Financial liberalization and remittances: Recent panel evidence

We investigate the impact of financial liberalization on remittances to 84 countries over the period 1986–2005. Explicitly accounting for the multidimensionality of financial reform, we find that the various dimensions impact remittances differently: Increased economic freedom in the financial sector, as captured by absence of direct government control over the allocation of credit, has a positive and immediate impact. However, the improved robustness of financial markets, as captured by the development of security markets, improvement in the quality of banking supervision, and removal of stringent restrictions on interest rates and international capital, has a negative and lagged effect. The net combined effect reveals that financial liberalization may have a modest negative impact on remittances in the long run.     

Optimality and construction of some rectangular designs

We obtain a sufficient condition forE-optimality of equireplicate designs. As an application, we proveE-optimality of certain types of three-class PBIBDs based on rectangular association scheme — in short — rectangular designs. These designs turn out to be highly efficient with respect to theA-criterion as well. We also observe that these designs, though themeselves not regular graph designs (RGD's) are yet strictlyE-better than every competing RGD, wheneverv≥26 andv=2 (mod 4). This provides an infinite series of counter examples to the conjecture of John and Mitchell (1977). We also present two methods of construction of the rectangular designs. Apart from providing infinitely many examples of the designs provedE-optimal in this paper and in Cheng and Constantine (1986), this construction also provides — as a special case — the first known infinite series of most balanced group divisible designs, which were proved optimal with respect to all type 1 criteria by Cheng (1978).     

Can overconfidence explain the consumption hump?

The standard neoclassical life-cycle model predicts that individual consumption should either increase, remain constant or fall monotonically depending on whether the market rate of return on savings is greater than, equal to or less than the discount rate. However, empirical evidence suggests that even after controlling for economic growth and family size, household consumption exhibits a robust hump at around age 45–55, with the ratio of peak consumption to consumption when entering the workforce greater than 1.1. This paper extends the “overconfidence” explanation (Caliendo and Huang, J. Macroecon 30(4):1347–1369, 2008) of this macroeconomic puzzle to a calibrated general equilibrium environment. The main finding is that although it is possible to identify parameter values under which overconfidence alone generates life-cycle consumption profiles and macro-indicators consistent with U.S. experience, quite extreme assumptions about both the magnitude and distribution of overconfidence in the population are generally required to obtain them.     

Network defense and behavioral biases: an experimental study

Experimental Economics - How do people distribute defenses over a directed network attack graph, where they must defend a critical node? This question is of interest to computer scientists,...     

Does a free media protect labour rights?

Based on a sample of 47 developing economies considered over the period 1992–2012, we find that a free media reduces the legal protection of labour, taken as a whole. However, the impact differs over various aspects of labour regulation: while media freedom correlates with less stringent regulation of work time, less constraints to dismissal, and lower protection of employee representation rights, it also correlates with greater legal parity of part-time and fixed-term labour with full-time and permanent workers.     

The Power of Emotional Benefits: Examining the Role of Benefit Focus on Donation Behavior

In donation contexts, many advertising appeals focus on the benefits that those in need will receive as the result of donations. Yet little is known about the effect that benefit information has on willingness to give. In this research, we differentiate between two types of benefits typically emphasized in appeals: emotional (which focus on the positive emotions beneficiaries experience as the result of donations) and functional (which focus on the basic needs met as the result of donations). We conduct three experiments and find that appeals focusing on emotional benefits increase willingness to donate relative to appeals that focus on functional benefits. We also provide evidence that visualization of benefits mediates the effect of benefit type on willingness to donate and introduce relevant moderators. In addition to contributing to theoretical understanding of donation behavior, this research also provides managers with practical tools to encourage donations.     

On theE-optimality of certain asymmetrical designs under mixed effects model

TheE-optimality of the following designs within the class of all proper and connected designs with givenb, k andv under mixed effects model are established.

1. A group divisible design with λ₂ = λ₁ + 1.
2. A group divisible design with λ₁ = λ₂ + 1 and group size 2.
3. A linked block design.
4. The dual of design (i)
5. The dual of design (ii).

All these designs are known to satisfy the same optimality property under fixed effects model whenk<v, while the design (i) is known to beE-optimal even whenk>v. From the results proved here, theE-optimality of designs (ii, (iii), (iv) and (v) under fixed effects model in the situation whenk >v also follows.     

STOCHASTIC HYPERBOLIC DYNAMICS FOR INFINITE-DIMENSIONAL FORWARD RATES AND OPTION PRICING

We model the term-structure modeling of interest rates by considering the forward rate as the solution of a stochastic hyperbolic partial differential equation. First, we study the arbitrage-free model of the term structure and explore the completeness of the market. We then derive results for the pricing of general contingent claims. Finally we obtain an explicit formula for a forward rate cap in the Gaussian framework from the general results.