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Publication Metadata only A general equilibrium analysis of state and private colleges and access to higher education in the US(Elsevier, 2017) Epple, Dennis; Romano, Richard; Sieg, Holger; Department of Economics; Department of Economics; Sarpça, Sinan; Faculty Member; College of Administrative Sciences and Economics; 52406We develop a general equilibrium model of the market for undergraduate higher education that captures the coexistence of public and private colleges, the large degree of quality differentiation among them, and the tuition and admission policies that emerge from their competition for students. A quantitative version of the model matches well estimates of enrollment elasticities, variation in need-based and merit-based institutional aid with, respectively, student income and ability, and aggregate characteristics of U.S. higher education including college attendance in public and private schools, tuition levels, and the provision of federal aid. Predictions about the provision of federal aid and the distribution of students across colleges by ability and income match the empirical counterparts well. We use the model to examine the consequences of federal and state aid policies. A one-third increase in the maximum federal aid increases college attendance by 6% of the initial college population, most of the increase being in state colleges and mainly of poor students. Elite private colleges reduce institutional aid and use the net funding gain to spend more on educational inputs and to substitute some highly able poor students for less able rich students. Reductions in federal or state aid result in substantially reduced attendance mainly by poor students. Reductions of support to state colleges induce private colleges to increase enrollments modestly and improve in quality as demand shifts toward them.Publication Open Access A kidney exchange clearinghouse in New England(American Economic Association (AEA), 2005) Roth, Alvin E.; Ünver, M. Utku; Department of Economics; Department of Economics; Sönmez, Tayfun; Faculty Member; College of Administrative Sciences and EconomicsPublication Metadata only Aggregate earnings, firm-level earnings, and expected stock returns(Cambridge Univ Press, 2008) Tehranian, Hassan; Demirtaş Özgür; Department of Economics; Department of Economics; Bali, Turan; Other; College of Administrative Sciences and Economics; N/AThis paper provides an analysis of the predictability of stock returns using market-, industry-, and firm-level earnings. Contrary to Lamont (1998), we find that neither dividend payout ratio nor the level of aggregate earnings can forecast the excess market return. We show that these variables do not have robust predictive power across different stock portfolios and sample periods. In contrast to the aggregate-level findings, earnings yield has significant explanatory power for the time-series and cross-sectional variation in firm-level stock returns and the 48 industry portfolio returns. The mean reversion of stock prices as well as the earnings' correlation with expected stock returns are responsible for the forecasting power of earnings yield. These results are robust after controlling for book-to-market, size, price momentum, and post-earnings announcement drift. At the aggregate level, the information content of firm-level earnings about future cash flows is diversified away and higher aggregate earnings do not forecast higher returns.Publication Metadata only An extreme value approach to estimating interest-rate volatility: pricing implications for interest-rate options(Informs, 2007) Department of Economics; Department of Economics; Bali, Turan; Other; College of Administrative Sciences and Economics; N/AThis paper proposes an extreme value approach to estimating interest-rate volatility and shows that during the extreme movements of the U.S. Treasury market the volatility of interest-rate changes is underestimated by the standard approach that uses the thin-tailed normal distribution. The empirical results indicate that (1) the volatility of maximal and minimal changes in interest rates declines as time-to-maturity rises, yielding a downward-sloping volatility curve for the extremes; (2) the minimal changes are more volatile than the maximal changes for all data sets and for all asymptotic distributions used; (3) the minimal changes in Treasury yields have fatter tails than the maximal changes; and (4) for both the maxima and minima, the extreme changes in short-term rates have thicker tails than the extreme changes in long-term rates. This paper extends the standard option-pricing models with lognormal forward rates to accomrnodate significant kurtosis observed in the interest-rate data. This paper introduces a closed-form option-pricing model based on the generalized extreme value distribution that successfully removes the well-known pricing bias of the lognormal distribution.Publication Metadata only Auctions, actions, and the failure of information aggregation(Amer Economic Assoc, 2014) Ekmekci, Mehmet; Department of Economics; Department of Economics; Atakan, Alp Enver; Faculty Member; College of Administrative Sciences and Economics; 39383We study a uniform-price auction where k identical common-value objects are allocated amongst z > k bidders who have imperfect signals about the state of the world. The common valuation is determined jointly by the state and an action that is chosen after winning an object. In large auctions, there are symmetric equilibria where the auction price aggregates no information. Moreover, market statistics other than price (e.g., the amount of rationing or the bid distribution) contain extra information about the state. In contrast, in standard large auctions without actions, the price aggregates all relevant information.Publication Metadata only Bargaining and reputation in search markets(Oxford Univ Press, 2014) Ekmekci, Mehmet; Department of Economics; Department of Economics; Atakan, Alp Enver; Faculty Member; College of Administrative Sciences and