Coffee, money and inflation in Colombia

The purpose of this paper is to analyse the relationship between coffee, money, inflation and international competitiveness in Colombia. The basic hypothesis being investigated is that higher (lower) prices of coffee will tend to result, through the accumulation of international reserves, in higher (lower) inflation. In turn, this higher inflation will generate, for a given rate of devaluation of the nominal exchange rate, a reduction of the real exchange rate, with the consequent loss of competitiveness in the non-coffee tradable goods sector. A ‘Dutch-disease’ type of model is developed to discuss analytically the relationship between coffee prices, money creation and competitiveness in the short and long run. Empirical results for 1952–1980 are presented. These results support the hypothesis that there has been a positive relationship between the price of coffee, money creation and inflation in Colombia.     

Insurance intermediation — Theoretical analysis and practical issues in the european market

This paper studies intermediation between consumers and providers of insurance. Different types of intermediaries are distinguished and investigated in the light of recent market dynamics in Germany and elsewhere in Europe, in particular concentration and the trend towards one-stop finance. Intermediaries’, the insurance providers’ and the consumers’ strategic options are evaluated with a focus on the incentive problems caused by an intermediaries double principal-agent relationship with insurance providers and consumers. Criteria for an intermediary’s independence, which is often aggressively advertised without transparent justification, are developed. It is argued that performance and stability of the market could be improved by well-specified levels of independence in insurance intermediation which are to be verified by regulation authorities and / or private rating agencies.     

The effect of pre-primary education on primary school performance

The theoretical case for universal pre-primary education is strong. However, the empirical foundation is less so. In this paper, we contribute to the empirical case by investigating the effect of a large expansion of universal pre-primary education on subsequent primary school performance in Argentina. We estimate that one year of pre-primary school increases average third grade test scores by 8% of a mean or by 23% of the standard deviation of the distribution of test scores. We also find that pre-primary school attendance positively affects student's self-control in the third grade as measured by behaviors such as attention, effort, class participation, and discipline.     

Why has unemployment risen in the New South Africa?1

We document the rise in unemployment in South Africa since the transition in 1994. We describe how changes in labour supply interacted with stagnant labour demand to produce unemployment rates that peaked between 2001 and 2003. Meanwhile, compositional changes in employment at the sectoral level widened the gap between the skill‐level of the employed and the unemployed. Using nationally representative panel data, we show that stable unemployment rates mask high individual‐level transition rates in labour market status. Our analysis highlights several key constraints to addressing unemployment in South Africa. We conclude that unemployment is near equilibrium levels and is unlikely to self‐correct without policy intervention.     

Die Risikoübernahme von Versicherungsunternehmen: Eine empirische Analyse für Deutschland und Großbritannien

In this paper we analyze the risk resulting from an insurer’s investment policy. For this a hypothetical asset return rate is defined, based on which the German and British insurance market is analyzed. The study design allows an investigation of the investment risk in different countries or for different lines of business. The aim of the analysis is to detect general market trends in the investment policy and an analysis of effects of important changes over time on the investment risk of insurers. The questions analyzed in this paper are also of particular relevance beyond the background of current reform proposal for insurance regulation in Europe in the field of risk management and capital adequacy (Solvency II).     

What moves option‐implied bond market expectations?

This article examines the impact of macroeconomic news announcements on bond market expectations, as measured by option‐implied probability distributions of future bond returns. The results indicate that expected bond market volatilities increase in response to higher‐than‐expected inflation and unemployment announcements. Furthermore, the asymmetries in bond market expectations are found to be affected mostly by surprises in inflation and economic production figures. In particular, it is found that higher‐than‐expected inflation announcements cause optionimplied bond return distributions to become more negatively skewed or less positively skewed, implying a shift in market participants' perceptions toward future increases in interest rates. Finally, the results indicate that market expectations of future extreme movements in bond prices are virtually unaffected by macroeconomic news releases. Some evidence is found, however, that suggests that after extreme surprises in inflation announcements market participants attach higher probabilities for extreme movements in bond prices. © 2005 Wiley Periodicals, Inc. Jrl Fut Mark 25:817–843, 2005