The effects of the subprime crisis on the Latin American financial markets: An empirical assessment

The aim of this article is to answer the following question: can the considerable rise in the volatility of the LAC stock markets in the aftermath of the 2007/2008 crisis be explained by the worsening financial environment in the US markets? To this end, we rely on a time-varying transition probability Markov-switching model, in which “crisis” and “non-crisis” periods are identified endogenously. Using daily data from January 2004 to April 2009, our findings do not validate the “financial decoupling” hypothesis since we show that the financial stress in the US markets is transmitted to the LAC's stock market volatility, especially in Mexico.     

Does backward participation in global value chains affect countries’ current account position?

Review of World Economics - This paper addresses the impact of countries’ backward participation in global value chains (GVCs) on their current account balances. Our results, based on a large...     

The dollar in the turmoil

We study the impact of the global financial crisis on the equilibrium exchange rate of the US dollar. We first simulate the impact of the crisis on the US net foreign asset position. Then, we calculate the equilibrium value of the dollar according both to a BEER and to a FEER approach. We find the case for a strong, although temporary, depreciation of the dollar even more acute than before the crisis. This suggests that the strength of the dollar in late 2008 and early 2009 may be short-lived.     

Foreign Exchange Intervention and Monetary Policy: A Tale of Two Agencies with Conflicting Objectives

In several industrial countries, the government is responsible for foreign exchange intervention while the central bank is given operational independence in conducting domestic monetary policy. We model the interaction between the two agencies when their views differ and generate empirical implications using lattice‐theoretic techniques. Japanese data from 2001–2004 support the model's predictions with respect to central bank behavior. The evidence is less conclusive as to whether the massive intervention of 2001–2004 by the Ministry of Finance caused the Bank of Japan to raise the monetary target.     

Is the social representation of nanotechnology anchored in that of GMOs?

The use of nanotechnology (devices/materials composed of parts less than 10 nanometres) in the development of new products is rapidly expanding. Industrialists and decision-makers consider nanotechnology to be the next industrial revolution, but fear they risk the same resistance to nanotechnology that their counterparts experienced with genetically modified organisms (GMOs). Although risk perception studies have shown that perceived risk of GMOs is quite high compared to that related to nanotechnology, no study to date has explored a potential direct social representation link between the two. The present study aims to fill that gap by comparing the social representations of nanotechnology and GMOs among a population of non-experts. This study was conducted with 282 students in human and social sciences and natural sciences. Using a free association task with the inductive words ‘nanotechnology’ and ‘GMO (genetically modified organism)’, we identified the existing social representations of the two based on a structural approach. While the representation of GMOs is objectified in the field of agriculture, objectification for nanotechnology seems to still be lacking, although its possible objectification likely lies in computing and robotics. Our calculation of the rate of similarity of associative words with nanotechnology and GMOs indicated no present, direct link between their social representations. We discuss the possible evolution of the social representation of nanotechnology over time.     

DOES INPUT QUALITY DRIVE MEASURED DIFFERENCES IN FIRM PRODUCTIVITY?*

One explanation for productivity dispersion is that the quality of inputs differs across firms. We add labor market history variables such as experience and firm and industry tenure, as well as general human capital measures such as schooling and sex. Adding these variables decreases the ratio of the 90th to 10th productivity quantiles from 3.27 to 2.68 across eight Danish manufacturing and service industries. We also use the wage bill and worker fixed effects. We find that the wage bill explains as much dispersion as human capital measures.     

TESTING CATCHING‐UP BETWEEN THE DEVELOPING COUNTRIES: “GROWTH RESISTANCE” AND SOMETIMES “GROWTH TRAGEDY”

This paper provides empirical evidence that there is no convergence between the GDP per‐capita of the developing countries since 1950. Relying upon recent econometric methodologies (non‐stationary long‐memory models, wavelet models and time‐varying factor representation models), we show that the transition paths to long‐run growth (the catch‐up dynamics) are very persistent over time and non‐stationary, thereby yielding a variety of potential steady states (conditional convergence). Our findings do not support the idea according to which the developing countries share a common factor (such as technology) that eliminates per‐capita output divergence in the very long run. Instead, we conclude that growth is an idiosyncratic phenomenon that yields different forms of transitional economic performance: growth tragedy (some countries with an initial low level of per‐capita income diverge from the richest ones), growth resistance (with many countries experiencing a low speed of growth convergence), and rapid convergence.     

An evaluation of the efficiency of Québec's school boards using the Data Envelopment Analysis method

In this paper the efficiency of Québec's school boards during a period of severe cutbacks in their finance is examined. Using Data Envelopment Analysis, the average efficiency is found to be relatively high. In spite of this, potential savings could be achieved if school boards were fully efficient. Results were found to depend heavily on school boards’ socio- economic conditions, thus they were subjected to Tobit analysis and the boards’ corrected efficiencies recalculated. It is concluded that inefficiencies cost 800 million dollars of which 200 million dollars come from unfavourable socio-economic conditions.     

Determinants of the income velocity of money in Portugal: 1891–1998

This paper performs a long-run time series analysis of the behaviour of the income velocity of money in Portugal between 1891 and 1998 by assessing the importance of both macroeconomic and institutional factors and looking for particularities in the Portuguese case. We estimate two cointegration vectors for the income velocity of money, macroeconomic variables and institutional variables. It is apparent that one of these vectors reflects the relationship between income velocity and macroeconomic variables, while the other reflects the relationship between income velocity and institutional variables. Moreover, a regression analysis reveals that the usual U-shaped pattern is displayed with a relatively late inflection point located around 1970, which is consistent with the Spanish case. It is further noted that this is a feature of countries with a late economic and institutional development process.