Cover photo books



James M. Murray, PhD

Professor of Economics


Published and Accepted Papers

Digital Collectibles: Exploring Non-Fungible Tokens (NFTs) Through Twitter Messages

Peter Haried and James M. Murray
Journal of International Technology and Information Management, Volume 32, pages 59-79, 2023.

Abstract: The growing popularity of non-fungible tokens (NFTs) has created a new digital collectibles asset class and market. NFTs are unique digital tokens built on blockchain technology that can represent anything from art, property rights, certificates of authentication to sports collectibles. The use of blockchain provides the framework for digital ownership and brings the notion of scarcity to the digital NFT asset class. With the emerging NFT market and growing consumer base little work has investigated the factors behind NFT interest and participation. Using a dataset of 26,444 tweets on NBA Top Shot, one of the largest and most popular NFT platforms for digital sport collectibles, we use exploratory data and content analysis to generate insights from NFT Twitter messages. Our results suggest that both hedonic and utilitarian factors are driving NFT interests and should be considered by NFT platforms to encourage participation. Our results show that consumer messages on NFTs are based on the ability to demonstrate ownership, compete against other collectors, provide personal enjoyment and for the opportunity to receive financial returns. This research is one of the first to examine the factors exploring NFT Twitter messages and our results provide early insights for practitioners and academics interested in exploring NFT digital collectibles.

Implications for Determinacy with Average Inflation Targeting

Yamin Ahmad and James M. Murray
Economics Bulletin, Forthcoming, 2023.

Abstract: We use a standard New Keynesian model to explore implications of backward- and forward-looking windows for monetary policy with average inflation targeting and investigate the conditions for determinacy. A unique equilibrium rules out sunspot shocks that can lead to self-fulfilling shocks for inflation expectations. We find limitations for the length of the forward window and demonstrate how this depends on other parameters in the model, including parameters governing monetary policy and expectations formation.

Predictors for Growth Mindset and Sense of Belonging in College Students

James M. Murray, Sloan Komissarov, Sara Cook, and Brenda L. Murray
Journal of Pedagogical Sociology and Psychology, Volume 4, pages 423-429, 2022.

Abstract: Mindset and sense of belonging are important predictors for college student success. Mindset refers to beliefs on how or whether intelligence can grow with time and effort. Belonging refers to students' sense of being respected and supported in their college environment. We measure several dimensions of mindset and belonging and educational and demographic background information for more than 2,000 students at two four-year universities including a public and a private university. We estimate factor analysis models to construct measures for mindset and belonging and we explore predictors for these including educational and demographic characteristics and frequency of instructor feedback to students. We find that formative instructor feedback on writing leads to improvements in mindset, belonging, perseverance, and confidence. We also find that frequent feedback on writing improves students’ mindset regarding mathematics. We also find explanatory power from semesters in college, parents' educational attainment, race, and students' chosen fields of study.

Factors that Influence Undergraduate Information-seeking Behavior and Opportunities for Student Success

Sloan Komissarov and James M. Murray
Journal of Academic Librianship, Volume 42(4), pages 423-429, 2016.

Abstract: Informed from a survey we administered to undergraduate students on their information seeking behavior, we identify variables that influence how students conduct their search for sources, what types of sources they select, and what attributes of their sources they value. These variables relate to student academic characteristics, demographics, and actions that have been taken by instructors and library staff. With a thorough understanding of students' information seeking process and its influences, we find opportunities for instructors and librarians to have a positive influence.

A life insurance deterrent to risky behavior in Africa

Pedro de Araujo and James M. Murray
Journal of Policy Modeling, Volume 37(4), pages 548-576, 2015.

