This collection contains exemplary work from the Economics and Finance senior seminar and capstone course, ECO490/FIN490.

Recent Submissions

  • How Does Economic Growth Affect Environmental Damages? Evidence From Country-Level Panel Data

    Cheney, Tatem (2023-05-12)
    The environmental effects of economic growth are a new topic of discussion in economics. Social media has been a large part of the rapidly increasing concern for our environment. How do us as consumers play a role in the long-term effect environmental damage could have on our planet? We have seen a large increase in average temperature and carbon dioxide emissions in the past 50 years. This is largely due to the increase in consumption of goods by consumers, increase in population and increase in international trade. Having an economy that is continuously growing, how much are we damaging our environment? Is there a possibility that this increase in our economy could eventually save our environment as technology continues to increase? Continuous economic growth can create long term environmental damage that is irreversible. Using regression analysis the following study will determine the relationship between environmental damage, using CO2 emissions and economic growth, using gross domestic product, GDP. The findings of this study include a negative relationship when the model is linear and an inverted U shape relationship when the model is quadradic. Therefore, dismissing the hypothesized positive linear relationship of the Daly Curve and affirming the inverted U shape of the Kuznets Curve.
  • Macroeconomic Factors that Affect the Price of Housing in the United States: Evidence from a State-Level Panel Data Analysis

    Ronan, Sean (2023-05-31)
    Due to all the changes in the economy recently the goal of the study is to see how specific macroeconomic factors have affected the housing market in the past to gain some insight into where the overall housing market may trend in the future. This paper offers evidence from a state- level panel data analysis from 1975-2021 on the effects that macroeconomic factors have on home prices in the United States. This analysis focuses on state and country level variables to determine their effect on the housing price index. The results produced by this model indicate that increases in the unemployment rates, the annual supply of new homes, and the federal funds effective rate are connected to decreases in the housing price index. While increases in state minimum wages and inflation can be attributed to increases in home prices. All the variables in the model are statistically significant at the 1% level and the model has an R-squared of .89.
  • Determinant Factors of German Bilateral Export Volume: Evidence From Panel Data Analysis

    Savage, Spencer (2023-05-30)
    "This study applies the gravity model of international trade to analyze determinant factors of bilateral export volume by specifically looking at German exports. Germany currently stands as one of the largest exporters in the world. By examining the export flow patterns of Germany, we can get a better understanding of what factors facilitate trade and which ones discourage. Research is based on panel data of 163 countries taken from the years 2009-2018. Analysis was conducted based on the specifications of the gravity model of international trade. Fixed effects and random effects models were estimated. The conclusions from the estimated model are that the gravity model is significant and an accurate model for determining bilateral trade flows in the case of Germany. The model also shows that membership in the European Union has a significant and positive impact on exports. Inflation has an insignificant impact on export volume, while population has a significant and non-linear relationship with exports."
  • Foreign Aid -- Economic Growth Nexus

    Barber, Veronica (2023-05-28)
    The purpose of this paper is to determine whether the United States’ current government spending on foreign assistance is efficient for the economic development of the recipient countries. The relationship between foreign aid and economic growth is a highly debated topic, as evidenced by its literature. Some believe that qualitative factors such as institutional quality may be the driving force behind economic growth in developing countries. Others have proved that factors such as institutional quality have no effect on the economic development of a nation at all. In my study, I analyze the relationship between disbursed U.S. economic aid and GDP per capita growth in developed countries from 2002 to 2021. I take into account the potential impact of institutional quality on the economic growth of developing nations. My results showed a positive relationship between GDP per capita growth and foreign aid. Additionally, institutional quality may have a positive influence on the economic growth of receiving countries. I used a primary regression to create three sub-regressions that show how institutional quality affects each income level: low income, lower-middle income, and upper-middle income. What I found is that voice and accountability affect low-income countries, rule of law affects lower-middle-income countries, and political stability and control of corruption affect upper-middle-income countries. This breakdown may be used to inform policymakers in the United States to reconsider their approach to foreign aid disbursement.
  • CO2 Emissions and Economic Growth: Empirical Analysis of the Environmental Kuznets Curve

    Nishizawa, Hana (2023-05)
    This research paper investigates the applicability of the Environmental Kuznets Curve (EKC) hypothesis using panel data from 183 countries between 1990 and 2019. The analysis employs a model incorporating a quadratic equation for per capita income. Methodological concerns, including simultaneous bias is addressed. Results support the existence of an EKC for both the full-sample panel and the high-income panel. The estimated tipping points, representing income levels where environmental improvement begins, for the full sample panel aligns with or below previous studies, and those for the high-income panel are higher than earlier estimates. Low- and middle-income countries, EKCs are not established in at least one of the models in each income panel, i.e. CO2 emissions are expected to continue increasing. These results implies that comprehensive strategies are needed that address both economic growth and environmental improvements, especially in low- and middle-income countries.
  • Effect of COVID-19 on stock prices

