The Exchange Rate and Inflation in Argentina: A Classical Critique of Orthodox and Heterodox Policy Prescriptions

In this paper we present an alternative framework to neoclassical theory of international trade and exchange rate determination. Our model, inspired in the classical tradition, provides support for the assertion that an exchange rate policy aiming to improve national competitiveness and to bring about a sustained trade surplus is a viable option. In fact, the success of this strategy does not depend on the effectiveness of monetary sterilization —as many argentinean heterodox authors claim— but on the ability to overcome the boundaries imposed by the evolution of the domestic wage rate and the potential emergence of competitive devaluations. In the particular case of Argentina, the introduction of export taxes on land-intensive commodities, in which the economy has absolute advantages, brings an additional policy tool that can make both the exchange rate target and the workers claims consistent.     

Consumption and Remittances in Migrant Households: Toward a Productive Use of Remittances

This article reviews the magnitude of remittance flows into Mexican households and examines the consumption patterns of remittance-receiving households. A thorough understanding of the dynamics of remittances and consumption in migrant households in Mexico should inform policy makers of the best ways to channel these resources into productive uses. The Mexican Income and Expenditure Survey for 1989 is used to compare and test patterns of consumption and uses of remittances in urban and rural Mexico. (JEL F2–F22 , O1–O15 )     

Valuing GM technologies using real options: the case of drought tolerant wheat in Australia

ABSTRACT

In this article we seek to estimate the value of a partially-developed crop technology from the perspective of the firm developing the technology. Firms need this value estimation to decide whether their technology will earn a sufficient return in the market to justify investing in it. However, determining the (ex-ante) value of the technology before it is commercialised is challenging as the technology is not yet in the market and hence the demand function has not yet been defined. An alternative valuation method is required. We use risk premiums, Monte Carlo simulation and real options analysis and we demonstrate this combination of valuation tools on wheat that is currently being developed in Australia to be drought tolerant. The results indicate that this drought tolerant wheat variety is likely to be adopted by farmers in most regions and has a pre-commercialisation value that justifies continued investment in its development. We also identified South Australia as a region in which the new variety would not be sufficiently valuable to farmers to see them adopt it and we consider possible explanations for this outcome.     

Corporate venture capital as a strategy for external innovation: an exploratory empirical study

By creating corporate venture capital (CVC) units, large corporations predominantly pursue strategic objectives, especially the realisation of external innovations. Theoretical and preliminary empirical results on corporate venturing suggest how to manage CVC in order to achieve strategic objectives. We analyse for a sample of 21 corporate venture units in Germany, if the respective CVC programmes pursue the strategic objective to leverage external innovation and if these programmes are managed accordingly. We find that the majority of German corporate venture programmes follow mixed objectives and are not organised and managed as suggested in the literature. We come to the conclusion that a short-term focus on financial objectives of these CVC programmes prohibits the achievement of long-term strategic benefits from external innovation.     

Who benefits from job placement services? A two-sided analysis

In light of additional information market agents would achieve better outcomes, for example, a lower ask price for the buyer and a higher offer price for the seller. I examine this notion in a labor market, where employers and employees do not possess perfect information about wages, and address the question of who benefits from the information provided by job placement services? The empirical strategy considers the two-sided nature of the labor market. Estimates of employee and employer incomplete information are contrasted between users and non-users of placement services provided by Job Corps, America’s largest and most important job training program for youths. Findings suggest that employees that use placement services don’t have more information about better offer wages, relative to non-users. Interestingly, firms that employed users of placement services are better informed about reservation wages relative to firms that employed non-users.     

Inference for treatment effects of job training on wages: using bounds to compute Fisher’s exact p-value

In the context of a training program’s randomized evaluation, where estimating wage effects is of interest, we propose employing bounds that control for sample selection as a model-based statistic to conduct randomization-based inference à la Fisher. Inference is based on a sharp null hypothesis of no treatment effect for anyone. In contrast to conventional inference, Fisher p-values are nonparametric and do not employ large sample approximations.     

The Exchange Rate and Inflation in Argentina: A Classical Critique of Orthodox and Heterodox Policy Prescriptions

In this paper we present an alternative framework to neoclassical theory of international trade and exchange rate determination. Our model, inspired in the classical tradition, provides support for the assertion that an exchange rate policy aiming to improve national competitiveness and to bring about a sustained trade surplus is a viable option. In fact, the success of this strategy does not depend on the effectiveness of monetary sterilization —as many argentinean heterodox authors claim— but on the ability to overcome the boundaries imposed by the evolution of the domestic wage rate and the potential emergence of competitive devaluations. In the particular case of Argentina, the introduction of export taxes on land-intensive commodities, in which the economy has absolute advantages, brings an additional policy tool that can make both the exchange rate target and the workers claims consistent.     

SOCIAL INSURANCE AND OCCUPATIONAL MOBILITY

This article studies how insurance from progressive taxation improves the matching of workers to occupations. We propose an equilibrium dynamic assignment model to illustrate how social insurance encourages mobility. Workers experiment to find their best occupational fit in a process filled with uncertainty. Risk aversion and limited earnings insurance induce workers to remain in unfitting occupations. We estimate the model using microdata from the United States and Germany. Higher earnings uncertainty explains the U.S. higher mobility rate. When workers in the United States enjoy Germany's higher progressivity, mobility rises. Output and welfare gains are large.