The effects of the minimum wage in Brazil on the distribution of family incomes: 1996–2001

The Brazilian economy has long relied on the minimum wage, having first implemented a minimum in 1940. Shortly after taking office in 2003, Brazil's President raised the minimum wage by 20% and promised to double the value of the minimum wage before his term ends in 2006. The usual rationale for minimum wage increases is to bring about beneficial changes in the income distribution, by raising incomes of poor and low-income families. The goal of this paper is to evaluate the efficacy of the minimum wage in Brazil in bringing about these changes in the income distribution. We examine data drawn from Brazil's major metropolitan areas, studying the years after Brazil's hyper-inflation ended. The estimates provide no evidence that minimum wages in Brazil lift family incomes at the lower points of the income distribution; if anything some of the evidence points to adverse effects on lower-income families.     

Valuation structure in first-price and least-revenue auctions: an experimental investigation

In many auctions the valuation structure involves both private and common value elements. Existing experimental evidence (e.g. Goeree and Offerman in Am. Econ. Rev. 92(3):625–643, 2002) demonstrates that first-price auctions with this valuation structure tend to be inefficient, and inexperienced subjects tend to bid above the break-even bidding threshold. In this paper, we compare first-price auctions with an alternative auction mechanism: the least-revenue auction. This auction mechanism shifts the risk regarding the common value of the good to the auctioneer. Such a shift is desirable when ex post negative payoffs for the winning bidder results in unfulfilled contracts, as is often the case in infrastructure concessions contracts. We directly compare these two auction formats within two valuation structures: (1) pure common value and (2) common value with a private cost. We find that, relative to first-price auctions, bidding above the break-even bidding threshold is significantly less prevalent in least-revenue auctions regardless of valuation structure. As a result, revenue in first-price auctions is higher than in least-revenue auctions, contrary to theory. Further, when there are private and common value components, least-revenue auctions are significantly more efficient than first-price auctions.     

Efficiency of two sided investments in an equilibrium unemployment framework

This paper investigates the efficiency of investments by firms and workers in a matching model with high- and low-productivity jobs. Search is sector specific and random within sectors. Search frictions and ex-post bargaining imply that wage inequality arises as a result of the difference in investment costs between the sectors. The efficiency properties of the equilibrium are analyzed under the particular division in bargaining proposed by Hosios (1990). The conclusion is that the equilibrium is inefficient, with a too low fraction of workers and a too high vacancy-unemployment ratio in the high-productivity sector. The opposite happens in the low-productivity sector.     

Modeling Financial Sector Joint Tail Risk in the Euro Area

We develop a novel high‐dimensional non‐Gaussian modeling framework to infer measures of conditional and joint default risk for numerous financial sector firms. The model is based on a dynamic generalized hyperbolic skewed‐t block equicorrelation copula with time‐varying volatility and dependence parameters that naturally accommodates asymmetries and heavy tails, as well as nonlinear and time‐varying default dependence. We apply a conditional law of large numbers in this setting to define joint and conditional risk measures that can be evaluated quickly and reliably. We apply the modeling framework to assess the joint risk from multiple defaults in the euro area during the 2008–2012 financial and sovereign debt crisis. We document unprecedented tail risks between 2011 and 2012, as well as their steep decline following subsequent policy actions. Copyright © 2016 John Wiley & Sons, Ltd.     

EFFECTS OF FEDERAL CONSTITUTIONAL GRANTS IN BRAZILIAN MUNICIPALITIES

The objective of the present study is to verify the flypaper effect of 476 Brazilian municipalities from 2005 to 2012, considering the new variables as instruments of grants. Political alignment, alignment of the party, and coalition of the mayor with the federal president and of the state governor were considered as instruments of grants. A municipal tax autonomy index was considered as a control variable, which represents the percentage of local taxes in the municipal total revenues. The results allow concluding that the flypaper effect exists in Brazilian municipalities and is intensified by the alignment of the representatives in the same way of theoretical literature (Hamilton 1983; Hines & Thaler 1995; Inman 2008) and previous empirical studies in Brazil. Moreover, evidences of higher flypaper effect were found in municipalities with low tax autonomy.     

