Flexible exchange rates,unemployment and stabilization policy effectiveness

The paper presents a general equilibrium model of a small flexible exchange rate economy comprising asset, goods, and labor markets. Viewing the exchange rate as determined proximately in asset markets, the study examines its influence on the excess demand for labor and for output and, correspondingly, its impact on the level of unemployment and external imbalance. The role of exchange rate expectations is central to the present analysis, which reconsiders, in that light, the conventional conclusions about monetary and fiscal policy effectiveness under flexible exchange rates.     

Die stochastische Modellierung von Großschäden für den Einsatz in internen Risikomodellen der Schadenversicherung

Along with individual corporate management and regulatory matters for instance within EU regime Solvency II, Internal Risk Models are very important for major general insurance companies. Of crucial importance in building these internal models, is the stochastic modelling of large claims and in particular, the selection and parameterization of suitable probability distributions for the amount and number of claims based on empirical data. To this end, in practice, a visually-based methodology is more appropriate and workable than strict mathematical approaches. Based on a practical case study, this paper provides some insight into a visually-based methodology for internal risk models.     

Modeling Financial Sector Joint Tail Risk in the Euro Area

We develop a novel high‐dimensional non‐Gaussian modeling framework to infer measures of conditional and joint default risk for numerous financial sector firms. The model is based on a dynamic generalized hyperbolic skewed‐t block equicorrelation copula with time‐varying volatility and dependence parameters that naturally accommodates asymmetries and heavy tails, as well as nonlinear and time‐varying default dependence. We apply a conditional law of large numbers in this setting to define joint and conditional risk measures that can be evaluated quickly and reliably. We apply the modeling framework to assess the joint risk from multiple defaults in the euro area during the 2008–2012 financial and sovereign debt crisis. We document unprecedented tail risks between 2011 and 2012, as well as their steep decline following subsequent policy actions. Copyright © 2016 John Wiley & Sons, Ltd.     

The Dive and Disruption of Successful Current Products: Measures,Global Patterns,and Predictive Model

This study examines the diffusion of pairs of substitute products (current versus new) in five categories across 86 countries between 1977 and 2011. The study finds that current products reach a peak at about 56% of market penetration. Subsequently, they suffer a dramatic decrease in penetration of 286%, which we call the dive. A dive occurs in 96% of current products in five categories across 86 countries between 1977 and 2011. On average, the time from takeoff of new product to a peak in penetration of the current product is 6.6 years and to the dive of the current product is 8.4 years. The total time‐to‐dive includes a hidden discontinuance period (10.4 years), from the introduction of the new product to the peak of the current product, plus an overt time‐to‐dive (1.8 years), from the peak to the dive of the current product. The hidden discontinuance period and the overt time‐to‐dive are shorter, and the dive is steeper in emerging markets than in developed ones. A discrete‐time hazard model shows that the introduction of the new product, prior penetration of the current product, the population density of the country, and prior dives in other countries predict intercountry the hazard of a peak. Subsequently, takeoff of the new product, relative percentage growth in penetration of the current product prior to a peak, the length of the hidden discontinuance period, and prior dives in other countries predict the hazard of a dive. The models can predict the occurrence of a peak with true positive rate of 62% and a true negative rate of 87%, and a dive with a true positive rate of 82% and a true negative rate of 61%.     

Immigration and local spending in social services: evidence from a massive immigration wave

The aim of this paper is to analyze the relationship between immigration and redistributive public spending by using the recent, massive arrival of immigrants in Spain. Specifically, we focus our analysis on the effect of 1998–2006 changes in local immigrant density on contemporaneous changes in municipal spending in social services. To address the potential endogenous location of immigrants, we adopt an instrumental variables approach that uses the distribution of rental housing in 1991 to predict the location of immigrant inflows. The results indicate that (per capita) social spending increased less in those municipalities that recorded the largest increases in immigrant density. We interpret our results as a reduction in natives’ demand for redistributive public spending.     