Abstract:The spread of HIV and AIDS and risky sexual behavior continues to be a problem in Sub-Saharan African countries despite government measures to educate people on the risk and severity of the disease and measures to promote safe sex practices such as making condoms readily available at reduced or no cost. We examine whether people decide to engage in risky sexual behavior due to low income and low life expectancy. Sub-Saharan Africa is characterized by conditions that significantly reduce life expectancy such as unsanitary conditions prevalent in poverty stricken areas, inaccessibility to health care, and dangerous working conditions such as those in very poor mining regions. Moreover, since income per capita in these countries is very low, the opportunity cost associated with dying from AIDS and foregoing future consumption is very low. We examine how a government provided life insurance benefit may be an effective means of deterring risky sexual behavior. To evaluate this policy prescription we develop a life-cycle model with personal and family consumption and endogenous probability of survival. In the model, agents can receive life insurance benefits if their death is not the result of AIDS. We demonstrate that excessive risky behavior does result from low life expectancy and low levels of income and illustrate the conditions for which the life insurance benefit can replicate the effects of higher income and life expectancy, deterring risky sexual behavior and reducing the spread of HIV/AIDS.

Developing Students’ Thought Processes for Choosing Appropriate Statistical Methods

Elizabeth Knowles and James M. Murray
Journal of Education for Business, Volume 89(8), pages 389-395, 2014.

Abstract:Students often struggle to select appropriate statistical tests when investigating research questions. The authors present a lesson study designed to make students’ thought processes visible while considering this choice. The authors taught their students a way to organize knowledge about statistical tests and observed its impact in the classroom and in students’ written work. The results from this intervention were mixed, but the authors discuss where they found evidence for improvement in students’ performance and thought processes. The classroom observations revealed that students have difficulty identifying variables and understanding the precise use of statistical language.

Dynamics of monetary policy uncertainty and the impact on the macroeconomy

Nicholas Herro and James M. Murray
Economics Bulletin, Volume 33(1), pages 257-270, 2013.

Abstract: A large literature lauds the benefits of central bank transparency and credibility, but when a central bank like the U.S. Federal Reserve has a dual mandate, is not specific to the extent it targets employment versus price stability, and is not specific to the magnitude interest rates should change in response to these targets, market participants must depend largely on past data to form expectations about monetary policy. We suppose market participants estimate a Taylor-like regression equation to understand the conduct of monetary policy, which likely guides their short-run and long-run expectations. When the Federal Reserve's actions deviate from its historical targets for macroeconomic variables, an environment of greater uncertainty may be the result. We quantify this degree of uncertainty by measuring and aggregating recent deviations of the federal funds rate from econometric forecasts predicted by constant gain learning. We incorporate this measure of uncertainty into a VAR model with ARCH shocks to measure the effect monetary policy uncertainty has on inflation, output growth, unemployment, and the volatility of these variables. We find that a higher degree of uncertainty regarding monetary policy is associated with greater volatility of output growth and unemployment.

Pencasts for Introductory Macroeconomics

James M. Murray
Journal of Economic Education, Volume 43(3), page 348, 2012.

Abstract:A 'Pencast' is a video of someone writing on a notebook page, while describing what they are writing. It is made with a special ballpoint pen, called a SmartPen and made by LiveScribe, that has a small video camera looking at the tip and a microphone to record audio. I created Pencasts that teach common material in Introductory Macroeconomics, covering nine topics from the course (each topic includes 2-8 Pencasts, for a total of 40 Pencasts). The style of these Pencasts are friendly and inviting, and emphasize intuition behind graphical modeling and problem solving, which is effectively taught by practicing problems with students. Each pencast is short (2-9 minutes in length, most are 4-6 minutes) with a specific focus. Some focus on a specific aspect of a concept, like what shifts an investment demand curve; others describe a worked out example, like how to use and compute the expenditure multiplier.

Regime switching and wages in major league baseball under the reserve clause

Michael Haupert and James M. Murray
Cliometrica, Volume 6(2), pages 143-162, 2012.

Abstract:Over the course of the twentieth century, American wages increased by a factor of about 100, while the wages of professional baseball players increased by a factor of 450, but that increase was neither smooth nor consistent. We use a unique and expansive dataset of salaries and performance variables of Major League Baseball pitchers that spans over 400 players and 60 years during the reserve clause era to identify factors that determine salaries and examine how the importance of various factors have changed over time. We employ a Markov regime-switching regression model borrowed from the macroeconomics literature, which allows regression coefficients to switch exogenously between two or more values as time progresses. This method lets us identify changes in wage determination that may have occurred because of a change in the league’s competitiveness, a change in the relative bargaining power between players and teams, or other factors that may be unknown or unobservable. We find that even though Major League Baseball was a tightly controlled monopsony with the reserve clause, there was a significant shift in salary determination that lasted from the Great Depression until after World War II where players’ salaries were more highly linked to their recent performance.

