Monetary policy and exchange rate dynamics in the Spanish economy

As the Spanish economy gets more integrated in international markets, the real exchange rate becomes a key determinant of the monetary transmission. In this paper we trace out the dynamic response of prices, output and the exchange rate following a monetary policy shock. We estimate a structural VAR model whose identification scheme is based on the long run properties common to a large class of models. The results suggest that a small model with efficient asset markets plus nominal inertia and long run monetary neutrality, captures the essential features of the monetary transmission mechanism in Spain. The interest rate shock is well identified and the exchange rate overshoots its long run value. There are no signs of liquidity puzzle nor of price puzzle or exchange rate puzzle either.     

Disentangling the transmission channel NPLs-cost of capital-lending supply

This paper analyses the effects of non-performing loans (NPLs) on the cost of capital, and on lending and liquidity supply, for a sample of 225 Eurozone banks over the period 2002Q1-2016Q4. Our results demonstrate that NPLs increase the cost of capital, which reduces both lending supply and liquidity creation. This phenomenon is comparatively more significant for periphery county banks than for core country banks.     

Promoting employment of disabled women in Spain; Evaluating a policy

Even though the Disability System in Spain is designed to allow partially disabled individuals to combine the receipt of the benefits with a job, their employment rates have remained very low since 1996. The aim of this paper is to evaluate the results of an employment promotion policy introduced in Spain in 2004 which increased the deductions to the Social Security contributions paid by employers that hired disabled women. We apply difference-in-difference models and estimate a recursive bivariate probit model to evaluate the existence of shifts in employment trends in the women relative to the men sample conditioning on the existence of preexisting trends. We find that the impact of the policy is significant and we estimate an average elasticity of employment of 0.14 for partially and of 0.08 for totally disabled women relative to the deductions in the employer Social Security contributions. Finally, when we extrapolate the results beyond our sample, we estimate that 7100 disabled women were able to find a job in Spain due to the policy with an associated cost of 10,997.900 euro for the government.     

Sisyphean Dilemmas of Development: Contrasting Urban Infrastructure and Fiscal Policy Trends in Maputo,Mozambique

In sub‐Saharan African (SSA) cities like Maputo, land commodification is predictably fueled by plans for aspirational infrastructure serving elites. What is rather more peculiar, however, is the way in which the promotion of some fiscal policy reforms can also inadvertently support land commodification and the uneven development it (re)produces. This article describes how efforts to host both democratic fiscal reforms (via localized exercises like participatory budgeting) and to tap into international capital circuits to stir economic development (via aspirational infrastructure and urban redevelopment plans) can produce a Sisyphean dilemma. While gains in ordinary infrastructure investments (e.g. wells, water pumps) were achieved democratically in Maputo's KaTembe district with the participatory budget, these material (and political) improvements have been rendered irrelevant by better funded aspirational infrastructure projects for KaTembe (e.g. bridges, high‐rise residential buildings, tourist facilities) supported by more opaque decisions made by the national government without residential input. Given the wide embrace of participatory budgeting in contexts of weak democracy across SSA cities and elsewhere, Maputo's experience serves as a timely alert of the risks run when this popular exercise is prematurely promoted, especially when wider‐scaled property tax reforms could better redress uneven and undemocratic urban development.     

Coalitional fairness in interim differential information economies

In this paper we propose a concept of coalitional fair allocation in order to solve the tension that may exist between efficiency and envy-freeness when agents are asymmetrically informed and the equity of allocations is evaluated at the interim stage.     

Detecting Common Longevity Trends by a Multiple Population Approach

Recently the interest in the development of country and longevity risk models has been growing. The investigation of long-run equilibrium relationships could provide valuable information about the factors driving changes in mortality, in particular across ages and across countries. In order to investigate cross-country common longevity trends, tools to quantify, compare, and model the strength of dependence become essential. On one hand, it is necessary to take into account either the dependence for adjacent age groups or the dependence structure across time in a single population setting—a sort of intradependence structure. On the other hand, the dependence across multiple populations, which we describe as interdependence, can be explored for capturing common long-run relationships between countries. The objective of our work is to produce longevity projections by taking into account the presence of various forms of cross-sectional and temporal dependencies in the error processes of multiple populations, considering mortality data from different countries. The algorithm that we propose combines model-based predictions in the Lee-Carter (LC) framework with a bootstrap procedure for dependent data, and so both the historical parametric structure and the intragroup error correlation structure are preserved. We introduce a model which applies a sieve bootstrap to the residuals of the LC model and is able to reproduce, in the sampling, the dependence structure of the data under consideration. In the current article, the algorithm that we build is applied to a pool of populations by using ideas from panel data; we refer to this new algorithm as the Multiple Lee-Carter Panel Sieve (MLCPS). We are interested in estimating the relationship between populations of similar socioeconomic conditions. The empirical results show that the MLCPS approach works well in the presence of dependence.     

Estimation of Armington elasticities in a CGE economy-energy-environment model for Europe

The main goal of the article is to estimate Armington elasticities of the energy and energy-intensive sectors of the GEM-E3 computable general equilibrium model. The model follows the standard two-stage budget optimisation of the consumer by first optimising between domestically produced and imported goods and, then, by country of origin. A panel data econometric framework is used here with dynamic adjustment to capture both the long and short term elasticities for the studied six aggregated sectors in Europe. The estimated long-term elasticities are in line with the literature, but higher than those used in the GEM-E3 model. The results suggest that consumer choice appears to be more price sensitive between the domestic and the composite imported goods, and amongst the importers, than already assumed in the model.