A Decentralized Market with Common Values Uncertainty: Non-Steady States

We analyse a market where (i) trade proceeds by random and anonymous pairwise meetings with bargaining; (ii) agents are asymmetrically informed about the value of the traded good; and (iii) no new entrants are allowed once the market is open. We show that information revelation and efficiency never obtain in equilibrium, even as discounting is removed. This holds whether the asymmetry is two-sided or one-sided. In some cases there exist equilibria where a substantial amount goes untraded. This contrasts with the earlier literature, which was based on the steady-state equilibria of a model where agents enter the market every period.     

The role of the exchange rate in Canadian monetary policy: evidence from a TVP-BVAR model

A time-varying parameters Bayesian structural vector autoregression (TVP-BVAR) model with stochastic volatility is employed to characterize the monetary policy stance of the Bank of Canada (BoC) in terms of an interest rate rule linking the policy rate to the output gap, inflation and the exchange rate. Using quarterly bilateral Canadian–US data, we find such an interest rate rule to have little explanatory power for the early part of our sample starting in the mid-1980s, but to become more suitable to explain interest rate dynamics from the mid-1990s onwards. Whereas the exchange rate turns out to be the major determinant of the policy rate in the 1980s, its importance declines throughout the 1990s and 2000s, although it continues to be influential even towards the end of the sample period ending in 2015Q2. We also find interest rate shocks to have become more effective in influencing the macroeconomy over time, indicating that the BoC has continually gained monetary policy credibility. We associate this development with the BoC successively de-emphasizing the role of the exchange rate in informing interest rate decisions, thereby alleviating the potential monetary policy conflict between targeting the exchange rate and maintaining the price stability goal.     

Harnessing rivers of wind: A technology and policy assessment of high altitude wind power in the U.S.

This paper provides an assessment of the commercialization potential for high altitude wind power (HWP). Several technological and policy barriers are identified that may affect the development and deployment of the technology in the US. Technical barriers include electrical transmission from high altitudes and the development of viable methods of energy storage to address intermittency. Non-technical barriers include the lack of a carbon price in the US, which provides an advantage to embedded technologies and widens the ‘valley of death.’ A variety of stakeholders are analyzed in order to understand potential impacts upon the development of HWP. Many fossil fuel producers and utility companies have been leveraging political authority to lobby against a carbon tax, which could be crucial for broad deployment of renewable energy technologies. The combination of technical and non-technical barriers indicates that commercialization of HWP is unlikely in the short term. Commercialization would require major policy shifts at the federal level and advances in S&T. Recommendations are provided to increase federal investment in applied research through additional funding for the Advanced Research Projects Agency—Energy (ARPA-E). It is also recommended that ARPA-E create a matching fund to assist in the commercialization of renewable energy technologies.     

Detecting and modelling nonlinearity in flexible exchange rate time series

The aim of this paper is to examine the appropriateness of nonlinear time series analysis as a framework in which to model the dynamics of exchange rates. This aim has been motivated by the questioning of the power of classical unit root tests, the accumulating amount of evidence which suggests that exchange rates follow some kind of nonlinear process, and the fact that standard asset pricing theories do not explain well the empirical observations of exchange rate movements. The paper has three major objectives. First, to test for the presence of unit roots in nominal exchange rate time series. Second, for those nominal exchange rate time series found to be stationary, to test for nonlinearity using both tests derived without a specific nonlinear alternative in mind and tests against a specific nonlinear model. Finally, we motivate the types of nonlinearity for which we test by examining a recently proposed nonlinear model of exchange rate dynamics.The authors are from the School of Finance and Economics, University of Technology, Sydney, Australia. We are extremely grateful to Alex Beliak and Alexander Khomin for their research assistance and help in developing our computer programs.     