Channels For Improved Performance From Living On Campus

Pedro de Araujo and James M. Murray
American Journal of Business Education, Volume 3(12), pages 57-64, 2010.

Abstract: In a recent study, de Araujo and Murray (2010) find empirical evidence that living on campus leads to improved student performance, finding both immediate effects (GPA improves while the student lives on campus) and permanent effects (GPA remains higher even after moving off campus). Using the same dataset, we extend the analysis to explain why students that live on campus perform better. We examine two possible channels. First, we examine whether on-campus students are more likely to take advantage of university provided resources (libraries, tutors, computer technology, university sponsored extracurricular activities, etc) than off-campus students. Secondly, we examine peer influences and interactions, including collaborative studying with friends and/or classmates and engagement in drug and alcohol consumption. For both these channels, we look for evidence of immediate and permanent effects. We find significant peer-effect channels that explain the positive permanent effect of academic performance from living on campus, and find two channels that explain why students should immediately perform better while they live on campus, but the evidence does not point to utilization of university resources.

Estimating the Effects of Dormitory Living on Student Performance

Pedro de Araujo and James M. Murray
Economics Bulletin, Volume 30(1), pages 866-878, 2010.

Abstract:Many large universities require freshman to live in dormitories on the basis that living on campus leads to better classroom performance and lower drop out incidence. Large universities also provide a number of academic services in dormitories such as tutoring and student organizations that encourage an environment condusive to learning. A survey was administered to college students at a large state school to determine what impact dormitory living has on student performance. We use a handful of instrumental variable strategies to account for the possibly endogenous decision to live on campus. We find a robust result across model specifications and estimation techniques that on average, living on campus increases GPA by between 0.19 to 0.97. That is, the estimate for the degree of improvement to student performance caused by living on campus ranges between one-fifth to one full letter grade.

Shirking in Major League Baseball in the Era of the Reserve Clause

Glenn Knowles, James M. Murray, Keith Sherony and Michael Haupert
Cliometrica, Volume 12(1), pages 59-71, 2003.

Abstract:Shirking has become an issue in professional sports with the advent of long-term guaranteed contracts, particularly because pay is largely uncoupled from performance. Baseball player-owner relations are a classic example of the principal-agent problem, which investigates incentive problems between contracting parties. The agent (player) is said to shirk if he chooses not to undertake efficient actions measured in terms of on-field performance. From the viewpoint of the principal (owner), actions are considered efficient when they afford the greatest opportunity for profit. Shirking, or inefficient action, is most likely to occur when contracts do not satisfy the incentive compatibility constraint. The constraint is satisfied when the contract spells out incentives that cause the agent to take efficient actions. In the case of both one-year contracts with a reserve clause and long-term guaranteed contracts in Major League baseball (MLB), there may be inadequate financial incentives for players to perform to the best of their ability, that is, efficiently.

Working Papers

Scholar Spotlights! A Curricular Intervention to Enhance Students' Perceptions of Relevance and Belonging in Principles of Macroeconomics

James M. Murray

Abstract: This paper describes a curriculum and pedagogy to use throughout a principles of macroeconomics course that enhances students' perceptions of course relevance and sense of belonging in economics classes, with a particular focus on enhancing these experiences for women, students of color, and first-generation students, populations of students that are underrepresented in the economics discipline. Building off of the ideas and resources in Bayer (2021), I propose a curriculum that highlights current scholars applying class content to timely social and economic issues that directly apply to standard principles of economics content. I put an emphasis on scholars with backgrounds under-represented in the economics discipline and I also put an emphasis on younger scholars, so that students might see scholars with identities not too different from themselves working and doing research in economics. Finally, I brought it alive with a photo of the scholar. With survey evidence gathered from my students at the end of the semester, I find that large proportions of all demographic subgroups felt a strong sense of belonging and found the content relevant. Approximately one-third of students display evidence of a fixed mindset, with the problem more evident among female and first-generation students.

