Chaotic dynamics in credit constrained emerging economies

This paper analyzes the role of financial development as a source of endogenous instability in small open economies. By assuming that firms face credit constraints, our model displays a complex dynamic behavior for intermediate values of the parameter representing the level of financial development of the economy. The basic implication of our model is that economies experiencing a process of financial development are more unstable than both very underdeveloped and very developed economies. Our instability concept means that small shocks have a persistent effect on the long run behavior of the model and also that economies can exhibit cycles with a very high period or even chaotic dynamic patterns.

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.

From creative ideas to new emerging ventures: the process of identification and exploitation among finnish design entrepreneurs

This study focuses on identification and exploitation processes among Finnish design entrepreneurs (i.e. selfemployed industrial designers). More specifically, this study strives to find out what design entrepreneurs do when they create new ventures, how venture ideas are identified and how entrepreneurial processes are organized to identify and exploit such venture ideas in the given industrial context. Indeed, what does educated and creative individuals do when they decide to create new ventures, where do the venture ideas originally come from, and moreover, how are venture ideas identified and developed into viable business concepts that are introduced on the markets? From an academic perspective: there is a need to increase our understanding of the interaction between the identification and exploitation of emerging ventures, in this and other empirical contexts. Rather than assuming that venture ideas are constant in time, this study examines how emerging ideas are adjusted to enable exploitation in dynamic market settings. It builds on the insights from previous entrepreneurship process research. The interpretations from the theoretical discussion build on the assumption that the subprocesses of identification and exploitation interact, and moreover, they are closely entwined with each other (e.g. McKelvie & Wiklund, 2004, Davidsson, 2005). This explanation challenges the common assumption that entrepreneurs would first identify venture ideas and then exploit them (e.g. Shane, 2003). The assumption is that exploitation influences identification, just as identification influences exploitation. Based on interviews with design entrepreneurs and external actors (e.g. potential customers, suppliers and collaborators), it appears as identification and exploitation of venture ideas are carried out in close interaction between a number of actors, rather than alone by entrepreneurs. Due to their available resources, design entrepreneurs have a desire to focus on identification related activities and to find external actors that take care of exploitation related activities. The involvement of external actors may have a direct impact on decisionmaking and various activities along the processes of identification and exploitation, which is something that previous research does not particularly emphasize. For instance, Bhave (1994) suggests both operative and strategic feedback from the market, but does not explain how external parties are actually involved in the decisionmaking, and in carrying out various activities along the entrepreneurial process.

The Monetary policy rules and the inflation process in open emerging

This paper has three objectives. First, it aims at revealing the logic of interest rate setting pursued by monetary authorities of 12 new EU members. Using estimation of an augmented Taylor rule, we find that this setting was not always consistent with the official monetary policy. Second, we seek to shed light on the inflation process of these countries. To this end, we carry out an estimation of an open economy Philips curve (PC). Our main finding is that inflation rates were not only driven by backward persistency but also held a forward-looking component. Finally, we assess the viability of existing monetary arrangements for price stability. The analysis of the conditional inflation variance obtained from GARCH estimation of PC is used for this purpose. We conclude that inflation targeting is preferable to an exchange rate peg because it allowed decreasing the inflation rate and anchored its volatility.

Relationship between technological progress, capital elasticity and emissions of industrial pollutants for the production sectors in Catalonia

As is known, the Kyoto Protocol proposes to reinforce national policies for emission reduction and, furthermore, to cooperate with other contracting parties. In this context, it would be necessary to assess these emissions, both in general and specifically, by pollutants and/or among productive sectors. The object of this paper is precisely to estimate the polluting emissions of industrial origin in Catalonia in the year 2001, in a multivariate context which explicitly allows a distinction to be made between the polluter and/or the productive sector causing this emission. Six pollutants considered, four directly related to greenhouse effect. A multi-level model, with two levels, pollutants and productive sectors, was specified. Both technological progress and elasticity of capital were introduced as random effects. Hence, it has been permitted that these coefficients vary according to one or other level. The most important finding in this paper is that elasticity of capital has been estimated as very non-elastic, with a range which varies between 0.162 (the paper industry) and 0.556 (commerce). In fact, and generally speaking, the greater capital the sector has, the less elasticity of capital has been estimated. Key words: Kyoto protocol, multilevel model, technological progress

Avaluació del creixement del fong ligninolític Trametes versicolor sobre diferents suports sòlids per a l'aplicació en tractaments de bioremediació