Ranking sectors using fuzzy output multipliers

Using input–output analysis to model the effects of changes in industry final demands is fraught with problems, many of which relate to the fundamental limitations of the concomitant linear framework. A further issue concerns the accuracy of the results, a consequence of the uncertainty surrounding the values of multipliers. Such uncertainty can create problems where the values of output multipliers are used to inform resource directions. This paper utilizes (and develops) a fuzzy input–output model and investigates the ranking of industries based on fuzzy output multipliers. The non-triviality of the fuzzy model is exposited in a general problem, where imprecision is defined by a proportional level of imprecision (fuzziness) in the technical coefficients. Through a nascent method for ranking fuzzy numbers, comparisons are made between the fuzzy and more traditional (non-fuzzy) analysis.     

Tarifications incitatrices polyvalentes et linéaires pour risques monotones en moyenne

Decisions in Economics and Finance - L'objectif visé par la présente étude consiste en l'apport d'une réponse que nous jugeons positive à la question suivante:...     

Pane e Cioccolata: The Impact of Native Attitudes on Return Migration

This paper addresses the link between native attitudes and return migration. We exploit the variation in xenophobia using information on media consumption by migrants in Italy. A widely documented crime provides a quasi‐experimental setting to identify the impact of Italian attitudes on migrants’ settlement intentions. Our results suggest a significant effect of anti‐immigrant attitudes on the intended duration of stay in the host country. The impact is more pronounced for low‐skilled migrants, which has consequences for how migration affects the long‐run convergence between sending and destination countries.     

Optimal Environmental Taxation with Capital Mobility*

Climate policy exemptions for energy‐intensive sectors are often justified with distributional concerns. One concern is that households employed in energy‐intensive sectors might be affected disproportionally because of (international) capital mobility. By assuming that workers cannot move freely between sectors, we can reproduce this concern: uniform climate policy causes more inequality between the sectors when capital is mobile than when it is not. However, we find that affected households can be relieved more effectively with sector‐specific labour taxes than with sector‐specific climate policy. The reason for this finding is that households benefit more directly from sector‐specific labour tax cuts than from climate policy exemptions. Keeping climate policy uniform across sectors has the added benefit of creating incentives for long‐term decarbonisation. In addition, we find that the differential effect of capital mobility depends on the government's degree of inequality aversion – redistribution is more expensive when capital is mobile.     

Cost-utility analysis of life-long prophylaxis with recombinant factor VIIIFc vs recombinant factor VIII for the management of severe hemophilia A in Sweden

Aims: Prophylaxis with recombinant factor VIII (rFVIII) is the standard of care for severe hemophilia A in Sweden. The need for frequent injections with existing rFVIII products may, however, result in poor adherence to prophylaxis, leading to increased bleeding and long-term joint damage. Recombinant FVIIIFc (rFVIIIFc) is an extended half-life fusion protein which can offer prolonged protection and reduced dosing frequency. The objective of this study was to evaluate the cost-utility of prophylaxis with rFVIIIFc in severe hemophilia A from the perspective of the Swedish health system.

Methods: A Markov model was built to estimate lifetime costs and benefits of prophylaxis with rFVIIIFc vs rFVIII products. Clinical outcomes were represented by annualized bleeding rate (ABR) and quality of life via disutility applied to bleeding events and injection frequency. Costs included the cost of FVIII for routine prophylaxis and bleed resolution. The pooled comparator was costed by weighting the cost of individual products by their market share.

Results: In the base case, rFVIIIFc was dominant vs the pooled comparator. Savings of SEK 9.0 million per patient resulted from lower factor consumption for prophylaxis and bleed resolution. Fewer bleeds and reduced injection frequency yielded an estimated 0.59 quality-adjusted life years (QALYs). Results were sensitive to drug dosage and robust to variation in other parameters. Probabilistic sensitivity analysis suggested a greater than 85% probability of rFVIIIFc being cost-effective at a willingness-to-pay threshold of 500,000 SEK/QALY.

Limitations: Due to unavailibilty of patient-level data, treatment benefit was based on a non-adjusted indirect comparison. Dosing and treatment outcomes were assumed to persist over the model duration in the absence of long-term outcome data.

Conclusion: The results suggest that rFVIIIFc may be a cost-effective option for hemophilia A prophylaxis, generating greater quality of life and reduced costs for the Swedish payer compared to more frequently administered rFVIII alternatives.