Decreasing absolute prudence: Characterization and applications to second-best risk sharing

In this paper, we provide two basic properties of utility functions u which exhibit decreasing absolute prudence i.e. (− u/u″)′ ≤ 0. These properties are used to examine the allocation of risks in an economy when some agents bear non-transferable risks. We show that it is fair Pareto-efficient to let those with a non-transferable risk bear relatively less of the transferable risk in the economy if and only if absolute prudence is decreasing. In another model, there is a complete set of contingent markets, but some agents have no direct access to them. We examine the fair efficient allocation of risk in a pool gathering a trader and a non-trader. Decreasing absolute prudence provides an upper bound to the share of the pool's risk that should be borne by the trader.     

One Money,One Market: A Revised Benchmark

The introduction of the euro generated substantial interest in the impact of currency unions (CUs) on trade flows. Initial estimates suggested a tripling of trade, which gave rise to a literature in search of “more reasonable” CU effects. Theoretical derivations of the gravity model highlight, however that the CU literature neglects to control simultaneously for general equilibrium effects (multilateral resistance) and unobserved bilateral heterogeneity among trade partners. Once we introduce the appropriate controls, CU trade effects are shown to range around 50%. We also highlight that the practice of reporting average CU effects generates misleading results. The average effect is shown to be a composite of disparate individual CU effects ranging from 40% (euro) to about 100% (Central African franc).     

Racial Harassment,Ethnic Concentration,and Economic Conditions*

In this paper, we analyse the association between the spatial concentration of ethnic minorities and racial harassment. Ethnic concentration relates to racial harassment through at least three channels: hostility in the attitudes of majority individuals that finds expression in harassment behaviour, the probability that minority individuals meet majority individuals, and the cost of expressing hostility aggressively. Thus, harassment cannot simply be modelled as a stronger form of hostility. Using unique data for Britain, we show that, in areas of higher local ethnic concentration, experience of harassment is lower, even though hostility on the side of the majority population is not.     

DOES THE ECB HAVE A TIME‐INCONSISTENCY PROBLEM? A NOTE

A standard time‐inconsistency model of monetary policy, extended to include a time‐varying natural rate of unemployment, implies cointegration between the inflation rate and the unemployment rate. An application of the model to data for the EMU countries does not yield strong evidence of cointegration. In addition, the sign of the estimated coefficient of cointegration is not in line with a sign restriction imposed by the time‐inconsistency model.     

Part-time work, school success and school leaving

In this paper, we analyse part-time employment of teenagers still in full-time education, their academic performance, and their school leaving decisions. Our estimation strategy takes account of the possible interdependencies of these events and distinguishes between two alternative states to full time education: entering the labour force full time and going on to further training. We model this decision in a flexible way. Our analysis is based on data from the UK National Child Development Study, which has an unusually rich set of variables on school and parental characteristics. Our main finding is that working part time while in full-time education has only small adverse effects on exam performance for females, and no effects for males. The effect of part-time work on the decision to stay on at school is also negative, but small, and marginally significant for males, but not for females. Other important determinants of exam success as well as the continuation decision are parental ambitions about the child’s future academic career.     

Firm-hosted online brand communities and new product success

Many firms use online brand communities to support the launch of their new products. This study proposes a typology of firm-hosted online brand communities and examines whether such a classification system can improve predictions of new product success. A cross-industry analysis of 81 firm-hosted online brand communities shows that these communities reflect three archetypes. A subsequent survey of 170 community-hosting firms in the consumer durable goods industry reveals that the three types of communities are not equally important for new product success. Moreover, one archetype generally underperforms the other two as a new product support mechanism. Overall, the results demonstrate that firm-hosted online brand communities can be a predictor of new product success.     

The effect of capital requirement regulation on the transmission of monetary policy: evidence from Austria

This paper analyzes the role of banks’ regulatory capitalization in the transmission of monetary policy. We use a confidential dataset for Austrian banks spanning from the first quarter of 1997 to the fourth quarter of 2003. We find evidence that Austrian banks react in an asymmetric way to monetary policy depending on their regulatory excess capitalization, i.e. low capitalized banks react more restrictively to a monetary tightening than their highly capitalized peers.

NOUVEL ESSOR DES FONDATIONS AU QUÉBEC ET AU CANADA: POUR UNE ANALYSE SOCIOPOLITIQUE FONDÉE SUR LE CONCEPT D'ÉCONOMIE PLURIELLE

Philanthropic foundations are the object of little research in Canada and Quebec. Our article recognizes the role of these organizations, as well as the presence of powerful new foundations, rich in assets and donations. This article consists of three parts. The first part presents a theoretical review of the American literature published from 2000 on. The second part examines data that we extracted from three main repertoires. Though informative, these repertoires tend to classify Canadian and Quebec foundations in categories that are mostly fiscal and legal and tend to break them down as public or private foundations. We therefore question the limits of studies based on such categories. In the third part of the article we propose a theoretical framework based on a sociopolitical point of view in an attempt to transcend the binary approach. Our approach borrows from the concepts of social and solidarity economy (SSE) and plural economy in order to better understand the new institutional arrangements in which foundations operate. This theoretical framework allows us to analyse foundations as actors of the SSE even though they might not reproduce automatically the principles and the values of the SSE in their behaviours. On the contrary, from the standpoint of a plural economy we may be in a better position to develop a sound sociopolitical analysis of diverse configurations and hybrid forms resulting from emulations or transactions between the principles of the social and solidarity economy (reciprocity), the private economy (competition) and the public economy (redistribution).     

Monetary integration vs. real disintegration: single currency and productivity divergence in the euro area #

Productivity slowdown plays a prominent role in the build-up of the euro area crisis. This phenomenon affected member countries asymmetrically, causing divergence in their productivity trends. Recent research traces this divergence back to monetary integration. After reviewing the arguments that link real “disintegration” of the euro area to its monetary integration, we assess them empirically by modelling the evolution of labour productivity using a panel of sectorial data. The results indicate that monetary unification may actually have fostered divergence in productivity trends, and suggest some economic policy measures that could prevent further divergence.     

The competitive firm and the role of information about uncertain factor prices

This paper studies the role of information about uncertain input prices for a competitive firm. The production decision has to be taken when the price of an input factor is perceived as random. However, a signal is observable in advance, conveying some information about the future factor price. Transparency is linked to the informational content of this signal. The impact of a higher level of transparency is analyzed from an ex ante perspective, i.e. before the information signal is observed. The change of factor use, production amount and cost are determined by comparing the strength of the curvatures of total and marginal product. By contrast, ex ante profit always increases, independently of the shape of the production function.