Fiscal Policies and Credit Regimes: A TVAR Approach

This work investigates how the state of credit markets affects the impact of fiscal policies. We estimate a threshold vector autoregression (TVAR) model on US quarterly data for the period 1984–2010. We employ the spread between BAA‐rated corporate bond yield and 10‐year treasury constant maturity rate as a proxy for credit conditions. We find that the response of output to fiscal policy shocks is stronger and more persistent when the economy is in the ‘tight’ credit regime. Fiscal multipliers are significantly different in the two regimes: they are abundantly and persistently higher than one when firms face increasing financing costs, whereas they are feebler and often lower than one in the ‘normal’ credit regime. The results appear to be robust to different model specifications, fiscal foresight, alternative threshold variables, different measure of variables and sample periods. Copyright © 2014 John Wiley & Sons, Ltd.     

Barriers to entry, deregulation and workplace training: A theoretical model with evidence from Europe

We study the impact of regulatory barriers to entry on workplace training. We develop a model of training in imperfectly competitive product and labour markets. The model indicates that there are two contrasting effects of deregulation on training. As stressed in the literature, with a given number of firms, deregulation reduces the size of rents per unit of output that firms can reap by training their employees. Yet, the number of firms increases following deregulation, thereby raising output and profit gains from training and improving investment incentives. The latter effect prevails. In line with the predictions of the theoretical model, we find that the substantial deregulation in the 1990s of heavily regulated European industries (energy, transport and communication) increased training incidence.     

What to do in globalised economies if global governance is missing? The vicarious role of competition in social responsibility

In this article, we present a model that seeks to illustrate mechanisms that have fostered the diffusion of socially responsible corporate practices with specific reference to Fair Trade. We do so with a simple standard Hotelling approach of competition on product differentiation between a profit-maximising producer (PMP) and a “socially responsible” not for profit “fair trader” (FT) over prices and (costly) “socially and environmentally responsible” features of their products. We show that, under reasonable conditions concerning consumers’ costs of ethical distance, the fair trader’s entry into the market triggers the partial adoption of socially responsible practices by the profit-maximising competitor. We finally compare the ethical choices of the two players with the optimal ones of a domestic benevolent planner. Our findings show that competition between the fair trader and the PMP leads to a level of transfers to marginalised producers in the South, which is above the optimal level fixed by a planner maximising the welfare of the consumers in the North. This finding shows that the competition in social responsibility triggered by fair traders partially compensates for the lack of global governance and global institutions properly representing marginalised producers.     

Executive compensation and firm performance: adjustment dynamics,non‐linearity and asymmetry

The relationship between executive compensation and firm performance is a field of intense theoretical and empirical research. The purpose of this study is to gain additional insights into the nature of this relationship by examining empirically the relatively unexplored areas of its dynamics of adjustment, as well as its non‐linearity. The findings of this study show strong evidence in support of the view that (a) executive compensation is characterized by a dynamic process of adjustment, and (b) the relationship between executive compensation and firm performance is non‐linear and asymmetric. Additionally, the structure of asymmetry is found to be dependent on the measure of performance. Convexity characterizes the asymmetry of the relationship between executive compensation and market returns, while concavity distinguishes the asymmetry of the relationship between executive compensation and accounting returns. Copyright © 2008 John Wiley & Sons, Ltd.     

Does Attending a Catholic School Make a Difference? Evidence From Italy

This paper analyses whether attending a Catholic high school in Italy yields higher benefits in student achievement compared with enrolment at a public school. Because a measure of the success of a given high school might be how its students perform after leaving high school, our attention is focused on university participation and the risk of university dropout. We find that attending a Catholic school increases the likelihood of enrolling at university but has no effect on dropout behaviour. Additionally, our findings show that the source of the effectiveness of Catholic schools in boosting university participation does not lie in better resource availability, peer group influences or positive selection.     

Some quasi-globally stable processes of price adjustment

In this paper, the existence of some quasi-globally stable processes of price adjustment in a perfectly competitive market, is proved. These processes are relative to a special class of “excess demand” vector fields satisfying regularity hypotheses and boundary conditions of classical type. Modifications of the above processes which, under different hypotheses, are still quasi-globally stable, are studied.     

Modelling and forecasting stock returns: exploiting the futures market,regime shifts and international spillovers

This paper proposes a vector equilibrium correction model of stock returns that exploits the information in the futures market, while allowing for both regime‐switching behaviour and international spillovers across stock market indices. Using data for three major stock market indices since 1989, we find that: (i) in sample, our model outperforms several alternative models on the basis of standard statistical criteria; (ii) in out‐of‐sample forecasting, our model does not produce significant gains in terms of point forecasts relative to more parsimonious alternative specifications, but it does so both in terms of market timing ability and in density forecasting performance. The economic value of the density forecasts is illustrated with an application to a simple risk management exercise. Copyright © 2005 John Wiley & Sons, Ltd.     

THE INVESTMENT GAME WITH ASYMMETRIC INFORMATION

We analyze the effects of introducing asymmetric information and expectations in the investment game ( Berg et al., Games and Economic Behavior, 1995 , 10, 122–42). In our experiment, only the trustee knows the size of the surplus. Subjects’ expectations about each other's behavior are also elicited. Our results show that average payback levels increase with the average amount sent. Asymmetric information does not reduce the amounts sent and returned, as compared with previous experimental studies. The first movers’ choices increase with their expectations about the second movers’ payback, whose choices depend in turn on the difference between expected and actual amounts received.     

EXAM SCHEDULING AND STUDENT PERFORMANCE

This paper uses data from a single School of a UK university to estimate the impact of a switch from end‐of‐semester to end‐of‐year final exams on student performance. The identification strategy exploits the fact that while the timing of final exams changed, the timing of mid‐term exams remained the same. Estimates are based on a difference‐in‐differences methodology that compares final and mid‐term exam scores after the switch, with final and mid‐term exam scores before the switch. The empirical findings suggest that the shift of final exams to the end of the academic year had a negative effect on student achievement. Many changes in higher education are often done on the basis of financial, administrative or ideological considerations, underestimating the magnitude of their effect on student learning and student performance.