An empirical note about estimation and forecasting Latin American Forex returns volatility: the role of long memory and random level shifts components

Portuguese Economic Journal - A set of RLS-type models with ARMA and ARFIMA dynamics is estimated and compared in a forecasting exercise with ARFIMA, GARCH and FIGARCH models. It is an extension of...     

Analysis of the Efficacy of Public Spending on Research and Development in State Programs

This paper presents an approach to assessing the efficacy of public spending on research and development in state programs. At present, there is a need to develop a unified approach to the analysis and evaluation of the efficacy of such spending from the perspective of participants in state programs (federal executive bodies). The proposed approach does not allow evaluating the efficacy of public spending on the development of research areas assigned to the authors.     

The scope and scale of the informal food economy of South African urban residential townships: Results of a small-area micro-enterprise census

Growing urbanisation in South Africa is reflected in burgeoning Working class and informal township settlements on the fringes of its major towns and cities. Paired with this is an increasing reliance on cash as the primary means of economic transaction, which has in turn stimulated the growth of micro-enterprise business activities within the township context. This article discusses the findings of an eight-township small-area census which occurred between 2010 and 2013 in Cape Town, Johannesburg, Ekurhuleni and Durban townships representing 250 000 residents. The researchers were able to establish the scope and scale of informal food and drink retailing in these localities. Of the 10 049 micro-enterprises located in the study, some 3966 (or 39% of the total) trade in food. These include enterprises in primary production, fresh produce retailing, grocery retailing from house and spaza shops, and informal foodservice enterprises. Food is the basis for much township informal business and plays an important role in making food increasingly affordable and locally accessible, and in creating cash employment. The article builds on the knowledge base of the township informal economy role in bolstering food security needs for the marginalised.     

The importance of consumer multihoming (joint purchases) for market performance: Mergers and entry in media markets

Consumer “multihoming” (watching two TV channels, or buying two news magazines) has surprisingly important effects on market equilibrium and performance in (two‐sided) media markets. We show this by introducing consumer multihoming and advertising finance into the classic circle model of product differentiation. When consumers multihome (attend more than one platform), media platforms can charge only incremental value prices to advertisers. Entry or merger leaves consumer prices unchanged under consumer multihoming, but leaves advertiser prices unchanged under single‐homing: Multihoming flips the side of the market on which platforms compete. In contrast to standard circle results, equilibrium product variety can be insufficient under multihoming.     

Introduction to the policy articles on Trump to Biden: Implications for Canadian Agriculture

President Biden was sworn in on January 20, 2021 after a 4‐year term by President Trump. Certainly, Trump's norm breaking presidency impacted Canada in significant ways and the agricultural sector was no exception. In this issue, we have a set of four short articles discussing the possible implications on Canadian agriculture of transitioning from a Trump to Biden presidency. Issues related to Canada‐U.S. agricultural trade, political norms and uncertainty, U.S. domestic support, participation in trade agreements, and U.S.‐China relations are all considered.     

A Real Options Model of Real Estate Development with Entitlement Risk

Most development projects encounter a highly uncertain entitlement process that is largely uncontrollable by developers. In this study, entitlement is modeled as a separate stage within a compound real option, where developers begin with minimal control (maximum risk) and each successful stage increases control (decreases risk). We solve the model analytically, provide three‐dimensional numerical comparisons, and empirically test the model's predictions using hand collected rezoning petitions. Our main result refines the classic development option model: developers first invest early (secure entitlements) in order to obtain the option to subsequently delay investment (construct the optimal building at the optimal time).     

Entry limiting agreements: First‐mover advantage,authorized generics,and pay‐for‐delay deals

During patent litigation, pay‐for‐delay (P4D) deals involve a payment from a patent holder of a branded drug to a generic drug manufacturer to delay entry and withdraw the patent challenge. In return for staying out of the market, the generic firm receives a payment, and/or an authorized licensed entry at a later date, but before the patent expiration. We examine why such deals are stable when there are multiple potential entrants. We combine the first‐mover advantage for the first generic with the ability of the branded manufacturer to launch an authorized generic (AG) to show when P4D deals are an equilibrium outcome. We further show that limiting a branded firm's ability to launch an AG before entry by a successful challenger will deter such deals. However, removing exclusivity period for the first generic challenger will not.     

Interorganisational project dynamics: A longitudinal study of perceptual distance and client-contractor collaborative relationships

Despite the importance of good collaborative relationships in interorganisational projects, clients and contractors often develop adversarial relationships due to perceptual distance about key project issues. In this case study research, we investigated how perceptual distance emerges and changes over time, and how the collaborative relationship between client and contractor develops alongside these dynamics. In this exploration, we built upon agency theory and stewardship theory as complementary perspectives for understanding client-contractor collaborative relationships. We gathered quantitative and qualitative data in two projects, conducting three assessments in about one year. We found that perceptual distance increased and decreased over time, and that a reduction was typically associated with the collaborative relationship being characterized by stewardship rather than agency. These findings suggest that a regular assessment and evaluation of partners’ perceptions of critical project issues is warranted to timely detect and counteract perceptual distance. Moreover, partners would best adopt a stewardship orientation to reduce perceptual distance, although this may take considerable effort given the distributive nature of many pre-project negotiations.     

State‐Dependent Forward Guidance and the Problem of Inconsistent Announcements

Forward guidance can be provided as an unconditional promise, i.e. commitment to a specific low policy rate. Alternatively, the promise may include an escape clause, i.e. a condition defining the state of the economy under which the central bank would not keep such a low rate and, instead, it would revert to setting policy under discretion. The escape clause can be expressed as a threshold in terms of a specific variable. The present paper shows that, when such a threshold is expressed in terms of an endogenous variable (e.g. output, inflation), there are cases where it becomes impossible for the central bank to act in a way that is consistent with its promise. Consistency imposes limits on the policy rate that can be set since reverting immediately to the optimal discretionary rate can be incompatible with exceeding the threshold.