Do market conditions affect gift exchange? Evidence from experimental markets with excess supply and excess demand

We study whether people's behavior in unbalanced gift exchange markets with repeated interaction are affected by whether they are on the excess supply side or the excess demand side of the market. Our analysis is based on the comparison of behavior between two types of experimental gift exchange markets, which vary only with respect to whether first or second movers are on the long side of the market. The direction of market imbalance could influence subjects' behavior, as second movers (workers) might react differently to favorable actions by first movers (firms) in the two cases. While our data show strong deviations from the standard game-theoretic prediction, we find mainly secondary treatment effects. Wage offers are not higher when there is an excess supply of firms, and workers do not respond more favorably to a given wage when there is an excess supply of labor. The state of competition does not appear to have strong effects in our data. We also present data from single-period sessions that show substantial gift exchange even without repeated interactions.

On the choice of an exchange rate regime: target zones revisited

From the classical gold standard up to the current ERM2 arrangement of the European Union, target zones have been a widely used exchange regime in contemporary history. This paper presents a benchmark model that rationalizes the choice of target zones over the rest of regimes: the fixed rate, the free float and the managed float. It is shown that the monetary authority may gain efficiency by reducing volatility of both the exchange rate and the interest rate at the same time. Furthermore, the model is consistent with some known stylized facts in the empirical literature that previous models were not able to produce, namely, the positive relation between the exchange rate and the interest rate differential, the degree of non-linearity of the function linking the exchage rate to fundamentals and the shape of the exchange rate stochastic distribution.

A proposal for a new specification for a conditionally heteroskedastic variance model: the Quadratic Moving-Average Conditional Heteroskedasticity and an application to the D. Mark-U.S. dollar Exchange Rate

Ever since the appearance of the ARCH model [Engle(1982a)], an impressive array of variance specifications belonging to the same class of models has emerged [i.e. Bollerslev's (1986) GARCH; Nelson's (1990) EGARCH]. This recent domain has achieved very successful developments. Nevertheless, several empirical studies seem to show that the performance of such models is not always appropriate [Boulier(1992)]. In this paper we propose a new specification: the Quadratic Moving Average Conditional heteroskedasticity model. Its statistical properties, such as the kurtosis and the symmetry, as well as two estimators (Method of Moments and Maximum Likelihood) are studied. Two statistical tests are presented, the first one tests for homoskedasticity and the second one, discriminates between ARCH and QMACH specification. A Monte Carlo study is presented in order to illustrate some of the theoretical results. An empirical study is undertaken for the DM-US exchange rate.

Knowledge, networks of cities and growth in regional urban systems

The objective of this paper is to measure the impact of different kinds of knowledge and external economies on urban growth in an intraregional context. The main hypothesis is that knowledge leads to growth, and that this knowledge is related to the existence of agglomeration and network externalities in cities. We develop a three-tage methodology: first, we measure the amount and growth of knowledge in cities using the OCDE (2003) classification and employment data; second, we identify the spatial structure of the area of analysis (networks of cities); third, we combine the Glaeser - Henderson - De Lucio models with spatial econometric specifications in order to contrast the existence of spatially static (agglomeration) and spatially dynamic (network) external economies in an urban growth model. Results suggest that higher growth rates are associated to higher levels of technology and knowledge. The growth of the different kinds of knowledge is related to local and spatial factors (agglomeration and network externalities) and each knowledge intensity shows a particular response to these factors. These results have implications for policy design, since we can forecast and intervene on local knowledge development paths.

Real equilibrium exchange rates. A panel data approach for advanced and emerging economies.

Based on an behavioral equilibrium exchange rate model, this paper examines the determinants of the real effective exchange rate and evaluates the degree of misalignment of a group of currencies since 1980. Within a panel cointegration setting, we estimate the relationship between exchange rate and a set of economic fundamentals, such as traded-nontraded productivity differentials and the stock of foreign assets. Having ascertained the variables are integrated and cointegrated, the long-run equilibrium value of the fundamentals are estimated and used to derive equilibrium exchange rates and misalignments. Although there is statistical homogeneity, some structural differences were found to exist between advanced and emerging economies.

