Theoretical Economics Letters

Journal Information
ISSN / EISSN : 21622078 / 21622086
Current Publisher: Scientific Research Publishing, Inc. (10.4236)
Total articles ≅ 1,129
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Latest articles in this journal

Erhard Reschenhofer, Manveer K. Mangat, Thomas Stark
Theoretical Economics Letters, Volume 10, pp 47-68; doi:10.4236/tel.2020.101004

In this paper, it is proposed to estimate the memory parameter of a potentially long-range dependent time series by applying goodness-of-fit tests to the cumulative normalized periodogram in the neighborhood of frequency zero. The results of an extensive simulation study show that this new estimator performs well compared to conventional frequency-domain estimators which are based on the Whittle likelihood or are obtained from the popular log periodogram estimator by trimming, smoothing, and utilizing non-Fourier frequencies, respectively. In an empirical investigation of log absolute daily index returns, we find evidence of long-range dependence with values of the memory parameter in the range between 0.2 and 0.3 both in developed and developing stock markets. There are no indications of long-range dependence in the case of the original index returns.
Teena Singh, Sombala Ningthoujam
Theoretical Economics Letters, Volume 10, pp 102-118; doi:10.4236/tel.2020.101007

The topic of student engagement has captured much research attention lately. However, there still remains a paucity of empirical work on the construct in Indian context. Therefore, the current investigation seeks to identify the precursors or antecedents of student engagement in Indian institutes. Sample of the current study comprised of 717 respondents from University students. Results indicate that Student engagement is a function of certain situational factors such as academic facilities, faculty, role of administration as well as some personality factors viz. locus of control and self-efficacy.
Saurabh Ghosh, Pawan Gopalakrishnan, Sakshi Satija
Theoretical Economics Letters, Volume 10, pp 232-249; doi:10.4236/tel.2020.101015

What are the quantitative effects of a government infused bank recapitalization in response to loan defaults? We analyze two different scenarios of government infused recapitalization using a dynamic stochastic general equilibrium (DSGE) model, calibrated to an emerging market economy with state owned banks. The first is an unconditional transfer and the second is an “equity in exchange for transfer” to banks. We show that a government infused recapitalization in response to a negative productivity shock may increase output in the short run. However, there is welfare loss, which is higher in the case of unconditional transfers. Our analysis suggests that bank recapitalization facilitates credit creation, capital formation and growth, especially during a cyclical downturn. There is however a need for appropriate policy vigil to protect the quality of public expenditure in the social sector that matters for welfare in the long run.
Ebenezer Appiah, Koudalo Yawovi Mawulikplim Agbeko, Toure Moumbark, Rahman Dunya
Theoretical Economics Letters, Volume 10, pp 250-271; doi:10.4236/tel.2020.101016

Small and Medium Enterprises are an integral part of the modern world. In today’s intensively competitive business environment, the retail industry will be more important for developing economies because of the rising unemployment rate. The growth of the retail shops, however, is hindered to a large extent of challenges. Observing the growth of the retail industry in Ghana recently, one can conclude that the sector is significantly developing with numerous challenges surrounding it. Hence the question, what makes small firms perform well needs to be addressed properly, particularly in the case of retail shops in Ghana. The data used in this study was collected by distributing questionnaires to retail shop owners. 348 out of 423 questionnaires were answered and returned successfully. The study then employed OLS, logit, and probit regression models to analyze the impact of numerous factors that influence the growth of retail shops. The study revealed that factors such as training, access to market, business experience of retail shops owners, and access to transportation are positively associated with the growth of retail shops whereas factors like gender, age, education, start-up capital, access to credit, and social network are negatively associated with the growth of retail shops. Based on the findings, this study recommends that the government of Ghana should pay much attention to the sector by providing training to retail shop owners and their employees in order to have access to the necessary entrepreneurship training that will equip them to manage the affairs of their business which will at long-run influence economic growth.
Li Wenli, Li Chenggang, Wenli Li, Chenggang Li
Theoretical Economics Letters, Volume 10, pp 119-130; doi:10.4236/tel.2020.101008

With the further development of “The Belt and Road”, bilateral trade between China and Kenya is becoming increasingly close. In order to further understand the development of bilateral trade in goods between China and Kenya, as well as the development trend of trade potential in the future, this paper uses trade intensity index and trade potential index to estimate the potential of bilateral goods trade between China and Kenya. The following conclusions are drawn: the import trade links between China and Kenya are relatively loose; the export trade links are relatively close; the import/export trade between the two sides is increasing year by year, with a better development trend in the future; although the trade potential index has fluctuated in the past decade, it has been rising in the past three years, with a better trend in the future. Through the analysis of trade potential, this paper summarizes the problems existing in the bilateral trade between China and Kenya, and puts forward relevant countermeasures and suggestions.
Jan Stenis
Theoretical Economics Letters, Volume 10, pp 523-534; doi:10.4236/tel.2020.103033