    Case, Connor (2022-05-14)
    The purpose of this study was to dissect the impact of COVID-19 cases on stock price of the largest public companies by market capitalization in each of the 11 Global Industry Classification Standard (GICS) sectors, from March 9th, 2020, until December 27th, 2021. This topic is so interesting considering the behavior of the S&P 500 index for example, which rose 58.50% while COVID-19 cases soared well over one hundred thousand new cases per week throughout the same period. Research done on a pandemic’s effect on stock markets have had the opposite response, at least for a year or so until the markets stabilize, including the Spanish Flu (1918-1920), Asian Flu (1957-1958), and more recently the SARS virus (2003). This study was conducted using panel regression analysis, and using observations gathered on a weekly occurrence. This study concluded that there is a highly significant positive relationship between the closing price of the 11 companies with new weekly COVID-19 cases, meaning that every time there was an increase in COVID-19 cases by 1%, the closing price of the 11 companies would increase by 1.9%. The outcome can be explained by an increased number of people having time to day trade due to layoffs or working from home, COVID-19-related stimulus packages offering the average American more funds to invest, or the most likely – investors looking past the catastrophic event to eventually return to normality as the reason to invest.
  • Educational factors and their effect on college tuition in private institutions across the United States

    Decker, Matthew J. (2022-05-16)
    To date, educational and economic factors have caused significant variation of tuition prices of private universities for the 2019 and 2020 fiscal educational year. This paper offers a cross-sectional model observing the causation of increasing college costs across the United States with underlying support from the human capital theory of education. The analysis at hand focuses on educational and institutional variables and their effects on the associated tuition costs for only private institutions. A series of STATA econometric tests were completed in order to determine a model, which further tests were then run for deeper analysis.
  • Does income inequality negatively affect GDP growth? A panel study

    Nguyen, Ha (2021)
    Ricardo’s Distribution theory (1817) proposes that, as the economy faces diminishing profits/returns on capital, there would be an increasing shortage of investments. Income inequality exacerbates this problem, by causing income not to be reinvested back in production timely. Therefore, the result is a stagnant economy, where economic growth is significantly slowed down. Literatures on the relationship between income inequality or overall inequality, and economic growth, which is usually measured by GDP growth, have revealed different and robust results. Forbes, 2000 and Partridge, 1997 found a significantly positive correlation between income inequality and GDP growth. However, Tabellini et al, 1994 produced a significant and negative correlation. Interestingly, Squire et al, 1998 found no significant relationship between aggregate inequality and GDP growth, but a significantly negative relationship between poverty and GDP growth. More recently, Brueckner and Lederman, 2017 found a significantly negative impact of income inequality on GDP transitional growth in countries with high initial incomes. Nonetheless, overall, recent literature has been leaning towards the hypothesis that the relationship between income inequality and GDP growth is non-linear. This paper is going to empirically study 146 countries in the world over 27 years from 1992 to 2018, to confirm that the relationship between income inequality and GDP growth is non-linear as suggested in recent literature. Moreover, this research will show that the effects of income inequality on GDP growth is heterogeneous; the impact of income inequality on economic growth is more positive on high income countries than on lower income countries. The method used is regression that aims to explain the GDP movements of countries, in terms of consumption, export, capital formation, poverty, and GINI coefficient. This research is at preliminary level; there can be further improvements to the model.
  • The effects of short selling on market efficiency

    Dang, Haily (2021)
    Using monthly data instead of daily data, I investigate the dynamic relationship between the short selling activity, market return, illiquidity and volatility of the NASDAQ 100 from February 2000 to December 2020. The findings suggest that high level of short selling can lower illiquidity and volatility. This relationship weakens during the financial crisis of 2008. The finding also suggests that the idea that short selling destabilizes the market is unfounded.
  • Effect of electric vehicle sales on the price of oil

    Arnob, Archi (2021)
    The primary goal of this study is to observe the relationship between the fluctuation of the oil price and the increasing number of sales of electric vehicles based on data from 20 developed and developing countries. As the number of electric vehicles on the market is growing, the demand in the world oil market is declining slightly and, as a result, oil prices are also declining due to several factors. Consumer theory tells us that oil prices could decline due to a rise in the number of electric vehicles sold. Electric vehicles can minimize carbon dioxide emissions and pollutants even when considering indirect emissions from power production and battery generation. Soon, the world may start banning regular gasoline vehicles as a part of the solution to climate change which has already started in Norway. The result shows us there is a slight negative relationship between the oil price and sales of electric vehicles. I can expect that the sales of electric vehicles will keep increasing and after a certain time, it will become a perfect substitute for regular gasoline vehicles.