Crises and growth: A re-evaluation

We address the question of whether growth and welfare can be higher in crisis prone economies. First, we show that there is a robust empirical link between per-capita GDP growth and negative skewness of credit growth across countries with active financial markets. That is, countries that have experienced occasional crises have grown on average faster than countries with smooth credit conditions. We then present a two-sector endogenous growth model in which financial crises can occur, and analyze the relationship between financial fragility and growth. The underlying credit market imperfections generateborrowing constraints, bottlenecks and low growth. We show that under certain conditions endogenous real exchange rate risk arises and firms find it optimal to take on credit risk in the form of currency mismatch. Along such a risky path average growth is higher, but self-fulfilling crises occur occasionally. Furthermore, we establish conditions under which the adoption of credit risk is welfare improving and brings the allocation nearer to the Pareto optimal level. The design of the model is motivated by several features of recent crises: credit risk in the form of foreign currency denominated debt; costly crises that generate firesales and widespread bankruptcies; and asymmetric sectorial responses, wherethe nontradables sector falls more than the tradables sector in the wake of crises.

Asymmetric effects of monetary policy in the US: Positive vs. negative or big vs. small?

This paper reconsiders the empirical evidence on the asymmetricoutput effects of monetary policy. Asymmetric effects is a common feature ofmany theoretical models, and there are many different versions of suchasymmetries. We concentrate on the distinctions between positive andnegative money-supply changes, big and small changes in money-supply, andpossible combinations of the two asymmetries. Earlier research has foundempirical evidence in favor of the former of these in US data. Using M1 asthe monetary variable we find evidence in favor of neutrality of big shocksand non-neutrality of small shocks. The results may, however, be affected bystructual instability of M1 demand. Thus, we substitute M1 with the federalfunds rate. In these data we find that only small negative shocks affectreal aggregate activity. The results are interpreted in terms of menu-costmodels.

Costly search and design

Firms compete by choosing both a price and a design from a family of designs thatcan be represented as demand rotations. Consumers engage in costly sequential searchamong firms. Each time a consumer pays a search cost he observes a new offering. Anoffering consists of a price quote and a new good, where goods might vary in the extentto which they are good matches for the consumer. In equilibrium, only two design-styles arise: either the most niche where consumers are likely to either love or loathethe product, or the broadest where consumers are likely to have similar valuations. Inequilibrium, different firms may simultaneously offer both design-styles. We performcomparative statics on the equilibrium and show that a fall in search costs can lead tohigher industry prices and profits and lower consumer surplus. Our analysis is relatedto discussions of how the internet has led to the prevalence of niche goods and the"long tail" phenomenon.

Optimal second-degree price discrimination and arbitrage: On the role of asymetric information among buyers

The traditional theory of monopolistic screening tackles individualself-selection but does not address the possibility that buyers couldform a coalition to coordinate their purchases and to reallocate thegoods. In this paper, we design the optimal sale mechanism which takesinto account both individual and coalition incentive compatibilityfocusing on the role of asymmetric information among buyers. We showthat when a coalition of buyers is formed under asymmetric information,the monopolist can do as well as when there is no coalition. Although inthe optimal sale mechanism marginal rates of substitution are notequalized across buyers (hence there exists room for arbitrage), theyfail to realize the gains from arbitrage because of the transaction costsin coalition formation generated by asymmetric information.

Full insurance, asymmetric information and genetic testing

This paper extends previous resuls on optimal insurance trading in the presence of a stock market that allows continuous asset trading and substantial personal heterogeneity, and applies those results in a context of asymmetric informationwith references to the role of genetic testing in insurance markets.We find a novel and surprising result under symmetric information:agents may optimally prefer to purchase full insurance despitethe presence of unfairly priced insurance contracts, and other assets which are correlated with insurance.Asymmetric information has a Hirschleifer-type effect whichcan be solved by suspending insurance trading. Nevertheless,agents can attain their first best allocations, which suggeststhat the practice of restricting insurance not to be contingenton genetic tests can be efficient.

Research joint ventures and optimal R&D policy with asymmetric information

When to allow Research Joint Ventures (RJVs) or not is an importantinstrument in the development of an optimal R&D policy. Theregulator, however, is unlikely to know all the relevant informationto regulate R&D optimally. The extent to which there existappropriability problems between the firms is one such variable thatis private information to the firms in the industry. In a duopolysetting we analyze the characteristics of a second-best R&D policywhere the government can either allow RJVs or not and give lump-sumsubsidies to the parties involved. The second-best R&D policy withoutsubsidies will either block some welfare improving RJVs or allow somewelfare reducing ones. With lump-sum subsidies, the second-best policytrades off the expected subsidy cost with allowing welfare decreasingRJVs or blocking welfare increasing ones.

The minimax distortion redundancy in empirical quantizer design

We obtain minimax lower and upper bounds for the expected distortionredundancy of empirically designed vector quantizers. We show that the meansquared distortion of a vector quantizer designed from $n$ i.i.d. datapoints using any design algorithm is at least $\Omega (n^{-1/2})$ awayfrom the optimal distortion for some distribution on a bounded subset of${\cal R}^d$. Together with existing upper bounds this result shows thatthe minimax distortion redundancy for empirical quantizer design, as afunction of the size of the training data, is asymptotically on the orderof $n^{1/2}$. We also derive a new upper bound for the performance of theempirically optimal quantizer.