The Naturally Optimised Revenue Demand in Communities (NORDIC) model was employed to improve the education. Dropout is a serious problem. It affects not only the individual who drops out but also the university and society. This article introduced a new and practical economic instrument for improved management of dropouts, based on the NORDIC model. The proposed model produced constructed shadow costs to be inserted into the public accounts to induce economic incentives to decrease the dropout rate. The resulting shadow cost, and its impact on the PSBR, constitutes a single key factor that, by one digit only, expresses how successful the education policy is over time. The launched model considered the age of students who pass a BSc. This case study showed how education in the Swedish society could be improved by application of the NORDIC model, that is the system of cooperation between students and government. The results point at a promising methodology for improving the dropout rate and decreasing the qualification age by using economic instruments. The study concludes that the NORDIC model could be used to improve the Swedish education system and its qualification age, particularly for BScs. Governments obtain a tool to monitor, manage and evaluate the education sector. Possible end users include school authorities and politicians that want a comprehensive tool to redesign the education policy. The NORDIC model is recommended to apply to education issues to improve the qualification age. Further research focuses on developing algorithms for certain categories of students.
Jinjun Cheng, Dian Cheng
Theoretical Economics Letters, Volume 10, pp 535-544; doi:10.4236/tel.2020.103034

Goods of utility, in the final analysis, contain two parts of natural value and labor value: the natural value is created by god and given to us for free, the labor value is the human labor which is condensed in the commodity without any difference, and the commodity value is reflected by the labor value. The essence of human labor is the process of consuming the energy and life time of the body and doing physical work to the object of labor. The value of labor, W, is the square root of the product of the energy consumed by the worker, E, and the time spent on labor, T (). By discovering the formula of commodity labor value, we can design a new currency that conforms to the principles of freedom and fairness—the Talent (symbol: ), whose value corresponds to its value: , J is joules, S is seconds. The Talent can perform all the functions of a kind of currency.
Yankuo Qiao
Theoretical Economics Letters, Volume 10, pp 500-522; doi:10.4236/tel.2020.103032

The literature evidently demonstrates the CEO-centric effect upon firms’ Corporate Social Responsibility (CSR) engagements. Given the CEO’s strong discretionary power over CSR decisions and self-serving motive divergent from shareholder value maximization, it would be interesting to investigate the strategic decisions made by the CEO on CSR policy facing varied dimensions of market conditions. From an agency theory perspective, the paper develops a theoretical framework to model and clarify the relationships between firm’s CSR provisions and the three dimensions of external market conditions: market complexity, munificence, and dynamism. Furthermore, I empirically measure the market dimensions and test the propositions implied by the theoretical work. Consistent with the model implications, I found CEOs tend to invest more in CSR in a competitive market, less in CSR when the market is munificent and more in CSR when the market is dynamic and unpredictable. The results are consistent with the extant literature and shed light on the value relevancy of CSR activities.
M. Campbell Iii Carl, Carl M. Campbell
Theoretical Economics Letters, Volume 10, pp 292-298; doi:10.4236/tel.2020.102019

In deriving the hybrid new Keynesian Phillips curve (HNKPC) in Galí and Gertler (1999) and Holmberg (2006), it is assumed that backward-looking firms index their prices to the average prices newly set last period plus last period’s inflation rate, resulting in a Phillips curve equation that relates current inflation to a demand variable, expected future inflation, and last period’s inflation. The present study generalizes the derivation of the HNKPC to allow firms to index prices to multiple lags of inflation, resulting in a HNKPC in which current inflation depends on multiple lags of inflation instead of only one lag of inflation, providing theoretical justification for empirical specifications of the HNKPC that include more than one lag of inflation.
Justin Y. Jin, Wenting Wang
Theoretical Economics Letters, Volume 10, pp 384-408; doi:10.4236/tel.2020.102026

This study investigates the determinants and consequences of intellectual capital efficiency in the U.S. banking industry. We find that banks’ individual institutional memory of bad times reduces their intellectual capital efficiency. We also find that intellectual capital efficiency restricts banks’ risk-taking behaviors and enhances their accounting conservatism. Finally, we find that intellectual capital efficiency helps banks attract more wholesale funding deposits. In addition, we test the impact of three components of intellectual capital efficiency on bank accounting conservatism, and find that both human capital efficiency and relational capital efficiency significantly impact on bank accounting conservatism.
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