Optimal Contracts for Central Bankers: Inflation versus Money Supply and Exchange Rate Targets

Some recent papers have shown how a simple contract can eliminate the inflationary bias of discretionary monetary policy. This paper shows that if the central banker is risk averse, a contract in terms of money is superior to one in terms of inflation. The paper also shows that, if the central banker cares about his reappointment, an exchange rate target might always leads to the implementation of the optimal policy.     

Reference group influence on binary choices dynamics

The recent literature has analyzed binary choices dynamics providing interesting results. Most of these contributions consider interactions within a single group. Nevertheless, in some situations the interaction takes place not only within a single group but also between different groups. In this paper, we investigate the choice dynamics when considering two populations where one serves as a reference group. Considering this influence effect enriches the dynamics. Although the structurally stable resulting dynamics are attracting cycles only, with any positive integer period, the reference group makes the dynamics of the influenced population much more complex. We considered both the possibility that the reference group has the same or the opposite attitude toward the distribution over the choices. We show how the dynamics and the bifurcation structure are modified under the influence of the reference group. Our results illustrate how the propensity to switch choices in the reference groups may, indirectly, affect choices in the first group.     

Do Sovereign Defaults Hurt Exporters?

This paper uses a difference-in-difference methodology similar to the one originally proposed by Rajan and Zingales to test whether sovereign defaults hurt the more export-oriented industries disproportionately, and it finds strong support for this hypothesis. However, contrary to the findings of previous studies, our estimates suggest that the effect of defaults is short-lived.     

DOES MIGRATION REDUCE REGIONAL DISPARITIES? THE ROLE OF SKILL‐SELECTIVE FLOWS

The existence of income per capita disparities is a striking feature of European regional development, while increasing internal migration is often cited as a convergence factor. This paper states that this argument is too simple if migration concerns skilled workers. To support this statement, the focus is on skill-selective migration flows: first, it is shown how easily they can happen (for instance, they can be caused by different regional wage settings); then, a model is used to investigate the effects of different regional endowments of immobile factors on migration. The model shows that skill-selective migration can, in some cases, lead to increasing income per capita disparities and, for this reason, policy makers need to pay attention when attempting to narrow regional disparities by easing interregional migration.     

A Bayesian non-parametric estimate for multivariate regression

The predictive approach to inference in multivariate regression problems is considered in a Bayesian non-parametric framework. A simple estimate of the regression coefficient matrix is derived under the Dirichlet process prior and then generalized by using a mixture of Dirichlet processes prior. These estimates are shown to belong to the class of linear Bayes estimates and their relation to ridge regression estimates is also exhibited. The paper ends with an illustrative application.     

Can countries rely on foreign saving for investment and economic development?

Contrary to widespread presumption, a surprisingly large number of countries have been able to finance a significant fraction of their investment for extended periods using foreign finance. While many of these episodes are in countries where official finance is important, we also identify episodes where a substantial fraction of domestic investment is financed by private capital inflows. Although there is evidence of a positive growth effect of such inflows in the short run, that positive impact dissipates after 5 years and turns negative over longer horizons. Many such episodes end abruptly, with compression of the current account and sharp slowdowns in investment and growth. Summing over the inflow (current account deficit) episode and its aftermath, we find that growth is slower than when countries rely on domestic savings. The implication is that financing growth and investment out of foreign savings, while not impossible, is risky and too often counterproductive.     

Corporate Governance and Sustainability Performance: Analysis of Triple Bottom Line Performance

Given the potential that environmentally oriented anti-consumption (EOA) has in achieving environmental sustainability, the authors draw upon marketing, management, environmental, and psychology studies to conceptualize and delimit EOA, differentiating it from other (related but distinct) phenomena. In addition, the authors review the available literature at the individual (micro) level and summarize research on the antecedents and meanings of broad and specific/strict EOA practices with different targets. Furthermore, the authors propose an agenda for future research, which reflects on EOA not only at the individual (micro) level, but also lays out new opportunities for EOA work at organizational (meso), industry, and national (macro) levels. The work presented here hopes to spark multilevel research on EOA, its antecedents and consequences, and reactions to EOA phenomena.     

A virtual voyage through 3D structures generated by chaotic mixing of magmas and numerical simulations: a new approach for understanding spatial and temporal complexity of magma dynamics

In this contribution, we present a virtual voyage through 3D structures generated by chaotic mixing of magmas and numerical simulations with the aim to highlight the power of 3D representations in the understanding of this geological phenomenon. In particular, samples of mixed juveniles from Salina island (Southern Italy) are reconstructed in 3D by serial lapping and digital montage and numerical simulations are performed by using a 3D chaotic dynamical system. Natural and simulated magma mixing structures are visualized by using several multimedia tools including animations and “virtual reality” models. It is shown that magma interaction processes can generate large spatial and temporal compositional heterogeneities in magmatic systems. The same topological structures are observed in both 3D reconstructed rock samples and chaotic numerical simulations, indicating that the mixing of magmas is governed by chaotic dynamics. The use of 3D multimedia models gives the opportunity to penetrate into magma mixing structures and to understand their significance in the context of magma dynamics. Such an approach is very powerful since multimedia tools can strongly capture the attention of the reader bringing him/her into an interactive and memorable geological experience.     

Leaders emergence in artificial populations: the role of networks

Social networks can be viewed as graphs in their basic form, but many networks of interest include positive and negative affect relations among nodes. The structural balance theory originally developed by Heider suggests how nodes may locally modify their relationships to maintain a sort of balance within sets of nodes. We analyze a model of leadership emergence in a social network and extend it by introducing structural balance among members when modeling the attitude toward the leader. This approach takes into account some of the mutual relationships among co-workers, including the adaptation process to achieve the balance. This component helps to explore differently the bounded rationality of agents when interacting, and prove the difficulty of finding a rapid and smooth covergent path to a social stable equilibrium.