Browsing by Subject "Master's Programme in Economics"

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  • Jämsä, Pentti (Helsingin yliopisto, 2021)
    The purpose of the thesis is to explore the link between labour markets and transportation accessibility. Accessibility has been estimated with logsum and travel times of public and private transportation. Logsum as a concept has been used in the transportation system estimation, all though all in all logsum as a measure of accessibility is not as established as travel times. This way the overview of the effects of accessibility to employment is thorough. I also evaluate how impact assessment of transportation is done historically and how wider economic impacts are considered in the framework. Cost-benefit analysis is widely used, but the framework should be improved on how to include wider economic impacts. The methods section goes through how transportation system estimation is done. The used data in the estimation is collected from three dependencies. These are the interview-based traveling habits from Helsingin Seudun Liikenne, Statistics Finland metropolitan regional employment statistics and travel times of public and private transportation from Helsinki Region Travel Time Matrix. In the results I go through the empirical model. Travel time, logsum and employment are all viewed as an elasticity measure. The results of the model are reasonable and in line with the previous literature, but the coefficient of determination ends up quite low. This means that the results still need confirmation, either through better data or better estimation model. My results can be viewed as a preliminary result on the link between employment and accessibility.
  • Kuokka, Karri (Helsingin yliopisto, 2021)
    Hinnoittelualgoritmien käyttö on yleistynyt viimeisen vuosikymmenien aikana. Tähän on vaikuttanut erityisesti sähköisten markkinapaikkojen eli verkkokauppojen suosion kasvu. Lisäksi algoritmeihin liittyvä teknologia on kehittynyt ja hinnoittelualgoritmeihin liittyviä palveluita on yhä helpommin yritysten saatavilla. Tässä tutkielmassa tarkastellaan hinnoittelupäätöksissä käytettävien algoritmien vaikutuksia markkinakäyttäytymiseen, missä useat yritykset koordinoivat toimiaan saadakseen kilpailullista markkinatilannetta korkeampia voittoja. Tällainen yritysten välinen kilpailun vastainen yhteistyö, eli kolluusio, on usein kuluttajien ja kilpailun kannalta haitallista. Siksi myös hinnoittelualgoritmien käytön vaikutuksia kolluusion on syytä tarkastella. Tämän tutkielman tavoitteena on tarkastella hinnoittelualgoritmien vaikutuksia erityisesti hiljaiseen kolluusioon. Tarkastelun kohteena on myös se, kykenevätkö tekoälyyn perustuvat algoritmit kolluusion autonomisesti eli täysin ilman ihmisten ohjausta. Tutkielman kirjallisuuskatsauksessa syvennytään tekoälyyn perustuviin algoritmeihin ja hiljaiseen kolluusioon teoriatasolla. Hinnoittelualgoritmien vaikutuksia hiljaiseen kolluusion on vaikea tutkia empiirisin menetelmin, koska hiljaista kolluusiota voi olla vaikeaa havaita markkinoilta ja yritykset harvoin paljastavat hinnoittelussaan käyttämiään algoritmeja. Tästä syystä tutkielman toisena tutkimusmenetelmänä on kokeellinen tietokonesimulaatio, jonka avulla tarkastellaan hinnoittelualgoritmien vaikutuksia hiljaiseen kolluusion. Simulaation avulla pyritään kokeellisesti selvittämään, kykenevätkö tekoälyyn perustuvat hinnoittelualgoritmit kolluusioon autonomisesti. Tutkielman tulosten mukaan hinnoittelualgoritmien käytöllä voi olla vaikutuksia hiljaiseen kolluusioon. Hinnoittelualgoritmien käyttö voi muuttaa markkinarakenteita vaikuttaen hiljaiseen kolluusioon. Vaikutukset markkinarakenteisiin ovat kuitenkin hieman epäselvät ja vaikutukset hiljaiseen kolluusioon voivat olla joko lisääviä tai vähentäviä. Lisäksi hinnoittelualgoritmit voivat toimia myös välillisesti hiljaisen kolluusion fasilitaattorina. Tutkielman tuloksista erityisen mielenkiintoinen on tekoälyyn perustuvien hinnoittelualgoritmien kyky oppia kolluusio autonomisesti. Tätä tulosta tuki aiempaan kirjallisuuteen perustuva kirjallisuuskatsaus sekä tässä tutkielmassa toteutettu tietokonesimulaatio. Yleistyvä hinnoittelualgoritmien käyttö ja niiden kehittyminen voivat aiheuttaa täysin uudenlaisia ongelmia kilpailun tehokkuuden turvaamisessa ja sääntelyssä. Kokeelliseen tutkimukseen perustuvien tuloksien mukaan tekoälyyn perustuvat algoritmit näyttäisivät kykenevän autonomisesti kolluusioon. Jatkossa tutkimusta hinnoittelualgoritmien vaikutuksista kolluusioon olisi syytä laajentaa. Haasteeksi voi kuitenkin muodostua se, miten tutkimusta voidaan toteuttaa sellaisessa taloudellisessa ympäristössä, joka vastaa riittävän tarkasti todellista markkinatilannetta.
