Announcements,financial operations or both? Generalizing central banks’ FX reaction functions

This paper generalizes the reaction functions of central banks’ FX interventions to include oral interventions alongside actual ones. Using Japanese data for the 1991–2004 period, we estimate an ordered-probit model explaining the occurrence of each type of intervention and evaluating the extent to which oral and actual interventions are substitutes or complements. In addition, the effectiveness of interventions is examined using an event-study approach. Our results indicate that the Japanese authorities tended to adopt progressively stronger measures as the exchange rate was found to behave in an increasingly unfavorable way. This suggests that words and deeds were only coordinated (i.e. used in a complementary way) in extreme cases. Overall, interventions are found to be moderately successful in correcting unwanted exchange-rate developments, especially volatility.     

The impact of public goods and services and public R&D on the non-observed economy size,wages inequality and growth

We develop a general equilibrium endogenous growth model in which final goods can be produced either in the Non-Observed Economy (NOE) or in the Official Economy (OE). In particular, by solving transitional dynamics numerically towards the unique and stable steady state, we show that, by affecting the technological-knowledge bias in favour of the OE, productive public goods and services and public policies promoting R&D explain the simultaneous rise in the OE size, the wage premium in favour of OE workers and the economic growth rate. These results are mainly in line with empirical evidence for developed countries, since the 1990s.     

The Interdependence Between Commodity-Price and GDP Cycles: A Frequency-Domain Approach

Atlantic Economic Journal - In this paper, the interdependence between aggregate commodity prices and world gross domestic product (GDP) is studied by performing two empirical exercises with...     

Walkability and the built environment: validation of the Neighborhood Environment Walkability Scale (NEWS) for urban areas in Mexico

The article gives the results of adjusting an abbreviated version of the Neighborhood Environment Walkability Scale to the situation in Mexico. The results were obtained through the application of 156 instruments to individuals selected through a probability sampling in the metropolitan area of Monterrey, in the state of Nuevo León, Mexico. The validation process was done over four stages; in the first stage, the questions were analyzed and the sampling was adjusted. In the second stage, a factor analysis was carried out; as the questions were Likert-scale type, we use principal components with a matrix of polychoric correlations. In the third stage, the ordinal and non-ordinal Cronbach Alpha coefficients were determined, as were the ordinal and non-ordinal McDonald Omega coefficients, showing that the non-ordinal ones tend to underestimate the level of reliability, as they assume that it is a continuous scale when in this case it is not; however, the literature shows that these coefficients have been the most used in the validation of this scale. Finally, the intervals of trust were calculated with the bootstrap method, with the goal of incorporating the sensitivity that the coefficients could imply in aspects such as the number of questions, intercorrelations between the questions, and the size of the sample. The results show that the ordinal Alpha and Omega coefficients for the three factors, as well as for the entire scale, will have robust values 95% of the time that the questionnaire is used.     

Optimal allocation of land to transportation in a non-optimal urban structure

This paper deals with the optimal allocation of land to competing uses, residential and transportation, in a built-up urban structure. The land to be allocated is being produced by an optimal demolition activity of the standing housing stock. The population removed has to be housed on the allocated residential land. Hoyt's sector theory is supported.