Heterogeneous life-cycle profiles, income risk and consumption inequality

Was the increase in income inequality in the US due to permanent shocks or merely to an increase in the variance of transitory shocks? The implications for consumption and welfare depend crucially on the answer to this question. We use CEX repeated cross-section data on consumption and income to decompose idiosyncratic changes in income into predictable life-cycle changes, transitory and permanent shocks and estimate the contribution of each to total inequality. Our model fits the joint evolution of consumption and income inequality well and delivers two main results. First, we find that permanent changes in income explain all of the increase in inequality in the 1980s and 90s. Second, we reconcile this finding with the fact that consumption inequality did not increase much over this period. Our results support the view that many permanent changes in income are predictable for consumers, even if they look unpredictable to the econometrician, consistent withmodels of heterogeneous income profiles.

The aftermath of Civil War

Using an event-study methodology, this paper analyzes the aftermath of civil war in a cross-section of countries. It focuses on those experiences where the end of conflict marks the beginning of a relatively lasting peace. The paper considers 41 countries involved in internal wars in the period 1960-2003. In order to provide a comprehensive evaluation of the aftermath of war, the paper considers a host of social areas represented by basic indicators of economic performance, health and education, political development, demographic trends, and conflict and security issues. For each of these indicators, the paper first compares the post- and pre-war situations and then examines their dynamic trends during the post-conflict period. It conducts this analysis both in absolute and relative terms, the latter in relation to control groups of otherwise similar countries. The paper concludes that, even though war has devastating effects and its aftermath can be immensely difficult, when the end of war marks the beginning of lasting peace, recovery and improvement are indeed achieved.

Forecasting and turning point predictions in a Bayesian panel VAR model

We provide methods for forecasting variables and predicting turning points in panel Bayesian VARs. We specify a flexible model which accounts for both interdependencies in the cross section and time variations in the parameters. Posterior distributions for the parameters are obtained for a particular type of diffuse, for Minnesota-type and for hierarchical priors. Formulas for multistep, multiunit point and average forecasts are provided. An application to the problem of forecasting the growth rate of output and of predicting turning points in the G-7 illustrates the approach. A comparison with alternative forecasting methods is also provided.

Credible redistributive policies and migration across US States

Does worker mobility undermine governments ability to redistribute income? Thispaper analyzes the experience of US states in the recent decades. We build a tractablemodel where both migration decisions and redistribution policies are endogenous. Wecalibrate the model to match skill premium and worker productivity at the state level,as well as the size and skill composition of migration flows. The calibrated modelis able to reproduce the large changes in skill composition as well as key qualitativerelationships of labor flows and redistribution policies observed in the data. Our resultssuggest that regional di¤erences in labor productivity are an important determinantof interstate migration. We use the calibrated model to compare the cross-section ofredistributive policies with and without worker mobility. The main result of the paperis that interstate migration has induced substantial convergence in tax rates acrossUS states, but no race to the bottom. Skill-biased in-migration has reduced the skillpremium and the need for tax-based redistribution in the states that would have hadthe highest tax rates in the absence of mobility.

Keeping up with the Joneses: An international asset pricing model

We derive an international asset pricing model that assumes local investorshave preferences of the type "keeping up with the Joneses." In aninternational setting investors compare their current wealth with that oftheir peers who live in the same country. In the process of inferring thecountry's average wealth, investors incorporate information from the domesticmarket portfolio. In equilibrium, this gives rise to a multifactor CAPMwhere, together with the world market price of risk, there existscountry-speciffic prices of risk associated with deviations from thecountry's average wealth level. The model performs signifficantly better, interms of explaining cross-section of returns, than the international CAPM.Moreover, the results are robust, both for conditional and unconditionaltests, to the inclusion of currency risk, macroeconomic sources of risk andthe Fama and French HML factor.

