Government debt dynamics and the global financial crisis: Has anything changed in the EA12?

This paper seeks to shed light on possible changes in the government debt dynamics for the first 12 euro area countries. Structural breaks are present around the global financial crisis for most countries, but not for Germany and France, the two core countries in the euro area. The properties of the government debt dynamics differ markedly across the countries receiving bailouts.     

A Hausman–Taylor instrumental variable approach to the penalized estimation of quantile panel models

This paper proposes an _?1${?}_1$ penalized quantile regression estimator which adapts the Hausman–Taylor instrumental variable approach in order to address the bias resulting from the shrinkage of the individual effects.     

Why does monetary policy respond to the real exchange rate in small open economies? A Bayesian perspective

To estimate how monetary policy works in small open economies, we build a dynamic stochastic general equilibrium model that incorporates the basic features of these economies. We conclude that the monetary policy in a group of small open economies (including Australia, Chile, Colombia, Peru, and New Zealand) is rather similar to that observed in closed economies. Our results also indicate, however, that there are strong differences due to the shocks from the international financial markets (mainly risk premium shocks). These differences explain most of the variability of the real exchange rate, which has important reallocation effects in the short run. Our results are consistent with an old idea from the Mundell–Fleming model: namely, a real depreciation to confront a risk premium shock is expansive or procyclical, in contradiction to the predictions of the balance sheet effect, the J curve effect, and the introduction of working capital into RBC models. In line with this last result, we have strong evidence that only in one of the five countries analyzed in this study does not intervene the real exchange rate, the case of New Zealand.     

Estimation of Area Elasticities from a Standard Profit Function

This article demonstrates that both crop area and output elasticities can be calculated from a profit function. A Chambers/Just profit function (which includes land allocations as quasi-fixed factors) is used to derive shadow price equations for each crop area allocation. Jointly solving these shadow price equations for crop area makes it possible to calculate individual crop area elasticities. A profit function is specified to represent agricultural producers in the state of Iowa. Shadow price equations are jointly estimated with output supply and input demand equations. From these estimated equations, we derive the individual crop area response and output response to a change in prices.     

Income inequality in central Spain, 1690–1800

This paper studies the evolution of income inequality in central Spain during the late seventeenth and eighteenth centuries, taking as case study the province of Guadalajara. The first part of the paper presents the sources and the dataset that was created to estimate income inequality using grain tithes. The second section shows that through the period grain represented the lion share of total income and therefore that it can be used as a reliable proxy. The following part of the paper introduces an analysis of income inequality in the province during the period 1690–1800 and concludes that inequality decreased during the last third of the eighteenth century. Finally the paper addresses this unexpected result and concludes that it was consequence of the success of the land reform carried out by the central government in the late 1760s. The reform was a success in Guadalajara, thanks to the characteristics of its population and the lack of bargaining power of pressure groups.     

When Is a Treasury Security On‐the‐Run?

The literature contains two conflicting definitions of the on‐the‐run period for Treasury securities. We address the conflict by empirically examining the implications of the two definitions. We conclude that it is important that researchers clearly understand the implications of each definition. Our results suggest that on‐the‐run activity spans different auction calendar time in T‐notes and T‐bills.     

Measuring the incentives to learn in Colombia using new quantile regression approaches

This paper employs newly developed quantile regression techniques to investigate a policy that could differentially affect students' performance. The Colombian vouchers were assigned using lotteries, and were renewable as long as the students maintained satisfactory academic progress. This second aspect of the program may provide incentives for low attainment students to work harder. The evidence supports the hypothesis that incentives could account for the impact of the vouchers, including lower repetition rate. The effect of the vouchers is largest in the lower tail of the educational attainment distribution, a possibility that was conjectured by others, but has not yet been confirmed empirically. The evidence suggests that the incentive effect of the program increases weak students' test scores by at least 0.1 standard deviations, roughly the score gain associated to a half year of school learning.     

Is real GDP per capita a stationary process? Smooth transitions,nonlinear trends and unit root testing

The aim of this article is to provide additional evidence about the order of integration of constant price GDP per capita in a selection of countries. It does so by taking into account the possibility of non-linear deterministic trends and of asymmetric adjustment towards equilibrium. We find evidence of a global stationary ESTAR process around a nonlinear deterministic trend in almost half of the selected countries. These results show that nonlinearities affect real GDP series. By neglecting them, one can draw misleading conclusions from unit root tests. Specifically, the article questions the so-called stylised fact of a near unit root which has so influenced macroeconomic thought over the past two decades.     

An options based bioeconomic model for biological and chemical control of invasive species

The management of non-native invasive species is a complex but crucial task given the potential for economic and environmental damages. For many invasions the development of socially optimal control strategies requires more than is offered by the single-species, single-control models that have dominated this area of research. We develop a general stochastic optimal control framework that accommodates multiple interacting species while accounting for uncertainty in the temporal population dynamics. This extension to the current line of bioeconomic control models allows for the design of optimal integrated pest management strategies that utilize both chemical and biological controls in an environment of uncertainty and irreversibility. We demonstrate the benefits of combining chemical and biological controls in long term management strategies through a case study of the hemlock wooly adelgid (Adelges tsugae) infestation in the eastern United States. In this application we find that the introduction of natural predators is usually sufficient to manage the infestation, though chemical insecticides can play an important role when detection of the infestation is delayed or when the biological control agent does not sufficiently increase mortality of the invasive species.