The determinants of international investment and attention allocation: Using internet search query data

This paper explores the joint determination of home bias and attention allocation. We overcome the typical challenge associated with evaluating attention allocation theories by using a new internet search query dataset to measure how much information investors decide to process. Employing an instrumental variables approach, we find empirical evidence of a two-way causality between home bias and attention. Our estimates suggest that if all countries were to receive the same level of attention as the U.S., then the average home bias by U.S. investors would fall from 85.2% to 57.3%.     

Are central banks' projections meaningful?

Central banks' projections – i.e. forecasts conditional on a given interest rate path – are often criticized on the grounds that their assumptions are inconsistent with the existence of a unique equilibrium in many forward-looking models. The present paper describes three alternative approaches to constructing projections that are not subject to the above criticism, using the New Keynesian model as a reference framework. The three approaches are shown to generate different projections for inflation and output, even though they imply an identical path for the interest rate. The latter result calls into question the meaning and usefulness of such projections.     

Panel‐data Estimates of the Production Function and the Revenue Function: What Difference Does It Make?*

The lack of individual firm information on output prices is a major problem in the econometrics of production. In particular, it may be expected to account for a significant share of the large discrepancies found between the cross‐sectional and time‐series estimates of capital and scale elasticities. However, taking advantage of two panel‐data samples for which we had such information, we find that estimating the revenue function (using a nominal output measure) or the production function proper (using a real output measure) makes very little difference for our results. The biases due to other sources of specification errors are probably more important.     

Wages and productivity: the role of labour market institutions in OECD countries

In the context of a monetary union, to keep a territorial equilibrium in terms of economic activity and employment, the relationship between real wages and productivity is crucial. In this paper, empirical evidence about the response of wages to productivity is obtained for 20 OECD countries and the role of labour market institutions to explain differences in this response is analysed.     

Mean absolute percentage error and bias in economic forecasting

This article develops a simple theoretical framework to show how forecasters may bias downward point predictions under the assumption that the asymmetric loss function is directly related to the (Mean) Absolute Percentage Error (M)APE.     

Loss of water availability and stream biodiversity under land abandonment and climate change in a Mediterranean catchment (Olzinelles,NE Spain)

In the north rim of the Mediterranean region, where forest cover is increasing as a result of land abandonment and temperatures are rising as a result of climate change, there is increasing interest for the effects of such changes on the runoff of water courses. This is a paramount issue for the conservation of many freshwater habitats and species. In this work we studied the effects of both an increase in forest cover after depopulation and land abandonment and an increase in temperature on the runoff of a Mediterranean catchment and on the aquatic and semi-aquatic fauna species of the stream (Olzinelles valley, NE Spain). Although in our simulation no decreasing trend in runoff is detected, the monthly runoff-rainfall ratio is now 15% lower than 30 years ago, a fact that may be attributed to a drier period rather than to the small afforestation experienced by the catchment in the last decades. Other factors such as increasing temperatures, changing rainfall patterns and increasing canopy cover are discussed. The observed decrease in the water flow has caused the disappearance of white-clawed crayfish (Austropotamobius pallipes), Mediterranean barbel (Barbus meridionalis), chub (Squalius cephalus), European eel (Anguilla anguilla), and southern water vole (Arvicola sapidus). Our results suggest that in a progressively warmer climate, and especially after land abandonment processes, management of Mediterranean mountain areas should be oriented towards an appropriate distribution of agrarian and forest land-covers in terms of water availability. Down to the stream scale, the pools that keep water throughout the year should be conserved and extended to enhance its potential to maintain aquatic and semi-aquatic species populations.     

Working hours in the European periphery: The length of the working day in Spain, 1885-1920

This paper studies the decline of the working day in Spain from 1885 to 1920. The decline was more continuous than previously thought. Differences in hours reinforce wage differentials, showing labor markets were not well integrated. Cross-sectional and time-series analysis suggests that hour reductions reflect a labor supply rather than a labor demand effect. Given the comparatively slow growth of real wages in Spain from 1870 to 1920, the Spanish case shows that international convergence in hours of work must have been stronger than convergence in wages.