  • Kanervo, Atte Jonatan (Helsingin yliopisto, 2021)
    This thesis investigates the tax base and allocation choices in international corporate income tax architecture and provides an evaluation of the effects of the choices made in three different systems: the current system, residual profit allocation, and OECD Pillar One. International corporate income tax design has a significant effect on the functioning of the international economy and on the welfare of individuals. Thus, making the correct design choices is extremely important. This thesis argues that the international corporate income tax system should be designed following certain important principles of taxation: 1) fairness, 2) economic efficiency, 3) robustness to avoidance, 4) administrative ease, and 5) incentive compatibility. The different systems are then introduced in turn and evaluated against these criteria. The thesis finds that the current system suffers from certain conceptual weaknesses that leave significant room for improvement with regards to the set criteria. It is further argued that a reform is required for the continued functioning of the international system. Such a reform could be introduced in the form of residual profit allocation. OECD Pillar One proposal involves elements of residual profit allocation, but in comparing the different systems with each other, this thesis argues that the OECD proposal is too narrow in scope to gain the full benefits of a residual profit allocation system.
  • Kurppa, Sara (Helsingin yliopisto, 2021)
    Työvoiman riittävyys on yksi tulevaisuuden suurimmista poliittisista kysymyksistä länsimaissa. Tähän pyritään löytämään ratkaisuja muun muassa pidentämällä nykyisten työntekijöiden työuria, kuitenkaan lisäämättä työkyvyttömyyseläkkeiden aiheuttamia kustannuksia. Yhtenä mahdollisena ratkaisuna pidetään ammatillisen kuntoutuksen tarjoamia työhön paluu mahdollisuuksia työkokeilun tai uudelleen kouluttautumisen avulla terveydentilalle sopivampaan ammattiin. Tutkimuksen alussa käydään tarkemmin läpi ammatillista kuntoutusta, sen prosessia, kohderyhmää sekä mahdollisia kuntoutuskeinoja. Tavoitteena on selvittää henkilötasoisten muuttujien vaikutusta ammatilliseen kuntoutukseen osallistumiseen. Lisäksi on tarkoitus selvittää, onko osallistumista mahdollista ennustaa jo hakemusvaiheessa. Aiemmat tutkimukset ovat osoittaneet iän, sukupuolen, koulutustausta ja sairauspoissaolojen lukumäärän olevan merkittäviä muuttujia tätä tutkittaessa. Tutkimuksen aineistona on yhden eläkelaitoksen vuosina 2016-2019 antamat ammatillisen kuntoutuksen ennakkopäätökset. Tutkimusmenetelminä käytetään khiin-neliötestiä, logistista regressiota sekä satunnaismetsää. Logistisen regression tuloksien mukaan tärkeimpiä ammatilliseen kuntoutukseen osallistumiseen vaikuttavia muuttujia ovat henkilön sukupuoli, kuntoutusrahan määrä, tietyt ammatit sekä vuosiansioiden määrä viimeisen viiden vuoden aikana ennen kuntoutusoikeuspäätöksen saamista. Ennustemalliksi luodun satunnaismetsän tulosten perusteella ammatilliseen kuntoutukseen osallistumista on mahdollista ennustaa. Positiivisen luokan ennustustarkkuus on selvästi parempi kuin negatiivisen luokan. Khiin-neliötestin, logistisen regression ja satunnaismetsän tuloksissa on kuitenkin myös toisistaan eroavia tuloksia.