Fiscal decentralization in Spain: An asymmetric transition to democracy

Asymmetric fiscal decentralization, by which we mean different fiscal arrangements between the central government and different groups of, or individual, lower-level governments, may be justified from an economic efficiency perspective. As argued by Tiebout (1956), Oates (1972) and others, a decentralized system of regional and local governments is better able to accommodate differences in tastes for public goods and services. This efficiency argument calls for decentralization of fiscal authority to regional and local governments, but not necessarily asymmetric decentralization. However, when the differences in tastes for public goods and services arise out of differences in history, culture and language across regions of a country, asymmetric treatment may be justified. History, culture and language may influence how a group of people (a region) views autonomy, independence and fiscal authority. Some regions may have had experience with autonomous government in the past, they may have a culture that is strongly reliant upon (or leery of) the central government, or they may be fearful of losing their separate languages if they do not have special arrangements. To accommodate differences in taste for independence, autonomy, and fiscal authority, it may be necessary to have different fiscal arrangements between the central government and the different regions comprising the country.

The challenge of representative design in psychology and economics

The demands of representative design, as formulated by Egon Brunswik (1956), set a high methodological standard. Both experimental participants and the situations with which they are faced should be representative of the populations to which researchers claim to generalize results. Failure to observe the latter has led to notable experimental failures in psychology from which economics could learn. It also raises questions about the meaning of testing economic theories in abstract environments. Logically, abstract tests can only be generalized to abstract realities and these may or may not have anything to do with the empirical realities experienced by economic actors.

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.

Optimal law enforcement under asymmetric information

In this paper, we focus on the problem created by asymmetric informationabout the enforcer's (agent's) costs associated to enforcement expenditure. This adverse selection problem affects optimal law enforcement because a low cost enforcer may conceal its information by imitating a high cost enforcer, and must then be given a compensation to be induced to reveal its true costs. The government faces a trade-off between minimizing the enforcer's compensation and maximizing the net surplus of harmful acts. As a consequence, the probability of apprehension and punishment is usually reduced leading to more offenses being committed. We show that asymmetry of information does not affect law enforcement as long as raising public funds is costless. The consideration of costly raising of public funds permits to establish the positive correlation between asymmetry of information between government and enforcers andthe crime rate.

Traducción técnica del capítulo III del libro Advanced Data Warehouse design: from conventional to spatial and temporal applications

The proposal to work on this final project came after several discussions held with Dr. Elzbieta Malinowski Gadja, who in 2008 published the book entitled Advanced Data Warehouse Design: From Conventional to Spatial and Temporal Applications (Data-Centric Systems and Applications). The project was carried out under the technical supervision of Dr. Malinowski and the direct beneficiary was the University of Costa Rica (UCR) where Dr. Malinowski is a professor at the Department of Computer Science and Informatics. The purpose of this project was twofold: First, to translate chapter III of said book with the intention of generating educational material for the use of the UCR and, second, to venture in the field of technical translation related to data warehouse. For the first component, the goal was to generate a final product that would eventually serve as an educational tool for the post-graduate courses of the UCR. For the second component, this project allowed me to acquire new skills and put into practice techniques that have helped me not only to perfom better in my current job as an Assistant Translator of the Inter-American BAnk (IDB), but also to use them in similar projects. The process was lenggthy and required torough research and constant communication with the author. The investigation focused on the search of terms and definitions to prepare the glossary, which was the basis to start the translation project. The translation process itself was carried out by phases, so that comments and corrections by the author could be taken into account in subsequent stages. Later, based on the glossary and the translated text, illustrations had been created in the Visio software were translated. In addition to the technical revision by the author, professor Carme Mangiron was in charge of revising the non-technical text. The result was a high-quality document that is currently used as reference and study material by the Department of Computer Science and Informatics of Costa Rica.

Application of a support system to the design of wastewater treatment plants

This paper presents a case study that explores the advantages that can be derived from the use of a design support system during the design of wastewater treatment plants (WWTP). With this objective in mind a simplified but plausible WWTP design case study has been generated with KBDS, a computer-based support system that maintains a historical record of the design process. The study shows how, by employing such a historical record, it is possible to: (1) rank different design proposals responding to a design problem; (2) study the influence of changing the weight of the arguments used in the selection of the most adequate proposal; (3) take advantage of keywords to assist the designer in the search of specific items within the historical records; (4) evaluate automatically thecompliance of alternative design proposals with respect to the design objectives; (5) verify the validity of previous decisions after the modification of the current constraints or specifications; (6) re-use the design records when upgrading an existing WWTP or when designing similar facilities; (7) generate documentation of the decision making process; and (8) associate a variety of documents as annotations to any component in the design history. The paper also shows one possible future role of design support systems as they outgrow their current reactive role as repositories of historical information and start to proactively support the generation of new knowledge during the design process

The Coordinated Radio and Infrared Survey for High-Mass Star Formation (The CORNISH Survey). I. Survey Design

We describe the motivation, design, and implementation of the CORNISH survey, an arcsecondresolution radio continuum survey of the inner galactic plane at 5 GHz using the Very Large Array (VLA). It is a blind survey coordinated with the northern SpitzerGLIMPSE I region covering 10°

New multiple matched filter: design and experimental realization

A method of making a multiple matched filter which allows the recognition of different characters in successive planes in simple conditions is proposed. The generation of the filter is based on recording on the same plate the Fourier transforms of the different patterns to be recognized, each of which is affected by different spherical phase factors because the patterns have been placed at different distances from the lens. This is proved by means of experiments with a triple filter which allows satisfactory recognition of three characters.