Valuation of defaultable bonds and debt restructuring

In this paper we develop a contingent valuation model for zero-coupon bonds with default. In order to emphasize the role of maturity time and place of the lender’s claim in the hierarchy of debt of a firm, we consider a firm that issues two bonds with different maturities and different seniorage. The model allows us to analyze the implications of both debt renegotiation and capital structure of a firm on the prices of bonds. We obtain that renegotiation brings about a significant change in the bond prices and that the effect is dispersed through different channels: increasing the value of the firm, reallocating payments, and avoiding costly liquidation. Moreover, the presence of two creditors leads to qualitatively different implications for pricing, while emphasizing the importance of bond covenants and renegotiation of the entire debt.

Debt and deficit fluctuations and the structure of bond markets

We analyse the implications of optimal taxation for the stochastic behaviour of debt. We show that when a government pursues an optimal fiscal policy under complete markets, the value of debt has the same or less persistence than other variables in the economy and it declines in response to shocks that cause the deficit to increase. By contrast, under incomplete markets debt shows more persistence than other variables and it increases in response to shocks that cause a higher deficit. Data for US government debt reveals diametrically opposite results from those of complete markets and is much more supportive of bond market incompleteness.

Fiscal insurance and debt management in OECD economies

Assuming the role of debt management is to provide hedging against fiscal shocks we consider three questions: i) what indicators can be used to assess the performance of debt management? ii) how well have historical debt management policies performed? and iii) how is that performance affected by variations in debt issuance? We consider these questions using OECD data on the market value of government debt between 1970 and 2000. Motivated by both the optimal taxation literature and broad considerations of debt stability we propose a range of performance indicators for debt management. We evaluate these using Monte Carlo analysis and find that those based on the relative persistence of debt perform best. Calculating these measures for OECD data provides only limited evidence that debt management has helped insulate policy against unexpected fiscal shocks. We also find that the degree of fiscal insurance achieved is not well connected to cross country variations in debt issuance patterns. Given the limited volatility observed in the yield curve the relatively small dispersion of debt management practices across countries makes little difference to the realised degree of fiscal insurance.

In Search of a theory of debt management

A growing literature integrates theories of debt management into models of optimal fiscal policy. One promising theory argues that the composition of government debt should be chosen so that fluctuations in the market value of debt offset changes in expected future deficits. This complete market approach to debt management is valid even when the government only issues non-contingent bonds. A number of authors conclude from this approach that governments should issue long term debt and invest in short term assets. We argue that the conclusions of this approach are too fragile to serve as a basis for policy recommendations. This is because bonds at different maturities have highly correlated returns, causing the determination of the optimal portfolio to be ill-conditioned. To make this point concrete we examine the implications of this approach to debt management in various models, both analytically and using numerical methods calibrated to the US economy. We find the complete market approach recommends asset positions which are huge multiples of GDP. Introducing persistent shocks or capital accumulation only worsens this problem. Increasing the volatility of interest rates through habits partly reduces the size of these simulations we find no presumption that governments should issue long term debt ? policy recommendations can be easily reversed through small perturbations in the specification of shocks or small variations in the maturity of bonds issued. We further extend the literature by removing the assumption that governments every period costlessly repurchase all outstanding debt. This exacerbates the size of the required positions, worsens their volatility and in some cases produces instability in debt holdings. We conclude that it is very difficult to insulate fiscal policy from shocks by using the complete markets approach to debt management. Given the limited variability of the yield curve using maturities is a poor way to substitute for state contingent debt. The result is the positions recommended by this approach conflict with a number of features that we believe are important in making bond markets incomplete e.g allowing for transaction costs, liquidity effects, etc.. Until these features are all fully incorporated we remain in search of a theory of debt management capable of providing robust policy insights.

Figures femenines a escena: Ofèlia, Antígona i Medea

La present recerca aporta l´anàlisi de la figura femenina que es representa en l´escena teatral actual a partir de tres grans personatges clàssics: Ofèlia, Antígona i Medea. En la figura d´Ofèlia conflueix el debat sobre les dones-aigua de Katia Kavanova; l´enamorament i adulteri de Madame Bovary i la recerca d´identitat femenina de Nora, d´Ibsen. A partir d´Antígona i la seva rebel•lió, s´inscriuen artistes contemporànies com Angélica Liddell, Cindy Sherman i Marta Carrasco. El personatge de Medea, tractat a partir del mite, permet analitzar l´evolució de la feminitat cap a una nova manera d´entendre i representar la realitat en l´escena contemporània: la dona viril. Finalment, es demostra com Sarah kane conclou i aglutina les tres figures anteriors i desenvolupa la síntesi de la dona de l´Amor i la Mort.

Regional value added in Italy over the long run (1891-2001): linking indirect estimates with official figures, and implications

This paper presents value added estimates for the Italian regions, in benchmark years from 1891 until 1951, which are linked to those from official figures available from 1971 in order to offer a long-term picture. Sources and methodology are documented and discussed, whilst regional activity rates and productivity are also presented and compared. Thus some questions are briefly reconsidered: the origins and extent of the north-south divide, the role of migration and regional policy in shaping the pattern of regional inequality, the importance of social capital, and the positioning of Italy in the international debate on regional convergence, where it stands out for the long run persistence of its disparities.

