THE BIAS OF THE MULTIPLIER MATRIX WHEN SUPPLY AND USE TABLES ARE STOCHASTIC

The literature on stochastic input–output (I–O) analysis has paid considerable attention to the bias in the Leontief inverse. This paper extends previous studies by assuming supply and use tables (SUTs rather than I–O tables or input coefficients matrices) to be stochastic. This is a natural starting point because SUTs have become the basic data sources for I–O applications. In a Monte Carlo simulation experiment, a given SUT is randomized in two different ways and the effects are determined for eight different multiplier matrices. The analysis is carried out for Spain, Italy, the Netherlands, Germany and Finland, using their SUTs for 2006. The findings indicate that, in general, biases are statistically significant but negligibly small. This corroborates earlier findings obtained for stochastic I–O tables.     

The entrepreneurial motivation in academia: a multidimensional construct

In this paper we propose a model to analyse the motivation of academic entrepreneurs that comprises six dimensions: personal, relating to the entrepreneurial opportunity, to scientific knowledge, to the availability of resources, to the incubator organization, and to the social environment. The model is tested based on information from a survey administered to 152 Spanish academic entrepreneurs. Our results show that entrepreneurial opportunity is not part of the entrepreneurial motivation, but is of the utmost importance to academic entrepreneurs. Also, we find the scientific knowledge is the main driver of entrepreneurial activity in the academia.     

Structural VAR and financial networks: A minimum distance approach to spatial modeling

In this paper, I interpret a time series spatial model (T-SAR) as a constrained structural vector autoregressive (SVAR) model. Based on these restrictions, I propose a minimum distance approach to estimate the (row-standardized) network matrix and the overall network influence parameter of the T-SAR from the SVAR estimates. I also develop a Wald-type test to assess the distance between these two models. To implement the methodology, I discuss machine learning methods as one possible identification strategy of SVAR models. Finally, I illustrate the methodology through an application to volatility spillovers across major stock markets using daily realized volatility data for 2004–2018.     

WHY FREE MARKETS SHOULD NOT BE BLAMED FOR THE CURRENT RECESSION

Interventionist thinkers are now claiming intellectual victory, blaming the free‐market system and its ideology for the current economic collapse. We find this thesis untenable, drawing on the Austrian Business Cycle Theory. Instead, we argue that the roots of our present downturn lie in the monetary system, whose institutional structure is far from any free‐market ideal. Moreover, several government policies have contributed to the problems.     

From sending to host societies: immigration in Greece,Ireland and Spain in the 21st century

In a relatively short period of time, new immigration patterns have changed the geography of immigration of the EU15, bringing three old emigration countries, Ireland, Spain and Greece, to the forefront of the new immigration wave. This article studies the analogies and differences of the recent immigration experience of this group of countries, focusing on the demographic characteristics of the immigrants (origin, sex, gender and education), labour market insertion (wages, labour market segregation and quality of matching) and overall economic performance in terms of poverty rates.     

Targeting fertility and female participation through the income tax

We evaluate the effect of a 2003 reform in the Spanish income tax on fertility and the employment of mothers with small children. The reform introduced a tax credit for working mothers with children under the age of three, while also increasing child deductions for all households with children. Theoretically, given the interplay of these two components, the expected effect of the reform is ambiguous on both outcomes. We find that the combined reforms significantly increased both fertility (by almost 5%) and the employment rate of mothers with children under three (by 2%). These effects were more pronounced among less-educated women. In addition, to disentangle the impact of the two reform components, we use an earlier reform that increased child deductions in 1999. We find that the child deductions affect mothers' employment negatively, which implies that the 2003 tax credit would have increased employment even more (up to 5%) in the absence of the change in child deductions.     

Estimation of Asymmetric Stochastic Volatility Models: Application to Daily Average Prices of Energy Products

Energy supply and demand, and as a consequence energy prices, are likely to represent one of the biggest challenges of the 21st century. Commodity markets exhibit increased volatility when there is little or no underutilized supply capability to meet natural fluctuations in demand. In the case of energy markets, the large capital requirements and significant lead times associated with energy production and delivery make them more susceptible to the imbalances in supply capability and demand. Energy price volatility has destructive impact on market agents, and this impact is intensified when the prices exhibit asymmetric volatility. This article pursues two aspects of the issue. First we consider general aspects, especially the asymmetric pattern of volatility of daily returns of different types of energy products. Then, we analyze the behaviour of daily returns by using traditional models of volatility that include AGARCH, TGARCH, EGARCH, and ARSV strategies, as well as a threshold asymmetric autoregressive stochastic volatility (TA-ARSV) model that we propose. The energy products considered in this analysis are probably the most relevant energy products for the economic activity of the nations and the economic relations between countries: Crude Oil (OPEC reference basket and London Brent index), Gasoline, Natural Gas, Butane, and Propane. We use spot prices and the time reference ranges from 1986–1993 to 2009 depending on the product.     

Why Sweden's pension reform was able to be successfully implemented

Governments that do not reform pay-as-you-go (PAYG) pension systems will eventually face a pension crisis. In a democracy, reforms require majority support. The problem is that pension reform requires today's generation to bear the burden to avoid burdening tomorrow's generation. Sweden recently passed pension legislation that specifies a gradual transition from a public defined-benefit plan to a defined contribution plan. Why was Sweden successful in reforming its pension system? We find that a political economy perspective helps to answer this question: there are more winners who would vote in favour of the reform than non-winners who would vote against it. When comparing the net effect (present value of expected benefits minus present value of remaining contributions) of the new and old systems, contributions of the working generation (age < 53) are reduced by more than their expected benefits.     

Whatever works: Uncertainty and technological hybrids in medical innovation

The persistent uncertainty that looms over the search for solutions to health problems offers important conceptual insights for the study of technological change. This paper explores the notion of hybridization, namely the embodiment of multiple competing operational principles within a single medical device, as strategy to deal with the practical shortcomings due to said uncertainty. The history of the development of the hybrid artificial disc affords the elaboration of an alternative view of hybridization and, at the same time, the articulation of a dualism between medical science as area of basic research (e.g. what disease is) and as practical knowledge (e.g. how disease can be tackled).     

Production Technology Estimates and Balanced Growth

Capital‐labour substitution and total factor productivity (TFP) estimates are essential features of many economic models. Such models typically embody a balanced growth path. This often leads researchers to estimate models imposing stringent prior choices on technical change. We demonstrate that estimation of the substitution elasticity and TFP growth can be substantially biased if technical progress is thereby mis‐specified. We obtain analytical and simulation results in the context of a model consistent with balanced and near‐balanced growth (i.e. departures from balanced growth but broadly stable factor shares). Given this evidence, a constant elasticity of substitution production function system is then estimated for the US economy. Results show that the estimated substitution elasticity tends to be significantly lower using a factor‐augmenting specification (well below one). We are also able to reject conventional neutrality forms in favour of general factor augmentation with a non‐negligible capital‐augmenting component. Our work thus provides insights into production and supply‐side estimation in balanced‐growth frameworks.