Els fongs de podridura blanca (WRF - de l'anglès: White-rot fungi) són de gran interès en l'àmbit de la bioremediació per la seva capacitat de degradar la lignina. La lacasa, un dels enzims extracel·lulars que aquests fongs excreten per degradar la lignina, pot ser utilitzada per degradar els contamiants presents en una matriu donada. Trametes versicolor ha estat estudiat per la seva capacitat de produïr aquest enzim en rersidus agrícoles com a substrats. Un primer triatge basat en la producció de CO2, la mesura de l'activitat lacasa i la quantificació de l'ergosterol han permés seleccionar els substrats on es donava un major poder oxidatiu dels cultius inoculats amb T. versicolor. Els posteriors experiments de colonització de sòls, on es monitoritzava l'activitat lacasa i l'ergosterol, han mostrat que T. vesicolor és capaç de colonitzar sòls i que té una major activitat lacasa en condicions no estèrils. També h'ha provat, mitjançant el test ND24, que T. versicolor és capaç de degradar un contaminant emergent, el naproxè, en sòls estèrils i no estèrils esmenats amb residus agrícoles.

Emerging narratives of conference interpreters’ training: a case study of ad hoc training in Babels and the Social Forum

Desde una perspectiva narrativa, este artículo explora cómo la práctica y la formación en interpretación de conferenciasse han percibido en la disciplina, en la profesión y en diferentescolectivos de traductores e interpretes comprometid@s como ECOSy Babels. Sostiene que estas distintas maneras de percibir la interpretación no son meramente opuestas sino que su potencial confluencia es clave para hacer posible una interpretación de conferencias más comprometida políticamente y más socio-crítica en un mundo de desigualdades cada vez más acentuadas y de mercantilización creciente de todos los aspectos de la vida. El artículo lleva a cabo un estudio de caso sobre la formación ad hoc de intérpretes en el Foro Social, en particular el Foro Social Europeo de Londres, y analiza cómo el trabajo colectivo entre instituciones educativas y sociedad civil tanto local como global ha dado luz a prácticas transformadoras hacia una metodología de formación mássocio-critica y con mayor consciencia ética.

Organisational Values as "Attractors of Chaos": An Emerging Cultural Change to Manage Organisational Complexity

Business organisations are excellent representations of what in physics and mathematics are designated "chaotic" systems. Because a culture of innovation will be vital for organisational survival in the 21st century, the present paper proposes that viewing organisations in terms of "complexity theory" may assist leaders in fine-tuning managerial philosophies that provide orderly management emphasizing stability within a culture of organised chaos, for it is on the "boundary of chaos" that the greatest creativity occurs. It is argued that 21st century companies, as chaotic social systems, will no longer be effectively managed by rigid objectives (MBO) nor by instructions (MBI). Their capacity for self-organisation will be derived essentially from how their members accept a shared set of values or principles for action (MBV). Complexity theory deals with systems that show complex structures in time or space, often hiding simple deterministic rules. This theory holds that once these rules are found, it is possible to make effective predictions and even to control the apparent complexity. The state of chaos that self-organises, thanks to the appearance of the "strange attractor", is the ideal basis for creativity and innovation in the company. In this self-organised state of chaos, members are not confined to narrow roles, and gradually develop their capacity for differentiation and relationships, growing continuously toward their maximum potential contribution to the efficiency of the organisation. In this way, values act as organisers or "attractors" of disorder, which in the theory of chaos are equations represented by unusually regular geometric configurations that predict the long-term behaviour of complex systems. In business organisations (as in all kinds of social systems) the starting principles end up as the final principles in the long term. An attractor is a model representation of the behavioral results of a system. The attractor is not a force of attraction or a goal-oriented presence in the system; it simply depicts where the system is headed based on its rules of motion. Thus, in a culture that cultivates or shares values of autonomy, responsibility, independence, innovation, creativity, and proaction, the risk of short-term chaos is mitigated by an overall long-term sense of direction. A more suitable approach to manage the internal and external complexities that organisations are currently confronting is to alter their dominant culture under the principles of MBV.

Determining underlying macroeconomic fundamentals during emerging market crises: Are conditions as bad as they seem?

Emerging market crises are characterized by large swings in both macroeconomic fundamentalsand asset prices. The economic significance of observed movements in macroeconomicvariables is obscured by the brief and extreme nature of crises. In this paper we propose to study the macroeconomic consequences of crises by studying the behavior of effective fundamentals, constructed by studying the relative movements of stock prices during crises. We find that these effective fundamentals provide a different picture than that implied by observed fundamentals. First, asset prices often reflect expectations of improvement in fundamentals after the initial devaluations; specifically, effective depreciations are positive but not as large as the observed ones. Second, crises vary in their effect on credit market conditions, with investors expecting tightening of credit in some cases (Mexico 1994, Philippines 1997), but loosening of credit in others (Sweden 1992, Korea 1997, Brazil 1999).

