Sovereign Risk, Anonymous Markets, and the Effects of Globalization

The goal of this paper is to study the e¤ects of globalization on the workings of financial markets. We adopt a "technological" view of globalization, which consists of an exogenous reduction in the cost of shipping goods across di¤erent regions of the world. We model financial markets where agents anonymously trade securities issued by every other agent in the world. In the absence of frictions, we show how globalization creates trade opportunities among residents of different regions of the world, thereby raising welfare. In the presence of sovereign risk, however, there emerge two crucial interactions between trade among residents within a region and trade among residents of di¤erent regions. First, the more residents within a region trade with each other, the more they can trade with residents of other regions. Second, the possibility of trade with residents of other regions sometimes leads a government to not enforce payments by its residents, destroying trade opportunities among residents within the region. The net effect on welfare of this process of creation and destruction of trade opportunities is ambiguous. We argue that there are no policies governments can take to avoid the negative effects of globalization on trade among domestic residents. In a dynamic extension, we analyze how our results are a¤ected by reputational considerations.

Portfolio choice and the effects of liquidity

This paper shows how to introduce liquidity into the well known mean-variance framework of portfolio selection. Either by estimating mean-variance liquidity constrained frontiers or directly estimating optimal portfolios for alternative levels of risk aversion and preference for liquidity, we obtain strong effects of liquidity on optimal portfolio selection. In particular, portfolio performance, measured by the Sharpe ratio relative to the tangency portfolio, varies significantly with liquidity. Moreover, although mean-variance performance becomes clearly worse, the levels of liquidity onoptimal portfolios obtained when there is a positive preference for liquidity are much lower than on those optimal portfolios where investors show no sign of preference for liquidity.

On the valuation and incentive effects of executive cash bonus contracts

Executive compensation packages are often valued in an inconsistent manner: while employee stock options (ESOs) are typically valued ex-ante, cash bonuses are valued ex-post. This renders the existing valuation models of employee compensation packages theoretically unsatisfactory and, potentially, empirically distortive. In this paper, we propose an option-based framework for ex-ante valuation of cash bonus contracts. After obtaining closed-form expressions for ex-ante values of several frequently used types of bonus contracts, we utilize them to explore the e¤ects that the shape of a bonus contract has on the executive s attitude toward risk-taking. We, also, study pay-performance sensitivity of such contracts. We show that the terms of a bonus contract can dramatically impact both risk-taking behavior as well as pay-performance incentives. Several testable predictions are made, and venues of future research outlined.

Modelling state dependence and feedback effects between poverty, employment and parental home emancipation among European youth

Youth is one of the phases in the life-cycle when some of the most decisivelife transitions take place. Entering the labour market or leaving parentalhome are events with important consequences for the economic well-beingof young adults. In this paper, the interrelationship between employment,residential emancipation and poverty dynamics is studied for eight Europeancountries by means of an econometric model with feedback effects. Resultsshow that youth poverty genuine state dependence is positive and highly significant.Evidence proves there is a strong causal effect between poverty andleaving home in Scandinavian countries, however, time in economic hardshipdoes not last long. In Southern Europe, instead, youth tend to leave theirparental home much later in order to avoid falling into a poverty state that ismore persistent. Past poverty has negative consequences on the likelihood ofemployment.

Design effect and interviewer effects: Evidence from the Spanish ESS3-2006 Data

In 2007 the first Quality Enhancement Meeting on sampling in the European SocialSurvey (ESS) took place. The discussion focused on design effects and inteviewereffects in face-to-face interviews. Following the recomendations of this meeting theSpanish ESS team studied the impact of interviewers as a new element in the designeffect in the response s variance using the information of the correspondent SampleDesign Data Files. Hierarchical multilevel and cross-classified multilevel analysis areconducted in order to estimate the amount of responses variation due to PSU and tointerviewers for different questions in the survey. Factor such as the age of theinterviewer, gender, workload, training and experience and respondent characteristicssuch as age, gender, renuance to participate and their possible interactions are alsoincluded in the analysis of some specific questions like trust in politicians and trustin legal system . Some recomendations related to future sampling designs and thecontents of the briefing sessions are derived from this initial research.

