Willie Belton

This study extends the literature on relative price dispersion by addressing two questions that have remained largely unanswered: (a) What is the impact on relative price dispersion of the variance of the uncertain relationship between money and prices? (b) Is there evidence across industries of a differential impact on price dispersion of the variance of the uncertain relationship between money and prices? These issues are examined in a bivariate GARCH-M model using monthly data from 1963–1997. The results at the aggregate level indicate that the variance of the uncertain relationship between money and prices has a positive and significant impact on relative price dispersion during the period 1963 to 1997. Disaggregated analysis at the industry level suggests that the magnitude of the impact of the variance of the uncertain money-price relationship differs greatly across industries and generally tends to have a greater impact on the price dispersion of durable goods than on the price dispersion of nondurable goods. This study also has important implications regarding the effectiveness of rules-based monetary policy in eliminating uncertainty associated with discretionary monetary policy.

To date, an overwhelming majority of the literature has addressed mean relationships between producer and consumer price inflation. Granger et al . (1986) represent the only attempt to investigate second moment relationships. We examine the consumer--producer price relationship employing a multivariate GARCH-M framework that allows simultaneous estimation of the bivariate system along with providing explicit times series estimates of the variances of consumer and producer price inflation. This research also breaks new ground in the use of core and over-all inflation variance measures as well as examining state dependent mean and variance relationships. We find that mean relationships are generally sensitive to the measure of inflation used. Food and energy prices play an important role in transmitting changes in aggregate input prices to aggregate output prices. When food and energy prices are eliminated from consumer and producer price inflation measures, mean relationships break down irrespective of whether the economy is experiencing a high or low inflation regime. Variance relationships appear to be more robust in general and input price relationships in particular appear to respond to inflation regime shifts.

This research examines the relationship between the economic status of an immigrant's home country and the probability of self-employment in the US. We find that immigrants from developing countries on average have lower self-employment probabilities relative to immigrants from developed countries. Similarly, we find a positive correlation between the current HDI of an immigrant's home country and the probability of self-employment in the US. These result are unexpected given that past research suggests immigrants from countries with high levels of self-employment (developing countries) are more likely to be self-employed in the US. We provide a possible explanation for these results.

In this paper we ask three questions: First, is there evidence of a Black-White gap in self-employment between 1994-2002 and could the inclusion of the White immigrant population be driving this result? Second, do within race differences in self-employment exist among the U.S. born? Finally, do cohort differences in the Black-White self-employment gap exist among the U.S. born? These questions are based on some of the regression findings in our earlier paper focused on the role of information and institutions in understanding the Black-White gap in self-employment. We find that the Black-White self-employment gap is not driven by the existence of White immigrants in the data set. In addition, we find that within race and cohort differences exist in the Black-White self-employment gap. A subgroup of U.S. born African-Americans have a self-employment probability that is identical to that of U.S. born White-Americans. In addition, younger cohorts of African-Americans have a much smaller self-employment gap than do older African-Americans.

This paper explores the relationship between ethnic fractionalization and social capital. First, using data from 1990, 1997 and 2005 we test for time differences in the impact of ethnic fractionalization on social capital. Subsequently, we examine U.S. data for evidence consistent with the proposed outcomes in the conflict, contact, or hunker-down theses discussed in Putnam (2007). Putnam (2007) examines what happens to “trust” or “social capital” when individuals of different ethnicity are introduced into social, political and/or economic groups over time. Using an instru- mental variable (IV) estimator, we find little evidence of heterogeneity in the impact of ethnic fractionalization on social capital over our period of analysis. In addition, using both fixed effect and IV estimators, we reject the contact hypothesis, but find evidence consistent with the outcomes predicted in both conflict hypothesis and Putnam’s hunker-down hypoth- esis in inter-ethnic relations. Due to data limitations, we are unable to test directly which of these two thesis are more relevant for the U.S ex- perience. However, we provide suggestive evidence in support of conflict hypothesis over the hunker-down hypothesis.  Our results suggest that as communities become more diverse, there is a tendency for social capital to decline.

