Career Paths,Unemployment, and the Efficiency of the Labor Market: Should Youth Employment Be Subsidized?

This paper studies the implications of learning‐by‐doing on youth unemployment and market efficiency when workers benefiting from this kind of training experience search (while on the job) for a higher skill job. Firms with low‐skill jobs suffer from a poaching behavior by firms with high‐skill jobs, causing a shortage of low‐skill jobs and excessive youth unemployment. An optimal policy, consisting of taxing the output of high‐skill jobs and subsidizing the output of low‐skill jobs, restores market efficiency and reduces youth unemployment.     

Leadership in Public Good Provision: A Timing Game Perspective

We address in this paper the issue of leadership when two governments provide public goods to their constituencies with cross‐border externalities as both public goods are valued by consumers in both countries. We study a timing game between two different countries: before providing public goods, the two policymakers non‐cooperatively decide their preferred sequence of moves. We establish conditions under which a first‐ or second‐mover advantage emerges for each country, highlighting the role of spillovers and the complementarity or substitutability of public goods. As a result, we are able to prove that there is no leader when, for both countries, public goods are substitutable. When public goods are complements for both countries, each of them may emerge as the leader in the game. Hence a coordination issue arises. We use the notion of risk‐dominance to select the leading government. Finally, in the mixed case, the government for whom public goods are substitutable becomes the leader.     

Consumer Attitudes Toward Shoplifting

This paper reports the findings of a consumer survey on shoplifting conducted during October, 1976 in three shopping centers in Omaha, Nebraska. It explores consumer awareness of shoplifting, attitudes toward shoplifting, and factors affecting attitudes toward shoplifting. It concludes that an educational program to inform and change attitudes would be In the consumer interest.     

Characterising Vulnerability to Poverty in Rural Haiti: A Multilevel Decomposition Approach

This article characterises vulnerability to poverty in Haiti using a unique survey conducted in 2007 in rural areas. In a first step, using two‐level linear random coefficient models of both per capita consumption and per capita income, the article assesses the impact of self‐reported shocks on households' economic well‐being. In a second step, the prediction model is used to calculate various measures of vulnerability to poverty, considering various types of shocks. Empirical findings show that self‐reported (or observable) idiosyncratic shocks, in particular health‐related shocks, have larger impact on vulnerability to poverty than observable covariate shocks. These results are in line with the fact that many households reported idiosyncratic health shocks as being the worst shocks they experienced. On the other hand, unobservable idiosyncratic shocks appear to have generally more influence on households' vulnerability to poverty than unobservable covariate ones. We also show that omitting self‐reported shocks in the analysis leads to an underestimate of households' vulnerability to poverty.     

Rolling Regression Analysis of the Pástor-Stambaugh Model: Evidence from Robust Instrumental Variables

The capital asset pricing model (CAPM), Fama-French (FF), and Pástor-Stambaugh (PS) factor models are examined using a new dynamic rolling regression version of the generalized method of moments (GMM) method. This rolling regression framework not only allows us to investigate phases of the business cycle, but also permits regression estimates to vary through time due to changes in the development and efficiency of the sectors. The principal reasons for using the dynamic GMM with robust instruments is that some of these factors are measured with errors and the disturbances may be non-spherical. The CAPM appears as the most parsimonious model to explain the FF sector returns. Furthermore, the rolling GMM approach is clearly more sensitive to dynamic financial episodes than the ordinary least squares approach. In particular, liquidity has some anticipatory power, as it is able to forecast the 2007–2009 crises with heightened volatility starting in late 2005.     

The Impact of In-Substance Defeasance on Bondholder and Shareholder Wealth

This paper hypothesizes and tests the argument that a defeasance transaction initiates a wealth transfer from stockholders to bondholders. Our empirical tests provide compelling evidence of bondholder gains, but no support for shareholder losses when a firm defeases debt. We speculate that the insignificance of the loss to shareholders is primarily due to the size disparity between the value of defeased debt and the market value of outstanding equity, since the suggested economic merits of defeasance appear unfounded. Although we cannot prove an agency motivation for defeasance, we find a very high correlation between compensation tied to earnings and defeasing debt at a book gain.     

Forecasting Irregularly Spaced UHF Financial Data: Realized Volatility vs UHF-GARCH Models

A new literature has been recently devoted to the modeling of ultra-high-frequency (UHF) data. Our first aim is to develop an empirical application of UHF-GARCH models to forecast future volatilities on irregularly spaced data. We also compare the out-sample performance of these generalized autoregressive conditional heteroskedastic (GARCH) models with the realized volatility method. We propose a procedure to account for the time deformation problem and show how to use these models for computing daily Value at Risk (VaR).     

The size structure of manufacturing establishments and enterprises: An international comparison

The development of the size structure of manufacturing establishments in 18 countries is analyzed by use of employment data. The data base for investigation of changes from the beginning of this century up to World War II is not extensive, but after that a unified statistical system of data is available. The paper reviews to what extent pre-World Wor II trends survived and what new characteristics emerged after World War II in countries under different social systems. Some hypotheses concerning causes and effects of the examined phenomena are offered.     

Misspecified Recovery

Asset prices contain information about the probability distribution of future states and the stochastic discounting of those states as used by investors. To better understand the challenge in distinguishing investors' beliefs from risk‐adjusted discounting, we use Perron–Frobenius Theory to isolate a positive martingale component of the stochastic discount factor process. This component recovers a probability measure that absorbs long‐term risk adjustments. When the martingale is not degenerate, surmising that this recovered probability captures investors' beliefs distorts inference about risk‐return tradeoffs. Stochastic discount factors in many structural models of asset prices have empirically relevant martingale components.     

Efectos de las remesas de migrantes mexicanos en el Canadá en las explotaciones agrarias mexicanas

Con datos de una encuesta a participantes en el Programa de Trabajadores Agrícolas Temporales México‐Canadá, los autores estiman un modelo de ecuaciones simultáneas de mínimos cuadrados ordinarios y encuentran que las remesas impulsan las inversiones agrícolas en México, que a su vez incrementan los ingresos agrícolas. También observan una influencia positiva de las remesas en los ingresos no agrícolas en México, ya que permiten a los encuestados emprender y diversificar sus inversiones. Ello refrenda la teoría de la «nueva economía de la migración laboral», según la cual las remesas contribuyen al desarrollo económico al compensar la falta de créditos en la función de inversión de las explotaciones agrarias familiares.