Measuring business cycles: A wavelet analysis of economic time series

Multiresolution wavelet analysis is a natural way to decompose an economic time series into trend, cycle, and noise. The method is illustrated with GDP data. The business-cycle component of the wavelet-filtered series closely resembles the series filtered by the approximate bandpass filter.     

Environmental performance and equilibrium

Abstract.  In this paper we show why firms' or industries' rankings in terms of environmental performance depend not only on the technology but also on market equilibrium. Between two industries committed to the same environmental constraint, the more eco-efficient is the one with the higher output level. By comparing industries and firms, we show that the rankings are not robust, for they are affected by market outcome. The role of eco-efficiency in firms' profitability in equilibrium is also scrutinized. All this shows that the usual eco-efficiency indicators are inadequate. To tackle this problem, we propose a sound indicator.     

Channels of international risk-sharing: capital gains versus income flows

Global financial integration unlocks a huge potential for international risk sharing. We examine the degree to which international equity holdings act as a risk sharing device in industrial and emerging economies. We split equity returns into investment income (dividend distribution) and capital gains to investigate which of the two channels delivers the largest potential for risk sharing. Our evidence suggests that net capital gains are a more potent channel of risk sharing. They behave in a countercyclical way, that is they tend to be positive (negative) when the domestic economy is growing more slowly (rapidly) than the rest of the world. Countries with more countercyclical net capital gains experience improved consumption risk sharing. The empirical analysis furthermore suggests that these risk sharing properties of net capital gains have increased through time, in particular in the 1990s and early-2000s, on the back of a declining equity home bias and financial market deepening.     

How stock markets react to regulatory sanctions? Evidence from France

Our study of how the stock market reacts to sanction announcements by the French financial regulator from 2004 to 2017 finds that the market reacts negatively when a sanction is announced in the press. Cross-sectional regression models show that the penalties are too low to influence market reactions. Our results suggest that after the financial crisis of 2008, a plethora of news on financial wrongdoings has desensitized markets to announcements of sanctions against large companies.     

Online business development services for entrepreneurs: an exploratory study

This paper addresses the use of the Internet to provide business development services such as training, consulting, counselling and networking. Using a Delphi study of experts from around the world, the possible uses of the Internet as well as criteria for successful implementation are presented. Three critical success factors for providing online services are identified. First, an effective use of online resources requires that the inherent strengths of the Internet be exploited. Using online tools when they are perceived to be a ‘second-best’ mode of communication is inefficient and can be counterproductive. Second, personal contact is still very important and can complement online services. Third, successful online services require an effective Internet site and program management. The study also shows that the specific nature of entrepreneurship and entrepreneurs must be carefully considered when developing online services. The entrepreneur is more concerned about his/her problems and is less concerned with the problems of others. However, he or she is willing to participate in a small learning network if the benefits go beyond that of just learning together. Similarly, online training for entrepreneurs should be complemented by a face-to-face component. An efficient/effective pure online training program for entrepreneurs would be very difficult if not impossible to develop and implement.     

Transition and the output fall

We present a model to explain why in the transition economies of Central andEastern Europe an important output fall has been associated with price liberalization. Its key ingredients are search frictions and Williamsonian relation-specific investment, implying that new investments are made only after having found a new long-term partner. When all firms search for new partners, output may fall because of three effects: a) disruption of previous production links, b) a fall in investment, and c) capital depreciation due to the absence of replacement investment. We show that forms of gradual liberalization like the Chinese 'dual-track' price liberalization may avoid the transitory output fall.
JEL classification: D21, D50, E30, E61, P41, P51.     

A macroeconomic perspective on Knowledge Management

This paper provides a theory of the interactions between knowledge codification, firm-level organization structures, information diffusion and the dynamics of technological competition. At the firm level, we focus on incentives to design Knowledge Management policies based on the codification of soft into hard information. At the aggregate level, we discuss the endogenous nature of knowledge spillover and the implications for macroeconomic growth. The model predicts the existence of a bell shaped relationship between knowledge codification and technological competition.