Essays in Macroeconomic Theory and Political Economy
Open Access
- Author:
- Claudius, Sascha
- Graduate Program:
- Economics
- Degree:
- Doctor of Philosophy
- Document Type:
- Dissertation
- Date of Defense:
- June 03, 2010
- Committee Members:
- Edward James Green, Dissertation Advisor/Co-Advisor
Edward James Green, Committee Chair/Co-Chair
Herman J Bierens, Committee Chair/Co-Chair
Burt Monroe Iii, Committee Member
Alexander Monge Naranjo, Committee Member - Keywords:
- political economy
macroeconomic theory - Abstract:
- This thesis consists of three chapters. The first chapter investigates how the functional operator used in Kocherlakota (1996) is linked to the game underlying the model. Using the machinery developed by Abreu et al. (1990) (APS) I solve for the set of equilibrium value profiles directly. Consider a function f whose hypograph is self-generating and apply the APS set operator B to the hypograph. The main result states that the functional operator used in Kocherlakota (1996) maps the function f to the upper boundary of the resulting set. The second chapter tackles various issues in the empirical literature investigating the claim that economic development leads to political development, i.e., higher income causes democracy. All democracy data are ordinal, i.e., ordered and discrete. In contrast to Barro (1999) and Acemoglu et al. (2008), who treat the democracy data as continuous, I develop and estimate a dynamic model where the ordinal democracy variable has the Markov property. As pointed out by Robinson (2006), most work in the literature fails to take into account that democracy might have an effect on income. Consequently, I test whether income has an effect on democracy and whether democracy has an effect on income. The effects between income and democracy are dynamic as they unfold over time. This leads me to employ the standard econometric causality concept in time series analysis, Granger causality. Mosconi et al. (2006) have extended the concept of Granger causality to binary processes. Using a similar Markov approach allows me to apply their definition of Granger causality in my econometric model. I also show that GDP per capita is a unit root process for almost all countries and that failing to take this into account leads to model misspecification and misleading results. My empirical analysis suggests the following. First, higher income Granger causes democracy for full democracies, which means that a high income helps to stabilize democracies. Second, higher income Granger causes democracy for medium democracies implying that income can have a positive effect on regime type where there is already a somewhat favorable environment. Third, I find that Granger causality runs from democracy to income meaning that income and democracy form a bidirectional feedback system. The third chapter investigates empirically the effect of extending the franchise to women. The underlying question is why women had to fight for their right to vote. The hypothesis is that richer and more educated women had a higher turnout at the polls than poorer and less educated women. Using data on demographic composition, election results and voter registration for Pittsburgh I estimate female voter turnout and female voter participation across different social groups and the effect of women suffrage on election results. I find that female voter turnout and female voter participation was higher in the richer and more educated parts of town. However, I cannot find an effect of the enactment women suffrage on the election results.