Browsing by Author "Tower, E"
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Item Open Access Buffer stocks are better stabilizers than quotas(Journal of International Economics, 1981-01-01) Tower, EMichael Pelcovits (1979, p. 307) recently showed that with an unstable foreign excess supply curve, either a fixed quota or a buffer stock program with a fixed tariff can be used to stabilize domestic price at a given level, and both policies 'will have the same effect on social welfare [so...t]he choice between [the two...] must then be made on the basis of administrative cost and feasibility'. However, he reached his conclusion by ranking the two policies on the basis of domestic welfare, and in this note we demonstrate with his same model that on the basis of foreign welfare the buffer stock is better than the quota. Thus, world welfre is higher under the buffer stock than under the quota. © 1981.Item Open Access Commercial Policy under Fixed and Flexible Exchange Rates(Quarterly Journal of Economics, 1973-08) Tower, EItem Open Access Do Chinese Investors Get What They Don't Pay For? Expense Ratios, Loads, and the Returns to China's Open-End Mutual Funds(Economic Research Initiatives at Duke (ERID), 2016-10-27) Wang, Y; Tower, EIn this paper we analyze the performance of China's open-ended mutual funds, using the data of 467 open-ended mutual funds from 60 fund families from January 2010 through April 2015. A paradox emerges. High expense ratios are associated with better performance. Unsurprisingly, in light of studies of US funds, when we benchmark performance against stock indexes with the same style, we find that the performance of most mutual funds does not beat the collection of indexes that most closely track the fund. Also, unsurprisingly, we find fund families with high expense ratios serve investors less well than those with low expense ratios, and, unsurprisingly in light of research on the US mutual fund market, the return reduction is larger than can be accounted for by the difference in expense ratios. Surprisingly, for most mutual funds we find high and similar expense ratios. We rank the mutual fund companies from best to worst, and we name names to help investors pick relatively good fund companies. Investors would earn higher returns by investing in mutual funds with low expense ratios and lower sales loads.Item Open Access GMO's Predictions: A Useful Guide for Investors?(2014-06-05) Tower, E; Barry, D; Stansky, EHow successful are stock market predictions? We explore one set of easily accessible predictions by a respected firm, GMO. Specifically, we evaluate how effective GMO’s predicted stock returns have been in guiding investors from June 2000 through March 2014. We find that the predictions have been useful, although based on past history investing solely in the top one or two performing indexes would have been an inferior strategy for maximizing return to investing equal amounts in the three indexes with the top predicted returns.Item Open Access How did the 2003 prescription drug re-importation bill pass the house?(Economics and Politics, 2006-03-01) Gokcekus, O; Adams, M; Grabowski, H; Tower, EWe examine the major interest groups in the debate over allowing the re-importation of prescription drugs by utilizing a logit model and instrumental variables. Consistent with political support approach, the evidence suggests that Representatives are maximizing their electoral prospects: Contributions from pharmaceutical manufacturers shrink the probability of voting for the bill; and Representatives are sensitive to their constituencies - employees of pharmaceutical manufacturing and senior citizens. Representatives' gender and ideology regarding free trade and subsidies are also determining factors. However, the decision was, by and large, a partisan one: Party affiliation was the most important factor in passing the bill. © 2006 The Authors. Journal compilation © 2006 Blackwell Publishing Ltd.Item Open Access Manufacturing Fetishism: The Neo-Mercantilist Preoccupation with Protecting Manufacturing(Economic Research Initiatives at Duke (ERID), 2016-12-06) Cassidy, AW; Tower, E; Wang, XTwo common views are that a country cannot develop without a strong manufacturing base and that trade restrictions are essential to facilitate the development of that strong manufacturing base and thus spur economic growth. We ask: • Does a strong manufacturing share of GDP facilitate economic growth? • Do trade restrictions ensure the development of a strong manufacturing base? • How can governance affect manufacturing share? • And are the relationships we find robust across regions? We find the manufacturing share is not significantly correlated with a higher standard of living. Nor is it related significantly and consistently to economic growth. We also find that trade restrictions both at home and abroad shrink the manufacturing base and smother economic growth. A better way than protectionism and subsidies specific to industry to enhance economic growth is to improve governance effectiveness and the quality of regulation.Item Open Access On the functional relationship between tariffs and welfare(Journal of International Economics, 1975-01-01) Tower, EThis paper uses a model of trade in two commodities between two countries to establish the following proposition. If the foreign offer curve has no points of inflection and if for each home rate of duty the equilibrium most favorable to the home country is selected (or else there is only one equilibrium), then as the rate of duty increases from zero, home welfare first rises then declines while foreign welfare steadily falls. © 1975.Item Open Access On the Shape of the Trade Indifference Curve: Rejoinder to Batra(American Economic Review, 1976-09) Kemp, MC; Tower, EItem Open Access Ranking the optimum tariff and the maximum revenue tariff(Journal of International Economics, 1977-01-01) Tower, EItem Open Access Should the Equities in the North Carolina State Employees’ Pension Fund Be Indexed or Actively Managed?(Economic Research Initiatives at Duke (ERID), 2016-05-19) Tower, ER. Ron Elmer is running for Treasurer of the State of North Carolina. He is aware that the high expenses and high turnover associated with active management of portfolios reduce returns. Part of Elmer’s platform is to replace active management of stock mutual funds, private equity, real estate funds, real estate partnerships, hedge funds and commodity funds with an index investment strategy, managed in house.Item Open Access The Economic Impact - Industrial and Regional - of an Arms Cut(Review of Economics and Statistics, 1965-08) Leontief, WW; Morgan, A; Polenske, K; Simpson, D; Tower, EItem Open Access The ranking of alternative tariff and quota policies in the presence of domestic monopoly(Journal of International Economics, 1977-01-01) Sweeney, RJ; Tower, E; Willett, TDBhagwati demonstrated the nonequivalence between tariffs and quotas in the presence of monopoly. This paper also assumes domestic production to be monopolized and shows that giving import licenses or tariff revenues to the domestic producer may raise or lower the welfare cost of protection and the price paid by consumers from the price under other tariff and quota arrangements which maintain the same market share for the domestic producer. However, if the monopolist realizes that commercial policy is an instrument used to maximize the policymaker's welfare function, instead of being a goal in itself, the equivalence of tariffs and quotas re-emerges. © 1977.Item Open Access The Short-Run Stability of the Foreign Exchange Market(Review of Economics and Statistics, 1967-05) Stein, JL; Tower, EItem Open Access THE STAHL-ALEXEEV PARADOX - A NOTE(JOURNAL OF ECONOMIC THEORY, 1988-02) Gang, IN; Tower, EItem Open Access Trade and Industrial Policy Under Oligopoly: Comment(1988) Csaplar, WW; Tower, EIn this comment we show by example that the optimal tax is not necessarily zero.