Four students majoring in economics have been named winners in a new competition to prepare the best undergraduate research paper in economics.

The Department of Business and Economics in collaboration with the Shippar-Beam Fund held the contest during spring semester.

• Jeremy Syrjanen received the top award for his paper titled "Foreign Direct Investment, Corruption, and Economic Development"
  
  
• Syrjanen along with Michael Doescher and Jessie Anderson received the second award for their paper "The Real Interest Rate, Inflation and the Price of Gold."

The authors will be recognized by the Department of Business and Economics at its annual awards banquet on Wednesday, May 4.

Below are abstracts of the winning papers:

First prize

Jeremy Syrjanen "Foreign Direct Investment, Corruption, and Economic Development"    

In this paper, I analyze the relationship between foreign direct investment (FDI) and economic development. To do this I examine relevant literature. I find that there are mixed results with regards to the relationship between FDI and development. I do find that FDI seems to lead to development in some regions of Africa and could lead to development in Bolivia. So, FDI could be a key component for economic development. I also examine the relationship between FDI and economic growth, and as one would expect, I find that there is a positive relationship between FDI and growth. In addition, I looked at what factors affect the amount of FDI that a country receives. To do this I examine a study by Cole, Elliott and Zhang (2009) that looks at provincial governments in China. Their results show that provinces that have governments that are efficient and have a low amount of corruption receive more FDI than provinces that have governments that are inefficient and corrupt. So, increasing government efficiency and decreasing government corruption could help a country attract more FDI. In the end, since there are mixed results with regards to the relationship between FDI and economic development, I conclude that local factors must play a role in determining the relationship between FDI and development in a country. 

Second prize  

Jessie Anderson, Michael Doescher and Jeremy Syrjanen "The Real Interest Rate, Inflation and the Price of Gold"  

The price of gold is extremely high as of now.  What is important to know is what is causing the price of gold to increase.  The most widely accepted theory is that the real interest rate is the main factor that affects the gold price; however, some feel the inflation rate is the main factor that affects the price of gold.  This paper examines these theories both theoretically and empirically.  Not only that, we examine the price of gold with regards to various time periods ranging from the Great Depression to the present.  From the literature we have examined there is no correlation between the price of gold and inflation.  Furthermore, the real interest rate seems to be the real factor that affects the price of gold.  Other factors such as economic pessimism have an effect on the price of gold as well though.