Co-Integration and Error Correction Estimation to Forecast Tourism in El Salvador

Using co-integration and error correction models, the objective of this study was to systematically analyze the factors affecting the international tourism demand for El Salvador. The results indicate that the degree of responsiveness of tourist arrivals to El Salvador due to a change in income is elastic and quite differs from country to country. Residents from Honduras appeared to be less responsive to prices than residents from the other origin countries. The dynamic specification of error correction models further confirms the majority of the results obtained in the co-integration relationships. The findings are useful for private developers and public tourism planners in El Salvador. Marketing of specific tourism attributes could enable El Salvador to gain comparative advantage over its competitors.     

Virtue and Commerce in Domingo de Soto’s Thought: Commercial Practices, Character, and the Common Good

This paper draws from the work of sixteenth century theologian, philosopher, and ethicist Domingo de Soto and considers his virtue-based approach to the ethical evaluation of commerce within an Aristotelian–Thomistic framework for the articulation of business and the common good. Particular attention is given to the fundamental emphasis placed by Soto in distinguishing between commerce as an activity and the specific conduct of persons engaging in commercial activity. The distinction between the material and the formal parts of the common good is then employed to shed light on the way Soto articulates commercial practices, virtuous character, and the common good. It is concluded that Soto’s major contribution for business ethics is clarifying that the key element for the ethical evaluation of commerce is the embodiment of virtuous personal conduct in the exercise of commercial activity. In this framework, the fulfillment of commerce’s potential to contribute to the common good is thus fundamentally interconnected with putting virtues into practice.     

Family,life cycle and consumption of services: the Spanish case

This article presents an analysis of service consumption patterns in Spanish homes, based on different stages in the life cycle of a family, using cross-section data from the Encuesta Continua de Presupuestos Familiares (Ongoing Survey of Family Budgets). The study's main objective consists of establishing a taxonomy of services consumed by the home by estimating income elasticity. The results obtained classify services as inferior, necessary and luxury and also point the public sector in the direction of some economic policy measures involving a more balanced distribution of income.     

Influence of tourist sector structure on motivations of heritage tourists

Cultural tourism has traditionally been approached in terms of its appeal to visitors wishing to find out about or get involved in places or to extend their education or to enjoy historical buildings and heritage managed for tourism. This is tourism that has most encouraged activities to preserve the environment and historical/artistic heritage, getting away from mass tourist models, destination impact and seasonality. The aim of this study is to develop a model to identify the elements that help modify the cultural tourist's motivations: the structure of the tourism industry (enterprise infrastructure factors, city infrastructure factors, tourist mobility and tourist resources) and value for money. The use of partial least square method allows us to confirm the proposed correlations and to validate a model.     

Portfolio selection with commodities under conditional copulas and skew preferences

This article investigates the portfolio selection problem of an investor with three-moment preferences taking positions in commodity futures. To model the asset returns, we propose a conditional asymmetric t copula with skewed and fat-tailed marginal distributions, such that we can capture the impact on optimal portfolios of time-varying moments, state-dependent correlations, and tail and asymmetric dependence. In the empirical application with oil, gold and equity data from 1990 to 2010, the conditional t copulas portfolios achieve better performance than those based on more conventional strategies. The specification of higher moments in the marginal distributions and the type of tail dependence in the copula has significant implications for the out-of-sample portfolio performance.     

Durable goods,financial frictions,and business cycles in emerging economies

Business cycles in emerging economies display very volatile consumption and strongly countercyclical trade balance. We show that aggregate consumption in these economies is not more volatile than output once durables are accounted for. Then, we present and estimate a real business cycles model for a small open economy that accounts for this empirical observation. Our results show that the role of permanent shocks to aggregate productivity in explaining cyclical fluctuations in emerging economies is considerably lower than previously documented. Moreover, we find that financial frictions are crucial to explain some key business cycle properties of these economies.     