The short and long-run determinants of the real exchange rate in Mexico

This paper explores the real exchange rate behavior in Mexico from 1960 until 2005. Since the empirical analysis reveals that the real exchange rate is not mean reverting, we propose that economic fundamental variables affect its evolution in the long-run. Therefore, based on equilibrium exchange rate paradigms, we propose a simple model of real exchange rate determination which includes the relative labor productivity, the real interest rates and the net foreign assets over a long period of time. Our analysis also considers the dynamic adjustment in response to shocks through impulse response functions derived from the multivariate VAR model.

Trials, tricks and transparency: how disclosure rules affect clinical knowledge

Scandals of selective reporting of clinical trial results by pharmaceutical firms have underlined the need for more transparency in clinical trials. We provide a theoretical framework which reproduces incentives for selective reporting and yields three key implications concerning regulation. First, a compulsory clinical trial registry complemented through a voluntary clinical trial results database can implement full transparency (the existence of all trials as well as their results is known). Second, full transparency comes at a price. It has a deterrence effect on the incentives to conduct clinical trials, as it reduces the firms'gains from trials. Third, in principle, a voluntary clinical trial results database without a compulsory registry is a superior regulatory tool; but we provide some qualified support for additional compulsory registries when medical decision-makers cannot anticipate correctly the drug companies' decisions whether to conduct trials. Keywords: pharmaceutical firms, strategic information transmission, clinical trials, registries, results databases, scientific knowledge JEL classification: D72, I18, L15

Market effects of foreign exchange coordinated intervention

In this article we develop a theoretical microstructure model of coordinated central bank intervention based on asymmetric information. We study the economic implications of coordination on some measures of market quality and show that the model predicts higher volatility and more significant exchange rate changes when central banks coordinate compared to when they intervene unilaterally. Both these predictions are in line with empirical evidence. Keywords: coordinated foreign exchange intervention, market microstructure. JEL Classification: D82, E58, F31, G14

La formació d'una política exterior per a l'Índia. La visita de Nehru a l'Espanya republicana durant la Guerra Civil

L'objectiu ha estat posar en relació dues realitats que fins al moment havien estat considerades completament alienes, com són l’Índia i Espanya. La recerca de fonts per a les relacions bilaterals de tot tipus es va iniciar al segle XIX. A partir d’aquest moment apareixen tres camps fonamentals on aprofundir. D’una banda tenim les relacions diplomàtiques i la seva vessant política a partir del segle XX. El desenvolupament de representacions consulars té a veure amb el creixement de l’activitat econòmica amb l’Índia britànica, especialment en el camp del proveïment de primeres matèries (cotó i jute). En aquest sentit, la recuperació de les relacions econòmiques va ser clau per al posterior mutu reconeixement diplomàtic el 1957 quan l’Índia ja era un estat independent. Entre mig queden anys de malvolença degut a la vinculació de Nehru amb el govern republicà durant la Guerra Civil i la posició de l’Índia en el cas d’Espanya a l’ONU. Un altre camp d’interès per a les relacions bilaterals es centra en la missió de Bombay que a partir de 1920 fou administrada per jesuïtes catalans, valencians i aragonesos. Finalment, un seguiment de la premsa i la intel•lectualitat espanyola mostra com l’Índia es va convertir a partir de 1920 en un nou focus d’interès informatiu i pel món acadèmic, com no ho havia estat fins llavors. Aquest descobriment de l’Índia per part de viatgers, artistes i periodistes obra una nova via d’intercanvi que es veurà trucada per la Guerra Civil i el posterior establiment d’un règim que destruí el teixit intel•lectual del país.

Efficient knowledge retrieval to calibrate input variables in forest fire prediction

Forest fires are a serious threat to humans and nature from an ecological, social and economic point of view. Predicting their behaviour by simulation still delivers unreliable results and remains a challenging task. Latest approaches try to calibrate input variables, often tainted with imprecision, using optimisation techniques like Genetic Algorithms. To converge faster towards fitter solutions, the GA is guided with knowledge obtained from historical or synthetical fires. We developed a robust and efficient knowledge storage and retrieval method. Nearest neighbour search is applied to find the fire configuration from knowledge base most similar to the current configuration. Therefore, a distance measure was elaborated and implemented in several ways. Experiments show the performance of the different implementations regarding occupied storage and retrieval time with overly satisfactory results.

