Sticky Information Phillips Curves: European Evidence

We estimate the Sticky Information Phillips Curve model of Mankiw and Reis (2002) using survey expectations of professional forecasters from four major European economies. Our estimates imply that inflation expectations in France, Germany, and the United Kingdom are updated about once a year, while in Italy, about once each 6 months.     

Bureaucrats and Babies: Government Regulation of the Supply of Genetic Material*

One might object to the sale of genetic material on the ground that it constitutes a trade in human beings. We argue that such exchange does not constitute a morally significant departure from current practice concerning the sale of other bodily property. Some utilitarians have argued that there is no justification for suppliers of genetic material receiving the competitive market-clearing price for their product. They maintain that utilitarian objectives would be better advanced by distributing genetic material through a government board. We contend that competitive market exchange of genetic material is preferable both because it does more to further individual liberty and because it is more efficient.     

REGIONAL FINANCIAL INTEGRATION IN SUB‐SAHARAN AFRICA – AN EMPIRICAL EXAMINATION OF ITS EFFECTS ON FINANCIAL MARKET DEVELOPMENT

This article examines the effects of political agreements on regional financial integration (RFI) on financial market development and access to and cost of finance in Sub‐Saharan Africa (SSA). Our results suggest that RFI positively affects financial development – measured very broadly as ratio of liquid liabilities to gross domestic product (GDP) – when combined with a sufficient level of institutional quality. If institutional quality is below a threshold level, RFI apparently has negative effects on financial development. However, we cannot find any significant effects of RFI on the ratio of private credit to GDP or on the efficiency of the banking sector. Regarding the effects of RFI on access to and costs of finance of enterprises in SSA, our results are mixed. We can find no significant effect of RFI on access to finance for all firms in the aggregate, but the results indicate that RFI actually impedes small firms' access to finance. Furthermore, there is a significant positive influence of foreign bank involvement on the severity of the credit constraint for small enterprises, while we do not find such an influence for large enterprises. These results provide some support for the foreign bank barrier hypothesis in the context of RFI.     

MARKET SEGMENTATION STRATEGIES OF MULTIPRODUCT FIRMS*

We analyze a multiproduct duopoly and ask whether firms should offer general purpose products or tailor their offerings to fit specific consumer needs. Offering a targeted product has two effects: utility increases for some consumers due to increased fit, whereas utility decreases for others due to increased misfit. Previous work has not considered these two effects jointly and has therefore not been able to capture the tradeoff inherent in market segmentation. We show that in addition to the degree of fit and misfit, the intensity of competition and the fixed cost of offering an additional product determine firms' market segmentation strategies.     

QUANTITATIVE STUDY ON THE IMPACT OF BRANCHLESS BANKING ON MICROFINANCE INSTITUTIONS

In this study, we examined how implementing branchless banking partnerships (BBPs) can enable microfinance institutions to improve their efficiency by reducing cash handling and to expand its product offering to savings. We examined the case of Attawfiq Microfinance in Morocco, that implemented a BBP strategy named Low Income Banking (LIB) in order to achieve increased efficiency and expand its product offering to savings through the LIB account offering. We studied how the customers of Attawfiq used the LIB account for transactional and savings purposes by analysing a large database of sociodemographic factors of customers and payments data of microcredits for the period 2010–15 (554,541 customers). We included in our analysis, for the first time to our knowledge, not only the study of the correlations between a very extensive dataset of sociodemographic variables and the use of bank accounts in terms of transactions and savings, but also the study of microcredit data as explanatory variables. Our study concluded that the BBP model implemented (LIB) allowed Attawfiq Microfinance to improve its operating efficiency although it failed to achieve increased savings.     

Repo Auctions and the Market for Liquidity

What is the nature of imperfections in the market for liquidity? Studying bidder level data from European Central Bank (ECB) repo auctions, we find that this market appears to be informationally efficient in the sense that participants do not have private information about future short‐term rates. However, auction allocations affect banks' subsequent behavior in a way that is consistent with a degree of allocational and operational inefficiency. Also, large bidders appear to have better access to the interbank market than small ones. Finally, the evidence suggests that the ECB uses collateral haircuts that do not equilibrate opportunity costs.