International Financial Liberalization, Capital Flows, and Exchange Rate Regimes: An Introduction

This introduction to a special edition of Review of International Economics summarizes a collection of articles that originated in a conference on “Is Globalization of Capital Markets a Boost or a Hindrance to Development?” that was sponsored by the Program in Economic Policy Management (PEPM) at Columbia University during 16–17 April 1999.     

An analysis of the effect of pre-incentives and post-incentives based on draws on response to web surveys

Most analyses of the effect of incentives on response rates have attempted to extrapolate to the Internet the already existing broad knowledge base of methodologies for personal surveys by telephone and post. However, such knowledge about existing methods is not directly applicable to the Internet-based interviews. This study therefore examines the manner in which different combinations of incentives can affect response to a survey over the Internet. With such a purpose incentives have been chosen based on draws that has been administered under the pre-incentives philosophy (giving the possibility to participate in a draw, independently that the questionnaire was stuffed or not) or post-incentives (giving the possibility to participate in a draw only those that stuffed the questionnaire). A surprising result is that the joint use of pre-incentives and post-incentives slightly improves response rates, although it also causes rates to be considerably lower than when these incentives are used separately.     

Lending relationships in the interbank market

We use a unique dataset to show that relationships are an important determinant of banks' ability to access interbank market liquidity. More precisely, we find that: (i) banks with a larger reserve imbalance are more likely to borrow funds from banks with whom they have a relationship, and to pay a lower interest rate than otherwise; (ii) smaller banks and banks with more non-performing loans tend to have limited access to international markets, and rely more on relationships; (iii) relationships are established between banks with less correlated liquidity shocks. These results suggest that relationships allow banks to insure liquidity risk in the presence of market frictions such as transaction and information costs. Our analysis explicitly controls for the endogeneity of bank relationships.     

Road traffic injuries in Colombia

Road traffic injuries are a leading public health problem in Colombia. Pedestrians are the most vulnerable road users, especially in the main urban centers of Bogotá, Medellin and Cali. Data analyzed in this report include official statistics from the National Police and the National Institute of Legal Medicine and Forensic Sciences for 1996-2000, and results of a study conducted at the National University of Colombia in 2000. Methods from the Highway Capacity Manual were used for determining physical and technical variables, and a Geographical Information System tool was used for the location and spatial analysis of the road traffic crashes. Pedestrians accounted for close to 32% of injuries and 40% of the deaths from road traffic crashes. The problem of road traffic crashes existed predominately in urban areas. In the main urban centers, pedestrians constituted nearly 68% of road traffic crash victims. The high level of risky road use behaviors demonstrated by pedestrians and drivers, and inadequate infrastructure for safe mobility of pedestrians in some sections of the road network were the main contributing factors. Major improvements were achieved in Bogotá following enhancements to the municipal transport system and other policies introduced since 1995. In conclusion, policies and programs for improving road safety, in particular pedestrian safety, and strengthening urban planning are top priority.     

Is the Border Effect an Artefact of Geographical Aggregation?

The existence of a large border effect is considered as one of the main puzzles of international macroeconomics. We show that the border effect is, to a large extent, an artefact of geographical concentration. To do so, we combine international flows with intra‐national flows data characterised by a high geographical grid. At this fine grid, intra‐national flows are highly localised and dropping sharply with distance. The use of a small geographical unit of reference to measure intra‐national bilateral trade flows allows to estimating correctly the negative impact of distance on shipments. When we use sector disaggregated export flows of 50 Spanish provinces in years 2000 and 2005 split into inter‐provincial and inter‐national flows, we find that the border effect is reduced substantially and even becomes statistically not different from zero in some estimations.     

Efficiency vs. market power in retailing: Analysis of supermarket chains

The objective of this article is to analyze the relationship between market structure and performance in the Spanish retail sector. As a new contribution, this paper considers a direct measurement of efficiency, which allows us to test different hypotheses explaining profitability in the generic framework of the theories of market power vs. efficiency. The results of the empirical application on a sample of 147 supermarket chains operating in Spain find that the competitive situation that best characterizes this sector is that of the modified efficient structure. Although efficiency does contribute positively to explaining differences in profitability, market share, which would capture the effect of market power, also has a positive effect.     

The development of a destructive sampling method designed for high quality production processes (DSM-HQ)

Customers are requiring producers to conduct destructive testing using traditional sampling techniques as monitoring tools. These techniques are not well suited for situations where the quality is high and tests are destructive since a high number of units need to be tested (and in turn destroyed) in order to guarantee good quality. Furthermore, traditional sampling methods are not specifically designed to monitor a high-quality production process where destructive tests are required and therefore make costly and inefficient monitoring tools. A sampling method is developed to monitor quality in high-quality processes where destructive testing is required. This method is based on a cost function, which balances the costs of sampling versus the costs of finding a defect on the field. It assumes a Poisson process defect pattern and uses an empirical Bayes updating scheme.     

Differences in the economic performance of hotel-based and residential tourist destinations measured by their retail activity. Evidence from Spain

This paper compares the economic performance of holiday and residential tourism destinations in Spain, as measured by the level of retail activity, from a quantitative perspective. Differences between destinations are explored. A positive association between the economic development of destinations and their retail index was expected. However, no significant differences were found between residential/second-home tourism and holiday/leisure tourism destinations. The results obtained contradict the conventional assumptions that holiday destinations perform better economically than residential ones due to a higher level of tourist spending of people accommodated in hotels.     

USING A CGE MODEL TO IDENTIFY THE POLICY TRADE-OFF BETWEEN UNEMPLOYMENT AND INFLATION. THE EFFICIENT PHILLIPS CURVE

This paper provides a new reading of a classical economic relation: the short-run Phillips curve. Our point is that, when dealing with inflation and unemployment, policy-making can be understood as a multicriteria decision-making problem. Hence, we use so-called multiobjective programming in connection with a computable general equilibrium (CGE) model to determine the combinations of policy instruments that provide efficient combinations of inflation and unemployment. This approach results in an alternative version of the Phillips curve labelled as efficient Phillips curve. Our aim is to present an application of CGE models to a new area of research that can be especially useful when addressing policy exercises with real data. We apply our methodological proposal within a particular regional economy, Andalusia, in the south of Spain. This tool can give some keys for policy advice and policy implementation in the fight against unemployment and inflation.     

Generalised shape theory via SV decomposition I

This work finds in terms of zonal polynomials, the non isotropic noncentral elliptical shape distributions via singular value decomposition; it avoids the invariant polynomials and the open problems for their computation. The new shape distributions are easily computable and then the inference procedure is based on exact densities, instead of the published approximations and asymptotic distribution of isotropic models. An application of the technique is illustrated with a classical landmark data of Biology, for this, three Kotz type models are proposed (including Gaussian); then the best one is chosen by using a modified BIC criterion.