Updated: December 15, 2023

Fiscal Policy Reactions and Impact Over the Labor Income Distribution

James M. Murray

Abstract: This paper investigates how fiscal policy reacts differently to negative income shocks on different points on the labor income distribution, and how fiscal policy shocks may have different effects at different points along the labor income distribution. Empirical examinations of fiscal policy typically consider a fiscal policy reaction function, where a single fiscal policy variable, such as the government budget deficit, responds to a variable related to the aggregate state of the economy, such as the output gap (in addition to outstanding government debt and allowing persistence). In this paper, I consider a fiscal policy reaction function where fiscal policy may respond to a weighted average of multiple quantiles along the labor income distribution. I also examine eight different fiscal policies variables including four types of government transfer variables shown to be countercyclical, government consumption and government investment, and personal versus corporate tax revenue. Embedding the fiscal policy variables into a Bayesian structural vector autoregression (SVAR), I estimate both the reaction of each of these fiscal policy variables to shocks to points along the labor income distribution, and the multiplier effect of fiscal policy shocks over time on points along the income distribution. With impulse response functions predicted by the SVAR, I show which fiscal policy variables are more reactive to shocks along the income distribution, which have larger multiplier effects, and how variable fiscal policy variables attenuate or exacerbate labor income inequality.

Updated: May 30, 2023

Predictors for Students' Understanding of Writing: Instructor Actions and Student Mindset

James M. Murray, Sloan Komissarov, Sara Cook, and Brenda L. Murray

Abstract: College instructors across the curriculum work to develop students’ ability to be purposeful writers, and it can be a significant pedagogical challenge and evolving practice. Whether it is in introductory English composition courses or capstone courses in the sciences, instructors expect students to understand concepts of purpose and audience, and use these ideas to guide decisions in their writing. More than 2,000 students at two four-year universities were surveyed to measure how well students used and understood ideas of audience and purpose in the last significant writing assignment they finished. A number of predictors are measured, including how often students are assigned writing, students’ use of writing centers and library resources, and students’ views on mindset, i.e. their perceived ability to learn new things and develop new skills. Most students report low-level writing experiences when it comes to purpose and audience. For example, students often describe a sense of purpose and audience as limited to writing about a topic for the instructor. No progression in the depth of perception on purpose and audience is found to be associated with academic progression, but there is statistical evidence for ways instructors can positively influence students’ application of audience and purpose, including nurturing a growth mindset, giving students formative feedback on writing, and sending students to a writing center.

Updated: May 1, 2022

Regime switching in Fiscal Debt Targets and Policy Functions in the United States

James M. Murray

Abstract: Forward-looking macroeconomic theory suggests the impact fiscal policy has on the macroeconomy depends on expectations for future fiscal policy behavior. The effects of fiscal policy therefore depend on long-run government debt targets, the degree to which various fiscal policy variables will respond to debt in order to balance the long-run government budget constraint, and the degree to which fiscal policy variables react to stabilize economic conditions. In this paper, I examine evidence for switching in fiscal policy behavior in the United States along these dimensions. I estimate fiscal policy behavior equations for government expenditures, taxes, transfers, and deficits, allowing each to have stabilizing responses to economic conditions and debt-servicing responses to lagged government debt. I incorporate a rich Markov-regime switching process allowing switching along three dimensions: (1) the long-run government debt target, (2) the stabilizing and debt-servicing response coefficients, and (3) fiscal policy volatility. With two possible regimes for each dimension, I allow for eight possible combinations for fiscal policy regimes. Smoothed estimates for the fiscal regimes for the United States over post-war period reveal switching in all three dimensions.

Fiscal Policy Uncertainty and Its Macroeconomic Consequences

James M. Murray

Abstract: I examine fiscal policy uncertainty in a context where market participants learn about the conduct of fiscal policy with regression rules for dependent variables including tax revenue, net transfers, government spending, and government debt. The explanatory variables include lagged fiscal policy, lagged government debt, and macroeconomic outcomes including real GDP, consumption, investment, and the unemployment rate. They re-run these regressions each quarter as a new observation becomes available, updating their understanding of the conduct of fiscal policy. I use the root mean squared errors as measures for fiscal policy uncertainty. I use autoregressive distributed lag (ARDL) models to estimate the effect fiscal uncertainty has on macroeconomic outcomes including real GDP, consumption, investment and unemployment. I find that the common component for fiscal policy uncertainty has adverse effects on real GDP, consumption, and investment. I find the buildup of fiscal policy uncertainty from 2005 through 2009 leads to a decline in real GDP growth by about 2 percentage points. I demonstrate that these finding are robust to lag specifications for the ARDL models and parameter specifications for the learning process.

