A study of behavioral finance: background, theories and application

Behavioral finance, or behavioral economics, consists of a theoretical field of research stating that consequent psychological and behavioral variables are involved in financial activities such as corporate finance and investment decisions (i.e. asset allocation, portfolio management and so on). This field has known an increasing interest from scholar and financial professionals since episodes of multiple speculative bubbles and financial crises. Indeed, practical incoherencies between economic events and traditional neoclassical financial theories had pushed more and more researchers to look for new and broader models and theories. The purpose of this work is to present the field of research, still ill-known by a vast majority. This work is thus a survey that introduces its origins and its main theories, while contrasting them with traditional finance theories still predominant nowadays. The main question guiding this work would be to see if this area of inquiry is able to provide better explanations for real life market phenomenon. For that purpose, the study will present some market anomalies unsolved by traditional theories, which have been recently addressed by behavioral finance researchers. In addition, it presents a practical application of portfolio management, comparing asset allocation under the traditional Markowitz’s approach to the Black-Litterman model, which incorporates some features of behavioral finance.

Brazil and Turkey, a comparative analysis of both countries' economic development and institutional design from the Great Depression to the early 21st century

Apos uma década de rápido crescimento econômico na primeira década do século 21, Brasil e Turquia foram considerados duas das economias emergentes mais dinâmicas e promissoras. No entanto, vários sinais de dificuldades econômicas e tensões políticas reapareceram recentemente e simultaneamente nos dois países. Acreditamos que esses sinais e a sua simultaneidade podem ser entendidos melhor com um olhar retrospectivo sobre a história econômica dos dois países, que revela ser surpreendentemente paralela. Numa primeira parte, empreendemos uma comparação abrangente da história econômica brasileira e turca para mostrar as numerosas similaridades entre os desafios de política econômica que os dois países enfrentaram, assim como entre as respostas que eles lhes deram desde a virada da Grande Depressão até a primeira década do século 21. Essas escolhas de política econômica comuns dão forma a uma trajetória de desenvolvimento notavelmente análoga, caracterizada primeiro pela adoção do modelo de industrialização por substituição das importações (ISI) no contexto da recessão mundial dos anos 1930; depois pela intensificação e crise final desse modelo nos anos 1980; e finalmente por duas décadas de estabilização e transição para um modelo econômico mais liberal. Numa segunda parte, o desenvolvimento das instituições econômicas e políticas, assim como da economia política subjacente nos dois países, são analisados comparativamente a fim de prover alguns elementos de explicação do paralelo observado na primeira parte. Sustentamos que o marco institucional estabelecido nos dois países durante esse período também têm varias características fundamentais em comum e contribui a explicar as escolhas de política econômica e as performances econômicas comparáveis, detalhadas na primeira parte. Este estudo aborda elementos do contexto histórico úteis para compreender a situação econômica e política atual nos dois países. Potencialmente também constitui uma tentativa de considerar as economias emergentes numa perspectiva histórica e comparativa mais ampla para entender melhor as suas fraquezas institucionais e adotar um olhar mais equilibrado sobre seu potencial econômico.

Capital flows and monetary control under a domestic currency substitution regime: the recent Brazilian experience

The 90s have witnessed a resumption in capital flows to Latin America. due to the conjugation of low interest rates in the US and economic reforms in most LA countries. In Brazil. however. substantial capital flows have becn induced by the extremely high domestic interest rates practiced by the Central Bank as a measure of last reson given the absence of successful stabilization policies. These very high interest rates were needed to prevent capital flight in a context of a surprisingly stable inflation rate above 20% a month. and keep interest bearing govemment securities preferable to foreign assets as money substitutes. We carefully describe how this domestic currency substitution regime (interest bearing govemment securities are substituted for MIas cash holdings) requires the Central Bank to renounce aoy control over monerary aggregates. In this domestic currency substitution regime. hyperinflation is the most likely outcome of an isolated (i.e.. without fiscal adjusanents) attempt by the Brazilian Central Bank to control money.

Elasticity of substitution between capital and labor: a panel data approach

This paper estimates the elasticity of substitution of an aggregate production function. The estimating equation is derived from the steady state of a neoclassical growth model. The data comes from the PWT in which different countries face different relative prices of the investment good and exhibit different investment-output ratios. Then, using this variation we estimate the elasticity of substitution. The novelty of our approach is that we use dynamic panel data techniques, which allow us to distinguish between the short and the long run elasticity and handle a host of econometric and substantive issues. In particular we accommodate the possibility that different countries have different total factor productivities and other country specific effects and that such effects are correlated with the regressors. We also accommodate the possibility that the regressors are correlated with the error terms and that shocks to regressors are manifested in future periods. Taking all this into account our estimation resuIts suggest that the Iong run eIasticity of substitution is 0.7, which is Iower than the eIasticity that had been used in previous macro-deveIopment exercises. We show that this lower eIasticity reinforces the power of the neoclassical mo deI to expIain income differences across countries as coming from differential distortions.