  • Tossavainen, Tuuli (Helsingin yliopisto, 2021)
    Asymmetric information in insurance markets is the result of policyholders, the buyers of insurance, having more information about their own risk types and preferences than the insurer. Informational asymmetry between the insurer and policyholders can lead to non-optimal insurance prices and quantities which reduce market efficiency. While the presence of asymmetric information has been widely studied in several insurance markets, it has not been empirically studied in the Finnish automobile insurance market before. This thesis aims to fill this gap in literature. The Finnish automobile insurance market consists of two types of insurance. Motor liability insurance is required by law from all vehicles used for driving in traffic. Also, voluntary automobile insurance can be acquired in addition to the mandatory motor liability insurance. In this thesis, the presence of asymmetric information is studied by comparing the occurrence of motor liability insurance claims, conditioned with the pricing variables used by the insurer, between policyholders who only have a motor liability insurance policy and policyholders with an additional automobile insurance policy. The data set used in this thesis is from a single Finnish insurance company. The data set is from the year 2019 and it contains nearly 105,000 motor liability insurance policies. The data include all variables observed by the insurer. Several regression specifications and the widely used positive correlation test are used in this thesis to study the correlation between insurance coverage and motor liability insurance claims. The results of this thesis suggest that signs of asymmetric information are not present at aggregate level in the Finnish automobile insurance market in question. However, different subgroups of policyholders show signs of asymmetric information: After controlling for the pricing variables, policyholders with an automobile insurance policy with the largest coverage show a positive correlation between buying automobile insurance and motor liability insurance claims whereas policyholders with an automobile insurance policy with the third largest coverage show a negative coverage-claims correlation. However, the results from different regression specifications regarding different automobile insurance coverages were not unanimous and thus the results are left ambiguous. In addition, new policyholders considered as experienced drivers show a negative correlation between motor liability insurance claims and having automobile insurance coverage. On the contrary, policyholders considered as experienced drivers with 1–2 years of company experience do not show signs of asymmetric information. The result suggests that the insurer learns from its repeat customers as signs of informational asymmetry disappear over time. Moreover, policyholders considered as unexperienced drivers do not show signs of asymmetric information regardless of the length of their customership in the firm. The results are in line with previous research.
  • Tiililä, Nea (Helsingin yliopisto, 2019)
    The regulatory framework for financial regulation has developed much in the Europe after the financial crisis. The use of borrower based macroprudential instruments as regulatory tools has become popular among the European Economic Area -countries. Already 21 out of 31 EEA-countries have at least one borrower based macroprudential instrument in use. The most commonly used borrower based instruments are Loan to Value (LTV) limit, Loan to Income (LTI) limit, Debt to Income (DTI) limit, Loan Service to Income (LSTI) limit, Debt Service to Income (DSTI) limit, amortisation requirement and maturity limit. As these instruments are only recently introduced as regulatory tools in Europe, their effectiveness and transmission channels are still under discussion. The aim of this master's thesis is to contribute to the ongoing discussion of the effectiveness of the instruments. This thesis provides a broad literature review in order to understand the transmission of each of the borrower based instruments and to explore previous findings of the impacts of the instruments. Further, an empirical analysis is formed by using a panel vector autoregression (PVAR) model in order to study whether borrower based macroprudential instruments have any effect on housing market stability and real economy in the Europe. The data that is used to answer this question consists of growth rates of mortgage stock, house price index, construction index, household consumption and GDP. According to the literature review, the borrower based macroprudential instruments function through four different transmission channels. These are the credit demand channel, expectations channel, resilience channel and anti-default channel. The empirical analysis provides evidence that tightening the borrower based instruments reduces mortgage growth. House prices react negatively to a policy shock in the short run but positively in the long run. Construction reacts negatively to a policy shock. Household consumption on its behalf responds to a policy shock positively in the short run but negatively in the long run. Finally, GDP responds to a policy shock negatively. However, the result concerning construction growth is the only one which is statistically significant in a 95% confidence level and all the other results lack statistical significance. Overall, the empirical results of this thesis provide slight evidence that regulating borrower based macroprudential instruments restrain the growth of mortgage stock, which for its part should enhance the stability of housing markets in Europe. Further, the impact on economic growth is likely negative. However, the results are not statistically significant in a 95% significance level. The difficulties in fitting the model and the lack of significance may implicate that the chosen model might not be the most suitable one for studying the efficiency of borrower based macroprudential instruments.