Marktwirtschaftliche Energiewende: Ein Wettbewerbsrahmen für die Stromversorgung mit alternativen Technologien

If the German energy transition is to succeed, environmental soundness should not be the only criterion on the agenda with respect to the restructuring of the energy system. It is rather the security of electricity supply and likewise the social sustainability during the transformation process that has to be ensured. The primary question is how to fulfill this challenge in the light of the legal obligation of a complete nuclear power phase-out in the most cost-effective way. The looming avalanche of costs triggered by record-breaking highs of the expanding solar power systems, promoted under the German Renewable Energy Sources Act (EEG), should have made it clear that cost efficiency has only played a minor role so far. According to this study, (real) additional costs for all solar power systems, which had been installed between 2000 and the end of 2011 in Germany, sum up to about 100 billion Euros (prices as of 2011). Since these resources are withdrawn from other societal uses, it is essential that costs for the energy transition in general and in particular the consumers’ costs due to an increased share in renewable energies have to be minimized. For this reason, a new, more cost-efficient and market-oriented promotion/funding system is needed to replace the current system based on the EEG. As suggested by the Monopoly Commission (Monopolkommission 2011), the German Council of Economic Experts (SVR 2011) and recently by acatech, Germany’s National Academy of Science and Engineering (acatech 2012), a market-based promotion system with quantity control in the form of quotas for “green” energy would be a more efficient system. If from 2013 onwards, the future expansion of renewable energies would be fostered by a national quota-based system instead of the EEG, the expansion could be more cost-effective, according to calculations of this study. If, for example, the future price for green electricity certificates exclusively accelerated the expansion of on-shore wind power, the overall subsidies for those wind power capacities that may be installed between 2013 and 2020 merely amount to EUR 6.8 billion (current prices) instead of subsidies in the amount of nearly 58.8 billion Euro (current prices) in the case of further sticking to the EEG. This alone should give sufficient reason to replace the EEG as quickly as possible by a market-based support system such as the quota system.     

Securitization and financial solvency: empirical evidence from Portugal

This paper analyses the effect of securitization issues on the solvency of Portuguese financial institutions. For this purpose, we use an unbalanced panel model estimated using GMM methods and find that securitization has a slightly positive impact on the soundness of the issuing entity. We study 35 financial entities and 60 traditional securitizations issued by 9 originators between 2001 and 2013. The analysis reveals that the financial entities’ soundness improved slightly, showing that securitization enhanced the quality of the originators’ portfolios and increased the regulatory capital requirements. We also found that efficiency and profitability improve the risk-adjusted ROAA and that efficiency increases regulatory capital requirements. The robustness analysis confirms the positive effect of securitization on solvency, where both credit quality and liquidity are shown to be significant variables.     

The determinants of cognitive and non-cognitive educational outcomes: empirical evidence in Spain using a Bayesian approach

This article aims to extend the literature about the role played by socio-economic and family background in educational outcomes by comparing the determinants of two different dimensions of educational output: academic achievement and non-cognitive traits. To do this, we explore the information provided by a self-report survey developed specifically for the purpose of this research. This will provide us with an innovative measure of non-cognitive performance based on particular personal traits, such as responsibility, effort, motivation and critical capacity, as well as a common measure of cognitive proficiency. We use a Bayesian approach to estimate the potential influence of multiple individual and family variables on both dimensions of educational output. From our results, we find that, despite some similarities, there are several important divergences with regard to some socio-economic variables that have been traditionally considered to be the most influential determinants of academic achievement which do not appear to have a significant impact on non-cognitive outcomes.     

Why progressive redistribution can hurt the poor

Recent macroeconomic research discusses credit market imperfections as a key channel through which inequality retards growth: With convex technologies, progressive transfers increase aggregate output because marginal returns become more equalized across investment opportunities. We argue that this reasoning may not hold in general equilibrium. Since the investment functions are concave in wealth, reducing inequality increases capital demand and the interest rate. Hence, through the impact on capital costs, shifting wealth from the rich to the middle class depletes the poorest investors' access to credit. But because the poor face the highest marginal returns, the net effect on output may be negative. We find, however, that redistributing towards the bottom-end of the distribution has a clear positive impact. Finally, we discuss the implications of our theoretical findings for future empirical research.