Import substitution and economic growth

In spite of Latin America s dismal economic performance between the 1950s and 1980s, the region experienced strong capital deepening. Furthermore, pro- ductivity (measured as TFP) grew at low rates in comparison with the U.S. In this paper, we suggest that all these facts can be explained as a consequence of the restrictive trade regime adopted at that time. Our analytical framework is based on a dynamic Heckscher-Ohlin model, with scale economies in the capital- intensive sector. We assume an economy that is initially open and specialized in the production of labor-intensive goods. The trade regime is modeled as a move to a closed economy. The model produces results consistent with the Latin American experience. Speci cally, for a su¢ ciently small country, there will be no long-run growth in income per capita, but capital per capita will increase. As a result, measured TFP will fall.

Impactos da imigração no mercado de trabalho brasileiro

Diante da importância que o tema da imigração adquiriu no país nos últimos anos, gerou-se uma necessidade de melhor entendimento dos efeitos econômicos causados por influxos populacionais dessa natureza. Todavia, sob o conhecimento dos autores, inexistem estudos para história recente brasileira acerca dos impactos dos imigrantes no mercado de trabalho, em especial, sobre o salário e o nível de emprego dos nativos. Com esse panorama em mente, os estudos realizados nesta tese visam dar os primeiros passos na investigação desse tema. O presente trabalho é composto por quatro capítulos, os quais examinam diferentes questões associadas aos efeitos da imigração no mercado de trabalho brasileiro. O primeiro capítulo motiva o tema da imigração no Brasil e, através de uma metodologia estrutural baseada no arcabouço da função CES multi-nível, simula o efeito na estrutura salarial em resposta a influxos imigratórios estipulados para o ano de 2010, data do último Censo Demográfico. Em particular, calcula-se que o impacto salarial médio decorrente de um influxo estipulado de 549 mil imigrantes, mesma magnitude do observado entre dezembro de 2010 e dezembro de 2011, estaria situado em torno de -0.25%. O segundo capítulo estima o grau de substituição entre imigrantes e nativos do mesmo grupo de habilidade e testa a hipótese de substituição perfeita suportada empiricamente por Borjas et al. (2012, 2008) e adotada no capítulo anterior. A metodologia empregada fundamenta-se no arcabouço estrutural desenvolvido em Manacorda et al. (2012) e Ottaviano & Peri (2012), o qual acrescenta um nível extra na função de produção CES multi-nível de Borjas (2003). As elasticidades de substituição estimadas sob diversas especificações variam entre 9 e 23, resultados que fortalecem a tese de substituição imperfeita preconizada por Card (2012). O terceiro capítulo estima dois tipos de elasticidades relacionadas ao impacto dos imigrantes sobre o rendimento do trabalho nativo através de uma metodologia alternativa baseada numa função de produção mais flexível e que não está sujeita a restrições tão austeras quanto a CES. As estimativas computadas para as elasticidades de substituição de Hicks subjacentes se situam entre 1.3 e 4.9, o que reforça as evidências de substituição imperfeita obtidas no Capítulo 2. Adicionalmente, os valores estimados para as elasticidades brutas dos salários dos nativos em relação às quantidades de imigrantes na produção são da ordem máxima de +-0.01. O quarto e último capítulo, por meio de uma metodologia fundamentada no arcabouço da função de custo Translog, examina como o nível de emprego dos nativos reage a alterações no custo do trabalho imigrante, uma questão que até o momento recebeu pouca atenção da literatura, conquanto apresente relevância para formulação de políticas imigratórias. Para todas as especificações de modelo e grupos de educação considerados, nossos resultados apontam que uma variação exógena no salário do imigrante produz apenas diminutos efeitos sobre o nível de emprego dos trabalhadores nativos brasileiros. Na maioria dos casos, não se pode rejeitar a hipótese de que nativo e imigrante não são nem p-complementares nem p-substitutos líquidos.

Cognitive abilities, sociocultural background and academic achievement

The infl uence of students’ sociocultural background on academic achievement is a well established fact. Research also points out that sociocultural background is related to students’ cognitive abilities and these have an effect on their academic achievement. However, the mediator role of cognitive abilities on the relationship between sociocultural background and academic achievement is less well known. A structural equation model that represents these relationships was tested in a sample (N= 728) of Portuguese junior high school students. Multigroup analysis of the model showed the importance of the cognitive ability mediation effect between sociocultural background and academic achievement in the 7th and 9th grades, but not in the 8th grade. This difference may be the result of the academic transition experienced in the 7th and 9th grades in the Portuguese educational system, which requires parents’ higher involvement in school.

