A game theoretic analysis of interactions between law abiding citizens and criminals with respect to ownership of guns

In this paper, it is recognized that there are criminals and law abiding citizens in any society, and that their decisions to own guns are based on rather different, through interdependent, motives. These ideas are used as a conceptual basis for a game theoretic model which is used to analyze one isolated interaction and two forms of repeated interactions. The Nash equilibrium is the main results in the static form of the game. It is concluded from the analysis of the dynamic forms that this equilibrium in globally stable. The presentation proceeds to the study of possible consequences of direct and indirect policy interventions regulating the proportion of law abiding citizens and of criminals that own guns. The paper concludes with some observations on the model's limitations and some suggestions for its improvement.     

Application of local projections in the monetary policy in Brazil

This article examines the relationship between selected monetary aggregates and inflation and output in Brazil. Impulse responses under VAR and local projections were used to discover the leading or lagging role of the monetary aggregates. In addition, the information provided by the monetary aggregates as predictors of output and inflation was examined. This was assessed by examining their predictive power for subsequent observations on an in-sample basis. Overall, the results indicate that in order to control inflation rates, Brazilian authorities should focus on restricting money supply rather than increasing interest rates.     

Quantitative analysis of the implementation of educational plans in Latin America

In this paper an index of plan implementation is defined and applied to the 1960–1970 educational plans of Latin American countries. Statistical analysis is used to specify the determinants of the values of the index. It is shown that a lack of statistical data and of qualified personnel are the main reasons for insufficient plan implementation.     

Risk aversion, moral hazard, and the principal's loss

Summary. In their seminal paper on the principal-agent model with moral hazard, Grossman and Hart (1983) show that if the agent's utility function is , then the loss to the principal from being unable to observe the agent's action is increasing in the agent's degree of absolute risk aversion. Their proof is restricted to the case where the number of observable outcomes is equal to two, and it uses an argument that is specific to that case. In this note, we provide an alternative proof that generalizes their result to any (finite) number of outcomes. Received: March 21, 2001; revised version: June 21, 2001     

The fading 1990s in Japan: Driving forces behind the unemployment upsurge

This paper sheds new light on the causes of the unemployment upsurge in Japan during the “fading 1990s”, an unprecedented period of structural crisis. We estimate a labor market model and identify the main macroeconomic determinants of labor demand and labor supply decisions in the last decades. We then conduct dynamic simulations and assess the relative contribution of these determinants to the evolution of unemployment from 1990 to 2002. Beyond the leading role exerted by the decline in productivity growth, we find the active and expansionary measures undertaken by the government had an overall negative effect on the labor market.     

PHILLIPS CURVES AND UNEMPLOYMENT DYNAMICS: A CRITIQUE AND A HOLISTIC PERSPECTIVE

Abstract.  The conventional wisdom that inflation and unemployment are unrelated in the long run implies the compartmentalization of macroeconomics. While one branch of the literature models inflation dynamics and estimates the unemployment rate compatible with inflation stability, another one determines the real economic factors that drive the natural rate of unemployment. In the context of the new Phillips curve, we show that frictional growth, i.e. the interplay between lags and growth, generates an inflation–unemployment trade-off in the long run. We thus argue that a holistic framework, such as the chain reaction theory (CRT), should be used to jointly explain the evolution of inflation and unemployment. A further attraction of the CRT approach is that it provides a synthesis of the traditional structural macroeconometric models and the (structural) vector autoregressions.     

Short Term External Debt and Economic Growth—Granger Causality: Evidence from Latin America and the Caribbean

In this paper the direction of the causality relationship between economic growth and short-term external debt was investigated for 27 Latin American and Caribbean countries over the period 1970–2003. The empirical results suggest the existence of bidirectional causality relationships between the two variables for several countries, which means that the performance of both variables is interrelated. The main finding is that in the short- and long- runs Granger causality from economic growth to short-term external debt is present in 13 Latin American and Caribbean countries. With the evidence suggesting, in the majority of estimated cases, economic growth Granger caused short-term external debt, short-term policy decisions related to capacity absorption enhancement should be encouraged in Latin America and the Caribbean. Further work in this regard is encouraged in the form of panel studies or specific individual case studies inclusive of foreign trade linkage parameters to capture the potential effects of omitted variables.

Cultural relativity of accounting professionalism: Evidence from New Zealand and Samoa

This study investigates the value orientations of two culturally distinct countries in the South Pacific, namely, Samoa and New Zealand, with a view to providing empirical evidence on the relationships between accounting and culture. It uses Rokeach's value survey (1973), Schwartz and Bilsky's motivational domains (1987, 1990), and Hofstede–Gray framework to establish the possible linkages between values and accounting professionalism. The results provide culture-related evidence that suggests the possibility for the existence of major differences in the levels of accounting professionalism in the two countries. This study may have implications for the application of International Financial Reporting Standards (IFRS) and the analysis of differences in judgments of professional accountants on measurement, disclosure, and ethical issues. It is the first substantial accounting study on Samoa.     

Fractional integration and nonlinear deterministic trends in the analysis of time series data

This article examines the interaction between fractional integration and nonlinear structures by using for the latter the Chebyshev polynomials in time that can be taken as an alternative, less abrupt way of modelling breaks in time series data. A Lagrange multiplier test, developed for testing the order of integration in the context of nonlinear deterministic trends, is implemented in three well-known and previously studied time series data: the Nile river data, the temperatures in the Northern hemisphere and CO₂ emissions in the US. The results suggest that the second and especially the third time series display nonlinear behaviour still with fractional degrees of differentiation.