lifecycle? We answer this question by employing a lifecycle consumption-portfolio choice model with housing, labour income and time varying predictable returns where the agents are constrained in the level of their borrowing. We first analytically characterize and then numerically solve for the optimal asset allocation on the risky asset comparing the return predictability case with that of IID returns. We successfully resolve the puzzles and find equity holding and participation rates close to the data. We also find that return predictability substantially alter both the level of risky portfolio allocation and the rate of stock market participation. High factor (dividend-price ratio) realization and high persistence of factor process indicative of stock market bubbles raise the amount of wealth invested in risky assets and the level of stock market participation, respectively. Conversely, rare disasters were found to bring down these rates, the change being severe for investors in the later years of the life-cycle. Furthermore, investors following time varying returns (return predictability) hedged background risks significantly better than the IID ones.

Quichua-Spanish language contact in Salcedo, Ecuador: revisiting media lengua syncretic language practices

The purpose of the current thesis is to develop a better understanding of the interaction between Spanish and Quichua in the Salcedo region and provide more information for the processes that might have given rise to Media Lengua, a ‘mixed’ language comprised of a Quichua grammar and Spanish lexicon. Muysken attributes the formation of Media Lengua to relexification, ruling out any influence from other bilingual phenomena. I argue that the only characteristic that distinguishes Media Lengua from other language contact varieties in central Ecuador is the quantity of the overall Spanish borrowings and not the type of processes that might have been employed by Quichua speakers during the genesis of Media Lengua. The results from the Salcedo data that I have collected show how processes such as adlexification, code-mixing, and structural convergence produce Media Lengua-type sentences, evidence that supports an alternative analysis to Muysken’s relexification hypothesis. Overall, this dissertation is developed around four main objectives: (1) to describe the variation of Spanish loanwords within a bilingual community in Salcedo; (2) to analyze some of the prominent and recent structural changes in Quichua and Spanish; (3) to determine whether Spanish loanword use can be explained by the relationship consultants have with particular social categories; and (4) to analyze the consultants’ language ideologies toward syncretic uses of Spanish and Quichua. Overall, 58% of the content words, 39% of the basic vocabulary, and 50% of the subject pronouns in the Salcedo corpus were derived from Spanish. When compared to Muysken’s description of highlander Quichua in the 1970’s, Spanish loanwords have more than doubled in each category. The overall level of Spanish loanwords in Salcedo Quichua has grown to a level between highlander Quichua in the 1970’s and Media Lengua. Similar to Spanish’s lexical influence in Media Lengua, the increase of Spanish borrowings in today’s rural Quichua can be seen in non-basic and basic vocabularies as well as the subject pronoun system. Significantly, most of the growth has occurred through forms of adlexification i.e., doublets, well-established borrowings, and cultural borrowings, suggesting that ‘ordinary’ lexical borrowing is also capable of producing Media Lengua-type sentences. I approach the second objective by investigating two separate phenomena related to structural convergence. The first examines the complex verbal constructions that have developed in Quichua through Spanish loan translations while the second describes the type of Quichua particles that are attached to Spanish lexemes while speaking Spanish. The calquing of the complex verbal constructions from Spanish were employed when speaking standard Quichua. Since this standard form is typically used by language purists, I argue that their use of calques is a strategy of exploiting the full range of expression from Spanish without incorporating any of the Spanish lexemes which would give the appearance of ‘contamination’. The use of Quichua particles in local varieties of Spanish is a defining characteristic of Quichuacized Spanish, spoken most frequently by women and young children in the community. Although the use of Quichua particles was probably not the main catalyst engendering Media Lengua, I argue that its contribution as a source language to other ‘mixed’ varieties, such as Media Lengua, needs to be accounted for in descriptions of BML genesis. Contrary to Muysken’s representation of relatively ‘unmixed’ Spanish and Quichua as the two source languages of Media Lengua, I propose that local varieties of Spanish might have already been ‘mixed’ to a large degree before Media Lengua was created. The third objective attempts to draw a relationship between particular social variables and the use of Spanish loanwords. Whisker Boxplots and ANOVAs were used to determine which social group, if any, have been introducing new Spanish borrowings into the bilingual communities in Salcedo. Specifically, I controlled for age, education, native language, urban migration, and gender. The results indicate that none of the groups in each of the five social variables indicate higher or lower loanword use. The implication of these results are twofold: (a) when lexical borrowing occurs, it is immediately adopted as the community-wide norm and spoken by members from different backgrounds and generations, or (b) this level of Spanish borrowing (58%) is not a recent phenomenon. The fourth and final objective draws on my ethnographic research that addresses the attitudes of syncretic language use. I observed that Quichuacized Spanish and Hispanicized Quichua are highly stigmatized varieties spoken by the country’s most marginalized populations and families, yet within the community, syncretic ways of speaking are in fact the norm. It was shown that there exists a range of different linguistic definitions for ‘Chaupi Lengua’ and other syncretic language practices as well as many contrasting connotations, most of which were negative. One theme that emerged from the interviews was that speaking syncretic varieties of Quichua weakened the consultant’s claim to an indigenous identity. The linguistic and social data presented in this dissertation supports an alternative view to Muysken’s relexification hypothesis, one that has the advantage of operating with well-precedented linguistic processes and which is actually observable in the present-day Salcedo area. The results from the study on lexical borrowing are significant because they demonstrate how a dynamic bilingual speech community has gradually diversified their Quichua lexicon under intense pressure to shift toward Spanish. They also show that Hispanicized Quichua (Quichua with heavy lexical borrowing) clearly arose from adlexification and prolonged lexical borrowing, and is one of at least six identifiable speech styles found in Salcedo. These results challenge particular interpretations of language contact outcomes, such as, ones that depict sources languages as discrete and ‘unmixed.’ The bilingual continuum presented in this thesis shows on the one hand, the range of speech styles that are accessible to different speakers, and on the other hand, the overlapping, syncretic features that are shared among the different registers and language varieties. It was observed that syncretic speech styles in Salcedo are employed by different consultants in varied interactional contexts, and in turn, produce different evaluations by other fellow community members. In the current dissertation, I challenge the claim that relexification and Media Lengua-type sentences develop in isolation and without the influence of other bilingual phenomena. Based on Muysken's Media Lengua example sentences and the speech styles from the Salcedo corpus, I argue that Media Lengua may have arisen as an institutionalized variant of the highly mixed "middle ground" within the range of the Salcedo bilingual continuum discussed above. Such syncretic forms of Spanish and Quichua strongly resemble Media Lengua sentences in Muysken’s research, and therefore demonstrate how its development could have occurred through several different language contact processes and not only through relexification.