  • Walta, Veikko (Helsingin yliopisto, 2020)
    The determinants of FDI have been a topic of interest in economics since the 1980s and this paper aims to contribute to this field. This study aims to measure how associated FDI is with the political risk as well as to see the extent of this relationship in Turkey in the years 1996–2017. The political risk is measured as a change in indexes that are provided by the World Bank, Freedom House, and Transparency International. These political indicators are Political Rights, Civil Liberties, the Corruption Perceptions Index, Regulatory Quality, Voice and Accountability, Rule of Law, Government Effectiveness, Control of Corruption, and Political Stability. The earlier literature on FDI and political risks is mostly empirical and there has not been much theoretical research. Chakrabarti analyzed the past studies on FDI and its determinants in 2001 and found out that in the earlier research, almost every explanatory variable of FDI except the market size was sensitive to small changes in the conditioning information set, casting doubt on the robustness of the results. There have also been conducted studies that address political risk or equivalent concepts. The 2005 research of Busse and Hefeker had the same topic as this paper but their data consisted of many countries and they employed two different panel models. One was a fixed-effects panel analysis while the other utilized a generalized method of moments estimator. I selected three model specifications for the time-series regression analysis. All three specifications have market size as a control variable and the other two also have the economy’s growth rate and trade openness. The third has the inflation rate as the final control variable. The data have a small number of observations which limits the options available for the empirical part of the study. Out of the nine political indicators, Regulatory Quality is the only political indicator that is not associated with FDI, while the results on the Corruption Perceptions Index and Control of Corruption are inconclusive. The rest six are associated with FDI. The Rule of Law index has the highest estimated coefficient value of the World Bank indicators and the Political Rights index has the highest estimated coefficient value of the Freedom House’s indicators.
  • Holster, Tuukka (Helsingin yliopisto, 2019)
    The design of college admissions has been a heatedly discussed topic in Finland, as recent government initiatives have led to a more centralized system. Some argue for letting colleges decide on their admissions procedures, while others believe that a centralized matchmaking procedure with priorities determined by the matriculation examination would be more cost-effective. This thesis aims to characterize various factors that the policy maker must take into account when designing a college admissions procedure, in light of existing theoretical research on both centralized and decentralized matching markets and empirical studies on social determinants of college choice and the capacity of entrance examinations to elicit information on student ability and motivation. The two-sided matching literature is discussed extensively because of its usefulness for designing centralized clearinghouses for matching markets. The student-proposing deferred acceptance algorithm emerges as the best choice for a policy maker who regards strategy-proofness and respecting of priorities as especially important, at least if manipulation by colleges is implausible. However, strategy-proofness is fragile in practical applications, applicants may try to manipulate also strategy-proof mechanisms and reporting the whole preference relation is still only weakly dominant. Consequently, satisfaction of reported preferences should not be taken as evidence of welfare properties of a matching without qualifications. The use of a common entrance examination may be more cost effective than a system based on college-specific entrance examinations, as colleges do not then need to spend resources on organizing the examinations. However, students have then stronger incentives to perform in the common entrance examination, and there is already evidence that more students retake the matriculation examination in Finland. The overall effect on the costs of organizing entrance examinations is an uncertain empirical matter. The importance of preparation courses is likely to decrease, which saves resources and contributes to socioeconomic equity. On the other hand, making students choose on their study paths earlier in life may erode socioeconomic equity. A larger role for the matriculation examination provides stronger incentives for showing effort in high school, which the policy maker may see as beneficial. While a system with a common entrance examination makes it possible for a student to get admitted to a second preference when she is rejected by her first preference, it remains an empirical question to what extent this reduces the propensity to apply again to competitive colleges. The excess demand for certain colleges is a result of student preferences and is not solvable by any mechanism that gives a strong priority to satisfying student preferences.