Programa intercultural pel Centre Penitenciari de Figures: activitat per treballar la interculturalitat amb interns del Centre Penitenciari de Figueres

Proposta d’activitat per treballar la interculturalitat en el centre penitenciari de Figueres des del punt de vista de l’educador social. L’activitat consisteix en la creació i manteniment d’un blog obert a tots els interns mitjançant la xarxa moodle. L’autora aprofita per fer una extensa contextualització de la realitat del CP de Figueres

Women in police services in the EU: facts and figures 2012

The Institute for Public Security of Catalonia (ISPC), the only state-funded education and research centre for police in Catalonia-Spain, developed in 2012 a comparative study on Gender diversity in police services in the European Union. The study is an update of the research Facts & Figures 2008 that was carried out by the European Network of Policewomen (ENP), a non-profit organization that works in partnership with colleagues from police and/or law enforcement organizations in its member countries to facilitate positive changes in the position of women in police services. To gather the 2012 data, the ISPC invited EU Member States’ police services to cooperate in the study answering a 10- ITEM questionnaire. The questionnaire was the same tool used in 2008 by the ENP. In February 2012, the ISPC sent the questionnaires through Cepol National Contact Points’ network. In order to include as many police services as possible in the study, the ENP also supported us to gather some of the data. Altogether we received questionnaires from 29 police services corresponding to 17 UE countries. Besides, we used data from open sources about England and Wales police services and the French National Police. In this document you can find: first, the tool we used to collect the data; second, the answers we gathered presented per country; finally, some comparative tables and graphics developed by the ISPC. Countries: Austria, Belgium Cyprus, Denmark, England, Wales, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Portugal, Romania, Slovenia, Spain, Swden.

Debt enforcement and relational contracting

We examine how third-party debt enforcement affects the emergence and performance ofrelational contracts in credit markets. We implement an experiment with finitely repeatedcredit relationships in which borrowers can default. In the weak enforcement treatmentdefaulting borrowers can keep their funds invested. In the strong enforcement treatmentdefaulting borrowers have to liquidate their investment. Under weak enforcement fewerrelationships emerge in which loans are extended and repaid. When such relationships doemerge they exhibit a lower credit volume than under strong enforcement. These findingssuggest that relational contracting in credit markets requires a minimum standard of thirdpartydebt enforcement.

The hidden costs of hidden debt

We report evidence that salience may have economically signi.cant e¤ects on homeowners.borrowing behavior, through a bias in favour of less salient but more costly loans. Survey evidence corroborates the existence of such a bias. We outline a simple model in which some consumers are biased and show that under plausible assumptions this affects prices in equilibrium. Market data support the predictions of the model.

Figures i mirades salvatges en el cinema de Werner Herzog

Aquest treball de recerca vol explorar com el concepte del salvatge europeu es plasmaen l'obra del cineasta alemany Werner Herzog. Aquesta plasmació es produeix tant anivell figuratiu i narratiu com a nivell estètic. Per una banda, en aquests films hi ha un treball del cos i de com aquest es sotmet a diverses regles socials i de representació, que el salvatge contestarà amb un rebuig de l'ordre establert, sovint concretat en la idea de fuga cap a la natura. Per altra banda, l'estètica dels films de Herzog respon al que denominem una mirada salvatge: la representació d'una societat teatral que s'enfonsa, per una banda, i l'ús de recursos formals per a reproduir una mirada primigènia sobre les imatges, per l'altra. En tots els casos, la dinàmica d'alliberament de les forces civilitzadores constitueix el fonament de la narració i l'estètica del cineasta alemany.

Institutions, Public Debt and Foreign Finance

We study the role of domestic financial institutions in sustaining capital flows to the private and public sector of a country whose government can default on its debt. As in recent public debt crises, in our model public defaults weaken banks' balance sheets, disrupting domestic financial markets. This effect leads to a novel complementarity between private capital inflows and public borrowing, where the former sustain the latter by boosting the government's cost of default. Our key message is that, by shaping the direction of private capital flows, financial institutions determine whether financial integration improves or reduces government discipline. We explore the implications of this complementarity for financial liberalization and debt-financed bailouts of banks. We present some evidence consistent with complementarity.

Nominal Debt as a Burden on Monetary Policy

We study the effects of nominal debt on the optimal sequential choice of monetary policy. When the stock of debt is nominal, the incentive to generate unanticipated inflation increases the cost of the outstanding debt even if no unanticipated inflation episodes occur in equilibrium. Without full commitment, the optimal sequential policy is to deplete the outstanding stock of debt progressively until these extra costs disappear. Nominal debt is therefore a burden on monetary policy, not only because it must be serviced, but also because it creates a time inconsistency problem that distorts interest rates. The introduction of alternative forms of taxation may lessen this burden, if there is enough commtiment to fiscal policy. If there is full commitment to an optimal fiscal policy, then the resulting monetary policy is the Friedman rule of zero nominal interest rates.

Credit card debt puzzles

Most US credit card holders revolve high-interest debt, often combined with substantial (i) asset accumulation by retirement, and (ii) low-rate liquid assets. Hyperbolic discounting can resolve only the former puzzle (Laibson et al., 2003). Bertaut and Haliassos (2002) proposed an 'accountant-shopper'framework for the latter. The current paper builds, solves, and simulates a fully-specified accountant-shopper model, to show that this framework canactually generate both types of co-existence, as well as target credit card utilization rates consistent with Gross and Souleles (2002). The benchmark model is compared to setups without self-control problems, with alternative mechanisms, and with impatient but fully rational shoppers.

Debt and deficit fluctuations and the structure of bond markets

This paper tests for the market environment within which US fiscal policyoperates, that is we test for the incompleteness of the US government bondmarket. We document the stochastic properties of US debt and deficits andthen consider the ability of competing optimal tax models to account forthis behaviour. We show that when a government pursues an optimal taxpolicy and issues a full set of contingent claims, the value of debthas the same or less persistence than other variables in the economyand declines in response to higher deficit shocks. By contrast, ifgovernments only issue one-period risk free bonds (incomplete markets),debt shows more persistence than other variables and it increases inresponse to expenditure shocks. Maintaining the hypothesis of Ramseybehavior, US data conflicts.