Consumption,asset wealth,equity premium,term spread,and flight to quality

We link transitory deviations of consumption from its equilibrium relationship with aggregate wealth and labor income to equity returns on the one hand, and to two characteristics of bond investors—the premium demanded to hold long‐term assets, and “flight to quality” behavior—on the other hand. Using a panel of 10 euro area countries over the period 1984Q1–2017Q4, we show that a rise in the consumption–wealth ratio predicts both higher equity returns and the future term spread, while a fall in the consumption–wealth ratio explains a large fraction of the rise in the spread between the “risky” and the “safe‐haven” bond.     

Cointegration analysis for cross-sectionally dependent panels: The case of regional production functions

This paper employs recently developed non-stationary panel methodologies that assume cross-section dependence to estimate a production function for Italian regions over the 1970–2003 period. The analysis consists of three steps. First, unit root tests for cross-sectionally dependent panels are applied. Second, the existence of a cointegrating relationship among value added, physical capital and human capital-augmented labour is investigated, fully allowing for cross-section dependence. Then, the appropriate Fully Modified Ordinary Least Square estimators developed by Bai and Kao [Bai, J., Kao, C. 2006. On the Estimation and Inference of a Panel Cointegration Model with Cross-Sectional Dependence. In: B.H. Baltagi (Ed) Panel Data Econometrics: Theoretical Contributions and Empirical Applications, Elsevier Science: Amsterdam; 2006, pp.3–30.] are used to estimate the long-run relationship. We find that neglecting cross-section dependence can have a strong impact on the estimated long-run input elasticities, generally imparting them an upward bias.     

A Bayesian approach to experimental analysis: trading in a laboratory financial market

We employ a Bayesian approach to analyze financial markets experimental data. We estimate a structural model of sequential trading in which trading decisions are classified in five types: private-information based, noise, herd, contrarian and irresolute. Through Monte Carlo simulation, we estimate the posterior distributions of the structural parameters. This technique allows us to compare several non-nested models of trade arrival. We find that the model best fitting the data is that in which a proportion of trades stems from subjects who do not rely only on their private information once the difference between the number of previous buy and sell decisions is at least two. In this model, the majority of trades stem from subjects following their private information. There is also a large proportion of noise trading activity, which is biased towards buying the asset. We observe little herding and contrarianism, as theory suggests. Finally, we observe a significant proportion of (irresolute) subjects who follow their own private information when it agrees with public information, but abstain from trading when it does not.     

Medication adherence and persistence in the treatment of rheumatoid arthritis with adalimumab and etanercept. Six years of analysis

Objective:

The aim of this study was to evaluate medication adherence and persistence of patients treated with Etanercept and Adalimumab for Rheumatoid Arthritis, also giving economic evaluations on therapy costs for Received Daily Dose (RDD).

Materials and methods:

This retrospective study took into account 6 years from January 1, 2007 to December 31, 2012. Medication adherence was quantified utilizing the ratio between RDD and Prescribed Daily Dose (PDD). Persistence has been reckoned taking into account the actual days of therapy comparing posology with supplied dose. The persistence has been graphed according to Kaplan-Meier method. The cost per RDD was reckoned starting from the expense incurred by Pescara General Hospital.

Results:

Medication adherence gave results in values between 0.88–0.97 for Etanercept and 0.83–0.90 for Adalimumab. The value of persistence was 100% for Etanercept and 90% for Adalimumab for the first year, and 70% for Etanercept and 80% for Adalimumab for the second year. In the 3rd year the persistence for Etanercept was 50% while for Adalimumab it was 60%. In the fourth year the persistence for Etanercept was 21% while for Adalimumab it was 27%. The statistical analysis was conducted using the Log rank test. The average cost per RDD was €32.97 for Etanercept and for Adalimumab it was €32.00 as an average of 6 years.

Conclusion:

The medication adherence was good for both Etanercept and Adalimumab. The rate of persistence decreased strictly in the fourth year of treatment. This data suggests the need for continuous monitoring of patients in treatment with TNF blockers.     