Asset pricing implications of benchmarking: A two-factor CAPM

In this paper we consider the equilibrium effects of an institutionalinvestor whose performance is benchmarked to an index. In a partialequilibrium setting, the objective of the institutional investor is modeledas the maximization of expected utility (an increasing and concave function,in order to accommodate risk aversion) of final wealth minus a benchmark.In equilibrium this optimal strategy gives rise to the two-beta CAPM inBrennan (1993): together with the market beta a new risk-factor (that wecall active management risk) is brought into the analysis. This new betais deffined as the normalized (to the benchmark's variance) covariancebetween the asset excess return and the excess return of the market overthe benchmark index. Different to Brennan, the empirical test supports themodel's predictions. The cross-section return on the active management riskis positive and signifficant especially after 1990, when institutionalinvestors have become the representative agent of the market.

Level shifts in a panel data based unit root test : an application to the rate of unemployment

Several unit root tests in panel data have recently been proposed. The test developed by Harris and Tzavalis (1999 JoE) performs particularly well when the time dimension is moderate in relation to the cross-section dimension. However, in common with the traditional tests designed for the unidimensional case, it was found to perform poorly when there is a structural break in the time series under the alternative. Here we derive the asymptotic distribution of the test allowing for a shift in the mean, and assess the small sample performance. We apply this new test to show how the hypothesis of (perfect) hysteresis in Spanish unemployment is rejected in favour of the alternative of the natural unemployment rate, when the possibility of a change in the latter is considered.

Testing for hysteresis in unemployment in OECD countries: new evidence using stationarity panel tests with breaks

This paper tests hysteresis effects in unemployment using panel data for 19 OECD countries covering the period 1956-2001. The tests exploit the cross-section variations of the series, and additionally, allow for a diferent number of endogenous breakpoints in the unemployment series. The critical values are simulated based on our specific panel sizes and time periods. The findings stress the importance of accounting for exogenous shocks in the series and give support to the natural-rate hypothesis of unemployment for the majority of the countries analyzed

Testing for multicointegration in panel data with common factors

The paper addresses the concept of multicointegration in panel data frame- work. The proposal builds upon the panel data cointegration procedures developed in Pedroni (2004), for which we compute the moments of the parametric statistics. When individuals are either cross-section independent or cross-section dependence can be re- moved by cross-section demeaning, our approach can be applied to the wider framework of mixed I(2) and I(1) stochastic processes analysis. The paper also deals with the issue of cross-section dependence using approximate common factor models. Finite sample performance is investigated through Monte Carlo simulations. Finally, we illustrate the use of the procedure investigating inventories, sales and production relationship for a panel of US industries.

New evidence of the real interest rate parity for OECD countries using panel unit root tests with breaks

This paper tests for real interest parity (RIRP) among the nineteen major OECD countries over the period 1978:Q2-1998:Q4. The econometric methods applied consist of combining the use of several unit root or stationarity tests designed for panels valid under cross-section dependence and presence of multiple structural breaks. Our results strongly support the fulfilment of the weak version of the RIRP for the studied period once dependence and structural breaks are accounted for.

Growth, convergence and public investment : a bayesian model averaging approach

The aim of this paper is twofold. First, we study the determinants of economic growth among a wide set of potential variables for the Spanish provinces (NUTS3). Among others, we include various types of private, public and human capital in the group of growth factors. Also,we analyse whether Spanish provinces have converged in economic terms in recent decades. Thesecond objective is to obtain cross-section and panel data parameter estimates that are robustto model speci¯cation. For this purpose, we use a Bayesian Model Averaging (BMA) approach.Bayesian methodology constructs parameter estimates as a weighted average of linear regression estimates for every possible combination of included variables. The weight of each regression estimate is given by the posterior probability of each model.