Updated: November 6, 2017

Learning and Judgment Shocks in U.S. Business Cycles

James M. Murray

Abstract: This paper examines the role of judgment shocks in combination with other structural shocks in explaining post-war economic volatility within the context of a New Keynesian model. Agents form expectations using constant gain learning then augment these forecasts with judgment. These judgments may be interpreted as a reaction to current news stories or policy announcements that would influence people's expectations. I allow for the possibility that these judgments be informatively based on information about structural shocks, but judgment itself may also be subject to its own stochastic shocks. I estimate a standard New Keynesian model that includes these shocks using Bayesian simulation methods. To aid in identifying expectational shocks from other structural shocks I include data on professional forecasts along with data on output gap, inflation, and interest rates. I find judgment is largely not informed by macroeconomic fundamentals; most of the variability in judgment is explained by its own stochastic shocks. Impulse response functions from the estimated model illustrate how shocks to judgment destabilize the economy and explain business cycle fluctuations.

Updated: March 11, 2011

Regime Switching, Learning, and the Great Moderation

James M. Murray

Abstract:This paper examines the "bad luck" explanation for changing volatility in U.S. inflation and output when agents do not have rational expectations, but instead form expectations through least squares learning with an endogenously changing learning gain. It has been suggested that this type of endogenously changing learning mechanism can create periods of excess volatility without the need for changes in the variance of the underlying shocks. Bad luck is modeled into a standard New Keynesian model by augmenting it with two states that evolve according to a Markov chain, where one state is characterized by large variances for structural shocks, and the other state has relatively smaller variances. To assess whether learning can explain the Great Moderation, the New Keynesian model with volatility regime switching and dynamic gain learning is estimated by maximum likelihood. The results show that learning does lead to lower variances for the shocks in the volatile regime, but changes in regime is still significant in differences in volatility from the 1970s and after the the 1980s.

Updated: September 30, 2008

Empirical Significance of Learning in a New Keynesian Model with Firm-Specific Capital

James M. Murray

Abstract: This paper examines the empirical significance of learning, a type of adaptive, boundedly rational expectations, in the U.S. economy within the framework of the New Keynesian model with endogenous capital accumulation. Estimation results for learning models can be sensitive to the choice for agents' initial expectations, so three methods for choosing initial expectations are examined. Maximum likelihood results show that learning under all methods do not significantly improve the fit the model. The evolution of forecast errors show that the learning models do not out perform the rational expectations model during the run-up of inflation in the 1970s and the subsequent decline in the 1980s, a period of U.S. history which others have suggested learning may play a role. Despite the failure of learning models to better explain the data, analysis of the impulse response functions and paths of structural shocks during the sample show that learning can lead to different explanations for the data.

Updated: September 30, 2008

Initial Expectations in New Keynesian Models with Learning

James M. Murray

Abstract:This paper examines how the estimation results for a standard New Keynesian model with constant gain least squares learning is sensitive to the stance taken on agents' beliefs at the beginning of the sample. The New Keynesian model is estimated under rational expectations and under learning with three different frameworks for how expectations are set at the beginning of the sample. The results show that initial beliefs can have an impact on the predictions of an estimated model; in fact previous literature has exposed this sensitivity to explain the changing volatilities of output and inflation in the post-war United States. The results indicate statistical evidence for adaptive learning, however the rational expectations framework performs at least as well as the learning frameworks, if not better, in in-sample and out-of-sample forecast error criteria. Moreover, learning is not found to better explain time varying macroeconomic volatility any better than rational expectations. Finally, impulse response functions from the estimated models show that the dynamics following a structural shock can depend crucially on how expectations are initialized and what information agents are assumed to have.

Updated: September 30, 2008