The research reported here was conducted as a foundational analysis component of the Colorado Statewide Dropout Initiative. Created in January 2008 as a response to Governor Ritter’s goal of cutting the state’s dropout rate in half within the next ten years, the State Dropout Initiative is a partnership of several education advocacy organizations and other non-profit organizations. These include the Colorado Children’s Campaign, the Partnership for Families and Children (and the associated National Center for Student Engagement), and Colorado Youth for a Change, together with representatives from the Colorado Department of Education, several Colorado school districts, and the Johns Hopkins University Center for Social Organization of Schools. Funding for this research was provided by the Donnell Kay Foundation.
Understanding the dropout problem in a community is an important first step in developing and implementing plans to reduce the number of dropouts and increase the graduation rate. This study of dropouts in Denver Public Schools is part of a larger study of factors predicting a dropout outcome from Colorado high schools. Its goal is to provide data for district decision making as well as recommendations for targeting interventions to increase the high school graduation rate and reduce the dropout rate. The study sought to go beyond a demographic snapshot of students who dropped out of school to identify behavioral warning signals prior to a dropout outcome. Knowing these early warning signals (e.g., problems with attendance, behavior, or course failure) could help inform district planning for interventions that could address some of the reasons behind a dropout outcome.
Equilibrium real exchange rate is defined as a rate, which is consistent with simultaneous achievement of internal and external equilibrium. Internal equilibrium is a situation where the non-tradable goods market clears, while external equilibrium is achieved when the current account is sustainable. Real exchange rate misalignment is a gap between actual and equilibrium real exchange rate and is a sustained departure of the real exchange rate from its long run equilibrium value (Zhang, 2001, Edwards, 1989a, 1989b and Asfaha and Huda, 2002).
According to Edwards (1988) pointed, the real exchange rate is expected to provide signals to economic agents in the economy. Information on the extent to which the real exchange rate diverges from its equilibrium level serves as a guide to policy makers to ensure that the real exchange rate does not send wrong signals to economic agents. Wrong signals can result in inefficient resource allocation and lead to the reduction of the country’s welfare. Misalignment of the real exchange rate could increase economic instability, distort investment decisions and result in welfare and efficiency costs. According to Edwards (1989a:12) real exchange misalignment especially overvaluation hurts exports and can wipe out the agricultural sector. It can also cause capital flight, which may be optimal from a private perspective but a substantial cost in terms of social welfare.
Strategic pricing of the interest rate is a central feature of models of competition among financial institutions (Dinc, 2000; Villas-Boas and Schmidt-Mohr, 1999; Peterson and Rajan, 1995; Riordan, 1993; Besanko and Thakor, 1993 and 1987). In many countries, however, especially developing ones, financial markets remain highly regulated. Interest rates are set by the government, typically below market-clearing levels, and inter-bank lending is restricted. In such environments, banks are limited in their ability to price and lend strategically, so that the effects of competition may be different.