Efficient energy transfer from Si clusters to Er3+ in complex silicate glasses

We present an extensive study of the structural and optical emission properties in aluminum silicates and soda-lime silicates codoped with Si nanoclusters (Si-nc) and Er. Si excess of 5 and 15¿at.¿% and Er concentrations ranging from 2×1019 up to 6×1020¿cm¿3 were introduced by ion implantation. Thermal treatments at different temperatures were carried out before and after Er implantation. Structural characterization of the resulting structures was performed to obtain the layer composition and the size distribution of Si clusters. A comprehensive study has been carried out of the light emission as a function of the matrix characteristics, Si and Er contents, excitation wavelength, and power. Er emission at 1540¿nm has been detected in all coimplanted glasses, with similar intensities. We estimated lifetimes ranging from 2.5¿to¿12¿ms (depending on the Er dose and Si excess) and an effective excitation cross section of about 1×10¿17¿cm2 at low fluxes that decreases at high pump power. By quantifying the amount of Er ions excited through Si-nc we find a fraction of 10% of the total Er concentration. Upconversion coefficients of about 3×10¿18¿cm¿3¿s¿1 have been found for soda-lime glasses and one order of magnitude lower in aluminum silicates.

Epitaxial growth of biferroic YMnO3(0001) on platinum electrodes

Epitaxial films of the biferroic YMnO3 (YMO) oxide have been grown on platinum-coated SrTiO3(1 1 1) and Al2O3(0 0 0 1) substrates. The platinum electrodes, (1 1 1) oriented, are templates for the epitaxy of the hexagonal phase of YMO with a (0 0 0 1) out-of-plane orientation, which is of interest as this is the polarization direction of YMO. X-ray diffractometry indicates the presence of two crystal domains, 60° rotated in-plane, in the Pt(1 1 1) layers which subsequently are transferred on the upperlaying YMO. Cross-section analysis by high-resolution transmission electron microscopy (HRTEM) of YMnO3/Pt/SrTiO3(1 1 1) shows high-quality epitaxy and sharp interfaces across the structure in the observed region. We present a detailed study of the epitaxial growth of the hexagonal YMO on the electrodes.

Analysis of the near-intrinsic and extrinsic photocapacitance due to the EL2 level in boron implanted GaAs

A detailed analysis of the photocapacitance signal at the near‐band and extrinsic energetic ranges in Schottky barriers obtained on horizontal Bridgman GaAs wafers, which were implanted with boron at different doses and annealed at several temperatures, has been carried out by using the optical isothermal transient spectroscopy, OITS. The optical cross sections have been determined as well as the quenching efficiency of the EL2 level which has been found to be independent of the annealing temperature. Moreover, the quenching relaxation presents two significant features: (i) a strong increase of the quenching efficiency from 1.35 eV on and (ii) a diminution of the quenching transient amplitude in relation with that shown by the fundamental EL2 level. In order to explain this behavior, different cases are discussed assuming the presence of several energy levels, the existence of an optical recuperation, or the association of the EL2 trap with two levels located, respectively, at Ev+0.45 eV and Ec−0.75 eV. The theoretical simulation, taking into account these two last cases, is in agreement with the experimental photocapacitance data at low temperature, as well as at room temperature where the EL2 filling phototransient shows an anomalous behavior. Moreover, unlike the previous data reported for the EL2 electron optical cross section, the values found using our experimental technique are in agreement with the behavior deduced from the theoretical calculation. The utilization of the OITS method has also allowed the determination of another level, whose faster optical contribution is often added to that of the EL2 level when the DLOS or standard photocapacitance is used.

Intense green-yellow electroluminescence from Tb+-implanted silicon-rich silicon nitride/oxide light emitting devices

High optical power density of 0.5 mW/cm2, external quantum efficiency of 0.1%, and population inversion of 7% are reported from Tb+-implanted silicon-rich silicon nitride/oxide light emitting devices. Electrical and electroluminescence mechanisms in these devices were investigated. The excitation cross section for the 543 nm Tb3+ emission was estimated under electrical pumping, resulting in a value of 8.2 × 10−14 cm2, which is one order of magnitude larger than one reported for Tb3+:SiO2 light emitting devices. These results demonstrate the potentiality of Tb+-implanted silicon nitride material for the development of integrated light sources compatible with Si technology.