The Myth of Self-Managing Teams: A Reflection on the Allocation of Responsibilities between Individuals, Teams and the Organisation

Concepts that include the participation and empowerment of workers are becoming increasingly important nowadays. In many of these concepts, the formal responsibility is delegated to teams. Does this imply that the normative responsibility for the actions of teams is also delegated? In this article we will reflect on the difference between holding a person accountable and bearing responsibility. A framework is elaborated in order to analyse the accountability and responsibility of teams. In this framework, the emergence of a collective mind, and the organisational factors that influence the extent to which teams have the possibility of acting in a responsible way play an important role. It shows that teams can bear responsibilities that could never be carried by a group of individuals. The framework is used to analyse two sample cases with self-managing teams in production facilities. The authors discuss the implications for the theory and practice of self-managing teams and the allocation of responsibility between individuals, teams and the organisation.     

Pareto-improving Immigration in an Economy with Equilibrium Unemployment

A dynamic two-country labour matching economy is presented. Workers decide whether to search in their native country or look for a job abroad (bearing an additional cost). The number of vacancies posted by firms in each country depends on the average characteristics of the workers searching inside that country. Wages are determined in an individual Nash bargain. We show the existence of multiple steady-state equilibria: one no-migration equilibrium and two migration equilibria. The multiplicity of equilibria is due to a self-fulfilling prophecy phenomenon linking average wages and incentives to migrate. The equilibria are Pareto-ranked, with migration-equilibria dominating no-migration.     

The practice of sport and its influence on social values and behaviour education

‘Non-health effects’ of sports practice, as life satisfaction or non-cognitive education, are being adopted as aim in academic journals in several fields. This paper tries to contribute to this literature by focusing on the links between youth sports and the formation of values and social skills. To do this, we have made a survey, in which more than 5000 Spanish students were involved. They were asked about their sport activity, leisure preferences and socio-economic and family characteristics. We analyse separately athletes and non-athletes using Heckman’s two-step method. Therefore, we split the sample based on the likelihood of practising sports initially predicted by a probit analysis. Then, we separately estimate the non-cognitive educational outcomes of each group of individuals. The results of the first step show significant differences in gender, socio-economic and academic performance. In the second step, segregating the sample provides a number of highly significant effects: The cases of household income and videogames frequency play, among others. So, we have detected a different effect of increasing family income on the educational results (positive in the athlete and negative in the non-athlete group). In addition, a more substantial negative effect was observed in time devoted to videogames in the sample of athletes. These results can be used to implement educational policy measures, such as the promotion of sport in schools, or implementing awareness campaigns about responsible engagement in leisure time activities.     

Anti-Discrimination Laws: Undermining Our Rights

The purpose of this article is to argue in favor of a private employer??s right to discriminate amongst job applicants on any basis he chooses, and this certainly includes unlawful characteristics such as race, sex, national origin, sexual preference, religion, etc. John Locke and many after him have argued that people have natural rights to life, liberty, and property or the pursuit of happiness. In this view, law should be confined to protecting these rights and be limited to prohibiting other people from transgressing those rights. The law should not hinder an employer??s ability to discriminate, any more than it should compel people to marry against their wishes. These laws generally emerge from a moral perspective that people think should be imposed on everyone else. But those who don??t welcome those morals are in effect being coerced to abide by them against their will; this is unethical. Finally, it will be argued that the free market has mechanisms by which discrimination will, be rendered powerless to harm its victims.     

A Theory of Socio‐spatial Integration: Problems,Policies and Concepts from a US Perspective

Discussions about socio‐spatial integration in the US have been primarily focused on research into residential segregation. The treatment of these two concepts as opposites has had two consequences. First, most policies for integration have been based solely on concepts of segregation. Second, the intensive criticism directed at integration flows more from those policies than from its conceptual meaning. This article develops a framework for socio‐spatial integration. It does this first by outlining an understanding of segregation and the complexities of its treatment, then by making a distinction between policy applications and the conceptual meaning of integration. This review shows that, rather than suiting a linear approach, socio‐spatial integration can be expressed as a multidimensional relationship that may work independently and at different scales. Socio‐spatial integration is then exposed as the opposite of social exclusion, of which physical proximity between different social groups is just one dimension. Two lines of research are proposed: first, a repositioning of integration as a progressive aspiration and a critique of naturalist conceptions; second, a balancing of the weight of spatial proximity among the different dimensions of integration.