Is social protection a necessity or a luxury good? New multivariate cointegration panel data results

The aim of this paper is to test the claim that social protection is a luxury good. Therefore, GDP elasticity of selected social protection expenditure is estimated using a new econometric approach developed first by Kao and Chiang (Advances in Econometrics, 15, 179–222, 2000). Time series properties of selected social expenditure in 18 OECD countries from 1981 to 1998 are examined. Using panel data cointegration tests and OLS, FMOLS and DOLS estimators, results were found which differ from previous analyses reporting substantially higher income elasticities. With the FMOLS, selected social expenditure has income elasticities smaller than one but greater than one with the DOLS. It is noteworthy that whether selected social expenditure is stationary or nonstationary may have critical implications for researchers and policy makers desiring to model and explain the impact of this expenditure on a country economic system.     

Bargaining Coalitions in the WTO Agricultural Negotiations

This paper aims to understand the structural features of bargaining coalitions in the Doha Round of the WTO. We provide an empirical assessment of the preferences of each negotiating actor considering general economics indicators, development levels, structure of agricultural sectors and trade policies. Bargaining coalitions are analysed by grouping countries using a cluster analysis procedure. The clusters are compared with existing coalitions in order to assess their degree of internal homogeneity as well as their common interests. Such a comparison allows the identification of possible ‘defectors’, i.e. countries that, according to their economic conditions and policies, seem to be relatively less committed to the positions of the coalition they join. In addition, the ex‐post analysis of the counterfactual coalitions sheds light on the ‘distance’ between different coalitions as well as between individual countries and the best alternative group available. Empirical results confirm our research hypothesis: clusters of structurally homogeneous countries well represent existing bargaining coalitions. In particular, the G‐20 shows a high degree of internal coherence, which, in our framework, may provide a clue to the ‘sustainability’ of this coalition and to its relevance in the Doha Round negotiations.     

Materiality in integrated and sustainability reporting: A paradigm shift?

This paper investigates the implementation of integrated reporting (IR) by Generali, one of the most important listed companies in Italy. The research questions we aim at answering are the following: Is the IR approach to materiality inherently different from the sustainability reporting (SR) approach? Does IR lead to the identification of different material topics than does SR? On the one hand, institutional theory suggests that IR and SR material topics are going to be significantly different because IR is mainly driven by a market logic, whereas SR is inspired by a stakeholder logic. On the other hand, organizational change theory predicts there will be some resistance to change by the organization, therefore leading to IR and SR topics being similar. In order to answer our research questions, we implement two empirical analyses. First, we propose and develop an innovative methodological approach on the basis of content analysis, which allows measuring the materiality of different issues under the IR approach. Second, we rely on evidence obtained through interviews, which suggests that IR and SR approaches to materiality are inherently different.     

Income Distribution,Household Debt and Growth in Modern Financialized Economies

Abstract:

We analyze some core features of the institutional transformation of the Canadian and U.S. economies over the last half century, as they became increasingly financialized economies resting on household consumption as the key contributor to economic growth, despite weak growth in real wages and personal disposable income. This growth in consumption spending is highly fragile not only because it is a debt-led growth that has relied on an unsustainable expansion of household indebtedness largely dependent on credit bubbles in the housing market, but also because of the perverse form of this indebtedness. Studied from the angle of disaggregated household consumption/saving behavior, it is the poorest and most vulnerable households who have been building up unsustainable debt, thereby presaging increasing financial fragility and crises.     

A panel cointegration approach to estimating substitution elasticities in consumption

This paper investigates the relationship between government spending and private consumption. The general framework is a cointegration approach of Ogaki (1992) used to estimate the intratemporal elasticity of substitution between government and private consumption in a panel of 15 European countries. Recently developed non-stationary panel methodologies that assume cross-section dependence are applied. Results indicate an Edgeworth substitutability between private and public spending.