Testing for Seasonal Fractional Roots in German Real Output

Abstract. This paper examines the seasonal structure of German real GNP per capita by using a version of Robinson's (1994) tests which is suitable in the context of seasonality. This method has several advantages over alternative approaches when testing for seasonal unit roots. First, unlike standard tests, which are nested in AR alternatives, it is embedded in fractional alternatives. Second, it allows testing at the zero frequency and at each of the seasonal frequencies separately. Third, it makes it possible to test for different orders of integration at each of the frequencies simultaneously. The empirical analysis suggests that the real output series may have a unit root at the zero frequency, and fractional rather than unit roots at the seasonal ones. This is in contrast to the findings reported by Lutkepohl et al. (1999) in their study on German money demand, and shows the importance of modelling the seasonal features of the data in alternative ways.     

A new axiomatization of the Banzhaf semivalue

A new characterization of the Banzhaf semivalue on the domain of monotonic simple games is given. We use the well-known valuation and dummy axioms plus two additional properties. The first one simply requires that the power-index be bigger for those players belonging to more winning coalitions. The second one is the proportionality axiom introduced by Owen in (1982) which is suitable for those simple games that represent an indirect voting process.     

Unit and Fractional Roots at the Long Run and the Seasonal Frequencies in Macroeconomic Time Series

In this article, we show that macroeconomic time series may contain unit and fractional roots at both, at zero and at zero and at the seasonal frequencies. The importance of the root at the long run or zero frequency requires in many cases to consider this root at both, separately in an independent polynomial, and also included in the seasonal one. Several Monte Carlo experiments are conducted to examine cases when the root at the zero frequency is not appropriately considered. An empirical application based on the tests of Robinson, Peter M. “Efficient Tests of Nonstationary Hypotheses,” Journal of the American Statistical Association, 89, 1994, pp. 1420–37 is also carried out at the end of the article.The author gratefully acknowledges financial support from the Government of Navarra (“Ayudas de Formación e Investigación y Desarrollo”).     

Tourism and regional development: a spatial econometric model for Portugal at municipal level

Portuguese Economic Journal - This study examines the importance of tourism as a factor for regional economic development in Mainland Portugal, emphasizing the inter-regional spatial spillover...     

Maximum likelihood estimation of search costs

In a recent paper Hong and Shum [2006. Using price distributions to estimate search costs. Rand Journal of Economics 37, 257-275] present a structural method to estimate search cost distributions. We extend their approach to the case of oligopoly and present a new maximum likelihood method to estimate search costs. We apply our method to a data set of online prices for different computer memory chips. The estimates suggest that the consumer population can be roughly split into two groups which either have quite high or quite low search costs. Search frictions confer a significant amount of market power to the firms: Despite more than 20 firms operating in each of the markets, we estimate price-cost margins to be around 25%. The paper also illustrates how the structural method can be employed to simulate the effects of the introduction of a sales tax.     

Carbon sequestration and farm income in West Africa: Identifying best management practices for smallholder agricultural systems in northern Ghana

The interest in agricultural soils as global storage of carbon has increased in recent years, along with the prospect of farmers' participation in payment schemes under the Clean Development Mechanism of the Kyoto protocol. Thus, a better understanding of agricultural practices that can increase soil carbon and enhance the livelihoods of farmers is necessary, particularly in smallholder farming systems of West Africa. This study evaluates different crop management strategies both by their capacity to sequester carbon in agricultural soils and by their contribution to household income. A case study in Wa, Upper West Region of Ghana is used to test 48 different cropping strategies by means of a crop simulation model and a household-level multiple-criteria optimisation model. Each cropping strategy is evaluated after a 20-year simulation period by its capacity to accrue carbon in the soil, by its economic performance at the plot-level, and by its contribution to the farm income with and without carbon payments. A set of best management practices that concomitantly increase soil carbon and farm income are identified and classified by their cost of investment.     

Fractional Integration of Nominal Exchange Rates: Evidence from CEECs in the Light of EMU Enlargement

This paper uses fractional integration models to describe the long‐run dependence of nominal exchange rates in Central and Eastern European countries (CEECs). The analysis is validated using nonparametric, semiparametric and parametric techniques. From comparing the results across the three approaches, it was clear that mean reversion takes places only for the euro exchange rates in Bulgaria, Estonia, and Slovenia. Other exchange rates based on the euro also display mean reversion with the parametric methods. For the US dollar rates, the unit‐root null hypothesis cannot be rejected in any single country, indicating that shocks affecting the exchange rates against the US dollar are of a permanent nature, while those directed against the euro are less persistent, and tend sometimes to disappear in the long run. Policy implications are derived.     

Income inequality and colonialism

This paper proposes that colonialism is a major explanation behind today's differences in income inequality across countries. We argue that income inequality has been higher in the colonies where the percentage of European settlers to total population was higher, as long as Europeans remained a minority. The countries where Europeans became the majority of the population did not suffer from high inequality. These initial differences continue to hold today. The empirical evidence we provide strongly supports our thesis.     

Local content and emission taxes when the number of foreign firms is endogenous

We consider a vertical relationship where an upstream monopolist supplies input to downstream duopolistic firms. Under the assumption that downstream firms produce under a soft capacity restriction, we show that the balance between price and quantity in downstream firms’ strategy is endogenous. In this way, the monopolist’s charge for input co-determines downstream market conduct. We spell out some consequences of this, for example, that an increase of downstream capacity costs can result in increased output. We discuss other implications in relation to pass-through and incidence of cost changes.