Accounting for the decline in Spanish household expenditures inequality during the 1980s

In this paper we apply decomposition methods to analyze some of the factors accounting for the decrease in household expenditures inequality in Spain during the 1980s. We adopt a simple one-parameter model in which equivalence scales depend only on household size. Then we propose an inequality decomposition method which minimizes equivalence scales' potential contamination problems. We find that most of the change in overall inequality is due to a reduction in the within-group term in the partition by household size. The bulk of this reduction is accounted for by changes at the lower tail of the distribution in the partitions by the socioeconomic category and educational level of the household head. These two findings are independent of the equivalence scales parameter.     

Insider trading: Regulation, securities markets, and welfare under risk aversion

I analyze in this article the impact of insider trading regulation (ITR) on a securities market and on social welfare, and argue that the imposition of ITR forces a reallocation of wealth and risk that decreases social welfare. Three reasons explain this result: First, ITR increases the volatility of securities prices; second, it worsens the risk sharing among investors; and, third, it diverts resources from the productive sector of the economy. Further, although I formally establish conditions under which ITR makes society better off, I argue that those conditions are not useful to justify the imposition of this regulation.     

The competitiveness of the Portuguese wine sector

The world wine market is currently characterized by two principal wine suppliers: the European and the New World. Countries such as France, Italy, Spain and Portugal have witnessed a tremendous growth in the New World wine-makers (Australia, Chile, South Africa, etc.). Portugal is one of the Old World countries that presents several natural and technical constraints, which might currently be resulting in modest performance in terms of its position in the global wine market, competitiveness and dynamics required to overcome difficulties. The main objective of this study is to analyse the Portuguese performance for competing in external markets and its evolution from 1996 to 2003. This study is based on indices such as the trade intensity index, revealed comparative advantage, auto-sufficiency and market share relation ratios.     

Business Creation and the Stock Market

We claim that the stock market encourages business creation, innovation, and growth by allowing the recycling of "informed capital". Due to incentive and information problems, start-ups face larger costs of going public than mature firms. Sustaining a tight relationship with a monitor (bank, venture capitalist) allows them to finance their operations without going public until profitability prospects are clearer or incentive problems are less severe. However, the earlier young firms go public, the quicker monitors' informed capital is redirected towards new start-ups. Hence, when informed capital is in limited supply, factors that lower the costs for start-ups to go public encourage business creation. Technological spill-overs associated with business creation and thick market externalities in the young firms segment of the stock market provide prima facie cases for encouraging young firms to go public.     

Determinants of Net Trade Flows in the OECD: New Evidence with Special Emphasis on the Former Communist Members

This study estimates an econometric panel-data model, in order to explore the capacity of some of the hypotheses formulated in recent dynamic models of trade and economic growth to explain the bilateral trade of OECD countries. The study suggests that the larger a country's endowment of both tangible and intangible (human and technological) capital in relation to that of its trade partners, the higher the export/import ratio of its bilateral trade. It also shows that direct investment enhances the export/import ratio with the host country. The former communist countries reflect only minor differences from the other OECD members.     

Willingness to consume and produce transgenic bananas in Costa Rica

An exploratory study of the willingness to produce and consume transgenic bananas was carried out in Costa Rica. Transgenic crops are plants with novel genes incorporated into their genome through the use of genetic engineering techniques. Farm managers’ opinions were gathered using faxed questionnaires while final consumers’ opinions were obtained through personal intercept interviews. Consumers expressed a lack of knowledge about transgenic crops and had received non‐favour but also non‐negative information through the media about their adoption. The results of a probit regression model show that, other things being equal, younger, wealthier consumers, with higher levels of education, with smaller households are more likely to consume transgenic bananas. All producers included in the study consider they would adopt a new transgenic variety. Producers’ willingness to pay for such a variety would depend on its capacity to reduce pest management costs and is estimated to range between $500 and $999 per hectare. This study stresses the potential for development and adoption of a new transgenic variety that would alleviate the current issues faced by banana farmers. On the other hand, final consumers should be better informed on the nature of such products, their benefits and risks.     

A theory of the optimum age to import a durable good: With a reference to the Columbian case

This essay develops a model which determines the optimum age at which to import a durable good, the optimum period of time during which it should be used, and the welfare costs of nonoptimum import-use patterns. An estimation of such costs is made for the case of bus chassis imports in Colombia.     

Copyright piracy as prey–predator behavior

The economic analysis of the piracy of copyright products has used a variety of modeling assumptions, the majority of which use typical industrial organization settings. The results of such models are manyfold, but in general they are ambiguous as to the optimal protection strategy, and the effects of protection on the welfare of copyright holders, and on the existence of piracy. Concretely, little has been said about which types of protection mechanisms are most adequate for controlling piracy. In the present paper, we propose a new theoretical framework by drawing an analogy between copyright piracy and prey–predator behavior. This analogy gives us a new perspective to approach copyright issues and it provides the economic theory of copyright piracy with a new set of mathematical models. We consider a very simple model that can be used to show that publicly instigated and financed policies designed to deter piracy can have the effect of increasing the amount of piracy, while privately financed strategies (e.g. DRM) will always decrease piracy.     

International cooperation in a fractured global order

This article takes a fresh look at the context for international cooperation in science and technology. It sketches out some key changes that have taken place in the international scene over the last few years, speculates about what is likely to happen during the next decade, and derives some implications for international cooperation in science and technology.     

Estimation of the structure and elasticities of Mexican imports in the period 1961–1979

This paper examines the changing structure of Mexican imports over the period 1961–1979 and its relationship to the acceleration of imports in 1978–1979. It is found that the more lenient policies adopted by the government in that period seem to be associated with the higher import levels. A review of Mexican policy with respect to foreign trade in 1980 seems to be consistent with the results reported in this paper.