Do economies converge? Evidence from a panel of U.S. states

Article Abstract:

A study aims to establish a convergence among the 48 contiguous US states and, if established, the absoluteness of such convergence. Economies were found to converge only when technology remains in line with a common trend. An occurring convergence is unlikely to be absolute unless there are no economy fixed effects in technology, share of capital, and rental rate. An analysis of data on the share of capital, level of technology and rental rate showed that contiguous US states rapidly converged to disparate levels.

Analysis, Economic development, Convergence (Mathematics)

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The risky spread, investment, and monetary policy transmission: evidence on the role of asymmetric information

Article Abstract:

Euler equations were used to analyze the importance of finance constraints that may arise when important information assymmetries exist in financial markets. A symmetric information specification of investment behavior was rejected in favor of an agency cost specification in which a divergence of the shadow cost of finance from the market interest rate is possible. Empirical estimates suggest that shocks to net worth can significantly increase the shadow cost of finance.

Usage, Canada, Investments, Euler's numbers, e (Number)

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The effects of monetary policy shocks: evidence from the flow of funds

Article Abstract:

Monetary policy shocks are significant in changing the flow of funds in various sectors of the US economy. Using flow of funds account data for analysis, it was observed that households react to shocks by maintaining their assets and liabilities within a certain period of time. Moreover, businesses increase their funds for approximately one year, after which it subsequently decreases.

Capital movements

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