Trade structure and economic growth

Abstract

How do the number of trade partners and the concentration of trade among partners affect the economic growth of a country? We refer to these characteristics as the structure of trade, and explore this question empirically in this study. We find that the structure of trade, independently of the level of trade itself, has an important effect on the rate of economic growth. The results of the study suggest that the number of trading partners is positively correlated with growth across all countries, and this effect is more pronounced for rich countries. Trade concentration is positively correlated with growth for all countries, and the effect is concentrated in poor countries. Previous work has overlooked these characteristics of trade, although we find them to be quite relevant and that they could lead to new ways of understanding the trade – growth relationship.     

The Drivers of E-tailers' Price Levels

One of the most important topics in online pricing is understanding the drivers of online price levels for different types of retailers, in order to better understand competition across retail channels. We developed a conceptual framework and conducted an empirical analysis on price levels in the books category among different e-tailers (pure play and multichannel) in Italy and obtained a dataset comprising 5,400 price quotes during 2002. We ran a correlation analysis that showed that e-tailer graphics, branding and trust, and shipping services are highly correlated to price levels. Moreover, we developed a regression analysis that showed that first impact attributes like graphics and navigability are the most important drivers of online price levels. We identify some areas of future research and offer some managerial insights.     

State‐Dependent Threshold Smooth Transition Autoregressive Models*

In this article, we consider extensions of smooth transition autoregressive (STAR) models to situations where the threshold is a function of variables that affect the separation of regimes of the time series under consideration. Our specification is motivated by the observation that unusually high/low values for an economic variable may sometimes be best thought of in relative terms. State‐dependent contemporaneous‐threshold STAR and logistic STAR models are introduced and discussed. These models are also used to investigate the dynamics of US short‐term interest rates, where the threshold is allowed to be a function of past output growth and inflation.     

Venture capital investor type and the growth mode of new technology-based firms

Independent venture capital (IVC) investors have more powerful incentives than corporate venture capital (CVC) investors to take actions that signal their capabilities (i.e. to “grandstand”). We argue that this should engender differences in the treatment effect of IVC and CVC on the mode of growth of portfolio companies. Short-term sales growth of IVC-backed firms in the period that immediately follows the VC investment should outpace that of CVC-backed firms, while we expect no difference in employment growth. We find support for these theoretical predictions on a sample of 531 Italian new technology-based firms, using several panel estimators to control for endogeneity of IVC and CVC.     

The Trouble with Harrod: The fundamental instability of the warranted rate in the light of the Sraffian Supermultiplier

The paper argues that Harrodian instability is an instance of what Hicks in his book Capital and Growth (1965) called static instability, related to the direction (and not to the intensity) of the disequilibrium adjustment process. We show why such instability obtains in demand‐led growth models in which the ratio of capacity creating private investment to output ratio is given exogenously by the aggregate marginal propensity to save. We also show that Sraffian Supermultiplier model overcomes the Harrodian instability and that its demand‐led equilibrium is statically stable. It is explained that the latter results do not follow from the presence of autonomous non‐capacity creating expenditure component as such but from its presence within a model in which investment is driven by the capital stock adjustment principle (i.e., the flexible accelerator). Finally, we argue that, although being statically stable, the equilibrium growth path of the Sraffian Supermultiplier model can be dynamically stable or unstable depending on the intensity of the reaction of investment to demand. We then provide a discrete time sufficient condition for the dynamic stability of such equilibrium that implies that the marginal propensity to invest remains lower than the marginal propensity to save during the adjustment process, a modified Keynesian stability condition.     

Gender invariance of dignity in non-terminal elderly patients with chronic diseases: a multicentric study

Quality & Quantity - The Dignity construct, originally developed in end-of-life care, includes perceptions, cognitions and emotions related to the quality of being worthy of esteem or respect....     

Optimal monetary policy in a ‘sudden stop’

In the wake of the 1997-98 financial crises, interest rates in Asia were raised immediately, and then reduced sharply. We describe an environment in which this is the optimal monetary policy. The optimality of the immediate rise in the interest rate is an example of the theory of the second best: although high interest rates introduce an inefficiency wedge into the labor market, they are nevertheless welfare improving because they mitigate distortions due to binding collateral constraints. Over time, as the collateral constraint is less binding, the familiar Friedman forces dominate, and interest rates are optimally set as low as possible.     

Long‐run relations in European electricity prices

This paper analyses the interdependencies existing in wholesale electricity prices in six major European countries. The results of a robust multivariate long‐run dynamic analysis reveal the presence of four highly integrated central European markets (France, Germany, the Netherlands and Austria). The trend shared by these four electricity markets appears to be common also to gas prices, but not to oil prices. The existence of a common long‐term dynamics among electricity prices and between electricity prices and gas prices can be explained by the similarity of the market design across Europe and by the same marginal generation technology. Since standard unit root and cointegration tests are not robust to the peculiar characteristics of electricity prices time series, we also develop a battery of robust inference procedures that should assure the reliability of our results. Copyright © 2009 John Wiley & Sons, Ltd.     

A Credit Risk Model for Consumer Loan Portfolios

ABSTRACT

We propose a credit risk model for consumer loan portfolios in Brazil. Consumer profiles and the risk classification of credit operations are used to segment the portfolios. Credit loss distributions for each segment are selected and used in a Monte Carlo simulation process to generate the loss distribution of the portfolios. The dependence among the credit losses in the different segments of the portfolios is modeled through an elliptical copula function. Statistical tests are done and show that the proposed model is adequate to represent credit loss distributions in consumer credit in Brazil.

RESUMEN.Proponemos un modelo para los créditos de riesgo de la cartera de préstamos al consumidor en Brasil. Los perfiles del consumidor y la clasificación del riesgo de las operaciones crediticias se utilizan para segmentar la cartera. La distribución de las pérdidas de los créditos de cada segmento se seleccionan e utilizan en un proceso de simulación Monte Carlo, para generar la distribución de las pérdidas de la cartera. La dependencia entre la pérdida del crédito en los diferentes segmentos de la cartera se modela utilizando una función de cópula elíptica. Las pruebas estadísticas se realizan y muestran que el modelo propuesto es apropiado para representar la distribución de la pérdida de crédito en el ramo de los créditos a los consumidores en Brasil.

RESUMO.Propomos um modelo de crédito de risco para portfólios de empréstimos ao consumidor, no Brasil. O perfil dos comsumidores e a classificação de risco das operações de crédito são usados para segmentar o portfólio. As distribuições de perda de crédito para cada segmento são selecionadas e usadas num processo de simulação Monte Carlo, para gerar a distribuição da perda do portfólio. A dependência entre a perda do crédito nos diferentes segmentos do portfólio é determinada por uma função de cópula elítica. Testes estatísticos foram realizados e demonstram que o modelo proposto é adequado, para representar as distribuições de perda de crédito no crédito ao consumidor, no Brasil.     

The economic value of virtue

This paper analyzes the interaction between socioeconomic factors and the value and prevalence of female virginity. Using a simple model of the marriage market, in which premarital chastity is an important factor influencing spouse selection, we show that the prevalence of virginity increases with male inequality, social fluidity, overall economic development, the gender gap and, under certain conditions, social status. We also build a dynamic version of the model, showing that it can reproduce both the emergence and the subsequent decline of chastity in favor of a more widespread practice of premarital sex. The implications of our theory are consistent with some historical and cross-cultural evidence.