Do Interregional Transfers Improve the Economic Performance of Poor Regions? The Case of Spain

The 17 regional governments of Spain receive grants from both the central government and the European Union. The grants are generally redistributive and are intended to stimulate economic activity in the poorer regions. We evaluate the effectiveness of the grants by comparing the economic performance of the regions before and after the implementation of the grant programs using a differences-in-differences approach. We find that these policies have not been effective at stimulating private investment or improving the overall economies of the poorer regions.     

Exchange rate and long run equilibrium in transition economies

The purpose of this paper is to calculate pruchasing power parity rates and the real exchange rate using several methods of calculation to estimate long-run equilibrium real exchange rates in transition economies, mainly in Eastern European countries considered in transition, such as Poland. The authors calculate different measures of exchange rate misalignment (absolute and relative deviations from long-run equilibrium). Each measure is calculated using different price indices, which include consumer price indices, GDP deflactor, and unit labor cost. The expected values of these variables are used. To calculate the long-run equilibrium, different methods such as an error correction equation and a forward-looking model are utilized, and again, the expected values of the variables are introduced along with new variables. The estimation of the long-run cointegration equation of the equilibrium real exchange rate and the corresponding dynamic error correction specification strongly corroborates the model and produced fairly consistent results across the countries under study. Using appropriated proxies, the estimated long run equations were used to derive indices of the equilibrium real exchange rate.     

Price Stability in Open Economies

This paper studies the theoretical conditions under which price stability is the optimal policy in a two-country open-economy model with imperfect competition and price stickiness. Special conditions on the levels of country-specific distortionary taxation and the intratemporal and intertemporal elasticities of substitution need to be satisfied. These restrictions apply to both cooperative and non-cooperative settings. Importantly, we show that cooperative and non-cooperative solutions do not coincide despite market completeness and producer currency pricing. We study the conditions under which quadratic approximations of single countries' welfare can be correctly evaluated by relying only on log-linear approximations of the equilibrium conditions.     

Pricing and Informational Efficiency of the MIB30 Index Options Market. An Analysis with High‐frequency Data

We analyse the pricing and informational efficiency of the Italian market for options written on the most important stock index, the MIB30. We report that a striking percentage of the data consists of option prices violating basic no‐arbitrage conditions. This percentage declines when we relax the no‐arbitrage restrictions to accommodate the presence of bid/ask spreads and other frictions but never becomes negligible. We also investigate the informational efficiency of the MIBO and conclude that option prices are poor predictors of the volatility of MIB30 returns. This conclusion is robust to a number of statistical and sampling methods.
(J.E.L.: G13, G14).     

Incentive compatible reward schemes for labour-managed firms

We consider a simple case of team production, where a set of workers have to contribute a single input (say labour) and then share the joint output amongst themselves. Different incentive issues arise when the skills as well as the levels of effort expended by workers are not publicly observable. We study one of these issues in terms of a very simple model in which two types of workers, skilled and unskilled, supply effort inelastically. Thus, we assume away the problem of moral hazard in order to focus on that of adverse selection. We also consider a hierarchical structure of production in which the workers need to be organised in two tiers. We look for reward schemes which specify higher payments to workers who have been assigned to the top-level jobs when the principal detects no lies, distribute the entire output in all circumstances, and induce workers to revel their true abilities. We contemplate two scenarios. In the first one, each individual worker knows only her own type, while in the second scenario each worker also knows the abilities of all other workers. Our general conclusion is that the adverse selection problem can be solved in our context. However, the range of satisfactory reward schemes depends on the informational framework.     

Health Systems and Health Reform in Europe

The organisation of health care differs widely across Europe. Access to services, financing schemes, incentives for better care, and administrative efficiency are challenges that are being dealt with in a variety of ways. Are insurance-based systems the best solution for balancing resources and services or are national health funds preferable? Does the introduction of competition fulfil high hopes for better service at lower costs? What are the relative advantages and drawbacks of central and local management of health care?     

Blockchain and cryptocurrencies: economic and financial research

Decisions in Economics and Finance - The motivation of proposing and editing the Special Issue “Blockchain and cryptocurrencies” came from the inspirational invited and contributed...     

The Effect of Providing Monetary Information on Energy Savings for Household Appliances: A Field Trial in Spain

Journal of Consumer Policy - Energy labels are one of the most widely used policies in the European Union for increasing the energy efficiency of household appliances. However, their effectiveness...