Vacancy posting, job separation and unemployment fluctuations

What is the relative importance of hiring and separation in driving unemployment fluctuations? This paper presents a framework to decompose the moments of unemployment and study the respective contributions of vacancy posting, a measure of firms’ hiring efforts, and separation. Separation accounts for about 40% of unemployment's variance, compared to 60% for vacancy posting, and contributes to about 60% of unemployment steepness asymmetry, the fact that unemployment increases faster than it decreases. Further, while vacancy posting is, on average, the most important contributor of unemployment fluctuations, the opposite is true around business cycle turning points, when separation is responsible for most of unemployment movements.     

Rural credit and the time allocation of agricultural households: The case of PRONAF in Brazil

This paper evaluates the impact of Brazil's National Program to Strengthen Family Farming (PRONAF) on the time allocation of household members. We use data from the 2014 Pesquisa Nacional por Amostra de Domicílios, and we apply propensity score methods to complex surveys recently recommended in the literature. We find that PRONAF helps to increase focus on agricultural activities, but it also stimulates female partners to engage in unpaid work. The results show significant effects of PRONAF on child labor and on the gender‐specific division of labor within households, although it does not have the usual adverse effects of rural credit programs on school attendance.     

Volatility Spillovers and the Risk-Return Relation Between Stock and Foreign Exchange Markets in Brazil

We examine the evidence of mean and volatility spillovers between stock and foreign exchange markets in Brazil with multivariate GARCH models and nonlinear Granger causality tests. We also use a multivariate GARCH-in-mean model to assess the relationship between risk and return in these markets. The results indicate that the stock market leads the foreign exchange market in price formation and that nonlinear Granger causalities from the exchange market to the stock market do occur. Part of these nonlinear causalities are explained by volatility spillovers. We show that exchange rate volatility affects not only stock market volatility but also stock returns.     

Community-based natural resource management: The role of social capital in collaborative environmental management of tribal resources in KwaZulu-Natal,South Africa

Community-based natural resource management (CBNRM) has become an important tool in promoting environmental and ecological sustainability as well as improving community access to eco-system services. However, CBNRM has been criticised as a programme that is largely driven by initiatives which are exogenous to local communities, promoting the agenda of external actors. In view of this, there is now increased attention given to CBNRM programmes that are co-management driven and which seek the participation of all community stakeholders. Using existing literature and field-based data, this article explores the role of social capital in promoting the management of common pool resources in tribal areas of KwaZulu-Natal. It is argued that social capital can be a vehicle through which the accumulation of different forms of capital can be achieved and contribute to sustainable environmental management.     

A trade-off theory of ownership and capital structure

This paper determines the optimal ownership share held by a unit into a second unit when both face a tax-bankruptcy trade-off. Full ownership is optimal when the first unit has positive debt, because dividends help avoid its default. Positive debt is, in turn, optimal when its corporate tax rate exceeds a threshold, and/or thin capitalization rules place an upper limit on the debt level in the second unit, and/or the Volcker Rule bans bailout transfers to the second unit. Full ownership is no longer optimal only if there is a tax on intercorporate dividend. This theory rationalizes observations on multinationals, financial conglomerates, and family groups.     

Productivity and unemployment over the business cycle

The low correlation between cyclical unemployment and productivity over the post-war period hides a large sign switch in the mid-1980s: from significantly negative the correlation became significantly positive. Using a search model of unemployment with nominal rigidities and variable labor effort, I show that technology shocks can generate a positive unemployment-productivity correlation whereas non-technology shocks (i.e. aggregate demand shocks) tend to do the opposite. In this context, I identify two events that can quantitatively explain the increase in the correlation: (i) a sharp drop in the volatility of non-technology shocks in the mid-1980s, and (ii) a decline in the response of productivity to non-technology shocks, which from procyclical became acyclical in the last 25 years.     

Transition and development of innovation capacities in Hungary

The paper attempts to synthesize the conclusions of theoretical works dealing with innovation processes and technological strategies in the frame of a national innovation system with some results from a survey of the national innovation system in Hungary.
An important focus of the paper is on the transition situation in Hungary and the role science and technology play and are expected to play to influence the competitiveness of the country. Special attention is therefore given to the new actors in the system. The conclusions are expressed in the form of premises dealing with the multiple impacts of the transition on the Hungarian innovation system.     

Basis risk in static versus dynamic longevity-risk hedging

This paper provides a tractable, parsimonious model for assessing basis risk in longevity and its effect on the hedging strategies of Pension Funds and annuity providers. Basis risk is captured by a single parameter, that measures the co-movement between the portfolio and the reference population’s longevity. The paper sets out the static, full and customized swap-hedge for an annuity, and compares it with a dynamic, partial, and index-based hedge. We calibrate our model to the UK and Scottish populations. The effectiveness of static versus dynamic strategies depends on the rebalancing frequency of the second, on the relative costs, and on basis risk, which does not affect fully-customized, static hedges. We show that appropriately calibrated dynamic hedging strategies can still be reasonably effective, even at low rebalancing frequencies.     

The Sustainability of European External Debt: What have We Learned?

In this paper we aim to analyze the level of sustainability of external debt and, more importantly, how it has changed for a number of European economies. Given the severity of the crisis since 2008, we argue that the path of external debt burdens may have changed since the start of the crisis, given the concerns about debt accumulation in most countries. We analyze the reaction of present debt accumulation to past debt stock, incorporating the possibility of endogenously determined structural breaks in this reaction function. We find that structural breaks happen in most cases after 2008, highlighting the importance of the policy measures taken by most governments.