Global economic effects of the EU Common Agricultural Policy

Among distortions in international agricultural trade, those imposed by the European Union (EU) are the most disruptive. Under the Common Agricultural Policy (CAP), the EU has switched from being a large net importer of agricultural products to a large exporter. This has greatly altered world agricultural markets, imposing substantial costs on the EU itself and efficient agricultural exporters in the rest of the world. We show how the CAP has affected world agricultural markets and present estimates of the associated costs. First we assess the aggregate costs broken down by various product categories. Next we provide a specific example of one product, sugar.     

Shipment frequency of exporters and demand uncertainty

This paper examines how exporting firms adapt to the uncertainty stemming from demand volatility. By using monthly customs data from France, we decompose exports into different extensive and intensive margins including two novel margins: the number of months the firms exported (frequency) and the average export value per month. We establish four empirical patterns. First, firms export less to markets with higher demand volatility. Second, this effect is mainly explained by the frequency margin. Third, volatility affects the frequency margin through two channels: indirectly through lower trade volume and directly through logistics re-optimization. In particular, our results suggest that firms send less frequent, larger shipments to more uncertain markets conditional on total exports. Fourth, the effect of demand volatility is magnified on markets with longer time-to-ship. We propose that these observations are in line with simple stochastic inventory management approaches.     

The Contribution of the Urban Sector to Australian Economic Development Before 1914

This article examines the contribution of the urban sector to Australian economic development before the First World War. This contribution has often been seen in negative terms: contemporary observers generally thought that the major cities were to large and drained resources from the productive sectors of the economy, while some modern historians have portrayed cities as centres of poverty and environmental disamenity. The article evaluates these claims and presents a case for the urban sector having been a powerful stimulus to economic growth. The problems which Australian urbanization created did not stem from cities being too large, with more inhabitants than the number of well-paying jobs; rather, the general preference for low-density suburban living, and the ability of most of the population to be able to afford to live that way, meant that the cities would be expensive to build and difficult to service in a cost-effective way.     

Stadium financing,usage and the impact of institutional change on consumer demand: The case of VFL Park, 1970–1986

Ownership, financing, and usage of stadiums are key issues that affect the commercial operations of sports leagues. Stadiums that are owned by leagues may generate deadweight losses if they are not used to full capacity. We (1) model demand to measure the impact of the Victorian Football League building a privately-funded stadium (VFL Park); (2) then use counterfactual scenarios to estimate social saving from different venues and playing days, and determine whether further welfare gains would have been possible. VFL Park provided greater control over revenue, but further institutional change was needed to fully exploit potential commercial gains from the stadium.     

The health cost of living in a city: The case of France at the end of the 19th century

Despite a long standing debate over urban living conditions during industrialization, the impact of rural–urban migrations on health and mortality remains an open question. We observe both mortality and geographical mobility in a large longitudinal dataset of French males and show that rural–urban migrants benefited from clear advantages over those who already lived in the city. However, this benefit fades in a few years. Further we find no evidence of a spike in mortality among rural migrants as they encountered the more severe disease environment of cities, instead it seems their initially superior physical human capital was depleted over time.     

Sport as a cultural system: sports policies and (new) ethnicities in Lyon and Birmingham

‘Sport promotes integration’: this idea seems to be commonly accepted both in France and in the UK, even though the authorities in each country see the issue of ‘ethnic minorities’ very differently. This article draws on research based on interviews with the main actors of ‘socio–sports’ policies in the cities of Lyon and Birmingham and on analysis of consultation procedures and official documents, to show that sport provides a set of symbolic markers that helps the authorities, professionals and ‘ethnic minorities’ to get their bearings in an uncertain multicultural situation. Although ‘ethnic minorities’ try to control the direction of sports policies in pursuit of their own objectives, their strategies tend to be ‘routinized’ around markers legitimized by the authorities in response to the success of certain sporting practices. Sports policies, therefore, promote ‘security’ of identity for these ‘minorities’ by ‘mapping’ their environment using the values and principles of sport. ‘Le sport favorise l’int´gration’: cette idée semble communément admise en France et en Grande–Bretagne alors même que leurs autorités respectives envisagent de manière très différente la question des ‘minorités ethniques’. À partir d’une recherche fondée sur des entretiens avec les principaux acteurs des politiques ‘socio–sportives‘ des villes de Lyon et de Birmingham, et sur l’analyse des procédures de concertation et des documents officiels, l’analyse montre que le sport trace des repères symboliques qui permettent aux pouvoirs publics, aux professionnels et aux ‘minorités ethniques’ de s’orienter dans une réalité multiculturelle incertaine. Mais si ces dernières tentent de contrôler l’orientation des politiques sportives de manière à poursuivre leurs propres objectifs, leurs stratégies tendent également à se ‘routiniser’ autour des repères que les pouvoirs publics ont légitimé pour répondre au succès des pratiques sportives. Les politiques sportives favorisent dès lors la ‘sécurisation’ identitaire de ces ‘minorités’ en ‘cartographiant’ leur environnement à l’aide des valeurs et des principes du sport.     

No-arbitrage Equilibria with Differential Information: An Existence Proof

On the example of a pure exchange financial economy with two periods incomplete nominal-asset markets and differential information of the adverse selection’s type, Cornet-De Boisdeffre (J Math Econ 38:393-410, 2002) introduced refined concepts of no-arbitrage prices and equilibria, which extended to the asymmetric information setting the classical concepts of the symmetric information literature. We now assess existence issues and extend a standard property of symmetric information models. Namely, we prove that a no-arbitrage equilibrium always exists, as long as financial markets preclude arbitrage, under the same standard conditions, whether agents have symmetric or asymmetric information.     

The impact of medical complications on optimal hospital payment

This paper studies the optimal payment policy offered by a regulator to a partially altruistic hospital when the latter privately observes the severity of illness of patients and chooses a hidden quality that influences the probability of medical complications occurring. We analyze how the level of altruism of the hospital affects the conditions under which the payment, for a given diagnosis-related group, should be refined according to the severity of illness and the occurrence of complications.     

Firm-network characteristics and economic robustness to natural disasters

This article proposes a theoretical framework to investigate economic robustness to exogenous shocks such as natural disasters. It is based on a dynamic model that represents a regional economy as a network of production units through the disaggregation of sector-scale input-output tables. Results suggest that disaster-related output losses depend on direct losses heterogeneity and on the economic network structure. Two aggregate indexes - concentration and clustering - appear as important drivers of economic robustness, offering opportunities for robustness-enhancing strategies. Modern industrial organization seems to reduce short-term robustness in a trade-off against higher efficiency in normal times.     

Dynamic Portfolio Choice with Parameter Uncertainty and the Economic Value of Analysts' Recommendations

We derive a closed-form solution for the optimal portfolio ofa nonmyopic utility maximizer who has incomplete informationabout the alphas or abnormal returns of risky securities. Weshow that the hedging component induced by learning about theexpected return can be a substantial part of the demand. Usingour methodology, we perform an "ex ante" empirical exercise,which shows that the utility gains resulting from optimal allocationare substantial in general, especially for long horizons, andan "ex post" empirical exercise, which shows that analysts’recommendations are not very useful. (JEL C61, G11, G24)