Emerging Market Business Cycles: The Role of Labor Market Frictions

Emerging economies are characterized by higher variability of consumption and real wages relative to output and a strongly countercyclical current account. A small open economy model with search‐matching frictions and countercyclical interest rate shocks can account for these regularities. Search‐matching frictions affect permanent income, and increase future employment uncertainty, heightening workers' incentives to save and generating a greater response of consumption and the current account. The greater consumption response feeds into larger fluctuations in workers' willingness to work, while interest rate shocks lead to variations in firms' willingness to hire; both of these outcomes contribute to highly variable wages.     

Can Miracles Lead to Crises? The Role of Optimism in Emerging Markets Crises

Emerging market financial crises are abrupt and dramatic usually occurring after a precrisis bonanza. This paper develops an equilibrium asset pricing model with informational frictions in which crisis itself is a  consequence  of the investor optimism in the period preceding the crisis. If preceded by a sequence of positive signals, a small, negative noise shock can trigger a downward adjustment in investors' beliefs, asset prices, and consumption. The magnitude of this downward adjustment  increases  with the level of optimism attained prior to the negative signal. Moreover, with informational frictions, asset prices display persistent effects in response to transitory shocks.     

Consumer behaviour of children in primary school age

Most research on consumer behaviour is concerned with adult behaviour, because the purchasing power of a household lies predominantly with the adults. However, children do undertake the management of a certain amount of money at early ages, and the importance of children, obviously an integral part of the family, in overall family consumption has been increasing gradually. In order to help children become ‘conscious’ consumers, it would be most useful to treat them separately for the purpose of defining consumer behaviour. In this research, using a population of 300 pupils, in the age groups of 8–9 years and 11–12 years, from six primary schools of different socio-economic levels, the consumption behaviour, behavioural forms of purchase and factors influencing such purchase forms of purchase forms of children have been studied.