This paper explores the relationship between ethnic fractionalization and social capital. First, using data from 1990, 1997 and 2005 we test for time differences in the impact of ethnic fractionalization on social capital. Subsequently, we examine U.S. data for evidence consistent with the proposed outcomes in the conflict, contact, or hunker-down theses discussed in Putnam (2007). Putnam (2007) examines what happens to “trust” or “social capital” when individuals of different ethnicity are introduced into social, political and/or economic groups over time. Using an instru- mental variable (IV) estimator, we find little evidence of heterogeneity in the impact of ethnic fractionalization on social capital over our period of analysis. In addition, using both fixed effect and IV estimators, we reject the contact hypothesis, but find evidence consistent with the outcomes predicted in both conflict hypothesis and Putnam’s hunker-down hypoth- esis in inter-ethnic relations. Due to data limitations, we are unable to test directly which of these two thesis are more relevant for the U.S ex- perience. However, we provide suggestive evidence in support of conflict hypothesis over the hunker-down hypothesis.  Our results suggest that as communities become more diverse, there is a tendency for social capital to decline.

In this paper we ask three questions: First, is there evidence of a Black-White gap in self-employment between 1994-2002 and could the inclusion of the White immigrant population be driving this result? Second, do within race differences in self-employment exist among the U.S. born? Finally, do cohort differences in the Black-White self-employment gap exist among the U.S. born? These questions are based on some of the regression findings in our earlier paper focused on the role of information and institutions in understanding the Black-White gap in self-employment. We find that the Black-White self-employment gap is not driven by the existence of White immigrants in the data set. In addition, we find that within race and cohort differences exist in the Black-White self-employment gap. A subgroup of U.S. born African-Americans have a self-employment probability that is identical to that of U.S. born White-Americans. In addition, younger cohorts of African-Americans have a much smaller self-employment gap than do older African-Americans.

This research examines the relationship between the economic status of an immigrant's home country and the probability of self-employment in the US. We find that immigrants from developing countries on average have lower self-employment probabilities relative to immigrants from developed countries. Similarly, we find a positive correlation between the current HDI of an immigrant's home country and the probability of self-employment in the US. These result are unexpected given that past research suggests immigrants from countries with high levels of self-employment (developing countries) are more likely to be self-employed in the US. We provide a possible explanation for these results.

To date, an overwhelming majority of the literature has addressed mean relationships between producer and consumer price inflation. Granger et al . (1986) represent the only attempt to investigate second moment relationships. We examine the consumer--producer price relationship employing a multivariate GARCH-M framework that allows simultaneous estimation of the bivariate system along with providing explicit times series estimates of the variances of consumer and producer price inflation. This research also breaks new ground in the use of core and over-all inflation variance measures as well as examining state dependent mean and variance relationships. We find that mean relationships are generally sensitive to the measure of inflation used. Food and energy prices play an important role in transmitting changes in aggregate input prices to aggregate output prices. When food and energy prices are eliminated from consumer and producer price inflation measures, mean relationships break down irrespective of whether the economy is experiencing a high or low inflation regime. Variance relationships appear to be more robust in general and input price relationships in particular appear to respond to inflation regime shifts.

This study extends the literature on relative price dispersion by addressing two questions that have remained largely unanswered: (a) What is the impact on relative price dispersion of the variance of the uncertain relationship between money and prices? (b) Is there evidence across industries of a differential impact on price dispersion of the variance of the uncertain relationship between money and prices? These issues are examined in a bivariate GARCH-M model using monthly data from 1963–1997. The results at the aggregate level indicate that the variance of the uncertain relationship between money and prices has a positive and significant impact on relative price dispersion during the period 1963 to 1997. Disaggregated analysis at the industry level suggests that the magnitude of the impact of the variance of the uncertain money-price relationship differs greatly across industries and generally tends to have a greater impact on the price dispersion of durable goods than on the price dispersion of nondurable goods. This study also has important implications regarding the effectiveness of rules-based monetary policy in eliminating uncertainty associated with discretionary monetary policy.