Product-based cultural change: Is the village global?

We provide a model of product-based cultural change where trade integration leads to cultural convergence. A standard trade model of Dixit–Stiglitz monopolistic competition is coupled with a micro-founded model of cultural dynamics. We show that access to varieties that are attached to a global cultural type changes the incentives of parents to socialize their children and transmit their type. The resulting increase in agents of the global cultural type leads to a magnification of the initial shock. A striking feature of the model is that even temporary shocks to openness may have permanent effects through the changing distribution of preferences in the economy.     

Limit Order Book as a Market for Liquidity

We develop a dynamic model of a limit order market populatedby strategic liquidity traders of varying impatience. In equilibrium,patient traders tend to submit limit orders, whereas impatienttraders submit market orders. Two variables are the key determinantsof the limit order book dynamics in equilibrium: the proportionof patient traders and the order arrival rate. We offer severaltestable implications for various market quality measures suchas spread, trading frequency, market resiliency, and time toexecution for limit orders. Finally, we show the effect of imposinga minimal price variation on these measures.     

Economic behaviour of the firm and prevention of occupational injuries

In this paper an economic model of the firm's behaviour is presented, examining the interrelationship between prevention activities and employment level. A competitive firm with a fixed capital stock is considered. Two decisions must be made: the level of employment of homogeneous workers (L) and the level of prevention activities (I). Although many simplifying assumptions are adopted, the impact of wage rate and compensation level on both decision variables is sign ambiguous. Moreover the case where injured workers are irreplaceable is more difficult than its counterpart with perfect substitutability.     

The Role of Quantitative and Qualitative Network Effects in B2B Platform Competition

This article aims at investigating how quantitative and qualitative (indirect) network effects impact pricing and trading decisions on a Business‐to‐Business marketplace. Using an original data set collected on MFG.com, one of the most prominent B2B platforms in the U.S.A., we find that the market share of a marketplace depends on both the quantity and quality of suppliers, but that quality effects tend to substitute for quantity effects as the size of the marketplace increases. These results suggest that while the quantity of suppliers on board is crucial during the early stage of a marketplace, supplier quality matters much more in the mature stage. Copyright © 2013 John Wiley & Sons, Ltd.     

Impact of social media on economic growth – evidence from social media

This article attempts to investigate the impact of social media (SM) on economic growth. Using information obtained from memberships to social networks, we find that SM has a negative and significant impact on economic growth. This provides evidence in favour of our hypothesis that SM increases the search costs for information and also increases the substitution effect from labour to leisure thereby producing a negative impact on growth.     

Does Aid Unpredictability Weaken Governance? Evidence from Developing Countries

This paper examines the effects of aid on governance from a different perspective by asserting that aid unpredictability can potentially increase corruption in recipient countries by providing incentives to risk‐averse and corrupt political leaders to engage in rent‐seeking activities. Analyses of data from 80 developing countries over the period 1984–2004 offer evidence that higher aid unpredictability is associated with more corruption as measured by a synthetic index. We also find further evidence that this latter impact is more severe in countries with weak initial institutional conditions. These findings are a supplementary advocacy for the need for better management and better predictability of aid flow in developing countries.     

Technical analysis profitability when exchange rates are pegged: A note

Abstract

This note extends earlier results which concluded that generally technical analysis trading rules were profitable when applied to several US dollar exchange rates. These results were linked to the presence of long swings in the dollar series, and here, it is tested whether they still hold in a different setting, with a quasi-fixed exchange rate system. Applying non-parametric and parametric tests to the main European currencies does not allow to confirm, in this case, the profitability of these rules. These results strengthen the likelihood of the hypothesis of a causal link from the exchange rate DGP to the profitability of technical analysis trading rules, as already highlighted in several articles.     

The distribution of realized variances: Marginal behaviors, asymmetric dependence and contagion effects

We examine the unconditional distribution of the realized variance of three European stock market indexes obtained from intraday transaction prices. We find that they share common distributional features: a significant mass close to zero, a sharp decrease afterwards and a significant right tail. Their important differences, however, compel us to model them non-parametrically through lognormal kernel estimators. We then move to the analysis of their dependence structure and find strong evidence of asymmetry. Hence, unlike common practice, we resort to non-exchangeable copula models. Such a characterization also allows us to assess the direction of greater contamination among stock market variances.     

Closing the development finance gap in post-conflict and fragile situations: What role for development finance institutions?

For many years, the main focus of international institutions and bilateral aid agencies has been on state building as the main action to support countries' recovery from conflicts or other fragile situations. The role of the private sector has been widely overlooked, despite being crucial in supporting economic growth and job creation. We argue that development finance institutions have a dedicated role to play in closing financial gaps, which are widening as fragility increases. They have the comparative advantages needed to make projects happen by supporting the private sector, hence significantly contributing to the recovery process.     

Historical accidents and the persistence of distributional conflicts

This paper studies a politico-economic dynamic model of endogenous growth where the political conflict focuses on the amount of resources devoted to public education. We show that if people also have the choice between investing or not investing in private human capital, multiple equilibria in growth and income distribution may arise in the long run. An inegalitarian equilibrium may coexist with an egalitarian one, the initial distribution of income completely determining which equilibrium finally is reached. We then discuss the impact of temporary political accidents such as reduced political rights on the dynamics of growth and inequality.