Explosive Hyperinflation, Inflation Tax Laffer Curve and Modelling the use of Money

This paper analyzes the existence of an inflation tax Laffer curve (ITLC) in the context of two standard optimizing monetary models: a cash-in-advance model and a money in the utility function model. Agents’ preferences are characterized in the two models by a constant relative risk aversion utility function. Explosive hyperinflation rules out the presence of an ITLC. In the context of a cash-in-advance economy, this paper shows that explosive hyperinflation is feasible and thus an ITLC is ruled out whenever the relative risk aversion parameter is greater than one. In the context of an optimizing model with money in the utility function, this paper firstly shows that an ITLC is ruled out. Moreover, it is shown that explosive hyperinflations are more likely when the transactions role of money is more important. However, hyperinflationary paths are not feasible in this context unless certain restrictions are imposed.

Optimal Fiscal Policy with Rationing in the Labor Market

Published as an article in: Topics in Macroeconomics, 2005, vol. 5, issue 1, article 17.

The Economics of Gasification: A Market-Based Approach

This paper deals with the economics of gasification facilities in general and IGCC power plants in particular. Regarding the prospects of these systems, passing the technological test is one thing, passing the economic test can be quite another. In this respect, traditional valuations assume constant input and/or output prices. Since this is hardly realistic, we allow for uncertainty in prices. We naturally look at the markets where many of the products involved are regularly traded. Futures markets on commodities are particularly useful for valuing uncertain future cash flows. Thus, revenues and variable costs can be assessed by means of sound financial concepts and actual market data. On the other hand, these complex systems provide a number of flexibility options (e.g., to choose among several inputs, outputs, modes of operation, etc.). Typically, flexibility contributes significantly to the overall value of real assets. Indeed, maximization of the asset value requires the optimal exercise of any flexibility option available. Yet the economic value of flexibility is elusive, the more so under (price) uncertainty. And the right choice of input fuels and/or output products is a main concern for the facility managers. As a particular application, we deal with the valuation of input flexibility. We follow the Real Options approach. In addition to economic variables, we also address technical and environmental issues such as energy efficiency, utility performance characteristics and emissions (note that carbon constraints are looming). Lastly, a brief introduction to some stochastic processes suitable for valuation purposes is provided.

The long road of climate negotiations: From Kyoto to Paris stopping over in Doha

4 p.

Linking Reduced Deforestation and a Global Carbon Market: Impacts on Costs, Financial Flows, and Technological Innovation

25 p.

Market Instruments and CO2 Mitigation: A General Equilibrium Analysis for Spain

25 p.

Economic Efficiency, Environmental Effectiveness and Political Feasibility of Energy Efficiency Rebates: The Case of the Spanish Energy Efficiency 'Renove' Plan

29 p.

Economic Evaluation of Energy Efficiency Labelling in Domestic Appliances: the Spanish Market

30 p.

Cointegration analysis of money demand in the Euro Area

The analysis of the evolution of the M3 money aggregate is an important element in the definition and implementation of monetary policy for the ECB. A well-defined and stable long run demand function is an essential requisite for M3 to be a valid monetary tool. Therefore, this paper analyzes based in cointegration techniques the existence of a long run money demand, estimating it and testing its stability for the Euro Area and for ten of its member countries. Specifically, bearing in mind the high degree of monetary instability that the current economic crisis has created in the Euro Area, we also test whether this has had a noticeable impact in the cointegration among real money demand and its determinants. The analysis gives evidence of the existence of a long run relationship when the aggregated Euro Area and six of the ten countries are considered. However, these relationships are highly instable since the outbreak of the financial crisis, leading in some cases to even rejecting cointegration. All this suggests that the ECB’s strategy of focusing in the M3 monetary aggregates could not be a convenient approach under the current circumstances

Competitive issue of money & abolition of central banks

The aim of this work is to analyze the main characteristics of the current financial system and to investigate the arising of critical voices with respect this system. In particular, we analyze some historical facts that have been important in the creation of this financial order. We analyze the new digital currency, known as Bitcoin, as the basic ingredient in the formation of a new alternative and decentralized international financial system. In 10 years Bitcoin has expanded its influence to many economic activities. We also analyzed briefly the classic liberal theory that criticizes the intervention of governments in the markets. Finally, we consider relevant the arising of a group of countries (BRICS) that may challenge the current system where the position of USA is privileged.

