Political uncertainty,risk of Frexit and European sovereign spreads

Using data from a prediction market (crowd-based forecasts), we build a daily measure capturing the risk of Frexit related to the 2017 French presidential elections. We study how unexpected changes in this new measure of political uncertainty in France affect European sovereign spreads vis-à-vis Germany. We show that our uncertainty proxy drives not only the French sovereign spread but also the spreads of those EU countries deemed the most vulnerable to the risk of desegregation of the Euro Zone. These results suggest that specific political uncertainty affects short-term investor’s expectations and may outweigh other economic determinants of sovereign spreads shortly prior to high stake elections     

How many educated workers for your economy? European targets,optimal public spending,and labor market impact

This paper studies optimal taxation schemes for education in a search-matching model where the labor market is divided between a high-skill and a low-skill sector. Two public policy targets - maximizing the total employment level and optimizing the social surplus - are studied according to three different public taxation strategies. We calibrate our model using evidence from thirteen European countries, and compare our results with the target from the Europe 2020 Agenda for achievement in higher education. We show that, with current labor market characteristics, the target set by governments seems compatible with the social surplus maximization objective for some countries, while being too high for other countries. For all countries, maximizing employment would imply higher educational spending than that required for the social surplus to reach its maximum.     

Persistence,mean reversion and non-linearities in the US housing prices over 1830–2013

The objective of this study is to provide a direct estimate of the degree of persistence of measures of nominal and real house prices for the US economy, covering the longest possible annual sample of data, namely 1830–2013. The estimation of the degree of persistence accommodates for non-linear (deterministic) trends using Chebyshev polynomials in time. In general, the results show a high degree of persistence in the series along with a component of non-linear behaviour. In general, if we assume uncorrelated errors, non-linearities are observed in both nominal and real prices, but this hypothesis is rejected in favour of linear models for the log-transformation of the data. However, if autocorrelated errors are permitted, non-linearities are observed in all cases, and mean reversion is found in the case of logged prices, though given the wide confidence intervals, the unit root null hypothesis cannot be rejected in these cases.     

Can Culture Account for Investment Expectations?

Until recently, risk-taking in investment decisions has been explained by cognitive biases and emotional urges. I would like to propose an alternative explanation, based on the work of Pierre Bourdieu, who links cultural capital to risk-taking. His concept of cultural capital has a very broad meaning, as it encompasses technical skills, aesthetic preferences, verbal facility, general cultural awareness, educational credentials, and artistic competencies. On theoretical grounds, one can assume that a high level of cultural capital enables the taming of uncertainty and allows for temporal horizons that cover longer terms. I test this hypothesis by conducting and analyzing a survey of 307 entrepreneurs. I define risk-taking in two ways: (i) in a somewhat mainstream way, on the basis of expected utility, and (ii) in a heterodox way, in a qualitative, context-dependent setting. I find that, in both cases, there seems to be a link between cultural capital and risk-taking. Furthermore, it seems to make financing issues more salient. I conclude by opening a discussion about the heterogeneity of entrepreneurs and their animal spirits.     

Surplus distribution and characteristics of social enterprises: Evidence from microfinance

The issue of surplus distribution has hardly been analyzed in the context of the social economy. This paper highlights the main drivers of distribution between various stakeholders of microfinance institutions (MFIs), which are an example of social enterprises. We focus on three major variables: size, governance structure and subsidies. Our results show that the size of the institution is the main indicator of the surplus that the organization keeps as a self-financial margin. Moreover, MFIs with a cooperative ownership structure allocate a larger part of their surplus to their employees, whereas non-profit organizations and shareholder-firm MFIs do not allocate their surplus in a significantly different way among their main stakeholders. Finally, we do not find any clear-cut effect of subsidies on the surplus allocation process.     

Indigenous Peoples’ Health Care: New approaches to contracting and accountability at the public administration frontier

Abstract

This article analyses reforms to contracting and accountability for indigenous primary health care organizations in Canada, New Zealand, and Australia. The reforms are presented as comparative case studies, the common reform features identified and their implications analysed.

The reforms share important characteristics. Each proceeds from implicit recognition that indigenous organizations are ‘co-principals’ rather than simply agents in their relationship with government funders and regulators. There is a common tendency towards more relational forms of contracting; and tentative attempts to reconceptualize accountability. These ‘frontier’ cases have broad implications for social service contracting.