Option Pricing Bounds: Synthesis And Extension

The main option pricing bounds in the literature were originally obtained through various disparate methods. I show that those bounds can be derived from a single analytical framework. The key to this synthesis lies in the use of a general expression for the price of a call option depending on the corresponding put option's discount factor. Although the put's discount factor is unknown, it can be bounded from below. I use this lower bound on the put's discount factor to derive traditional lower bounds for call prices. In addition, I extend the literature by finding a new tighter lower bound.     

An empirical comparison of the Tucker-Messick and INDSCAL models: Measuring viewpoints about transit attributes

This investigation sought (1) to identify perceptually homogenous respondent groups by two individual differences scaling models initially proposed by Tucker and Messick, and Carroll and Chang, (2) to reveal the significance of group percepts with respect to anticipated satisfactions and socio-economic and activity pattern characteristics of group members, and (3) to test empirically the significance of formal distinctions between the two individual differences models. The study utilized judgments about 12 transit attributes of three innovative urban, public transportation modes from a sample of 243 respondents. It was possible to specify seven perceptually homogenous groups, which were distinct in terms of a qualitative analysis of their perceptual spaces and a quantitative convergent-discriminant validity analysis predicated on the distances between pairs of attributes in their spaces. The perceptual groups were shown to have interpretable links to socio-economic and activity pattern characteristics of the respondents. In addition, it was possible to statistically account for the satisfaction ratings of the respondents by the dimensions of their corresponding spaces. Since the Tucker-Messick model was shown to derive more distinct spaces for the separate groups than the INDSCAL model of Carroll and Chang, the Tucker-Messick spaces more uniquely tied a group's percepts to its corresponding satisfactions.     

Inattentive consumers

This paper studies the consumption decisions of agents who face costs of acquiring, absorbing and processing information. These consumers rationally choose to only sporadically update their information and re-compute their optimal consumption plans. In between updating dates, they remain inattentive. This behavior implies that news disperses slowly throughout the population, so events have a gradual and delayed effect on aggregate consumption. The model predicts that aggregate consumption adjusts slowly to shocks, and is able to explain the excess sensitivity and excess smoothness puzzles. In addition, individual consumption is sensitive to ordinary and unexpected past news, but it is not sensitive to extraordinary or predictable events. The model further predicts that some people rationally choose to not plan, live hand-to-mouth, and save less, while other people sporadically update their plans. The longer are these plans, the more they save. Evidence using U.S. aggregate and microeconomic data generally supports these predictions.     

South Africa's export predicament*

Using South Africa as an example, this article explores how the structure of production affects export diversification and economic growth. We show that the lagging process of structural transformation is part of the explanation for stagnant exports per capita in South Africa over the past 40 years. This slow structural transformation is shown to be a consequence in part of the peripheral nature of South Africa's productive capabilities: the country is specialized in sectors intensive in highly specific factors of production that cannot be easily redeployed to other activities. Using this methodology, we examine the sectoral priorities of the South African Department of Trade and Industry and explore the policy implications of the country's orientation in the product space.     

Reciprocity and practical comparability

Reciprocity does not require exactness but only a certain equilibrium in the things reciprocated: it is often overabundant. In addition, reciprocity may be fulfilled by returning something of a different kind that may be heterogeneous and incommensurable with the thing received. The reason of this “uneven response” of reciprocity is that in these situations the exchange of means aims at manifesting some values that are ends for the persons involved. Hence, the consideration of reciprocity supposes a reinsertion of ends in economics. The paper firstly defines reciprocity. Next, it summarizes a variety of arguments for a reconsideration of ends in economics. After that, it explains the differences between the rationalities of means and ends. A key difference lies in the problem of incommensurability of ends. This problem will be then tackled and a possible way to overcome it will be proposed. It will be finally sustained that practical comparability allows for incommensurable fair reciprocation.     

Fiscal regime shifts in Portugal

We estimate changes in fiscal policy regimes in Portugal with a Markov Switching regression of fiscal policy rules for the period 1978–2007, using a new dataset of fiscal quarterly series. We find evidence of a deficit bias, while repeated reversals of taxes making the budget procyclical. Economic booms have typically been used to relax tax pressure, especially during elections. One-off measures have been preferred over structural ones to contain the deficit during economic crises. The EU fiscal framework prompted temporary consolidation, but did not permanently change the budgeting process.     

Using strategic performance measurement systems for strategy formulation: Does it work in dynamic environments?

This paper examines how strategic performance measurement systems (SPMS) influence organisational performance through the shaping of the strategic agendas and strategic decision arrays that result from the processes of (re)formulation of intended strategies. Using a combination of archival and survey data collected from 267 medium and large Spanish companies, we find evidence supporting a positive association between SPMS and organisational performance that is mediated by the comprehensiveness of the strategic decision arrays. We find this mediation is negatively moderated by the level of environmental dynamism, so that the comprehensiveness of strategic decision arrays that result from strategy (re)formulation processes mediates the association between SPMS and organisational performance when environmental dynamism is low, but not when environmental dynamism is high.     

Labor market flexibility and poverty dynamics

The past two decades have witnessed a rapid growth in flexible work arrangements that, in some instances, could expose workers to a higher poverty risk via limited job stability, few advancement opportunities, and low wages. Nowhere in the world has this increase in flexible work arrangements being more evident than in Spain, where about a third of the wage and salary workforce holds fixed-term contracts. Using Spanish panel data and maximum-likelihood binary models that account for state dependence and unobserved heterogeneity, we examine the poverty implications of past and present temporary employment. Our findings suggest that fixed-term contracts are linked to a greater poverty exposure among women and older men relative to open-ended contracts. Furthermore, this greater poverty exposure can last several years due to feedback effects operating via job instability or via the transition to work statuses characterized by higher poverty hazards. Finally, the adverse impact of temporary employment is linked to the short duration of some contracts, thus signaling the importance of work attachment.     

经验、挑战和政策建议:中国融入世界经济三十年

本文从一个外国学者的视角,对改革开放三十年来中国在融入世界经济方面所作的工作进行了分析和评估,并在此基础上从四个方面总结了作为全球化最大受益者的中国从其自身的市场化改革和对外开放中应汲取的经验教训,即毫不动摇的开放战略、循序渐进的试点方法、一揽子政策方案的政策措施、以及互利共赢的外交理念。文章最后给出了具体的政策建议。     

Social Movements and the Dynamics of Rural Territorial Development in Latin America

This special section brings together 4 of the 12 studies conducted within a research program analyzing the relationships among social mobilization, governance, and rural development in contemporary Latin America. The introduction gives an overview of the contemporary significance of social movements for rural development dynamics in the region, and of the principal insights of the section papers and the broader research program of which they were a part. This significance varies as an effect of two distinct and uneven geographies: the geography of social movements themselves and the geography of the rural political economy. The effects that movements have on the political economy of rural development also depend significantly on internal characteristics of these movements. The paper identifies several such characteristics. The general pattern is that movements have had far more effect on widening the political inclusiveness of rural development than they have on improving its economic inclusiveness and dynamism.