Marketing of the Spanish film industry in the entertainment market

This project analyzes the role that marketing plays at present.It is a distinctive in the film industry because of the emergence of new patterns of production, distribution and exhibition due to the unstoppable progress of digital technologies, the expansion of the internet and consumer changes in the spectator. To perform this analysis, a description of the situation of the film industry in the competitive market, Hollywood, and the evolution of digital technology in general are included. It is also essential in the project, to observe, the marketing applied to the different phases of the globalized cinema. And then introduce the potential Spanish marketing strategies.

Reform of Spain's profesional services market: Implementation of the EU Services Directive

The implementation of the European Commission Services Directive initiated the modernization process of services markets within the European Union. The objective was to guarantee the creation of a single market by ensuring the freedom of establishment and circulation. The transposition of the Directive in Spain triggered an initial wave of reforms in the Spanish legal system. A second package of reforms is currently underway, following recommendations by the EC, IMF and OECD, which highlight the relative lack of competition in Spain’s services as one of the major imbalances in its economy, alongside the public deficit and unemployment. Both the implemented and planned reforms represent a major step forward. Nevertheless, the government has recently announced modifications to the draft bill of the Professional Services and Associations Law, which is expected to soon be submitted for parliamentary debate and approval. Taking into consideration modifications already introduced, together with anticipated further changes, it will be important to maintain the main points of the draft bill and to introduce a deeper review of the legal framework for professional services, of the professional associations themselves, and for the activities that are subject to compulsory membership within a professional association. Spain’s territorial map of professional associations must too be redrawn.

Geographical mobility and the labour market

This paper studies the e ect of home-owners' migration costs on migration and unemployment in an economy where workers move both for work- and nonwork- related reasons. To this end, a search model with heterogeneous locations is developed and calibrated to the U.S. economy. Consistent with the empirical evidence, the model predicts that home-owners have a lower unemployment rate than renters despite their higher migration costs. The result is due to home-owners' higher transition rate to employment and lower transition rate to unemployment.In addition, the model generates lower inequality in home-owners' local unemployment rates than in renters'. In line with this result, it is documented that, for the period 1996-2013, home-owners had less unemployment dispersion across metropolitan areas than renters.

Systematic liquidity: commonality and inter-temporal variation in the Portuguese stock market

[EN] The aim of this paper is to study systematic liquidity at the Euronext Lisbon Stock Exchange. The motivation for this research is provided by the growing interest in financial literature about stock liquidity and the implications of commonality in liquidity for asset pricing since it could represent a source of non-diversifiable risk. Namely, it is analysed whether there exist common factors that drive the variation in individual stock liquidity and the causes of the inter-temporal variation of aggregate liquidity. Monthly data for the period between January 1988 and December 2011 is used to compute some of the most used proxies for liquidity: bid-ask spreads, turnover rate, trading volume, proportion of zero returns and the illiquidity ratio. Following Chordia et al. (2000) methodology, some evidence of commonality in liquidity is found in the Portuguese stock market when the proportion of zero returns is used as a measure of liquidity. In relation to the factors that drive the inter-temporal variation of the Portuguese stock market liquidity, the results obtained within a VAR framework suggest that changes in real economy activity, monetary policy (proxied by changes in monetary aggregate M1) and stock market returns play an important role as determinants of commonality in liquidity.

Analysis of the housing market in the autonomous community of the Basque country: the adjustment after the burst of the housing bubble

In this project study the characteristic and dynamics of the residential housing market in the Basque country. When strong expansion and colapsing emerged in 2007,studied the differents adjustment.