Dynamic bank runs: an agent-based approach

Journal of Economic Interaction and Coordination - This paper simulates bank runs by using an agent-based approach to assess the depositors’ behavior under various scenarios in a...     

The new “alert procedures” in Italy: Regarder au‐delà du modèle français?

Italy is about to enforce the first comprehensive reform of its corporate insolvency framework since the Second World War. The new Codice della Crisi d'Impresa e dell'Insolvenza builds on international recommendations, European laws and foreign best practice. One area that has been subject to substantial influence from foreign models is preventive insolvency mechanisms, where the Italian Legislator drew from the French and English experiences, as these countries have a widely recognized reputation of excellence in this field. Nevertheless, the similarities between the Italian and the English system – particularly with reference to the Italian panel of experts in the alert procedures and the English “pre‐pack pool” in pre‐packaged administrations – have so far been overlooked in the academic literature. This article sheds some light on the degree of cross‐fertilization between the Italian panel of experts in the procedure d'allerta and the English pre‐pack pool in pre‐packaged administration. The primary purpose of this study is to investigate whether regulatory reforms are needed to support the activity of the Italian panel in promoting restructuring deals for debtors in distress.     

Are happiness and productivity lower among young people with newly-divorced parents? An experimental and econometric approach

High rates of divorce in western society have prompted much research on the repercussions for well-being and the economy. Yet little is known about the important topic of whether parental divorce has deleterious consequences upon adult children. By combining experimental and econometric survey-based evidence, this study attempts to provide an answer. Under controlled conditions, it measures university students’ subjective well-being and productivity (in a standardized laboratory task). It finds no evidence that either of these is negatively associated with recent parental divorce. If anything, happiness and productivity appear to be slightly greater, particularly among males, if their parents have divorced. Using longitudinal data from the British Household Panel Survey—to control for so-called fixed effects—we then cross-check this result, and confirm the same finding, on various random samples of young British adults.     

The economic value of forests in supplying local climate regulation

Several authors have argued that forest ecosystems serve as a hedge against extreme climatic events at a local scale. Consequently, the local climate regulation ecosystem services provided by forests can be economically valued by evaluating the reduction (increase) in the insurance premium that risk‐averse individuals are willing to pay when forest cover is marginally increased (reduced). This type of insurance value associated to forest ecosystems services is estimated to be USD 0.0733 per hectare of forest for Chilean farmers. The empirical framework proposed in this paper is useful and relevant for the cost‐benefit analysis of natural resource conservation investments.     

ACCOUNTING FOR THE TIMING OF FIRST MARRIAGE*

Among first marriages in the United States, grooms are on average 1.7 years older than their brides. Traditionally, this fact is explained by sex differences in income. We use a general equilibrium, overlapping generations search model economy to show instead that sex differences in fecundity are essential to account for the age gap at first marriage, whereas sex differences in income play a secondary role. Our model economy also accounts for other facts on the timing of first marriages that the literature has overlooked.     

How banks go abroad: Branches or subsidiaries?

We examine the factors influencing international banks’ organizational form, using an original database on the operations in Latin America and Eastern Europe of the world’s top 100 banks. We find that banks are more likely to operate as branches in countries that have higher taxes and lower regulatory restrictions on bank entry and on foreign branches. Subsidiary operations are preferred by banks seeking to penetrate host markets by establishing large retail operations. Finally, economic and political risks have opposite effects, suggesting that legal differences in parent banks’ responsibilities associated with branches and subsidiaries are important determinants of banks’ organizational form.     

The Influence of Country of Birth and Other Variables on the Earnings of Immigrants

A bstract .   With globalization, plus the ongoing wars and political problems facing many countries, immigration has lately been accentuated. It is very common for immigrants to move to countries where it is perceived that their economic and political possibilities might be enhanced. In light of this, many foreigners tend to see the United States as their destination. However, sometimes these new additions to the economy face an uphill battle to fit in and make their abilities be valued in the new country. This paper tries to measure and quantify these problems faced by newcomers. It also addresses the question of who will most probably fare better in the United States. These two issues are measured through data obtained in the Current Population Survey published in March 1999.     

Does less inequality among households mean less inequality among individuals?

Consider an income distribution among households of the same size in which individuals, equally needy from the point of view of an ethical observer, are treated unfairly. Individuals are split into two types, those who receive more than one half of the family budget and those who receive less than one half. We look for conditions under which welfare and inequality quasi-orders established at the household level still hold at the individual one. A necessary and sufficient condition for the Generalized Lorenz test is that the income of dominated individuals is a concave function of the household income: individuals of poor households have to stand more together than individuals of rich households. This property also proves to be crucial for the preservation of the Relative and Absolute Lorenz criteria, when the more egalitarian distribution is the poorest. Extensions to individuals heterogeneous in needs and more than two types are also provided.