Policy Gambles

Majumdar, Sumon; Mukand, Sharun W.

doi:10.1257/0002828042002624

Cited by 116 publications

(69 citation statements)

References 16 publications

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“…However, in our paper the observed policy choice has no dynamic implications about the future course of policies, since the emphasis over here is on the signaling of private information, and the perverse incentive effects this generates. Finally, this paper is also similar in structure to work by Prendergast and Stole (1996), Majumdar and Mukand (2004), and especially Brandenburger and Polak (1996). Under the assumption that managers care about the current valuation of firms, in the latter paper, there emerges an informational inefficiency similar to the one in this paper.…”

Section: Introductionsupporting

confidence: 52%

Globalization and the ‘confidence game’

Mukand

2006

Journal of International Economics

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Section: Introductionsupporting

confidence: 52%

Globalization and the ‘confidence game’

Mukand

2006

Journal of International Economics

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“…First, CEO governors may differ from "career politicians" with respect to their economic policy competence. Both economists and political scientists acknowledge that policymakers have imperfect information about the true state of the economic environment as well as about the appropriateness of different policy programs ex ante (e.g., Callander, 2011;Majumdar and Mukand, 2004). In short, policymaking is a highly uncertain process, where policymakers "fumble their way through the policy space" (Callander, 2011: 643).…”

mentioning

confidence: 99%

Do Businessmen Make Good Governors?

Neumeier

2015

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis paper empirically evaluates the economic performance of U.S. state governors who came to the position from a business background (CEO governors), focusing on the growth rate of real personal income per capita, unemployment rate, and income inequality.Methodologically, we apply a matching method to account for the endogeneity of political selection. Using entropy balancing, we identify credible counterfactuals for CEO governors, that is, governors without a business background who took office under similar economic and fiscal situations. We find, first, that businesspeople tend to take office in times of economic and fiscal strain. Second, the tenures of CEO governors are associated with a 0.6 percentage points higher annual income growth rate and a 0.6 percentage points lower unemployment rate than are the tenures of non-CEO governors. Also, state-level income inequality decreases when CEO governors hold office, indicating that low-income households benefit from the economic upswing. Third, the positive effect of having a CEO governor increases with time in office. Fourth, Republican CEO governors perform slightly better than their Democratic colleagues.

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“…Fernandez and Rodrik (1991) find status quo bias due to individual specific uncertainty. Status quo bias occurs in Majumdar and Mukand (2004) due to government's reputation effects. Key to our infrastructure traps-akin to status quo bias-are the details of market environment which have little role to play in these papers.…”

Section: Free Entrymentioning

confidence: 99%