Dependency traps in self‐targeting food aid programs

We present an economy of farmers where food aid is warranted due to poverty traps triggered by nonconvex production sets. We model a food‐aid intervention as a dynamic game between a food‐aid manager and the farmers in a context of asymmetrical information. The food‐aid manager is motivated by a relief objective and targets farmers suffering the poverty trap. The food‐aid manager uses a self‐targeting mechanism by providing the aid through a food wage in exchange for participation in the intervention's activities. Guided by the relief objective and targeting constraint, he fixes the food wage equal to the reservation wage of the farmers not suffering the poverty trap. Dependency traps will then happen every time there is a considerable technological and nutritional gap between farmers who are in and out of the poverty trap. When there is a gap, poor farmers earn more working for the reservation wage of the well‐off farmers than by working in their own farm. Dependency can be overcome only if the food‐aid program allows farmers to upgrade their productive technologies and catch up with those farmers who are out of the poverty trap.     

Default and bankruptcy in an entrepreneurial economy with incomplete markets

We build a general equilibrium model with incomplete markets, production, default, and bankruptcy. The existence of equilibrium is proved. Theoretically, under appropriate conditions, we show that the reduced-form entrepreneurial equilibrium and profit-maximization entrepreneurial equilibrium, as defined by Magill and Quinzii (1996), are equivalent. In addition, we find an inverse relationship between the economy real interest rate and the probability of default. This result is empirically tested by applying the Cox proportional hazards model with time-dependent covariates for a sample of sole proprietorships’ unsecured credit operations in the Brazilian economy. The estimates confirm the findings from the theoretical model.     

Economic growth as a function of human capital,internet and work

The World Bank has suggested the need to enhance Information and Communication Technology skills in all sectors because a 10% increase in internet connectivity was found to boost GDP growth by 1.38%. Simultaneously, the OECD argued that high internet access rates generate a 2% increase in GDP. Because the internet positively affects economic growth, we investigated the relationship between an economically active population, human capital and technology to evaluate these effects in Mexico. A data series from 1991 to 2010 was analysed in three stages according to the least-squares method. A Cobb–Douglas function under the Solow model was considered. Technology and internet access were found to positively affect top-level students and graduate students and thus contribute to the global innovation index.     

New Multilateralism in Action for Peace: A Case Study of the US-led Operation Unified Assistance in the Asian Tsunami Disaster1

Abstract

In the aftermath of the Indian Ocean earthquake and tsunami in December 2004, the ensuing multinational relief, humanitarian, and rebuilding efforts of the Operation United Assistance (OUA) are new examples of international cooperation to sustain and rebuild Asian communities in the post-9/11 security environment. An analysis of the cooperative efforts in light of differing theoretical perspectives provides a forum for debate on the nature of cooperation in the international arena and the implications for ethnic and civil wars in Indonesia and Sri Lanka. Once described and explained by multiple theories, the relief operations can then be used to predict and perhaps even prescribe future international cooperation in natural disasters and conflict resolution in civil war environments. As a case study, this paper also examines international security strategies and the implications for economic prosperity and political stability in sovereign but weak nation states.     

Strategic and Queue effects on Entry in Spanish Banking

This paper analyzes the factors that influence entry and geographic diversification decisions, a topic of special strategic interest in a context of growing globalization. The empirical model we propose is tested in a framework— the Spanish savings-bank market—where recent deregulation has eliminated the legal barriers to entry. Our results show two important conclusions for the evolution of the effects of branching deregulation in Europe and the US. First, it seems that entry in new geographical markets has been impeded by the strategic interactions between entrants and incumbents. Second, savings banks exhibit a preference for closer locations at the time of expanding, which may have undermined the effects of deregulation and its potential benefits for consumers.     

Microeconomic adjustments in Uruguay during 1973–1981: The interplay of real and financial shocks

This paper uses the financial statements of industrial firms to develop an integrated firm's eye view of the changes in the Uruguayan economy during 1973–1981. In the first of three subperiods, 1973–1975, real financial costs were very negative and tended to offset low returns on operating assets. During 1976–1978, the dismantling of interest rate controls increased real financial costs, but other factors increased the returns on operating assets more rapidly. During 1979–1981, financial costs jumped enough to more than absorb increases in gross earnings, which were probably due to Argentine demand. The rates of earning and capital formation were highest among exporters in the second subperiod, when a major export promotion program was in place. This pattern was reversed in the third subperiod, as the promotion programs were dismantled and real currency appreciation seemed to squeeze gross earnings of exportables relatively more. This unequal squeezing was probably due to redundant tariff and other protection for import-competing producers.     

External shocks,financial reforms,and stabilization attempts in Uruguay during 1974–1983

This paper interprets and evaluates Uruguay's reforms emphasizing the outcome of financial reforms and attempts to bring down inflation. It is shown that domestic interest rate deregulation and the removal of prohibition towards holding dollar-denominated assets led to a rise in the ratio of financial assets in GDP and to a shift towards dollar-denominated assets. Causes of the persistent and large spread between peso and dollar interest rates adjusted for the preannounced rate of devaluation (tablita) are examined.The discussion of the stabilization program during 1979–1982 and its aftermath in 1983 shows that setting the tablita at less than the difference between internal and external inflation led to severe imbalances. Because of remaining redundant protection and price stickness, the real exchange rate appreciated sharply for a prolonged period and the trade balance widened until the stabilization episode ended with capital flight when doubts set in about the sustainability of the tablita.     

Organizational knowledge and the manufacturing strategy process: A resource-based view analysis

The current competitive environment is characterized by new sources of information, new technologies, new management practices, new competitors, and shorter product life cycles, which highlights the importance of organizational knowledge in manufacturing companies. We integrate some of those knowledge-based approaches seeking to understand how aspects related to cross-functional orientation, new technologies, and increasing access to information affect manufacturing strategy. In this paper, “know-what” (where to find the needed information) and “know-how” (how to run operations smoothly) are considered key components of organizational knowledge in the process of manufacturing strategy formulation. Assuming that knowledge accumulation may lead to competitive advantage, we propose a model of manufacturing strategy process from a resource-based view perspective. We used a survey to collect field data from 104 companies. The results indicate that cross-functional activities integrate manufacturing knowledge and contribute to the creation of valuable and rare product characteristics.     

Securities market theory: Possession,repo and rehypothecation

By introducing repo markets we understand how agents need to borrow issued securities before shorting them: (re)-hypothecation is at the heart of shorting. Non-negative amounts of securities in the box of an agent (amounts borrowed or owned but not lent on) can be sold, and recursive use of securities as collateral allows agents to leverage their positions. A binding box constraint induces a liquidity premium: the repo rate becomes special and the security price higher than expected discounted cash-flows. Existence of equilibrium is guaranteed under limited re-hypothecation, a situation secured by (current or proposed) institutional arrangements.     

¿Más trabajo pero no mejor en Chile? La importancia capital del contrato indefinido

Los gobiernos chilenos desde 1990 han confado en el crecimiento económico para generar empleo, salarios más altos y mejores condiciones de trabajo, obteniendo resultados cuantitativos, pero no de la calidad del empleo. Revelando el contraste entre una legislación aparentemente rígida y la flexibilidad real del mercado laboral, los autores resaltan la importancia de las condiciones de trabajo para evaluar el comportamiento del mercado. Exploran empíricamente los efectos de las características individuales y laborales en la capacidad para encontrar empleo y generar ingresos, cuyo determinante más importante, según sus resultados, es el contrato indefinido. Concluyen con sugerencias para la elaboración de políticas.