The Quantitative Significance of the Lucas Critique

Doan, Litterman, and Sims (DLS) have suggested using conditional forecasts to do policy analysis with Bayesian vector autoregression (BVAR) models. Their method seems to violate the Lucas critique, which implies that coefficients of a BVAR model will change when there is a change in policy rules. In this article, we attempt to determine whether the Lucas critique is important quantitatively in a BVAR macro model that we construct. We find evidence following two candidate policy rule changes of significant coefficient instability and of a deterioration in the performance of the DLS method.     

MDEWMA chart: an efficient and robust alternative to monitor process dispersion

Control chart is the most important statistical process control tool used to monitor changes in process location and dispersion. In this study, an EWMA control chart is proposed for efficient and robust monitoring of process dispersion. The proposed chart, namely the MDEWMA chart, is based on estimating the process standard deviation (σ) using the mean absolute deviations (MD), taken from the sample median. The performance of the proposed chart has been compared with the EWMASR chart (a dispersion EWMA chart based on sample range) and MD chart (a Shewhart-type dispersion chart based on MD), under the existence and violation of normality assumption. It has been observed that the proposed MDEWMA chart is more efficient and robust when compared with both EWMASR and MD charts in terms of run length (RL) characteristics such as average RL, median RL and standard deviation of the RL distribution.     

Children and Violence: Nurturing Social-Emotional Development to Promote Mental Health

The absence of violence against children is a fundamental children's right and a major milestone of civilized society. Similarly, reports on incidences of violence by children and youth, including severe cases with devastating consequences, speak to the need that the trauma of exposure to violence in childhood needs to be addressed. While violence and its risk factors are generally understood, what is less clear are the essential protective factors, how we can identify those as early as possible, and how we can use them to prevent and address the trauma of violence exposure in children and youth. In this report, I review pathways of child and youth violence through the lens of social-emotional development as a central protective factor. Negative emotions of frustration and anger can underlie violence and aggression. Kind emotions, such as caring and our ability to connect with others emotionally, can serve as social-emotional protective factors. A brief review of the central social-emotional processes and their development is provided, including the human capacity to feel with others and express empathy, be emotionally aware and care about the effects of one's own actions on others, and be able to regulate the self and their emotions. Given the negative widespread and long-term impact of exposure to violence, I describe research-informed attempts to prevent violence exposure across development. Taking a humanistic, strength-based perspective, the focus is on social-emotional protective factors to address violence and nurture mental health in every child. I conclude with recommendations for practice and policy.     

EARLY EVIDENCE ON RECREATIONAL MARIJUANA LEGALIZATION AND TRAFFIC FATALITIES

Over the last few years, marijuana has become legally available for recreational use to roughly a quarter of Americans. Policy makers have long expressed concerns about the substantial external costs of alcohol, and similar costs could come with the liberalization of marijuana policy. Indeed, the fraction of fatal accidents in which at least one driver tested positive for tetrahydrocannabinol has increased nationwide by an average of 10% from 2013 to 2016. For Colorado and Washington, both of which legalized marijuana in 2014, these increases were 92% and 28%, respectively. However, identifying a causal effect is difficult due to the presence of significant confounding factors. We test for a causal effect of marijuana legalization on traffic fatalities in Colorado and Washington with a synthetic control approach using records on fatal traffic accidents from 2000 to 2016. We find the synthetic control groups saw similar changes in marijuana-related, alcohol-related, and overall traffic fatality rates despite not legalizing recreational marijuana. (JEL K42, I12, I18)     

ENVIRONMENTALISM,STIMULUS, AND INEQUALITY REDUCTION THROUGH INDUSTRIAL POLICY: DID CASH FOR CLUNKERS ACHIEVE THE TRIFECTA?

The 2009 American Cash for Clunkers program, which subsidized consumers who scrapped old vehicles and purchased new vehicles, was promoted by appealing to multiple constituencies. We evaluate the policy and alternatives according to its stated goals: emissions reductions, economic stimulus, and reducing inequality. We calibrate a dynamic partial equilibrium portfolio model to match consumer expenditure data from 1998 to 2011 focusing on heterogeneity across cars and trucks. We find the program generated $0.17 in environmental benefits, $0.28 in consumer surplus, and $0.31 in net discounted additional spending per subsidy dollar. Since subsidies largely went to middle-income infra-marginal consumers, the program exacerbated consumption inequality. We evaluate alternative policy designs and find no policy which simultaneously improves all outcomes. (JEL H23, L52, L92, D63)     

Couple-Level Patterns of Disclosure Process Beliefs and Their Association with Marital Satisfaction

Abstract

Grounded in symbolic interaction theory, we used latent class analysis (LCA) to investigate the preexisting patterns of belief surrounding the disclosure process in married relationships. With a sample of 131 heterosexual married dyads from the U.S., we found four classes: two classes represented similarity of spouses’ beliefs (Both High Beliefs and Neither High Beliefs), and two classes represented dissimilarity of spouses’ beliefs (where only the wife endorsed high beliefs, Wife High Beliefs, and where only the husband did, Husband High Beliefs). Husbands’ satisfaction was positively associated with membership in the Both High Beliefs class. An interaction between spouses’ satisfaction was found: the impact of wives’ satisfaction on class membership is dependent on husbands’ satisfaction. Implications for research and practice are discussed.