The “Emulator Effect” of the Uruguay Round on US Regionalism

Using a detailed data set at the tariff line level, we find an emulator effect of multilateralism on subsequent regional trade agreements (RTAs) involving the USA. We exploit the variation in the frequency with which the US grants immediate duty free access (IDA) to its RTA partners across tariff lines. A key finding is that the US grants IDA status especially on goods for which it has cut the multilateral most favored nation (MFN) tariff during the Uruguay Round the most. Our results suggest that the Uruguay Round multilateral “concessions” have elicited subsequent preferential trade liberalization.     

Fast traders and slow price adjustments: an artificial market with strategic interaction and transaction costs

Journal of Economic Interaction and Coordination - In this paper, we propose an artificial market to model high-frequency trading where fast traders use threshold rules strategically to issue...     

Trust and foreign ownership: Evidence from intra‐European foreign direct investments

We use a novel firm‐level dataset to test whether trust affects the volume and the ownership structure FDI across Europe. Our methodology deals with the endogeneity of trust from the investor to the recipient country. We expect such a trust measure to affect investment decisions, and the associated knowledge capital, differently across types of foreign investors. In particular, this effect is expected to be stronger for industrial investors who possess transferable knowledge capital. The data confirm our predictions. Higher trust increases the number and volume of FDIs, but also the probability of co‐investing with a partner from the recipient country.     

Exploring the Conceptual Expansion within the Field of Organizational Behaviour: Organizational Climate and Organizational Culture

Developments within social and exact sciences take place because scientists engage in scientific practices that allow them to further expand and refine the scientific concepts within their scientific disciplines. There is disagreement among scientists as to what the essential practices are that allow scientific concepts within a scientific discipline to expand and evolve. One group looks at conceptual expansion as something that is being constrained by rational practices. Another group, however, suggests that conceptual expansion proceeds along the lines of ‘everything goes’. The goal of this paper is to test whether scientific concepts expand in a rational way within the field of organizational behaviour. We will use organizational climate and culture as examples. The essence of this study consists of two core concepts: one within organizational climate and one within organizational culture. It appears that several conceptual variations are added around these core concepts. The variations are constrained by rational scientific practices. In other terms, there is evidence that the field of organizational behaviour develops rationally     

Wanted: a Bigger Stick. On Unfair Terms in Consumer Contracts with Online Service Providers

The Unfair Contract Terms Directive offers consumers protection from pre-formulated imbalanced contract terms. While the standard terms and conditions of online service providers have previously been accused of harming clients of such online services, a comprehensive analysis of the potential unfair character of such terms and conditions in line with the interpretation of the Directive supplied by the CJEU has not yet been provided. This paper aims to fill in this gap in the academic literature. It identifies several types of contractual terms used by international online service providers in their consumer contracts, which are unlikely to pass the Directive’s unfairness test.     

On the Number of Pure Strategy Nash Equilibria in Random Games

How many pure Nash equilibria can we expect to have in a finite game chosen at random? Solutions to the above problem have been proposed in some special cases. In this paper we assume independence among the profiles, but we allow either positive or negative dependence among the players' payoffs in a same profile. We provide asymptotic results for the distribution of the number of Nash equilibria when either the number of players or the number of strategies increases. We will show that different dependence assumptions lead to different asymptotic results. Journal of Economic Literature Classification Number C72.     

Non‐Fundamentalness in Structural Econometric Models: A Review

Current economic theory typically assumes that all the macroeconomic variables belonging to a given economy are driven by a small number of structural shocks. As recently argued, apart from negligible cases, the structural shocks can be recovered if the information set contains current and past values of a large, potentially infinite, set of macroeconomic variables. However, the usual practice of estimating small size causal Vector AutoRegressions can be extremely misleading as in many cases such models could fully recover the structural shocks only if future values of the few variables considered were observable. In other words, the structural shocks may be non‐fundamental with respect to the small dimensional vector used in current macroeconomic practice. By reviewing a recent strand of econometric literature, we show that, as a solution, econometricians should enlarge the space of observations, and thus consider models able to handle very large panels of related time series. Among several alternatives, we review dynamic factor models together with their economic interpretation, and we show how non‐fundamentalness is non‐generic in this framework. Finally, using a factor model, we provide new empirical evidence on the effect of technology shocks on labour productivity and hours worked.     

Individual autonomy in evolutionary game theory: defending Sugden against Ross’s accusation of eliminativism

In this paper, I provide a defence of Robert Sugden’s contribution to evolutionary game theory against Donald Ross’s accusation of eliminating the individual’s autonomy by denying the explanatory role of rationality, utility maximization and rational beliefs. In this regard, I claim that Sugden’s methodological remarks on evolutionary game theory do not imply a characterization of real agents as automata. On the methodological level, Sugden claims that it is not correct to conceive the empirical phenomenon of social evolution in terms of normative concepts, whose empirical status is not obvious. However, Sugden proposes a theory that explains the agent’s behaviour in terms of inductive reasoning, adaptive beliefs, salience and pattern recognition. The latter are psychological features that describe the way agents manage to self-determine their own actions. From these clarifications, I draw the conclusion that Ross’s critique misunderstands Sugden’s contribution both on the methodological and empirical level.     

The unintended consequences of the zero lower bound policy

We study the impact of the zero lower bound interest rate policy on the industrial organization of the U.S. money fund industry. We find that in response to policies that maintain low interest rates, money funds: change their product offerings by investing in riskier asset classes; are more likely to exit the market; and reduce the fees they charge their investors. The consequence of fund closures resulting from interest rate policy is the relocation of resources in affected fund families and in the asset management industry in general, as well as decline in capital of issuers borrowing from money funds.