Deconstructing Shocks and Persistence in OECD Real Exchange Rates

This paper analyzes the persistence of shocks that affect the real exchange rates for a panel of seventeen OECD developed countries during the post-Bretton Woods era. The adoption of a panel data framework allows us to distinguish two different sources of shocks, i.e. the idiosyncratic and the common shocks, each of which may have di¤erent persistence patterns on the real exchange rates. We first investigate the stochastic properties of the panel data set using panel stationarity tests that simultaneously consider both the presence of cross-section dependence and multiple structural breaks that have not received much attention in previous persistence analyses. Empirical results indicate that real exchange rates are non-stationary when the analysis does not account for structural breaks, although this conclusion is reversed when they are modeled. Consequently, misspecification errors due to the non-consideration of structural breaks leads to upward biased shocks' persistence measures. The persistence measures for the idiosyncratic and common shocks have been estimated in this paper always turn out to be less than one year.

Innovation, R&D spillovers and productivity: the role of knowledge-intensive services

This paper analyses the performance of companies’ R&D and innovation and the effects of intra- and inter-industry R&D spillover on firms’ productivity in Catalonia. The paper deals simultaneously with the performance of manufacturing and service firms, with the aim of highlighting the growing role of knowledge-intensive services in promoting innovation and productivity gains. We find that intra-industry R&D spillovers have an important effect on the productivity level of manufacturing firms, and the inter-industrial R&D spillovers related to computer and software services also play an important role, especially in high-tech manufacturing industries. The main conclusion is that the traditional classification of manufactured goods and services no longer makes sense in the ‘knowledge economy’ and in Catalonia the regional policy makers will have to design policies that favour inter-industrial R&D flows, especially from high-tech services.

Rethinking economies: regulation and responsibility in contemporary ethnographic cases of production and exchange

Informe de investigación realizado a partir de una estancia en la University of London entre el 3 de marzo al 10 de abril 2007. Redacción de un artículo sobre aspectos metodológicos centrales para las ciencias sociales en su vertiente tanto teórica como aplicada: la articulación entre la investigación etnográfica y los modelos abstractos. Tanto la etnografía en sus múltiples formas de describir la realidad observable, como los modelos en su intento por reducir la complejidad con el fin de subrayar las conexiones causales son instrumentos de las ciencias sociales. Los modelos cambian el mundo: gracias a su cualidad abstracta pueden presentar no sólo una imagen de cómo funcionan las cosas, sino también subrayar el aspecto procesual de las conexiones permitiendo de este modo establecer proposiciones prospectivas y guiar las políticas públicas de desarrollo. En la base de la acción encontramos siempre alguna forma de modelización, incluso en el ámbito de las disposiciones subjetivas que mueven a la gente a la toma de decisiones cotidianas. A menudo la realidad escapa a la matriz de los modelos, sin embargo, y el cambio y la adaptación toman caminos insospechados y no planificados. Este proyecto busca construir la posibilidad de un diálogo constructivo, creativo y no-jerárquico entre los modelos de desarrollo económico y la etnografía(...)

Analyzing aggregate real exchange rate persistence through the lens of sectoral data

In this paper we analyze the persistence of aggregate real exchange rates (RERs) for a group of EU-15 countries by using sectoral data. The tight relation between aggregate and sectoral persistence recently investigated by Mayoral (2008) allows us to decompose aggregate RER persistence into the persistence of its different subcomponents. We show that the distribution of sectoral persistence is highly heterogeneous and very skewed to the right, and that a limited number of sectors are responsible for the high levels of persistence observed at the aggregate level. We use quantile regression to investigate whether the traditional theories proposed to account for the slow reversion to parity (lack of arbitrage due to nontradibilities or imperfect competition and price stickiness) are able to explain the behavior of the upper quantiles of sectoral persistence. We conclude that pricing to market in the intermediate goods sector together with price stickiness have more explanatory power than variables related to the tradability of the goods or their inputs.

Language knowledge and earnings in Catalonia

In this paper we are aimed to investigate the relationship between Catalan knowledge and individual earnings in Catalonia. Using data from 2006, we find a positive earning return to Catalan proficiency; however, when accounting for self-selection into Catalan knowledge, we find a higher language return (20% of extra earnings), suggesting that individuals who are more prone to know Catalan are also less remunerated than others (negative selection effect). Moreover, we also find important complementarities between language knowledge and completed education, which means that only more educated individuals benefit from Catalan knowledge.