Fixed and random effects in Classical and Bayesian regression

This paper proposes a common and tractable framework for analyzingdifferent definitions of fixed and random effects in a contant-slopevariable-intercept model. It is shown that, regardless of whethereffects (i) are treated as parameters or as an error term, (ii) areestimated in different stages of a hierarchical model, or whether (iii)correlation between effects and regressors is allowed, when the sameinformation on effects is introduced into all estimation methods, theresulting slope estimator is also the same across methods. If differentmethods produce different results, it is ultimately because differentinformation is being used for each methods.

Efectos de la presencia social de las lenguas escolares en el desarrollo lingüístico del alumnado extranjero. Un estudio empírico en Cataluña = The Social Presence of School Languages and Their Effects on the Development of Immigrant Students’ Linguistic Proficiency. An Empirical Study in Catalonia

El estudio de las variables relacionadas con la adquisición de las lenguas escolares en contextos bilingües y multilingües ha resurgido a raíz de la incorporación de alumnado extranjero al sistema educativo español. En este sentido, y gracias a su peculiar situación sociolingüística, Cataluña se ha convertido en un observatorio perfecto para estudiar el proceso de adquisición de lenguas del alumnado extranjero. En este artículo presentamos una parte de los datos obtenidos en la evaluación del conocimiento de catalán y del castellano de 668 alumnos extranjeros de sexto de Primaria escolarizados en 57 centros de Cataluña. Con ello pretendemos estudiar los efectos de la presencia y del uso social de las lenguas escolares en el conocimiento lingüístico de este alumnado. La hipótesis principal es que el desarrollo de buenos niveles de conocimiento escrito de las lenguas escolares por parte de los alumnos extranjeros depende, en buena medida, de las oportunidades que haya en el entorno social para que ellos puedan utilizar estas lenguas en los intercambios comunicativos informales con sus compañeros o con otros adultos. Las conclusiones del trabajo señalan las relaciones existentes entre el desarrollo de habilidades lingüísticas conversacionales y el de habilidades lingüísticas cognitivo-académicas (Cummins, 1979b), en el sentido de que tanto el conocimiento escrito de catalán como el de castellano que tiene el alumnado extranjero están condicionados por el nivel de desarrollo conversacional previo en ambas lenguas. Además, apuntan a que la transferencia de habilidades lingüísticas cognitivo-académicas no se produce directamente entre el catalán y el castellano, sino que depende fundamentalmente de la presencia social que tengan estas lenguas y de sus usos informales. Así, en la medida en que un buen número de estudiantes extranjeros no desarrolla suficiente competencia lingüística conversacional ni en catalán ni en castellano, el proceso de adquisición de las lenguas escolares se alarga más allá de los seis años

Pro-inflammatory gene expression and neurotoxic effects of activated microglia are attenuated by absence of CCAAT/enhancer binding protein beta

Background. Microglia and astrocytes respond to homeostatic disturbances with profound changes of gene expression. This response, known as glial activation or neuroinflammation, can be detrimental to the surrounding tissue. The transcription factor CCAAT/enhancer binding protein ß (C/EBPß) is an important regulator of gene expression in inflammation but little is known about its involvement in glial activation. To explore the functional role of C/EBPß in glial activation we have analyzed pro-inflammatory gene expression and neurotoxicity in murine wild type and C/EBPß-null glial cultures. Methods. Due to fertility and mortality problems associated with the C/EBPß-null genotype we developed a protocol to prepare mixed glial cultures from cerebral cortex of a single mouse embryo with high yield. Wild-type and C/EBPß-null glial cultures were compared in terms of total cell density by Hoechst-33258 staining; microglial content by CD11b immunocytochemistry; astroglial content by GFAP western blot; gene expression by quantitative real-time PCR, western blot, immunocytochemistry and Griess reaction; and microglial neurotoxicity by estimating MAP2 content in neuronal/microglial cocultures. C/EBPß DNA binding activity was evaluated by electrophoretic mobility shift assay and quantitative chromatin immunoprecipitation. Results. C/EBPß mRNA and protein levels, as well as DNA binding, were increased in glial cultures by treatment with lipopolysaccharide (LPS) or LPS + interferon ¿ (IFN¿). Quantitative chromatin immunoprecipitation showed binding of C/EBPß to pro-inflammatory gene promoters in glial activation in a stimulus- and gene-dependent manner. In agreement with these results, LPS and LPS+IFN¿ induced different transcriptional patterns between pro-inflammatory cytokines and NO synthase-2 genes. Furthermore, the expressions of IL-1ß and NO synthase-2, and consequent NO production, were reduced in the absence of C/EBPß. In addition, neurotoxicity elicited by LPS+IFN¿-treated microglia co-cultured with neurons was completely abolished by the absence of C/EBPß in microglia.

