The limited usefulness of macroeconomic Bayesian VARs when estimating the probability of a US recession

The Bayesian VAR model provides a convenient tool for generating predictive densities and making probability statements regarding the future development of economic variables. This paper investigates the usefulness of standard macroeconomic Bayesian VAR models to estimate the probability of a US recession. Defining a recession as two quarters in a row of negative GDP growth, the probability is estimated for two quarters of the most recent US recession, namely 2008Q3–2008Q4. In contrast to judgemental probabilities from this point in time, it is found that the BVAR assigns a very low probability to such an event. This is true also when survey data, which generally are considered as good leading indicators, are included in the models. We conclude that while Bayesian VAR models are good forecasting tools in many cases, the results in this paper raise question marks regarding their usefulness for predicting recessions.     

Estimating sensitivities of temperature-based weather derivatives

Pricing of temperature-based weather derivatives has been studied in the literature; however, there is no analysis of the estimation of the sensitivities of weather derivatives in a stochastic model of temperatures. We use pathwise derivative and kernel methods to derive Monte Carlo estimators for the sensitivity (Greeks) of temperature-based weather derivatives. These sensitivities can be used by investors for choosing the most suitable weather contracts for partial hedging or speculation. Temperature data from New York, Atlanta and Chicago are used in the discussion of numerical results.     

Market power and hot air in international emissions trading: the impacts of US withdrawal from the Kyoto Protocol

Ten years after the initial Climate Change Convention from Rio in 1992 the industrialized world is finally likely to ratify the Kyoto Protocol, which will impose legally binding greenhouse gas emission reductions on the developed world. However, the Kyoto Protocol will enter into force without the USA, which withdrew under President Bush in March 2001. Accounting for hot air and market power of the Former Soviet Union on emission permit markets, it is shown that US withdrawal has important consequences on environmental effectiveness, compliance costs, and excess costs of market power under the Kyoto Protocol. Non-compliance of the USA implies a dramatic decrease in environmental effectiveness as well as compliance costs of OECD countries whereas the Former Soviet Union and transitional economies in Eastern Europe suffer from a huge decline in permit sales revenues. Excess costs of market power in permit trade increase in relative terms, but decline substantially in absolute terms due to US withdrawal. Policy options are quantified to bypass the problems of hot air and market power through compensation mechanisms.     

Exploring the mediating role of innovation in the effect of the knowledge management process on performance

The aim of this study is to explore the mediating role of innovation components in the relationship between knowledge management processes and performance. The research questions were investigated through questionnaires with top-level managers of a firm operating in the Turkish telecommunication industry. The results of the study indicated that knowledge management processes affect all innovation components. In addition to the direct effects of the knowledge management process on firm performance, marketing, product and process innovation are mediators in the relationship between the knowledge management process and performance. Finally, this research sheds light on how firms can manage their knowledge to gain a competitive advantage based on innovation.     

Distance to the pre-industrial technological frontier and economic development

This research explores the effects of distance to the pre-industrial technological frontiers on comparative economic development in the course of human history. It establishes theoretically and empirically that distance to the frontier had a persistent non-monotonic effect on a country’s pre-industrial economic development. In particular, advancing a novel measure of the travel time to the technological frontiers, the analysis establishes a robust persistent U-shaped relation between distance to the frontier and pre-industrial economic development across countries. Moreover, it demonstrates that countries, which throughout the last two millennia were relatively more distant from these frontiers, have higher contemporary levels of innovation and entrepreneurial activity, suggesting that distance from the frontier may have fostered the emergence of a culture conducive to innovation, knowledge creation, and entrepreneurship.     

QUADRATIC PEN'S PARADE AND THE COMPUTATION OF THE GINI INDEX

Following Milanovic's (1997) paper, we propose a simple way to compute the Gini index when income y is a quadratic function of its rank among n individuals.     

The role of the public sector in the provision of housing supply in Turkey, 1950–2009

This study examines the changing role of the public sector in Turkey with regard to housing provision since 1950, and particularly since 2000, and seeks to clarify how public intervention has affected housing provision and urban development dynamics in major cities. Three periods may be identified, with central government acting as a regulator in a first period characterized by a ‘housing boom’. During the second period, from 1980 to 2000, a new mass housing law spurred construction activity, although the main beneficiaries of the housing fund tended to be the middle classes. After 2000, contrary to emerging trends in both Northern and Southern European countries, the public sector in Turkey became actively involved in housing provision. During this process, new housing estates were created on greenfield sites on the outskirts of cities, instead of efforts being made to rehabilitate, restore or renew existing housing stock in the cities. Meanwhile, the concept of ‘urban regeneration’ has been opportunistically incorporated into the planning agenda of the public sector, and — under the pretext of regenerating squatter housing areas — existing residents have been moved out, while channels for community participation have been bypassed.     

Generational analysis of leisure time physical activity participation of women in Turkey

The purpose of this study was to analyse the adolescent-period leisure time physical activity (LTPA) experiences of three generations of women within the framework of the socio-ecological model and feminist cultural studies. For this purpose, we conducted semi-structured interviews with 144 women from three generations (48 girls, 48 mothers of the girls, and 48 grandmothers of the girls) and subjected the data to thematic analysis using a constant comparison method. Four themes were organized to assess similarities and differences across three generations drawing on the socio-ecological model: 1) Changing the meaning of sports, LTPA and being active; 2) Social resources for participating in LTPA: From authoritarian to supportive parenting; 3) Doorsteps, streets and the four-walls; and finally: 4) Changing educational policy. The findings revealed that, in parallel with the multifaceted historical changes in Turkey, the individual, social, physical environment and political factors of socio-ecological model determine the women’s LTPA participation differed throughout the generations. Results also showed that gendered relations continue to influence LTPA participation of women across the generations.