Treasury auctions in Spain: a linear approach

Abstract. The majority of Treasuries use discriminatory auctions to sell government debt. A few Treasuries use uniform auctions. The Spanish Treasury is the only one that uses a hybrid format of discriminatory and uniform auctions. All Treasury auctions are multiple-unit multiple-bid auctions, usually assumed to be common and unknown value auctions. Taking in account these features, we analyze the Spanish auction format, taking a linear approximation to bidders' multiple bids, and characterize a parameter set in which the Spanish format gives higher expected seller's revenue than discriminatory and uniform auctions. Policy implications are obtained by calibrating theoretical results with data. We thank S. Nu?ez, and seminar participants at GREQAM, CEFI, the 1999 CEF meeting in Boston and the 57th European Meeting of the Econcometric Society for suggestions. We are especially grateful to two anonymous referees for detailed comments that greatly improved the paper. Any error is our responsability. The authors express their thanks for financial support to Ministerio de Ciencia y Teconologia from Proyecto SEC2000-0723, n_o 9114.     

Reinterpreting social pacts: Theory and evidence

We investigate the empirical determinants of social pacts over the 1970–2004 period. We adopt a political economy approach, showing that governments are more likely to sign a pact when the cost of a conflict with trade unions is relatively larger. Such a cost depends on macroeconomic variables and on measures of social conflict and union strength. These findings are remarkably stable across sub-periods, in apparent contrast with previous contributions that emphasised differences between first- and second-generation pacts. Our interpretation is that pacts were different across periods because the policy issues changed, but the incentives to seek union consensus did not.     

Macroeconomic conditions and well-being: do social interactions matter?

We investigate the role played by social interactions in the transmission of the effects of macroeconomic conditions on well-being. Using survey data for a representative sample of Italian individuals, we find that social interactions play a dual role. On the one hand, the well-being of people who spend more time with their friends or go out more often is less sensitive to macroeconomic fluctuations. On the other hand, social interactions are negatively affected by worsening macroeconomic conditions, thus playing a relevant role in the transmission of macroeconomic shocks to subjective well-being. More specifically, the negative impact of downturns on the frequency of going out and active participation in associations significantly contributes to the adverse effects of recessions on satisfaction with life and with individual life domains.     

Collaboration in R&D with universities and research centres: an empirical study of Spanish firms

Innovation is sometimes the result of collaboration between different agents with complementary resources. When companies make formal agreements to collaborate in R&D they do so with different types of organizations, such as their competitors, suppliers, and customers, or universities and research centres. This paper focuses on attempting to understand the reasons that lead companies to cooperate with universities and research centres and the characteristics of the relationship that this involves. The empirical study is based on a sample of 747 Spanish firms that took part in some type of collaborative R&D project between 1994 and 1996. Results indicate that cooperation with centres is a nation–wide phenomenon involving basic research, conducted under the sponsorship of different research support schemes promoted by central and regional administrations.     

Synamic banking: a reconsideration

Financially intermediated and stock market consumption-investmentallocations, with and without governmental interventions, arecompared in a welfare sense in overlapping generation economieswith (and without) shocks to agents' intertemporal preferences.We first show that, in economies with preference shocks, governmentalinterventions subject to the same information requirements asthose imposed on financial intermediaries, lead to stock marketallocations that are not inferior to those attained under financialintermediation. Second, we argue that the necessary interventionsare qualitatively no different from those required to implementstationary optimal allocations in OLG models without shocksto agents' intertemporal consumption preferences.     

The causal structure of economic models

Large quantitative models of the economy are increasingly being used to prepare short-term and long-term projections. In most cases inspection of each single equation is not sufficient to understand the functioning of a complete model, a situation which sometimes leads to so-called “counter-intuitive” results of model simulations. The authors briefly describe a method for the analysis of the causal structure of large models and apply this method to an analysis of the United Nations model of the future of the world economy directed by W. Leontief.     

Estimates and Determinants of Armington Elasticities for the U.S. Food Industry

This paper provides estimates of elasticities of substitution between domestic and imported goods for 40 4-digit S.I.C. food manufacturing industries and explains the inter-industry differences among these coefficients in terms of industry sectoral characteristics. The results show that there is a wide range of variation among such elasticities and that the intensity of each industrys percentage of output sold to final consumers, foreign direct investment, expenditures on advertising and the existence of import quotas affect the degree of substitutability between domestic and foreign goods in the face of a relative price change.     

Financial distress,bank debt restructurings,and layoffs

We develop a model of a financially distressed firm to analyze the implications of a bank debt restructuring when the operational characteristics of the firm's project for the post-distress period are endogenously determined as part of the workout. We establish a formal link between the debt restructuring and operational actions such as employee layoffs, and show how these actions are affected by the firm's capital structure, the ordering of absolute priorities, and the allocation of control rights and residual claims after reorganization. Finally, we discuss the implications of our analysis for the design of reorganization law.     

Multilateral institutions for international economic policy coordination: bargaining vs voting

We study a world economy where worldwide policy coordination is essential to optimally stabilize unfavorable common supply shocks. We develop a two-stage game to investigate how to implement the first-best response to these shocks via a multilateral institution, whose board of directors is composed of a representative per each member country. In a first stage, national governments nominate their representatives on the board. In a second stage, the board collectively chooses stabilization policies. We compare the relative merits of two collective choice mechanisms – bargaining and majority voting – in avoiding manipulation of the cooperative agreement through the strategic nomination of national representatives.