GDP steady-state multipliers under monopolistic competition revisited

New Keynesian general-equilibrium static models showed the fiscal multiplier is an increasing function of the degree of monopoly. Here, I develop a simple intertemporal model allowing us to study the steady-state role of optimal capital stock (and depreciation) in the fiscal policy transmission mechanism. The GDP multiplier may be locally decreasing in the degree of monopoly when the number of firms is fixed, but results depend strongly on the set of parameter values chosen. Using a net-output definition or allowing for free entry leads to unambiguous dominance of the long-run monopolistic multiplier over the Walrasian one.

A participatory framework for conservation payments

This paper describes a participatory framework used in Alta Verapaz, Guatemala to analyze the future viability of different conservation measures in a cloud forest area. It presents how in the case of conservation initiatives, participatory developed instruments could provide the incentive for farmers to reinforce or introduce conservation measures in their farming systems to preserve habitats, reduce species disruptions and alleviate poverty. A model's architecture was created with stakeholders of different settings of the region of study. Together, baseline-scenarios and policy-scenarios on land use and income generation were developed. The paper investigates the potential impacts of different policy measures for conservation and poverty reduction through the instrument “payments for environmental services”. Aim was to integrate social, economic and environmental aspects.     

Conservation agriculture practices adopted in southern Brazil

The adoption of conservation agriculture (CA) practices are essential for soil and water conservation. In CA, farmers must adopt no-tillage (NT) with crop rotation to maintain a permanent soil cover. In Brazil, mainly in the South region, for CA to be more efficient, practices such as contour farming and agricultural terraces should also be adopted. Thus, the objective of this study is to determine the extent to which NT has been adopted with crop rotation and others soil and water conservation practices. Data from the Agricultural Census in Paraná State, southern Brazil, were used. For the data analysis, the relationship between the level of adoption of NT and the use of crop rotation, contour farming and agricultural terraces was analyzed. A factor and cluster analysis were performed to distinguish regions in terms of soil and water conservation practices. The results show good overall soil and water conservation practices, although heterogeneity has been observed in the adoption practices between regions. Adoption of NT is high in almost all the studied regions. The conservation practice most widely used with NT is contour farming, whereas the least used is agricultural terraces. Conservation practices for runoff control are being neglected by farmers.     

The Challenges for Labour Market Policy during the COVID-19 Pandemic*

The COVID-19 pandemic is having a dramatic economic impact in most countries. In the UK, it has led to sharp falls in labour demand in many sectors of the economy and to initial acute labour shortages in other sectors. Much more than in a typical downturn, the current crisis is not simply a general slowdown in economic activity but also a radical short-term shift in the mix of economic activities – of which an unknown, but possibly significant, amount will be persistent. The initial policy response has focused on cushioning the blow to families’ finances and allowing the majority of workers and firms to resume their original activities once the crisis subsides. These are crucial priorities. But there should also be a focus on reallocating some workers, either temporarily if working in shut-down sectors or permanently by facilitating transitions to sectors and jobs offering better prospects and facing labour shortages. The phasing-out of the furlough subsidies, which is projected to happen in Autumn 2020, brings this into even sharper focus since the alternative for many workers will be unemployment. Active labour market policy will need to be front and centre.     

The Value Relevance of Reputation for Sustainability Leadership

This study investigates whether the market valuation of the two summary accounting measures, book value of equity and net income, is higher for firms with reputation for sustainability leadership, when compared to firms that do not enjoy such reputation. The results are interpreted through the lens of a framework combining signalling theory and resource-based theory, according to which firms signal their commitment to sustainability to influence the external perception of reputation. A firm’s reputation for being committed to sustainability is an intangible resource that can increase the value of a firm’s expected cash flows and/or reduce the variability of its cash flows. Our findings are according to expectations and show that the net income of firms with good sustainability reputation has a higher valuation by the market, when compared to their counterparts.     

A Socio-technical Approach for Group Decision Support in Public Strategic Planning: The Pernambuco PPA Case

This article describes a socio-technical approach to public strategic planning. A multi-methodological framework with decision support systems (DSS) of problem structuring, multi-criteria decision analysis and strategic thinking was used in a decision conferencing process to support the key-players of the Pernambuco State Department of Social Development and Human Rights, in Brazil, to elaborate its 2008–2011 Multi-Annual Plan (PPA). This interactive process took place in June 2007, with thirty technical and political actors meeting in 5 consecutive days to discuss what should be the fundamental objectives/development axes of the PPA and to generate, assess and classify intervention programmes to achieve the objectives. Structuring objectives and programmes started by a group causal mapping session supported by the Decision Explorer DSS. Then, a multi-criteria group value model, created on-the-spot by means of the M-MACBETH DSS, helped the politicians in evaluating the overall benefit of each programme. The doability of the programmes was also appraised with MACBETH and, finally, the programmes were classified into four benefit versus doability categories defined in a $2\times 2$ strategic graph: “pearls” (programmes with high benefit value and easy to implement), “oysters” (high benefit but difficult to implement), “bread and butter” (easy to implement but of low added value) and “white elephants” (low benefit and difficult to implement). The group agreed that at least all pearls and oysters should be selected. The programmes were prioritised based on their value-for-effort and the robustness of the selection was analysed with the PROBE DSS a posteriori.     

Mixed Equilibrium,Collaborative Dominance and Burning Money: An Experimental Study

We experimentally study three aspects of $2\times 2$ one-shot games with collaboratively dominant strategies: if subjects play according to the mixed Nash equilibrium; if the collaborative equilibrium has a focal point property; and if the burning money mechanism stimulates a collaborative behavior. First, our results show that players do not seem to play according to the mixed Nash equilibrium and that the collaborative equilibrium does not seem to have focal point properties. In fact, the subjects seem to prefer less risky strategies when compared to efficient ones. Our results also show that a burning money mechanism only helps players to collaborate when it transforms a collaborative profile of strategies into a collaborative equilibrium. This fact is justified because other burning money mechanisms will only help collaboration if the subjects were playing according to de mixed Nash equilibrium. Furthermore, even when burning money mechanisms improved the collaboration rate, such rate’s increase was smaller than the expected by the mixed Nash equilibrium.     

Trade credit and cost stickiness

Using a large sample of US data, we examine the relation between trade credit and cost behaviour and further investigate the moderating effects on this relation of agency problem, product market competition, and customer concentration. We find that firms using high levels of trade credit exhibit lower cost stickiness and this is prevalent in the high agency problem sub‐sample. In addition, in a non‐competitive market, where the agency problem arises owing to lack of competition, trade credit plays an external monitoring role by attenuating cost stickiness. However, high customer concentration curtails this monitoring ability.