Organisational values as "attractors of chaos": An emerging cultural change to manage organisational complexity

Business organisations are excellent representations of what in physics and mathematics are designated "chaotic" systems. Because a culture of innovation will be vital for organisational survival in the 21st century, the present paper proposes that viewing organisations in terms of "complexity theory" may assist leaders in fine-tuning managerial philosophies that provide orderly management emphasizing stability within a culture of organised chaos, for it is on the "boundary of chaos" that the greatest creativity occurs. It is argued that 21st century companies, as chaotic social systems, will no longer be effectively managed by rigid objectives (MBO) nor by instructions (MBI). Their capacity for self-organisation will be derived essentially from how their members accept a shared set of values or principles for action (MBV). Complexity theory deals with systems that show complex structures in time or space, often hiding simple deterministic rules. This theory holds that once these rules are found, it is possible to make effective predictions and even to control the apparent complexity. The state of chaos that self-organises, thanks to the appearance of the "strange attractor", is the ideal basis for creativity and innovation in the company. In this self-organised state of chaos, members are not confined to narrow roles, and gradually develop their capacity for differentiation and relationships, growing continuously toward their maximum potential contribution to the efficiency of the organisation. In this way, values act as organisers or "attractors" of disorder, which in the theory of chaos are equations represented by unusually regular geometric configurations that predict the long-term behaviour of complex systems. In business organisations (as in all kinds of social systems) the starting principles end up as the final principles in the long term. An attractor is a model representation of the behavioral results of a system. The attractor is not a force of attraction or a goal-oriented presence in the system; it simply depicts where the system is headed based on its rules of motion. Thus, in a culture that cultivates or shares values of autonomy, responsibility, independence, innovation, creativity, and proaction, the risk of short-term chaos is mitigated by an overall long-term sense of direction. A more suitable approach to manage the internal and external complexities that organisations are currently confronting is to alter their dominant culture under the principles of MBV.

Why do emerging economies borrow short term?

We argue that one reason why emerging economies borrow short term is that it is cheaperthan borrowing long term. This is especially the case during crises, as in these episodes therelative cost of long-term borrowing increases. We construct a unique database of sovereignbond prices, returns, and issuances at di¤erent maturities for 11 emerging economies from 1990to 2009 and present a set of new stylized facts. On average, these countries pay a higher riskpremium on long-term than on short-term bonds. During crises, the di¤erence between the tworisk premia increases and issuance shifts towards shorter maturities. To illustrate our argument,we present a simple model in which the maturity structure is the outcome of a risk sharingproblem between an emerging economy subject to rollover crises and risk averse internationalinvestors.

Why are capital flows so much more volatile in emerging than in developed countries?

The standard deviations of capital flows to emerging countries are 80 percent higher than those to developed countries. First, we show that very little of this difference can be explained by more volatile fundamentals or by higher sensitivity to fundamentals. Second, we show that most of the difference in volatility can be accounted for by three characteristics of capital flows: (i) capital flows to emerging countries are more subject to occasional large negative shocks ( crises ) than those to developed countries, (ii) shocks are subject to contagion, and (iii) the most important one shocks to capital flows to emerging countries are more persistent than those to developed countries. Finally, we study a number of country characteristics to determine which are most associated with capital flow volatility. Our results suggest that underdevelopment of domestic financial markets, weak institutions, and low income per capita, are all associated with capital flow volatility.

Banking as an emerging technology: Hoare's Bank, 1702-1742

London s financial market underwent dramatic change after 1700. More limitedthan Paris or Amsterdam in the seventeenth century, London became the leadingfinancial centre in Europe in the eighteenth century. There is an extensive andgrowing literature on the causes of this change, but comparatively little on thechange itself. This article provides detailed information on the operation of theLondon financial market around 1700 by describing the operations of a nascentLondon bank.

Credit derivatives in emerging markets

Credit Derivatives are securities that offer protection against credit or default risk ofbonds or loans. The credit derivatives emerging market has grown rapidly and creditderivatives are widely used. This paper describes the emerging credit derivativesmarket structure. The current market activity is analyzed through elementary pricingdynamics and the study of the term structure of default risk. Focusing on theperformance of credit derivatives in stress situation, including legal and market risks,we discuss the potential consequences of a debt restructuring in a large emergingmarket borrower. The contribution of credit derivatives to the risk sharing in emergingmarkets is also examined.