Credit Union Division Activities, December 2003, Issue 9

Newsletter for Iowa Credit Union Division

Department of Commerce Iowa Credit Union Division Performance Report, FY 2004

Agency Performance Report from the Credit Union Division

Department of Commerce Iowa Credit Union Division Performance Report, FY 2005

Agency Performance Report from the Credit Union Division

La restauration des qsûr : institution du patrimoine et enjeux de mémoire

Sous l'égide du ministère de la Culture algérien et de l'UNESCO, a été engagé récemment un programme de rénovation des qsûr, villages fortifiés du sud de l'Algérie. La restauration de ce patrimoine bâti, qui atteste de la prise de conscience de la part des autorités politiques de son importance en tant que patrimoine historique et culturel, est toutefois sujette à interrogation. Quelles sont les conditions et formes que prend cette réhabilitation ? Quels en sont les enjeux ? Et pour qui ? Car si sa rénovation repose sur une politique de préservation du patrimoine revêtant plusieurs enjeux pour les institutions, elle suscite également un grand intérêt auprès des populations des régions du Sud. En effet, les modalités de réhabilitation de ces qsûr interrogent les conditions et formes de l'institution du patrimoine en Algérie ainsi que les enjeux de mémoire et identitaires liés à l'institution de ces qsûr (lesquels sont les marques de l'autochtonie berbère).

Endogenous Credit Cycles and Financial Dampening in an Adverse Selection Economy

We propose an adverse selection framework in which the financial sector has a dual role. It amplifies or dampens exogenous shocks and also generates endogenous fluctuations. We fully characterize constrained optimal contracts in a setting in which entrepreneurs need to borrow and are privately informed about the quality of their projects. Our characterization is novel in analyzing pooling and separating allocations in a context of multi-dimensional screening: specifically, the amounts of investment undertaken and of entrepreneurial net worth are used to screen projects. We then embed these results in a dynamic competitive economy. First, we show how endogenous regime switches in financial contracts may generate fluctuations in an economy that exhibits no dynamics under full information. Unlike previous models of endogenous cycles, our result does not rely on entrepreneurial net worth being counter-cyclical or inconsequential for determining investment. Secondly, the model shows the different implications of adverse selection as opposed to pure moral hazard. In particular, and contrary to standard results in the macroeconomic literature, the financial system may dampen exogenous shocks in the presence of adverse selection.

Adverse Selection, Credit, and Efficiency: the Case of the Missing Market

We analyze a standard environment of adverse selection in credit markets. In our envi- ronment, entrepreneurs who are privately informed about the quality of their projects need to borrow from banks. As is generally the case in economies with adverse selection, the competitive equilibrium of our economy is shown to be ine¢ cient. Under adverse selection, the choices made by one type of agents limit what can be o¤ered to other types in an incentive-compatible manner. This gives rise to an externality, which cannot be internalized in a competitive equilibrium. We show that, in this type of environment, the ine¢ ciency associated to adverse selection is the consequence of one implicit assumption: entrepreneurs can only borrow from banks. If an additional market is added (say, a .security market.), in which entrepreneurs can obtain funds beyond those o¤ered by banks, we show that the e¢ cient allocation is an equilibrium of the economy. In such an equilibrium, all entrepreneurs borrow at a pooling rate in the security market. When they apply to bank loans, though, only entrepreneurs with good projects pledge these additional funds as collateral. This equilibrium thus simultaneously entails cross- subsidization and separation between di¤erent types of entrepreneurs.

Adverse selection, credit, and efficiency: the case of the missing market

We analyze a standard environment of adverse selection in credit markets. In our environment, entrepreneurs who are privately informed about the quality of their projects need to borrow in order to invest. Conventional wisdom says that, in this class of economies, the competitive equilibrium is typically inefficient. We show that this conventional wisdom rests on one implicit assumption: entrepreneurs can only access monitored lending. If a new set of markets is added to provide entrepreneurs with additional funds, efficiency can be attained in equilibrium. An important characteristic of these additional markets is that lending in them must be unmonitored, in the sense that it does not condition total borrowing or investment by entrepreneurs. This makes it possible to attain efficiency by pooling all entrepreneurs in the new markets while separating them in the markets for monitored loans.

Money, Fame and the Allocation of Talent: Brain Drain, the Matthew Effect and the Institution of Science

The earning structure in science is known to be flat relative to the one in the private sector, which could cause a brain drain toward the private sector. In this paper, we assume that agents value both money and fame and study the role of the institution of science in the allocation of talent between the science sector and the private sector. Following works on the Sociology of Science, we model the institution of science as a mechanism distributing fame (i.e. peer recognition). We show that since the intrinsic performance is less noisy signal of talent in the science sector than in the private sector, a good institution of science can mitigate the brain drain. We also find that providing extra monetary incentives through the market might undermine the incentives provided by the institution and thereby worsen the brain drain. Finally, we study the optimal balance between monetary and non-monetary incentives in science.

Credit Constraints, Firms' Precautionary Investment, and the Business Cycle

This paper studies the macroeconomic implications of firms' precautionary investment behavior in response to the anticipation of future financing constraints. Firms increase their demand for liquid and safe investments in order to alleviate future borrowing constraints and decrease the probability of having to forego future profitable investment opportunities. This results in an increase in the share of short-term projects that produces a temporary increase in output, at the expense of lower long-run investment and future output. I show in a calibrated model that this behavior is at the source of a novel and powerful channel of shock transmission of productivity shocks that produces short-run dampening and long-run propagation. Furthermore, it can account for the observed business cycle patterns of the aggregate and firm-level composition of investment.

Health problems of nursing workers in a public educational institution

Objective: To identify the issues occurred with nursing workers through a Health Monitoring System for Nursing Workers (SIMOSTE) and to describe the consequences of those problems. Method: This is a quantitative, exploratory and descriptive study realized in a teaching hospital in the west region of the city of São Paulo. Results: From the SIMOSTE, 1.847 occurrences were registered in a six month period. Within the main occurrences, medical licenses, work related accidents with and without removals; psychiatric consultations and psychotherapy were highlighted. Conclusion: The data points out to the need for the development of new health vigilance actions to notify accidents and illness related to work, besides the prevention of issues.