  • Markkula, Tuomas (Helsingin yliopisto, 2020)
    This thesis evaluates the effects of entry on incumbent firms' prices and procedures volume in dental care markets using difference-in-differences regression and administrative data on private dental care visits reimbursed by the Social Insurance Institution of Finland. The entry is considered as a competition increasing shock. The entrant's prices were remarkably low at the time of the entry and the firm was able to acquire a large share of volume in common procedures performed at the market. Thus, the entrant offered a real low-cost alternative to the residents of the Capital Region. I focus on examinations and fillings, which are two of the most common procedures. Patients face switching costs when changing their dental care provider. This means that incumbent firms with locked-in customers might be able to accommodate the entry easier, than without the switching costs. The results show that incumbent firms do not lower their prices in response to the entry by economically significant amount. However, the results suggest that incumbent firms perform less fillings after the entry. The effect is driven by summer months. The pattern where the incumbent firms do not change their prices and lose a share of their turnover to the entrant is consistent with the theoretical switching costs literature.
  • Ahonen, Elena Venla Maria (Helsingin yliopisto, 2017)
    The aim of this thesis is to demonstrate the importance of selecting feasible and, preferably data-based prior assumptions for the Bayesian time-varying coefficient vector autoregressive model (TVC VAR model for further reference) of Primiceri (2005) and Del Negro and Primiceri (2015). The TVC VAR model would be suitable for quantifying, for example, the impacts of different monetary policy or fiscal policy regimes. The biggest advantage of the TVC VAR model is that it takes into account both changes in economic policy and in the private sector behaviour. The latter feature makes the model very compelling to use, because the private sector plays an important role in facilitating mote stable change in monetary and fiscal policy regimes. In complex mathematical models, such as the TVC VAR model, the objectiveness of the model may be compromised by deliberate selection of parameters. The TVC VAR model uses the Bayesian approach, which means that the researcher’s choice for the prior assumptions for the model plays an important role in the estimation. Unfortunately, Primiceri’s (2005) approach for selecting hyperparameters for the model is poorly explained and difficult to follow. Given that the model depends only for a small number of hyperparameters, it might be possible that the model can be tuned in a predefined way. To investigate whether the TVC VAR model can be tuned according to a researcher’s preferences, I design a proof of concept approach for optimising the hyperparameters of the model according to a set of predefined results. In other words, my research question is: could one tune the TVC VAR model to produce results according to the researcher’s bias? In my proof of concept approach I tune the TVC VAR model for six different targets for the Finnish government consumption multiplier. Given that Finland is a small open economy, Primiceri’s (2005) original hyperparameter values for the United States are not feasible and other values have to be used. The results from my proof of concept analysis show that the TVC VAR model can be tuned for predefined results, which shows that the practical reliability of the model can be easily compromised. My findings highlight the need for a comprehensible, data-based approach for selecting the hyperparameters for the model.
  • Anttonen, Jetro (Helsingin yliopisto, 2019)
    In this thesis, a conditional BVARX forecasting model for short and medium term economic forecasting is developed. The model is especially designed for small-open economies and its performance on forecasting several Finnish economic variables is assessed. Particular attention is directed to the hyperparameter choice of the model. A novel algorithm for hyperparameter choice is proposed and it is shown to outperform the marginal likelihood based approach often encountered in the literature. Other prominent features of the model include conditioning on predictive densities and exogeneity of the global economic variables. The model is shown to outperform univariate benchmark models in terms of forecasting accuracy for forecasting horizons up to eight quarters ahead.
