3-Regime symmetric STAR modeling and exchange rate reversion

The breakdown of the Bretton Woods system and the adoption of generalized oating exchange rates ushered in a new era of exchange rate volatility and uncer- tainty. This increased volatility lead economists to search for economic models able to describe observed exchange rate behavior. In the present paper we propose more general STAR transition functions which encompass both threshold nonlinearity and asymmetric e¤ects. Our framework allows for a gradual adjustment from one regime to another, and considers threshold e¤ects by encompassing other existing models, such as TAR models. We apply our methodology to three di¤erent exchange rate data-sets, one for developing countries, and o¢ cial nominal exchange rates, the sec- ond emerging market economies using black market exchange rates and the third for OECD economies.

Nondictatorial Arrovian Social Welfare Functions: An Integer Programming Approach

In the line opened by Kalai and Muller (1997), we explore new conditions on prefernce domains which make it possible to avoid Arrow's impossibility result. In our main theorem, we provide a complete characterization of the domains admitting nondictorial Arrovian social welfare functions with ties (i.e. including indifference in the range) by introducing a notion of strict decomposability. In the proof, we use integer programming tools, following an approach first applied to social choice theory by Sethuraman, Teo and Vohra ((2003), (2006)). In order to obtain a representation of Arrovian social welfare functions whose range can include indifference, we generalize Sethuraman et al.'s work and specify integer programs in which variables are allowed to assume values in the set {0, 1/2, 1}: indeed, we show that, there exists a one-to-one correspondence between solutions of an integer program defined on this set and the set of all Arrovian social welfare functions - without restrictions on the range.

An axiomatization of difference-form contest success functions

This paper presents an axiomatic characterization of difference-form group contests, that is, contests fought among groups and where their probability of victory depends on the difference of their effective efforts. This axiomatization rests on the property of Equalizing Consistency, stating that the difference between winning probabilities in the grand contest and in the smaller contest should be identical across all participants in the smaller contest. This property overcomes some of the drawbacks of the widely-used ratio-form contest success functions. Our characterization shows that the criticisms commonly-held against difference-form contests success functions, such as lack of scale invariance and zero elasticity of augmentation, are unfounded.By clarifying the properties of this family of contest success functions, this axiomatization can help researchers to find the functional form better suited to their application of interest.