Proposal for calculating regulatory capital requirements for reverse mortgages

In the current context in which many people worry about the sustainability of pension systems, reverse mortgages are gaining popularity because they are a way to supplement elderly people's incomes. However, it is necessary to provide banks with an adequate risk measurement and management procedure for reverse mortgages to increase the commercialization of these products, which will result in greater well-being for the retirement age population. In this paper, we propose a method to measure risk and estimate the regulatory capital requirements for a portfolio of reverse mortgages owned by a financial institution according to Basel II and III. The method considers house price risk, mortality risk and interest rate risk; consequently, regulatory capital requirements need to be computed using a Monte Carlo simulation procedure. The proposed method is general and can accommodate several scenarios for reverse mortgage specifications, including fixed or variable mortgage rates and different income stream schemes (with the lump sum as a particular case). The results for the U.K. show that reverse mortgage providers face higher risk when the lender initially advances a higher amount, with the lump-sum case indicating the highest risk, for relatively younger borrowers, the female population, higher interest rates and floating mortgage rates.     

Contagious development: Neighbor interactions in deforestation

We estimate neighbor interactions in deforestation in Costa Rica. To address simultaneity and the presence of spatially correlated unobservables, we measure for neighbors' deforestation using the slopes of neighbors' and neighbors' neighbors' parcels. We find that neighboring deforestation significantly raises the probability of deforestation. Policies for agricultural development or forest conservation in one area will affect deforestation rates in non-targeted neighboring areas. Correct estimation of the interaction reverses the naive estimate's prediction of multiple equilibria.     

高管激励与研发支出:内生性考察

高管激励与研发支出显著正相关,但二者是否存在内生性问题?基于2009—2011年中国制造业上市公司数据的实证研究发现,高管激励和研发支出之间存在内生性问题,OLS回归法会导致系数估计不具有一致性。利用联立方程模型则发现,高管股权激励和研发支出之间存在双向因果关系,高管报酬激励与研发支出之间并不存在因果关系。这表明高管激励和企业研发支出决策之间存在相互影响。     

Innovation And Inter-Firm Co-Operation: The Case Of The West Midlands

Drawing upon the innovative milieux and industrial districts literature, the paper provides substantial empirical evidence that firms have a greater chance of being innovative if they co-operate with other firms over innovation, albeit undertaking no investment in RLD. This is an important result especially for small firms. In particular, the paper focuses on inter-firm cwperation along the supply chain, using a swey of firms in the West Midlands to investi-gate co-operation over innovation between suppliers and buyers. A probit model is used to test the link between innovation performance and four innovation inputs: R&D expenditure, R&D personnel, networking with suppliers and networking with client firms.     

Denmark’s Agricultural Institutions: An Instrumental Evaluation

This paper begins with a tax and a specially organized commission proposed by John R. Commons. Commons made his proposal because high tariffs were not benefiting workers. The paper contends that his proposal also applies to a current problem - the failure of trade agreements to improve working conditions. The paper bases its argument on data, standard economic reasoning, and Commons’ approach in “constructive research” to wage transactions, public purpose, limiting factors, and power imbalances.

The paper argues that Commons’ proposal could improve the evolution of American labor law and that it could ameliorate power imbalances created by laws that give corporations and trade associations a bargaining advantage over nations and organizations such as the International Labor Organization (ILO). It concludes that economic discourse could benefit from consideration of the belief behind Commons’ proposal - that costs of production passed on to consumers should include the cost of good working conditions.     

Dutch Disease,factor mobility,and the Alberta Effect: the case of federations

Do reduced costs of factor mobility mitigate Dutch Disease effects to the extent that they are reversed? The case of federations provides an indication they do. We observe resource blessing (curse) effects at the provincial (federal) level, and argue the difference in outcomes stems from the difference in factor mobility costs. We construct a simple tax competition model which shows that if factor mobility costs are sufficiently low, a resource‐boom triggers an Alberta Effect that mitigates, and possibly reverses, Dutch Disease symptoms. The paper concludes with empirical evidence for the main implications of the model.     

Effects of Transport Regulation on the Oil Market: Does Market Power Matter?

Instruments used to regulate the consumption of oil in the transport sector include fuel taxes, biofuel requirements, and fuel‐efficiency standards. However, the effects that these have on oil consumption and price vary. If market power is present in the oil market, the directions of change in consumption and price might contrast with those in a competitive market. As a result, the market structure affects not only the effectiveness of the policy instruments used to reduce oil consumption, but also the terms of trade and carbon leakage. In particular, reduced oil consumption, as a result of increased fuel‐efficiency standards, will unambiguously increase the price of oil under a monopoly.     

Buying a Home with a Resale Value: Location,Location, Location*

We develop a dynamic multiregion model, where a household's choice of housing location depends on its current wealth and its current type, and involves both consumption and investment considerations. The relative strength of the consumption motive and the investment motive determines the equilibrium pattern of residential sorting. A strong investment (consumption) motive implies sorting according to household type (wealth). The model predicts that large house‐price fluctuations are associated with a low degree of sorting by type. This prediction is consistent with evidence from US metropolitan areas when income, education, and age are used as proxies for household type.     

不对称R＆D活动下的市场绩效分析——基于有差异产品的寡头市场

为了研究在Stackelberg寡头竞争模型下企业在产品市场是否合作对市场绩效的影响,建立了寡头市场中面向R＆D工艺的两阶段博弈模型。采用逆向归纳法求出了产品市场合作与不合作两种情况下的古诺-均衡解。研究表明,从促进技术进步的角度来看,对于R＆D效率不太高的R＆D项目,产品市场合作策略优于产品市场竞争策略。从提高企业利润的角度来看,对于R＆D效率较高的R＆D项目,当产品差异不大时,产品市场合作策略优于产品市场竞争策略;当产品差异较大时,产品市场竞争策略优于产品市场合作策略。对于R＆D效率较低的R＆D项目,产品市场竞争策略优于产品市场合作策略。从提高消费者剩余以及改善社会福利的角度来看,对于R＆D效率较低的R＆D项目,产品市场竞争策略优于产品市场合作策略。     

Growth,Convergence, and Social Cohesion in the European Union

The aim of this paper is to analyze the economic and social cohesion in the European Union. There are different factors to explain the convergence process and besides, empirical findings are not conclusive. To the European Union, GDP per head interregional differences have decreased for certain periods but it has remained unchanged or even increased for others periods. The second report on the economic and social cohesion indicates that some decades are necessary to eliminate regional differences. These differences in regional GDP are mainly explained by differences in their productive structures, degree of innovate activity, communications structures, which depend on the relative level of transport infrastructures, and manpower qualifications. This analysis allows us to obtain some conclusions to the economic policies and the social cohesion. A preliminary version of this paper was presented in the 57th International Atlantic Conference, held in Lisbon, Portugal, March 10–14, 2004.