  • Tahvonen, Ossi (Helsingin yliopisto, 2021)
    Despite continuous improvements in treatments, childhood cancers are among the most common causes of death for children in Finland. The cancer treatments are often arduous and have long-lasting effects even beyond the person diagnosed. Estimating these effects is important, since they can affect the cost-effectiveness of many policies. This thesis focuses on estimating the effects of childhood cancer on parental labour market outcomes, especially on the earnings gap between genders. Estimating the causal connection between health and socioeconomic variables is difficult for many reasons. In this thesis, a quasi-experimental method called "staggered differences-in-differences" is employed to solve this problem. In this method, families where cancer is diagnosed are compared to those that are diagnosed at a different time, and this way the true causal effect can be estimated. The thesis used administrative data from all childhood cancer diagnoses in Finland during years 1999-2017. The results show that childhood cancer reduces parents' income significantly. In short run, the effect is around 30% of the income before the diagnosis for mothers and around 7% for fathers. For mothers, the decline in employment is also significant. The welfare state provides support to these families to the extent that the decline in the income after transfers is not as large. The gender earnings difference increases around 20% in the short run, and increases also in families where mother is the main provider in the years before the diagnosis. My results are robust to different checks, including alternative estimators to correct for possible cohort-heterogeneous effects. The previous research is scarce and has provided differing estimates, but the results of this thesis are in line with the most relevant literature. The decline in earnings can be caused by the need to take care of the child, mental health effects or declined accumulation of human capital. While it is hard to suggest policy changes based on these results alone, the current benefits around ill children are short in duration and focused on one person and the results indicate that perhaps a longer benefit scheme distributed more evenly between genders might provide different outcomes.
  • Haaga, Tapio (Helsingin yliopisto, 2020)
    I study whether modest copayment increases affect the general practitioner (GP) use in Finland, a country with relatively low copayments, low inequality, and an extensive welfare state. I also examine whether the estimates are driven by certain low–income groups considered to be economically vulnerable. The Finnish Government allowed municipalities to increase copayments in 2015 and 2016 by 9.5% and 27.5% respectively. At maximum, this meant that the copayment for a GP visit was 20.90 euros at the beginning of 2016, approximately 40% higher than at the end of 2014. Almost all municipalities made the 9.5% increase at the start of 2015, but some of them decided not to make the 27.5% increase at all or made smaller increases. I exploit this variation by estimating two–way fixed effects regression models, and I use population–wide administrative data containing all primary healthcare visits in 2013–2018 and socioeconomic information on patients. In the models, copayment increases are negatively associated with both GP use and median waiting times. Based on the means of estimates from several specifications, the 27.5% increase alone is associated with a 2% decrease in visits per resident in the first four quarters after the change and a 6% decrease thereafter. The estimates are not statistically significant. The median waiting times decrease by two days in the first year after the change and five days thereafter, and these results are significant. When I estimate the effects of both increases, the means of estimates are now a 5% decrease in visits per resident in the first four quarters after the last increase and an 8% decrease thereafter. Some of the estimates are statistically significant. I find no evidence to support the hypothesis that the low–income groups were more sensitive to the increases. However, the confidence intervals are wide across the study, suggesting that the design may be underpowered to detect small effects from zero. Moreover, the point estimates are surprisingly far from zero, which is especially surprising when upper income quintiles are concerned. Therefore, more evidence is needed to be able to make firm conclusions about the causal effects of policy changes.
  • Liukkonen, Sini (Helsingin yliopisto, 2020)
    High growth enterprises are important contributors to the aggregate economy but not much is known of their dynamics. Based on previous literature it is quite clear that their growth is usually not very persistent. The purpose of this study is to find the enterprise characteristics that positively affect the length of the growth period. In this study, extensive micro data from Statistics Finland is used. The data comprises of information from business register, financial statements, foreign trade, ownership and employee registers. Survival analysis methods are used to get information on the effects of different enterprise characteristic. The models account for the time-varying nature of the covariates and the coefficients. Based on the results, it is found that many of the characteristics have time-varying effects and the effects are not the same for all size classes of enterprises. It is quite clear though that access to foreign markets and innovativeness are important positive factors to the length of the growth period whereas size and age have negative effects. Survival analysis methods seem to fit quite well to this framework and they seem to produce robust results.
