General Economics (econ.GN)

Abstract: We evaluate and extend the solution methods for models with binary and multiple continuous choice variables in dynamic programming, particularly in cases where a discrete state space solution method is not viable. Therefore, we approximate the solution using taste shocks or black-box optimizers that applied mathematicians use to benchmark their algorithms. We apply these methods to a default framework in which agents have to solve a portfolio problem with long-term debt. We show that the choice of solution method matters, as taste shocks fail to attain convergence in multidimensional problems. We compare the relative advantages of using four optimization algorithms: the Nelder-Mead downhill simplex algorithm, Powell's direction-set algorithm with LINMIN, the conjugate gradient method BOBYQA, and the quasi-Newton Davidon-Fletcher-Powell (DFPMIN) algorithm. All of these methods, except for the last one, are preferred when derivatives cannot be easily computed. Ultimately, we find that Powell's routine evaluated with B-splines, while slow, is the most viable option. BOBYQA came in second place, while the other two methods performed poorly.

Abstract: The paper examines the effects of stringent land use regulations, measured using the Wharton Residential Land Use Regulatory Index (WRLURI), on employment growth during the period 2010-2020 in the Retail, Professional, and Information sectors across 878 local jurisdictions in the United States. All the local jurisdictions exist in both (2006 and 2018) waves of the WRLURI surveys and hence constitute a unique panel data. We apply a mediation analytical framework to decompose the direct and indirect effects of land use regulation stringency on sectoral employment growth and specialization. Our analysis suggests a fully mediated pattern in the relationship between excessive land use regulations and employment growth, with housing cost burden as the mediator. Specifically, a one standard deviation increase in the WRLURI index is associated with an approximate increase of 0.8 percentage point in the proportion of cost burdened renters. Relatedly, higher prevalence of cost-burdened renters has moderate adverse effects on employment growth in two sectors. A one percentage point increase in the proportion of cost burdened renters is associated with 0.04 and 0.017 percentage point decreases in the Professional and Information sectors, respectively.

Abstract: The purpose of this research is to examine the relationship between the Dhaka Stock exchange index return and macroeconomic variables such as exchange rate, inflation, money supply etc. The long-term relationship between macroeconomic variables and stock market returns has been analyzed by using the Johnson Cointegration test, Augmented Dicky Fuller (ADF) and Phillip Perron (PP) tests. The results revealed the existence of cointegrating relationship between stock prices and the macroeconomic variables in the Dhaka stock exchange. The consumer price index, money supply, and exchange rates proved to be strongly associated with stock returns, while market capitalization was found to be negatively associated with stock returns. The findings suggest that in the long run, the Dhaka stock exchange is reactive to macroeconomic indicators.