THE URBAN LEFT IN POWER: Comparing the Profiles of ‘Municipal Socialists’ and the ‘New Urban Left’ in Swiss Cities

Today, many cities in post-industrial societies are strongholds of left and progressive political forces. Almost 100 years ago, left parties had instituted municipal socialism in several European cities. In this article, we compare these two periods of left urban rule by focusing on the long-term changes over the last 120 years in the socio-demographic profile of urban left elites in four major Swiss cities. Our analysis of left elected representatives at six key dates highlights the main differences between the municipal socialists of the interwar period and the new urban left that rules contemporary cities. The former are members of the working class, blue-collar workers without university education, while the latter are members of the upper-middle class, highly educated sociocultural professionals. The results of our analysis contribute to a better understanding of the sociological composition of urban left-progressive political forces, an aspect that is somewhat neglected in recent research on the urban left. We discuss the potential political implications and further research avenues for contemporary debates in urban studies, in terms of urban policy priorities and political mobilization.     

Le Pont de Londres: Interactions between monetary and prudential policies in cross‐border lending

Using two unique confidential datasets summarizing the cross‐border lending of banks in France and the UK, we examine whether recipient‐country prudential policies can help to reduce the spillover effects of euro‐area (EA) monetary policy. We address this question from a novel angle, focused on the role of international financial centres, by considering differences in bank size and location (lending from French headquarters vs. from French affiliates located in the UK). For small French banks that lack a presence in international financial centres, the response of direct cross‐border lending from France to EA monetary policy is partially offset by recipient‐country prudential policy. For larger banks, however, the offsetting effect applies only to lending that passes through foreign affiliates located in London. This suggests the existence of a “London Bridge”: banks adapt their flows to the UK conditional on EA monetary policy and global prudential policies; and from their UK affiliates to third‐party countries in a manner that depends on local prudential settings.     

On the Provision of Insurance against Search‐Induced Wage Fluctuations*

Should workers be provided with insurance against search‐induced wage fluctuations? To answer this question, I rely on the numerical simulations of a model of on‐the‐job search and precautionary savings. The model is calibrated to low‐skilled workers in the United States. The extent of insurance is determined by the degree of progressivity of a non‐linear transfer schedule. The fundamental trade‐off is that a more generous provision of insurance reduces incentives to search for better‐paying jobs, which increases the cost of providing insurance. I show that progressivity raises the search intensity of unemployed workers, which reduces the equilibrium rate of unemployment, but it lowers the search intensity of employed job seekers, which reduces the output level. I also solve numerically for the optimal non‐linear transfer schedule. The optimal policy is to provide little insurance up to a monthly income level of $1350, so as to preserve incentives to move up the wage ladder, and nearly full insurance above $1450. This policy reduces the standard deviation of labor income net of transfers by 34 per cent and generates a consumption‐equivalent welfare gain of 0.7 per cent. The absence of private savings does not fundamentally change the shape of the optimal transfer function, but tilts the optimal policy towards more insurance, at the expense of a less efficient allocation of workers across jobs.     

Financial development in adversarial and inquisitorial legal systems

This paper aims to understand why common law countries have more developed financial markets than civil law countries. One difference between these two legal origins is the procedure of evidence collection for a trial: It is adversarial in common law and inquisitorial in civil law. The adversarial system delegates the collection of evidence to a larger extent to lawyers than the inquisitorial system does. The paper presents a model of law and finance in which investors use courts to enforce their financial contracts with entrepreneurs. Investors are willing to lend more if courts collect evidence more efficiently. Financial markets are more developed in the adversarial than in the inquisitorial system if investors are richer than entrepreneurs or if lawyers are more productive than judges. Manipulation of evidence by lawyers has an ambiguous impact on finance.     

Compensation schemes,liquidity provision,and asset prices: an experimental analysis

In an experimental setting in which investors can entrust their money to traders, we investigate how compensation schemes affect liquidity provision and asset prices, two outcomes that are important for financial stability. Compensation schemes can drive a wedge between how investors and traders value the asset. Limited liability makes traders value the asset more than investors. To limit losses, investors should thus restrict liquidity provision to force traders to trade at a lower price. By contrast, bonus caps make traders value the asset less than investors. This should encourage liquidity provision and increase prices. In contrast to these predictions, we find that under limited liability investors increase liquidity provision and asset price bubbles are larger. Bonus caps have no clear effect on liquidity provision and they fail to tame bubbles. Overall, giving traders skin in the game fosters financial stability.     

The cost of warfarin treatment for stroke prevention in patients with non-valvular atrial fibrillation in Mexico from a collective perspective

Aims: To describe the collective costs of vitamin K antagonist (VKA) treatment for stroke prevention in non-valvular atrial fibrillation (NVAF). VKA drug costs are relatively low, but they necessitate frequent international normalized ratio (INR) monitoring. There are currently minimal data describing the economic impact of this in Mexico.

Materials and methods: Cardiologists provided data on their NVAF patients (n?=?400) to quantify direct medical costs (INR testing, appointments, drug costs). A sub-set of patients (n?=?301) completed a patient questionnaire providing data to calculate direct non-medical costs (travel and other expenses for attendance at VKA-associated appointments) and indirect costs (opportunity cost and reduced work productivity associated with VKA treatment).

Results: Estimated annual direct medical costs totaled $753.6 per patient. Annual direct non-medical and indirect costs were USD$149.8 and $132.1, respectively.

Limitations: Recruited patients were those who consulted with a cardiologist during the study period and selected due to inclusion criteria. All had received uninterrupted treatment for 12–24 months. Consequently, the results are not fully generalizable to all VKA treated NVAF patients.

Conclusions: The true cost of VKA treatment cannot be appreciated by a consideration of drug costs alone. Ongoing monitoring appointments incur additional expenses for both patients and the healthcare system.     

The interaction between macroprudential policy and monetary policy: Overview

This paper presents the main findings of an International Banking Research Network initiative examining the interaction between monetary policy and macroprudential policy in determining international bank lending. We give an overview on the data, empirical specifications and results of the seven papers from the initiative. The papers are from a range of core and smaller advanced economies, and emerging markets . The main findings are as follows. First, there is evidence that macroprudential policy in recipient countries can partly offset the spillover effects of monetary policy conducted in core countries. Meanwhile, domestic macroprudential policy in core countries can also affect the cross‐border transmission of domestic monetary policy via lending abroad, by limiting the increase in lending by less strongly capitalized banks. Second, the findings highlight that studying heterogeneities across banks provides complementary insights to studies using more aggregate data and focusing on average effects. In particular, we find that individual bank characteristics such as bank size or GSIB status play a first‐order role in the transmission of these policies. Finally, the impacts differ considerably across prudential policy instruments, which also suggests the importance of more granular analysis.