Economics; 39383This article considers a two-sided search market where firms and workers are paired to bargain over a unit surplus. The matching market serves as an endogenous outside option for the agents. The market includes inflexible commitment types who demand a constant portion of any match surplus. The frequency of such types is determined in equilibrium.An equilibrium where there are significant delays in reaching an agreement and where negotiations occasionally break down on the equilibrium path is constructed. Such an equilibrium exists and commitment types affect bargaining dynamics even if the equilibrium frequency of such types is negligible. If the inflows of firms and workers into the market are symmetric, then bargaining involves two-sided reputation building and reputation concerns lead to delays and inefficiency. Access to the market exacerbates bargaining inefficiencies caused by inflexible types. If the inflows of workers and firms are sufficiently asymmetric, then bargaining involves one-sided reputation and commitment types determine the terms of trade.Publication Metadata only Better to give than to receive: predictive directional measurement of volatility spillovers(Elsevier, 2012) Diebold, Francis X.; Department of Economics; Department of Economics; Yılmaz, Kamil; Faculty Member; College of Administrative Sciences and Economics; 6111Using a generalized vector autoregressive framework in which forecast-error variance decompositions are invariant to the variable ordering, we propose measures of both the total and directional volatility spillovers. We use our methods to characterize daily volatility spillovers across US stock, bond, foreign exchange and commodities markets, from January 1999 to January 2010. We show that despite significant volatility fluctuations in all four markets during the sample, cross-market volatility spillovers were quite limited until the global financial crisis, which began in 2007. As the crisis intensified, so too did the volatility spillovers, with particularly important spillovers from the stock market to other markets taking place after the collapse of the Lehman Brothers in September 2008.Publication Metadata only Bridging the Covid-19 data and the epidemiological model using the time-varying parameter SIRD model(Elsevier Sci Ltd, 2024) Şimşek, Yasin; Department of Economics; Department of Economics; Çakmaklı, Cem; College of Administrative Sciences and EconomicsThis paper extends the canonical model of epidemiology, the SIRD model, to allow for timevarying parameters for real-time measurement and prediction of the trajectory of the Covid-19 pandemic. Time variation in model parameters is captured using the score -driven modeling structure designed for the typical daily count data related to the pandemic. The resulting specification permits a flexible yet parsimonious model with a low computational cost. The model is extended to allow for unreported cases using a mixed -frequency setting. Results suggest that these cases' effects on the parameter estimates might be sizeable. Full sample results show that the flexible framework accurately captures the successive waves of the pandemic. A realtime exercise indicates that the proposed structure delivers timely and precise information on the pandemic's current stance. This superior performance, in turn, transforms into accurate predictions of the death cases and cases treated in Intensive Care Units (ICUs).Publication Open Access Building social cohesion in ethnically mixed schools: an intervention on perspective taking(Oxford University Press (OUP), 2021) Alan, Şule; Baysan, Ceren; Kubilay, Elif; Department of Economics; Department of Economics; Gümren, Mert; Researcher; Graduate School of Social Sciences and HumanitiesWe evaluate the effect of an educational program that aims to build social cohesion in ethnically mixed schools by developing perspective-taking ability in children. The program is implemented in Turkish elementary schools affected by a large influx of Syrian refugee children. We measure a comprehensive set of outcomes that characterize a cohesive school environment, including peer violence incidents, the prevalence of interethnic social ties, and prosocial behavior. Using randomized variation in program implementation, we find that the program significantly lowers peer violence and victimization on school grounds. The program also reduces the likelihood of social exclusion and increases interethnic social ties in the classroom. We find that the program significantly improves prosocial behavior, measured by incentivized tasks: treated students exhibit significantly higher trust, reciprocity, and altruism toward each other as well as toward anonymous out-school peers. We show that this enhanced prosociality is welfare improving from the ex post payoff perspective. We investigate multiple channels that could explain the results, including ethnic bias, impulsivity, empathetic concern, emotional intelligence, behavioral norms, and perspective taking. Children's increased effort to take others' perspectives emerges as the most robust mechanism to explain our results.Publication Metadata only Business cycles in developed and emerging economies: evidence from a univariate markov switching approach(Routledge Journals, Taylor & Francis Ltd, 2012) Bildirici, Melike; Department of Economics; Department of Economics; Altuğ, Sumru; Faculty Member; College of Administrative Sciences and Economics; N/AThis paper characterizes business cycle phenomena in a sample of twenty-seven developed and emerging economies using a univariate Markov regime-switching approach. It examines the efficacy of this approach for detecting business cycle turning points and for identifying distinct economic regimes for each country in question. The paper also presents results on business cycle synchronization for the sample of countries under consideration. The findings of the paper have implications for understanding the commonalities and differences in cyclical phenomena for a diverse set of developed and emerging economies.