  • Kurki, Jaakko (Helsingin yliopisto, 2019)
    Wage discrimination occurs when employees of equal productivity receive different wages due to characteristics such as ethnicity, sex, or nationality, which do not affect their productivity directly. One of the common challenges in empirical research on wages has always been the challenge of determining individual employees` productivity. Professional sports leagues such as NBA (National Basketball Association) provide an ideal setting for the study of salary discrimination, as the salaries, players` backgrounds, and different statistical measures of players` performance throughout their whole careers are available publicly. Therefore, economists have used professional sports leagues when studying salary discrimination by ethnicity or nationality. The objective of this research is to find out whether salary discrimination by nationality occurs in the NBA during the period between 2016 and 2018. The research consists of a literature review that introduces previous findings on salary discrimination by nationality in the NBA, and an empirical part which aim is to find out whether this discrimination still occurs in the 2016 – 2018. The dataset of this thesis consists of statistics that measure NBA players' on-court performance and salary during the 2016 – 2017 and 2017 – 2018 seasons, as well as their nationality, and physical attributes. The empirical analysis is carried out using linear regression-analysis, which has been a standard in previous researches on salary discrimination by nationality in the NBA. Moreover, this study applies Blinder-Oaxaca decomposition, which is one of the standard tools used in salary discrimination studies in general. The statistical analysis of this study does not find discrimination by nationality against either foreign or domestic born NBA-players during our sample period. Nevertheless, foreign players earn, on average, around USD 500,000.00 higher annual salaries than their American contemporaries. However, according to our analysis, this difference is explained by foreign players' on-court performance rather than their nationality. Some previous researches find that foreign players from large economic markets receive sizeable salary premiums due to marketing possibilities in their home countries. However, this study does not find the market size of a player's home country to have a statistically significant effect on their salaries. The earliest literature on salary discrimination by nationality in the NBA dates back to the 1990s. Over the years, the results of previous researches have varied between foreign or domestic players being discriminated against by nationality. However, as different tools for statistical analysis on player performance have improved drastically and basketball has indeed become a global sport over the years, it seems that discrimination by nationality does not occur in the NBA anymore in 2019.
  • Kaur, Anmol (Helsingin yliopisto, 2020)
    This thesis aims to answer the question of whether monetary policy influences stock prices in the United Kingdom and Finland. These countries have been chosen due to their economic differences. The United Kingdom is an open relatively large economy with an independent monetary policy set by the Bank of England. Finland, on the other hand is a small open economy, and it is part of a monetary union called Eurozone. Hence, the monetary decisions are made by the European Central Bank for all the members of the union. The research is conducted for the time period of 15 years (2003-2018) with monthly time-series data. The method used in the thesis is the structural vector autoregression model which allows for solving the endogeneity issue through imposing restrictions on the structure of the model. Hence, short-run restrictions and long-run monetary neutrality are applied to the model. The model is analysed using the estimation as well as impulse response functions. In order to consider the macroeconomic environment, variables such as inflation, commodity prices, and industrial production are used in the model. Moreover, a dummy variable is used to account for the financial crisis of 2008. The results of the structural vector autoregression estimation show there to be a statistically significant negative effect of monetary policy on stock prices for both countries. The impulse responses show that as contractionary monetary policy is implemented, stock prices tend to decrease. Contrarily, expansionary monetary policy results in an increase of stock prices. The effect of a monetary policy shock is larger on the stock prices and dissipates quicker in the United Kingdom. For Finland, the effect is minor, and it takes longer to dissipate. However, the effect is statistically significant for both countries
  • Tolonen, Topias (Helsingin yliopisto, 2020)
    We consider a so-called principal-agent problem, where our aim is to construct an optimal contract that maximises utilities for the contractor, the principal, and for the effort-exerting party, the agent. In our setting, the time-horizon of the contract is infinite, and the agent receives a continuously paid compensation for exerting effort. Our main goal is to establish a problem introduced in Sannikov (2008) and characterise an optimal contract by restricting the menu of feasible contracts, an approach inspired by Cvitanic et. al. (2018) We begin with an extensive literature review, where we review the continuous-time principal-agent problems and further motivate the scope of this thesis. We start from the notable article Holmström et. al. (1987), and we progress towards the works Williams (2008), Sannikov (2008) and Cvitanic et. al. (2018) Following the review, we construct the problem and lay the mathematical foundations for it. We focus on a new benchmark setting, adapted from Sannikov (2008) and Cvitanic et. al. (2018). We first define the so-called controlled state equation, and construct the canonical probability space. Then, we introduce then impose few assumptions regarding the core concepts, and identify the problems of the agent and the principal and characterise their objective functions. After characterising the problem, we characterise the optimal contract and show that the optimal contract maximises the principal's profit. We characterise the difference function of Sannikov (2008) to the agent's optimisation problem, and then follow Cvitanic et. al. (2018) on the reduction of the problem. The reduction is done by restricting the possible menu of contracts and thus reduce the non-standard problem to a dynamic programming problem. We introduce the corresponding Hamiltonian functionals, together with the value functions to the both principal and the agent. Furthermore, we introduce a family restricted processes, which we show to characterise the optimal contract. We finish with showing that the optimal contract exists even with the notion of retirement. Having completed the main technical contribution, that is, having solved for the optimal contract, we briefly discuss the results and their implications against previous literature. Additionally, we discuss the possible extensions to our research.