Auction theory, sequential local service privatization, and the effects of geographical scale economies on effective competition

A sequential weakly efficient two-auction game with entry costs, interdependence between objects, two potential bidders and IPV assumption is presented here in order to give some theoretical predictions on the effects of geographical scale economies on local service privatization performance. It is shown that the first object seller takes profit of this interdependence. The interdependence externality rises effective competition for the first object, expressed as the probability of having more than one final bidder. Besides, if there is more than one final bidder in the first auction, seller extracts the entire bidder¿s expected future surplus differential between having won the first auction and having lost. Consequences for second object seller are less clear, reflecting the contradictory nature of the two main effects of object interdependence. On the one hand, first auction winner becomes ¿stronger¿, so that expected payments rise in a competitive environment. On the other hand, first auction loser becomes relatively ¿weaker¿, hence (probably) reducing effective competition for the second object. Additionally, some contributions to static auction theory with entry cost and asymmetric bidders are presented in the appendix

Oxygen content and inhomogeneity effects on the electrical properties of YBa2Cu3Oy thin films

Oxygen content is a very important factor influencing the electrical properties of YBa2Cu3Oy. In this work the electrical properties of laser deposited YBa2Cu3Oy thin films on LaAlO3(100), in the whole range 6 y 7, are studied. An electrical network model, which randomly assigns oxygen contents and R(T) characteristics to the different elements in the circuit according to an arbitrary distribution, is used to analyze several features in the measured R(T) characteristics as a function of oxygen homogeneity. The model takes into account both short-range and long-range oxygen inhomogeneities. Good agreement between estimated oxygen contents from x-ray diffraction data in our samples and the average oxygen contents used to reproduce their R(T) characteristics is found. The model points out that oxygen homogeneity is very important in order to get the best and reproducible properties, and for conduction and superconductivity analysis through the shape or derivatives of R(T) characteristics.

Growth rate of fractal copper electrodeposits: Potential and concentration effects

Experiments are reported on fractal copper electrodeposits. An electrochemical cell was designed in order to obtain a potentiostatic control on the quasi-two-dimensional electrodeposition process. The aim was focused on the analysis of the growth rate of the electrodeposited phase, in particular its dependence on the electrode potential and electrolyte concentration.

Dietary n-6- or n-3-rich vegetable fats and antioxidants: effects on fatty acid composition and stability of rabbit plasma, liver and meat

We supplemented diets with a-tocopheryl acetate (100 mg/kg) and replaced beef tallow (BT) in feeds with increasing doses of n-6- or n-3-rich vegetable fat sources (linseed and sunflower oil), and studied the effects on the fatty acid (FA) composition, the a-tocopherol (aT) content and the oxidative stability of rabbit plasma and liver. These effects were compared with those observed in a previous study in rabbit meat. As in meat, the content of saturated, monounsaturated and trans FA in plasma and liver mainly reflected feed FA profile, except stearic acid in liver, which increased as feeds contained higher doses of vegetable fat, which could be related to an inhibition of the activity of the stearoyl-CoA-desaturase. As linseed oil increased in feeds, the n-6/n-3 FA ratio was decreased in plasma and liver as a result of the incorporation of FA from diets and also, due to the different performance and selectivity of desaturase enzymes. However, an increase in the dose of vegetable fat in feeds led to a significant reduction in the aT content of plasma and liver, which was greater when the fat source was linseed oil. Increasing the dose of vegetable fat in feeds also led to an increase in the susceptibility to oxidation (lipid hydroperoxide (LHP) value) of rabbit plasma, liver and meat and on the thiobarbituric acid (TBA) values of meat. Although the dietary supplementation with a-tocopheryl acetate increased the aT content in plasma and liver, it did not modify significantly their TBA or LHP values. In meat however, both TBA and LHP values were reduced by the dietary supplementation with a-tocopheryl acetate. The plasma aT content reflected the aT content in tissues, and correlated negatively with tissue oxidability. From the studied diets, those containing 1.5% linseed oil plus 1.5% BT and 100 mg of a-tocopheryl acetate/kg most improved the FA composition and the oxidative stability of rabbit tissues.