The Co‐initial Swap Market Model

In this paper, we introduce a novel approach to the pricing and the risk management of generic European style interest‐rate derivatives. This new model has great flexibility and has the advantage of avoiding complex model calibration techniques typical of standard short‐rate models. Dynamics is assigned on a set of co‐initial forward swap rates, and arbitrage‐free restrictions are determined in a normal and lognormal setup. Model implementation and calibration are discussed, and details of two example applications are also presented.
(J.E.L.: G12, G13).     

Relative price shifts,economies of scale and poverty during economic transition1

Economic transition is associated with significant shifts in relative prices between private and public goods. If, as a result, public goods claim a larger share of total expenditures, economies of scale in consumption increase. We show how relative price changes might alter the welfare of different‐sized households in the short run and over time. We illustrate, for a selection of transition economies, that conventional poverty profiles are quite sensitive to assumptions made about economies of scale in consumption. In particular, the common view that large households with many children are poor relative to small households (such as those comprising the elderly) is shown to be highly non‐robust.     

A meta-design approach to agroindustrial buildings: A case study for typical Italian wine productions

The study is part of a wider research aiming at defining building design criteria for small and medium-sized wine-growing and producing farms. The goal of this paper is to work out and validate a specific meta-design process, suitable to lead to the definition of possible layout solutions optimized in terms of functional requirements. The production process has been resolved into two macro-phases, in their turn composed of sections consisting of various series of operations and functions. The in-depth analyses performed on the spatial requirement of these operations and functions allowed to define the functional areas and spatial units suitable for building design. Finally, their functional and spatial relations were analysed through flow charts and matrix approach. The results allowed us to outline examples of possible layout solutions.     

Habit formation and the equity–premium puzzle: a skeptical view

We argue that, ceteris paribus, introducing a habit that resolves the equity–premium puzzle is equivalent to increasing the Arrow-Pratt coefficient of relative risk aversion, AP-RRA. If we constrain the AP-RRA to a constant ‘acceptable’ level, the effect on the equity premium is quantitatively insignificant. In a dynamic setting, the fluctuations of the habit increase the equity premium, slightly, though generates unrealistic fluctuations in the risk-free interest rate. We conclude a habit is observationally equivalent, up to a first-order approximation, to a higher AP-RRA and to a preference shock. These effects cannot resolve the equity–premium puzzle.      

Flexibility, Structuration, and Simultaneity in New Product Development

A large body of research has pointed out the need for a contingent approach in the design of new product development processes, highlighting the risk of simply accepting a normative perspective that leads to the identification and diffusion of decontextualized “best practices.” In the literature there are contrasting views regarding the identification of the characteristics of product innovation processes in extremely uncertain and dynamic conditions. Some studies propose a fascinating dichotomy: the contraposition between flexible processes and Stage‐Gate^® processes. They maintain that Stage‐Gate^® processes are characterized by “early and sharp” product definition and clear separation between concept development and implementation (detail design and production ramp‐up), whereas flexible development models seek to delay the concept freeze point and overlap product development stages going beyond concurrent engineering. Other studies have arrived at seemingly conflicting results; the suitability of the early and sharp product definition approach in turbulent environments is debated without supporting the dichotomy between flexible processes and Stage‐Gate^® processes. Moreover, additional reasons for questioning the contraposition between Stage‐Gate^® and flexible processes come from a series of studies on the management of discontinuous innovation. The aim of the present study was to develop a conceptual framework that can overcome this widely accepted but controversial dichotomy. The framework is based on the recognition of the orthogonality among three analytical dimensions: organizational, informational, and temporal. The organizational dimension refers to the structuration of the process. The informational dimension deals with classifying the development activities and investigating the firm's product definition approach (early and sharp mode vs. late freeze mode). The temporal dimension relates to the execution strategies of development tasks. The three‐dimensional framework enables us to better understand the complex relationships between the degree of structuration in process design (organizational dimension), the degree of intersection between problem‐formulation and problem‐solving in product definition (informational dimension), and different types of execution strategies (temporal dimension).     

Cumulative culture and explosive demographic transitions

A demographic transition is a change in the pattern of growth of a population. Human history records several kinds of such transitions, e.g., from stability to growth or between different kinds of growth. Culture is often implied as the main fuel of demographic transitions, but theorizing is so far limited to verbal arguments. Here we study two simple formal models in which population size and the amount of culture in a population influence each other’s dynamics. The first model has two regimes: an equilibrium regime in which both population size and amount of culture reach stable values, and an explosive regime in which both variables increase exponentially without bound. A transition between these regimes is caused by changes in parameters that describe the accuracy of cultural transmission and the interaction between demography and culture. The second model suggests that a transition from extensive to intensive accumulation of culture may derive from a qualitative change in how individuals cooperate to create culture.     

Brewing a Bitter Cup? Deregulation,Quality and the Re‐organization of Coffee Marketing in East Africa

To what extent is global economic change mediated by national‐level policies? Are global corporations adopting the same strategies in different countries or do they address varying local circumstances in different ways? Do governments in developing countries have any meaningful regulatory powers left? This paper seeks to address some of these issues by examining the dynamics of coffee‐market reforms in three East African countries against the background of recent restructuring of the global coffee‐marketing chain. The paper focuses on two relatively neglected areas of inquiry: (1)changes in the identity, market share and organization of the actors involved in commodity markets and their contractual/power relationships in the marketing chain; and (2)changes in the assessment, monitoring and valuation of quality parameters in commodity trade. The author highlights the consequences of different trajectories of domestic market reforms and considers whether the preservation of quality and reputation is possible in deregulated markets.     

Unit root tests of capital mobility in the less developed countries

Conclusions This article contributes to the ongoing debate on international capital mobility in the LDCs. The extent of capital mobility has been assessed in a time-series context, performing unit root tests on the adjusted current account for thirty-seven developing countries. The results show that the hypothesis of capital mobility cannot be rejected in a large number of countries.