Daniel Posthumus

Daniel Posthumus

Pre-Doctoral Fellow with Stanford Institute for Economic Policy Research (SIEPR)

Projects

Constitutional Upheavals and Autocracy in Southeast Asia

The foundation for any modern nation-state is a written constitution. The emergence of constitutionalism as a legal doctrine in the Enlightenment period was one of the crucial developments necessary for the growth of democracy and decline of absolutism. A constitution is merely the means by which a state constitutes and specifies the limits of legislative power, executive power, and judicial power. This turn towards limiting these powers (which began with the Magna Carta and the English Glorious Revolution) marked a turn away from absolutism— although plenty of non-democracies have employed constitutions. It is thus now commonly accepted that constitutions form the bedrock of government, autocracy and democracy.

Bond Yield Decomposition - Dynamic Term Structural Models (DTSM), Approaches and Challenges

In this paper, I examine one structural model that has been used to answer questions related to the effects of quantitative easing and its transmission channels, the dynamic term structural model (DTSM). In particular, I will focus on the use of DTSM, first by Kim and Wright (2005) and then by Rudebusch and Bauer (2014). DTSM is used to decompose bond yields into two portions: the term premia, capturing the premium paid for having a bond with an $n$-year maturity, and the expected interest rate over the $n$ years of the bond’s maturity. Thus, the changes to these components of a bond’s yield are critical for deciphering the relative importance of different transmission channels of QE policy. I describe shortcomings of the model, criticisms posed by the literature, and other possible applications of it.

Starting Early: Returns on Kindergarten Attendance in Indonesia

This project is my Honors Thesis in Economics that I am completing with my advisor Ranjan Shrestha at William & Mary. I examine the effects of kindergarten on short-, medium-, and long-term effects. I employ three empirical strategies: OLS estimation, mother fixed-effects, and instrumental variable (IV) estimation. I find kindergarten has mixed effects; for OLS and IV estimation, kindergarten has strong positive effects on years of education completed, school completion, and cognitive test scores. However, using mother fixed-effects, there’s no statistically significant evidence of kindergarten’s effects. I also find mixed results regarding fadeout. I am interested in extending this project after graduation to examine heterogenous effects using Bayesian methods, kindergarten’s effects on labor market outcomes, and other health, social, and economic outcomes.

The Pass-Through of Changes in Monetary Policy to Borrowing Costs

The Federal Reserve conducts monetary policy in a variety of different ways, but the most common is by adjusting the Target Federal Funds Rate. By changing its policy rate, the Federal Reserve can change the costs of borrowing in the economy, although different interest rates respond to changes in the policy rate very differently. In order to test the pass-through of changes to the federal reserve policy rate (here we limit ourselves to conventional monetary policy making), we will engage in a three-pronged empirical approach: 1) a cross-sectional regression of changes in various borrowing costs in conjunction with the policy rate, 2) a vector auto-regressive (VAR) approach, and 3) a structural auto-regressive (SVAR) approach that borrows heavily from the work of Pétursson.

Truth Commissions and Transitional Justice in the United States

This project is the result of my work with Dr. Kelebogile Zvobgo and Zoha Siddiqui as part of the International Justice Labs. We are examining US Truth Commissions’ adoption and design, a novel subject for human rights, and specifically transitional justice, researchers. With Dr. Zvobgo, I published Democratizing Truth in 2021, and now Zoha, Dr. Zvobgo, and I are working on a new project seeking to understand the role of public opinion in US truth commission design and adopion.