  • Leinonen, Nea (Helsingin yliopisto, 2021)
    Earnings insurance is a measure of how much earnings of a worker change relative to idiosyncratic shock to firm performance. In case of full earnings insurance, shocks are not passed onto earnings at all and otherwise earnings insurance is partial. Linked employer-employee data is widely used in this recent empirical research interest due to its rich nature. This paper explores earnings insurance in Finland by focusing on three aspects: how much firms in Finland provide earnings insurance, are there differences in levels of earnings insurance between industries and whether partial earnings insurance is driven by hours worked or hourly wage. The main findings are that firms in Finland provide partial but substantial earnings insurance in all industries and that hours worked play a smaller role than hourly wage in determining partial earnings insurance. Because data on hours worked is not available in many countries, this paper is able to bring new insight on the role of hours worked and hourly wage in the composition of partial earnings insurance. However, hours worked and hourly wage explain only around half of partial earnings insurance, so the result should be considered with caution.
  • Rönkkö, Niko-Petteri (Helsingin yliopisto, 2020)
    In this thesis, I analyze the causes and consequences of the Asian Crisis 1997 and simulate it with Dynare. The model includes financial accelerator mechanism, which in part explains the dynamics and the magnitude of the crisis via balance sheet effects. I find that the major components of the crisis were highly similar to other crisis that had happened in other emerging economies: High levels of foreign-currency denominated debt, unsound financial regulation, and fixed exchange rates with skewed valuation. Even though this simulation do not specifically incorporated different exchange rate regimes into the simulation, the previous literature draw a clear conclusion that flexible exchange rates lessen the shock’s effects on the economy. Thailand, as well as other ASEAN-countries during the crisis, faced severe economic contraction as well as changes in political landscape: Due to the crisis, Thailand’s GDP contracted over 10 percent, the country lost almost a million jobs, and the stock exchange index fell 75 percent. In addition, the country underwent riots, resignation of ministers, and several political changes towards more democratic institutions, even though faced some backlash and re-entry of authoritarian figures later. As the crisis worsened, IMF collected a large rescue package that was given to ASEAN-countries with preconditioned austerity policies. The simulation with recalibrated parameter-values seems to be relatively accurate. The dynamics and the impact of the crisis is captured realistically with correct magnitudes. The financial accelerator mechanism accounts a large part of the shock’s impact on investment and companies net worth, but do not account much on overall decline in output.
  • Snellman, Oliver (Helsingin yliopisto, 2019)
    It has lately become a common practice among national authorities with macroeconomic mandates to build large Dynamic Stochastic General Equilibrium (DSGE) models to assist in forecasting and policy analysis. The Finnish Ministry of Finance has also developed a small open economy New Keynesian DSGE model, “KOOMA”. As DSGE models try to emulate the key features and dynamics of the economy, the crucial question is, how well do they function in accordance with reality? An answer to this question can be searched by using Structural Vector Autoregression (SVAR) models, which are natural econometric counterparts to DSGE models and are better suited for analyzing data. The aim of this study is to evaluate the calibration of KOOMA with a SVAR model, which is identified with sign restrictions. I compare impulse response functions from the SVAR model, which are found both statistically significant and robust to changes in model specifications, to the equivalent impulse response functions from KOOMA. The findings suggest, that KOOMA generally produce impulse responses with same signs as the SVAR model, but there are some differences in the magnitudes and persistence of the responses.