Total gastrectomy with substitution of stomach by jejunal pouch with and without duodenal passage. Study in rats

A comparison was done between the F. Paulino jejunal pouch (FP) and a jejunal pouch (JP) as esophagusduodenum interpositional graft, for replacing the stomach after total gastrectomy. It was investigated the effect of the two procedures on esophagus histology, nutritional state and serum gastrin in rats. Methods: Male Wistar rats weighing 282±17g were randomly submitted to sham operation (S), FP and JP after total gastrectomy. After eight weeks the rats were killed with overdose of anesthetic and tissue was taken from the distal esophagus for histology. Serum levels of total proteins, albumin, iron, transferring, folate, cobalamine, calcium, as well as serum gastrin were determined. Survival was considered. Results: Fourty six rats were operated and thirty survived for eight weeks. Five (33.3%) died after FP and 11 (52.3%) after JP (p<0.05). Postoperative esophagitis occurred in 6 JP rats. At 8th week, no difference was observed on body weight when compared FP and JP rats (p>0.05). The JP rats had a significant decrease in serum albumin, glucose, transferrin, iron, folate and calcium, compared to sham (p<0.05). Serum gastrin, iron and calcium were significantly higher in JP rats than in FP rats (p<0.05). In FP rats, transferrin and cobalamine showed significant decrease comparing the preoperative with 8th week levels (p<0.05). Conclusion: F. Paulino pouch in rats had lower mortality than JP, and esophagitis was not detected in it. JP rats had serum gastrin, iron and calcium unaffected, possibly because of preservation of duodenal passage

Desempenho e background familiar: um estudo no acesso a uma instituição de ensino técnico federal no Brasil

This paper comprises an investigation on the influence of the variable family backgrounds (father school level, mother school level and family income) over the pupil s performance in admissions examination (entrance test or PROITEC) at Instituto Federal de Educação, Ciência e Tecnologia do Rio Grande do Norte (IFRN). From that point of view, the main goal of this research is to analyze the influence of the family background as a determiner of the pupil´s performance in the access to Technical and Professional education at IFRN. Secondary data were used from two databases (entrance test and PROITEC) adding up to 19.226 observations to the vacancies offered in the year of 2013. Aiming at achieving the proposed goal, a conceptual model composed of three hypothesis was developed. The results were presented in four stages: stage I presentation of the descriptive statistical results of the two databases; stage II separation of the campi in clusters; stage III analysis of multiple regressions; stage IV analysis of the logistics regressions. Two statistical tests were used to validate the hypothesis: T-test and Wald test. Hypothesis 1 and 2 were confirmed and H3 was refused. The results presented favorable causal connections to the family income and the father school level variables (with bigger effect for fathers with a higher education degree). The mother school level variable did not provide statistical significance for this research. Based on this result, after this work, this institution is to develop a strategic plan to assist in the success rate of students preparing diagnoses in order to diminish the effects of the variables that impacted negatively

Effects of strontium and calcium simultaneous substitution on electrical and structural properties of Pb1-x-y Ca (x) Sr (y) TiO3 thin films

Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP)

Exact solution for a fermion in the background of a scalar inversely linear potential

The problem of a fermion subject to a general scalar potential in a two-dimensional world is mapped into a Sturm-Liouville problem for nonzero eigenenergies. The searching for possible bounded solutions is done in the circumstance of power-law potentials. The normalizable zero-eigenmode solutions are also searched. For the specific case of an inversely linear potential, which gives rise to an effective Kratzer potential, exact bounded solutions are found in closed form. The behaviour of the upper and lower components of the Dirac spinor is discussed in detail and some unusual results are revealed. (C) 2004 Elsevier B.V. All rights reserved.

Bounded solutions of fermions in the background of mixed vector-scalar inversely linear potentials

The problem of a fermion subject to a general mixing of vector and scalar potentials in a two-dimensional world is mapped into a Sturm-Liouville problem. Isolated bounded solutions are also searched. For the specific case of an inversely linear potential, which gives rise to an effective Kratzer potential in the Sturm-Liouville problem, exact bounded solutions are found in closed form. The case of a pure scalar potential with their isolated zero-energy solutions, already analyzed in a previous work, is obtained as a particular case. The behavior of the upper and lower components of the Dirac spinor is discussed in detail and some unusual results are revealed. The nonrelativistic limit of our results adds a new support to the conclusion that even-parity solutions to the nonrelativistic one-dimensional hydrogen atom do not exist. (c) 2004 Elsevier B.V. All rights reserved.

Bounded solutions of fermions in the background of mixed vector-scalar Poeschl-Teller-like potentials

The problem of a fermion subject to a convenient mixing of vector and scalar potentials in a two-dimensional space-time is mapped into a Sturm-Liouville problem. For a specific case which gives rise to an exactly solvable effective modified Poschl-Teller potential in the Sturm-Liouville problem, bound-state solutions are found. The behaviour of the upper and lower components of the Dirac spinor is discussed in detail and some unusual results are revealed. The Dirac delta potential as a limit of the modified Poschl-Teller potential is also discussed. The problem is also shown to be mapped into that of massless fermions subject to classical topological scalar and pseudoscalar potentials. Copyright (C) EPLA, 2007.

The peremptory influence of a uniform background for trapping neutral fermions with an inversely linear potential

The problem of neutral fermions subject to an inversely linear potential is revisited. It is shown that an infinite set of bound-state solutions can be found on the condition that the fermion is embedded in an additional uniform background potential. An apparent paradox concerning the uncertainty principle is solved by introducing the concept of effective Compton wavelength.