Mozambique Metical Exchange Rate Dynamics: Evidence of Fractional Co‐Integration in the USA and South African Rates

This paper studies the exchange rate dynamics of the Mozambique metical with respect to the US dollar and the South African rand. However, instead of using standard I(0)/I(1) techniques, we use long memory and fractionally integrated and co‐integrated models. Our results indicate that the two exchange rates are highly persistent, with orders of integration equal to or above 1. They also seem to be co‐integrated, with an order of integration close to albeit above 0 but with an AR coefficient very close to 1. Thus, although the two series seem to be fractionally co‐integrated, shocks in the long‐run relationship between the two variables are persistent and take a long time to disappear.     

A Psychological Reexamination of the Bertrand Paradox

The Bertrand paradox describes a situation in which two competing firms reach an outcome where both price at marginal cost. In laboratory experiments, this equilibrium is not generally observed. Existing empirical works on Bertrand competition have found evidence for boundedly rational models. We find that such models are useful in organizing behavior in early stages of the game, but less so in later stages. We show that a new model, coarse grid Nash equilibrium, based on the assumption that subjects discretize the strategy space, explains the data better.     

Tourist accommodation,consumption and platforms

The expansion of mediated accommodation on peer to peer (P2P) platforms, such as Airbnb, has generated extensive economic impact and structural changes in all the destinations involved. This study proposes an innovative analysis which estimates the economic impact associated with the expenditure of tourists staying in traditional hotel establishments in comparison to the impact of those staying in tourist housing mediated through P2P platforms. This research analyses fieldwork based on 1343 surveys carried out in the city of Granada, one of the main tourist destinations in Spain. Through the application of the input–output methodology we found that tourists staying in tourist housing mediated through P2P platforms generate a greater impact as a consequence of longer average stays and more heterogeneously distributed consumption. Their average expenditure is similar to that of tourists in hotels, but the indirect impact generated is greater. Consequently, we can better comprehend the economic impact associated with these platforms and their real effect. Public planners have to consider this information as part of the regulation and restriction of this activity.     

Competition effects in EU external aid supply tenders funded with the Pre-accession and Neighbourhood instruments

Empirica - This paper investigates empirically the competition effects on procurement costs for Europe Aid funded supply tenders in countries benefiting from the EU Pre-accession (IPA) and...     

Testing prospect theory in airline demand

The article tests for the existence of reference dependence, loss aversion and diminishing sensitivity in airline demand, in the context of price responsiveness amongst low cost, regular and charter airlines. We incorporate the reference-dependent model into a mixed model to control for heterogeneity. The application finds considerable differences between reference and actual prices in decision-making, confirming that reference dependence exists. People react more strongly to price increases than to decreases relative to their reference price supporting the loss aversion phenomenon and that there is diminishing sensitivity for losses only.     

Institutional design and governance of airport regulators: The case of Latin America

This paper offers a cross-country assessment of the governance of airport regulators in Latin America. The analysis links the institutional design of airport regulators, whether in the form of independent regulatory agencies or government departments, to their overall governance. It examines four dimensions of regulatory governance: autonomy, transparency, accountability, and bureaucratic quality. Independent regulatory agencies in the Latin American airport sector seem to provide a better framework for transparency and bureaucratic quality than government departments. It is not conclusively found, however, that independent regulatory agencies contribute to a more autonomous decision-making or to an enhanced accountability of regulators to other branches of government and airport users. Overall, governance indicators of airport regulators in Latin America are well below the threshold that defines good governance.     

The great divergence and the economics of printing†

While China's invention of printing took place several centuries ahead of Europe's, it was in Europe where the more advanced printing technology of movable type took hold and where book production reached far higher levels. This article explores the extent to which China's complex logographic writing system explains these different outcomes. Using an economic analysis, I show how China's preference for block printing technology over movable type can be justified as the rational choice of commercial producers. In addition to this, model simulations also predict that movable type would be used in China under some specific circumstances which closely match the historical record. On the other hand, the use of block printing would not have led to larger printing costs in China, and as such should not be regarded as the reason behind China's modest level of book production when compared to Europe's.     

Globalization, industrialization and urbanization in Pre-World War II Southeast Asia

This article uses new data to analyze the impact on Southeast Asian urbanization of globalization and industrialization in the world economy's core countries between the 1870s and World War II. Dramatic falls in transport costs and free trade, enforced, if necessary, by colonial rule, combined to open vast frontier areas throughout Southeast Asia to global commerce and create a handful of large urban centres. These cities, through linking Southeast Asian primary commodity exporters to world markets, grew predominantly as part of the global economy. Our econometric analysis shows that measures of globalization — in particular industrial production in the world core and international transport costs — are much better predictors of the size of Southeast Asia's main cities than domestic factors such as total population, GDP per capita, land area or government expenditure.     

Regional entrepreneurship capital and firm production

Certain theories suggest that the capacity of a region to generate new firms, called entrepreneurship capital, has positive spillover effects on the production of the firms in that region. Evidence generated with aggregated data at the regional level supports this prediction. This paper argues that, using aggregated data at the regional level, entrepreneurship capital could be correlated with regional production even if entrepreneurship capital has no spillover effects on firm production. This will not be the case when data at the firm level are used. This paper provides evidence from a sample of 11,276 Spanish firms during the 2004–2012 period. Positive spillovers are estimated in between effects models, but such spillovers are only found in technological firms when within effects models have been estimated. Thus, the regional entrepreneurship capital spillovers are unclear when data at the firm level are used. Plausible interpretations and implications are discussed.