Technological knowledge as an essential facility

The economics of regulation has articulated the notions of essential facility and mandated interconnection. Their application to the governance of technological knowledge can be fruitful especially when implemented by the adoption of a compensatory liability rule and the parallel reduction in the exclusivity of patents. Because knowledge is at the same time an output and an input in the production of new knowledge, exclusivity, traditionally associated to patents, is the cause of actual knowledge rationing with major drawbacks in terms of both static and dynamic efficiency. This institutional innovation can improve the governance of technological knowledge and increase both its rates of dissemination and generation.

Italian households’ debt: the participation to the debt market and the size of the loan

This paper analyses Italian households’ participation to the debt market, separating the probability of demanding a loan from the probability of being rationed by lenders; on the supply side of the market specific attention is paid to enforcement costs of the loan contract when customers default. A new result is that the age of the household head acts essentially as a demand factor, rather than a variable influencing the lender’s choice. Both current and future households’ income increase the demand for loans and reduce credit rationing. Self-employed workers are more rationed by lenders. Credit constraints are also linked to the area where the household lives, partly because of different enforcement costs. The final part of the paper analyses the equilibrium quantity of the loan, for households who have a loan and are not constrained. The loan size is positively linked to household net wealth and income profile. An important contribution of this paper is the finding that, not only the participation to the debt market, but also the loan size is negatively affected by enforcement costs.      

Property rights and information flows: a simulation approach

With the growth of the information economy, the proportion of knowledge-intensive goods to total goods is constantly increasing. Lessig (The future of ideas: the fate of the commons in a connected world. Vintage, New York 2001) has argued that IPRs have now become too favourable to existing producers and that their ‘winner-take-all’ characteristics are constraining the creators of tomorrow. In this paper we look at how variations in IPRs regimes might affect the creation and social cost of new knowledge in economic systems. Drawing on a conceptual framework, the Information Space or I-Space to explore how the uncontrollable diffusibility of knowledge relates to its degree of structure, we deploy an agent-based modelling approach to explore the issue of IPRs. We take the ability to control the diffusibility of knowledge as a proxy measure for an ability to establish property rights in such knowledge. Second, we take the rate of obsolescence of knowledge as a proxy measure for the degree of turbulence induced by different regimes of technical change. Then we simulate the quantity and cost to society of new knowledge under different property right regimes.

Commodity price cycles and heterogeneous speculators: a STAR–GARCH model

We propose an empirical commodity market model with heterogeneous speculators. While the power of trend-extrapolating chartists is constant over time, the symmetric impact of stabilizing fundamentalists adjusts endogenously according to market circumstances: Using monthly data for various commodities such as cotton, sugar or zinc, our STAR–GARCH model indicates that their influence positively depends on the distance between the commodity price and its long-run equilibrium value. Fundamentalists seem to become more and more convinced that mean reversion will set in as the mispricing enlarges. Commodity price cycles may thus emerge due to the nonlinear interplay between different trader types. The paper represents the authors’ personal opinion and does not necessarily reflect the views of the Deutsche Bundesbank.     

Component efficient solutions in line-graph games with applications

Recently, applications of cooperative game theory to economic allocation problems have gained popularity. We investigate a class of cooperative games that generalizes some economic applications with a similar structure. These are the so-called line-graph games being cooperative TU-games in which the players are linearly ordered. Examples of situations that can be modeled like this are sequencing situations and water distribution problems. We define four properties with respect to deleting edges that each selects a unique component efficient solution on the class of line-graph games. We interpret these solutions and properties in terms of dividend distributions, and apply them to economic situations. This research has been done while the third author was visiting Tinbergen Institute at the Free University, Amsterdam. The research is part of the Research Programme “Strategic and Cooperative Decision Making” at the Department of Econometrics. Financial support from the Netherlands Organization for Scientific Research (NWO) in the framework of the Russian-Dutch programme for scientific cooperation, is gratefully acknowledged. The third author also appreciates partial financial support from the Russian Leading Scientific Schools Fund (grant 80.2003.6) and Russian Humanitarian Scientific Fund (grant 02-02-00189a). We thank three anonymous referees for their valuable comments.     

Charitable Donations: Evidence of Demand for Environmental Protection?

Using data from the 2001 Giving and Volunteering in the United States survey, I examine household charitable donations to environmental organizations. Household income has a positive impact on environmental giving. While the tax price affects overall charitable contributions, it does not affect environmental giving. More education, being female, homeownership, and voting are also associated with a greater likelihood of contributing to the environment. African-Americans and Latinos are less likely to contribute to the environment, although conditional on giving, Latinos give more. Retired persons and households with children are less likely to contribute to the environment. Larger households give less to the environment. Households from the Northeast are the most likely to make environmental contributions while households from the South are the least likely.

Value at Risk and Economic Growth

The improvement of data statistics as well as the econometrician methods have facilitated the introduction the new variables and factors I the economic growth analysis. In this sense, real variables have mainly been considered in the economic growth studies, but not financial or risk management aspects. In this sense, it is interesting to analyze the relationship between economic growth and value at risk and the feed-back process. The goal of the paper is to analyze the relationship between economic growth and risk management and the feed-back process. We will consider economic variables, including economic growth, rule of law, human capital, fiscal policy and monetary policy, among others, in our analysis. We will analyze the theoretical relationships between these variables and risk and the effects of risk on economic growth. We will also develop an empirical analysis considering the case of 15 European Union countries.

Constitutional coordination in unstable party systems: the Brazilian constitution of 1988

Constitutional assemblies are a common feature of many democratic transitions. However, the goal of coordinating constitutional choice would seem nearly impossible when assemblies are comprised of highly fragmented and volatile political parties. Building on Knight’s bargaining model, this article argues that the main challenge to coordination in unstable party systems is the procedural disequilibrium that results from incomplete information over breakdown payoffs. The likelihood of compromise in such circumstances is a function of the ideologies that frame constitutional choice and inform coalition-building. Thus, unstable party systems are not chaotic, although they may be deeply conflict-laden. These issues are illustrated empirically via the Brazilian Constitution of 1988, which demonstrates the possibilities for a stable constitutional order emerging from a fragmented and volatile party system.

New evidence on the convergence of international income from a group of 29 countries

This paper updates and extends the time-series evidence on the convergence of international incomes using a set of 29 countries over the period 1900–2001. Time-series tests for stochastic convergence are supplemented with tests which provide evidence on the notion of “β-convergence” predicted by the Solow model. The evidence indicates that the relative income series of 21 countries are consistent with stochastic convergence, and that β-convergence has occurred in at least 16 countries at some point during the twentieth century. Further examination of the properties of the β-convergence test provides anecdotal evidence of conditional convergence in three additional countries for which the convergence hypothesis was initially rejected. Consideration of convergence clubs strengthens the evidence in favor of convergence. Analysis of the cross-country dispersion of incomes over time also suggests that convergence has occurred over the 1900–2001 period, particularly within certain clubs, with structural breaks associated with World War II in many countries causing a break in the convergence process.