ON THE ACCURACY OF INDEX NUMBERS

Index number accuracy is affected by formula specification and sampling error. The authors argue that an index formula should be "ideal" and "exact" (with reference to the range of economically plausible aggregator functions) to be economically justified. These indices are invariant in the homothetic case, as well as in certain non-homothetic scenarios. Empirically, based on foreign trade data for Egypt from 1885-1961, the set of economically justified indices are virtually identical, supporting the theoretical argument that "instrumental error" or "formula variance" should be a negligible factor contributing to index number error. In a discussion of sampling error, on the other hand, the authors criticize earlier work and propose an upper and lower bound. Using the same data, these limits imply that sampling error may be a serious problem for many indices.     

Singular justice and software piracy

This paper assumes that the purpose of ethics is to open up a space for the possibility of moral conduct in the flow of everyday life. If this is the case then we can legitimately ask: ‘How then do we do ethics?’ To attempt an answer to this important question, the paper presents some suggestions from the work of Emmanuel Levinas and Jacques Derrida. With Levinas, it is argued that ethics happens in the singularity of the face of the Other before me ‘here and now’. Ethics matters in my everyday contact with the Other that disturbs my egological existence and claims my response. But what about all other Others, not here now but nevertheless simultaneously already present? What about their equal claim on me? With Levinas and Derrida, the paper attempts to articulate the notion of singular justice as the simultaneous demand of all others requiring my response. In singular justice, the paper attempts to show how the demands of ethics (the singular) and the demands of justice (all other Others) can become the impossible possibility for a ‘justice where there is no distinction between those close and those far off, but in which there also remains the impossibility of passing by the closest’. Furthermore, the paper attempts to argue that singular justice is our calling – or more precisely my calling – to do the right thing, here and now. Finally, by way of explication, the paper discusses a case of software piracy to try to show how singular justice can help us not to think about ethics, which is important, but to (almost) do it – which is very important.     

Making the connections between transport disadvantage and the social exclusion of low income populations in the Tshwane Region of South Africa

To date, the majority of studies which consider transport from a social exclusion perspective have been conducted in the context of the developed world where both income poverty and lack of transport are relative rather absolute states. In a unique departure from these previous studies, this paper explores the relationship between transport and social disadvantage in the development context, the key difference being that income poverty is absolute and where there is much lower access to both private and public transportation generally. Thus, it seeks to explore whether the concept of social exclusion remains valid, when it is the majority of the population that is experiencing transport and income poverty compared with the minority who do so in advanced economies.The paper is based on a scoping study for the Republic of South Africa Department of Transport (RSA DOT), which primarily involved focus group discussions with a range of socially deprived urban and peri-urban population groups living in the Tshwane region of South Africa. In a second departure from previous studies which consider transport and social disadvantage in the development context, the study takes a primarily urban focus. The rationale for this is that theoretically low income urban settlements do not suffer from the lack of transport infrastructure and motorised transport services in the way that more remote rural areas do. The policy issue is therefore less a question of addressing a deficit in supply and more one of addressing particular aspects of public transit service failure, which are more readily amenable to relatively low cost, manageable, small-scale national and local policy interventions.A primary aim for the study was to reinvigorate cross-government debate of these issues in the hope of breaking South African government’s long-standing and persistent policy inertia in the delivery of equitable and socially sustainable urban transport systems.     

Limits on the Use of Public Space and Consumer Tactics: A Study on Urban Cycling

Although public space is supposed to be democratic and accessible to all, in reality, such access is inegalitarian and exclusionary. The research aims, therefore, to understand how public space that reflects the imposition of interests of dominant ideologies affects the consumption practices of nondominant ideologies. The qualitative research data were collected in the context of urban cycling through in-depth interviews and observation and are analyzed using a hermeneutical approach. The research explains that, in order to deal with the limits of public space use, these consumers use tactics involving (1) disputes for space, (2) disorganized occupation, and (3) transgressive practices; moreover, there is an overlapping relationship between the agency of consumers and public space.