Suitability comparison of rainwater harvesting and piped water systems in the Dominican Republic

Rainwater harvesting (RWH) has a long history and has been supported as an appropriate technology and relatively cheap source of domestic water supply. This study compares the suitability of RWH and piped water systems in three rural Dominican communities seeking to improve their water systems. Ethnographic methods considering the views of residents and feasibility and cost analysis of the options were used to conclude that RWH is not a feasible or cost-effective solution for domestic water needs of all households in the communities studied. RWH investment is best left to individual households that can implement informal RWH with incremental increases in storage volume. Piped water distribution (PWD) systems perceived as too large or expensive to implement have much lower capital costs and are more supported by residents as a solution because they provide large quantities of water needed to maintain water services beyond mere survival levels.

The role of brand marketing in snowboarding: A comparative study of Switzerland and New Zealand

Introduction: Brands play an essential role in the organizational structure of snowboarding by sponsoring athletes, arranging events, contributing to product development and developing long-term partnerships with other key actors. However, the specialities of their role in scene sports, such as creating identities, networking and brand marketing strategies, have not been extensively researched. This study aims to provide an analysis of the function of brands within the snowboarding subculture by comparing how the sport is organized in Switzerland and New Zealand. Sociological theories of subcultures (Hitzler & Niederbacher, 2010) and social networks (Stegbauer, 2008) are used to defi ne the structures of the sport, whereas marketing and branding theories (Adjouri & Stastny, 2006) help to understand the role of the brands. Snowboarding will be defi ned as an alternative sports subculture based on characteristics such as aesthetics, adventure and new resources of performance (Schwier, 2006). Such a defi nition also begs for a novel form of analyzing its organization. Unlike more conventional structures, the organization of snowboarding allows a variety of actors to get involved in leading the sport. By portraying and encouraging differentiated identities and lifestyles, athletes provide a space for other actors to fi nd their place within the sport (Wheaton, 2005). According to Stegbauers network theory, individual actors are able to obtain high positions and defi ne their identity depending on their ties to actors and networks within the subculture (Stegbauer, 2008). For example, social capital, contacts within the sport and insider knowledge on subculture-related information enable actors to get closer to the core (Hitzler & Niederbacher, 2010). Actors who do not have close networks and allies within the subculture are less likely to engage successfully in the culture, whether as an individual or as a commercial actor (Thorpe, 2011). This study focuses on the organizational structure of snowboarding by comparing the development of the sport in Switzerland and New Zealand. An analysis of snowboarding in two nations with diverse cultures and economic systems allows a further defi nition of the structural organization of the sport and explains how brands play an important role in the sport. Methods: The structural organization of the sport will be analyzed through an ethnographic approach, using participant observation at various leading events in Switzerland (Freestyle.ch, European Open) and New Zealand (World Heli Challenge, New Zealand Open, New Zealand Winter Games). The data is analyzed using grounded theory (Glaser & Strauss 1967) and gives an overview of the actors that are playing an important role in the local development of snowboarding. Participant observation was also used as a tool to get inside the sport culture and opened up the possibility to make over 40 semi-structured qualitative expert interviews with international core actors from 11 countries. Obtaining access to one actor as a partner early on helped to get inside the local sport culture. The ‘snowball effect’ allowed the researcher to acquire access, build trust and conduct interviews with experts within the core scene. All the interviewed actors have a direct infl uence on the sport in one or both countries, which permit a cross-analysis. The data of the interviews was evaluated through content analysis (Mayring 2010). The two methods together provided suffi cient data to analyze the organizational structure and discuss the role of brand marketing within snowboarding. Results: An actors mapping by means of a center-periphery framework has identifi ed fi ve main core groups: athletes, media representatives, brand-marketing managers, resort managers and event organizers. In both countries the same grouping of actors were found. Despite possessing different and frequently multiple roles and responsibilities, core actors appear to have a strong common identifi cation as ‘snowboarders’, are considered to be part of the organizational elite of the sport and tend to advocate similar goals. The author has found that brands in Switzerland tend to have a larger impact on the broader snowboarding culture due to a number of factors discussed below. Due to a larger amount of snowboarders and stronger economic power in Europe, snowboarders are making attempts to differentiate themselves from other winter sports, while competing with each other to develop niche markets. In New Zealand, on the other hand, the smaller market enables more cooperation and mutual respect within snowboarders. Further they are more closely linked to other winter sports and are satisfi ed with being lumped together. In both countries, brands have taken up the role of supporting young athletes, organizing competitions and feeding media with subculture-related content. Brands build their image and identity through the collaboration with particular athletes who can represent the values of the brand. Local and global communities with similar lifestyles and interests are being built around brands that share a common vision of the sport. The dominance of brands in snowboarding has enabled them with the power to organize and rule the sport through its fan base and supporters. Brands were defi ned by interviewees as independent institutions led by insiders who know the codes and symbols of the sport and were given trust and credibility. The brands identify themselves as the engines of the sport by providing the equipment, opportunities for athletes to get exposure, allowing media to get exclusive information on activities, events and sport-related stories. Differences between the two countries are more related to the economic system. While Switzerland is well integrated in the broader European market, New Zealand’s geographical isolation and close proximity to Australia tends to limit its market. Further, due to different cultural lifestyles, access to resorts and seasonal restrictions, to name a few, the amount of people practicing winter sports in New Zealand is much smaller than in Switzerland. However, this also presents numerous advantages. For example, the short southern hemisphere winter season in New Zealand enables them to attract international sports athletes, brands and representatives in a period when Europe and North America is in summer. Further, the unique snow conditions in New Zealand and majestic landscape is popular for attracting world renowned photo- and cinematographers. Another advantage is the less populated network as it provides the opportunity for individuals to gain easier access to the core of the sport, obtain diverse positions and form a unique identity and market. In Switzerland, on the other hand, the snowboarding network is dense with few positions available for the taking. Homegrown brands with core recognition are found in both countries. It was found that the Swiss brands tend to have a larger impact on the market, whereas in New Zealand, the sport is more dependent on import products by foreign brands. Further, athletes, events and resorts in New Zealand are often dependent on large brand sponsorships from abroad such as from brand headquarters in the Unites States. Thus, due to its location in the centre of Europe, Swiss brands can take advantage of brands which are closer in proximity and culture to sponsor athletes and events. In terms of media coverage, winter sports in New Zealand tend to have a minor coverage and tradition in local mass media, which leads to less exposure, recognition and investment into the sport. This is also related to how snowboarding is more integrated into other winter sports in New Zealand. Another difference is the accessibility of the ski resort by the population. While in Switzerland the resorts are mostly being visited by day-travelers, ‘weekend warriors’ and holiday makers, the location of the resorts in New Zealand make it diffi cult to visit for one day. This is in part due to the fact that Swiss ski resorts and villages are usually the same location and are accessible through public transportation, while the ski resorts in New Zealand have been built separately from the villages. Further, the villages have not been built to accommodate to high tourist arrivals. Thus, accommodation and food facilities are limited and there is a lack of public transportation to the resorts. Discussion: The fi ndings show that networks and social relations combined with specifi c knowledge on scene-related attributes are crucial in obtaining opportunities within the sport. Partnerships as well as competition between these different actors are necessary for core acceptance, peer credibility and successful commercial interests. Brands need to maintain effective marketing strategies and identities which incorporate subcultural forms of behavior and communication. In order to sustain credibility from its fans, athletes and other snowboarding actors, brands need to maintain their insider status through social networks and commercial branding strategies. The interaction between all actors is a reciprocated process, where social capital, networks and identities are being shared. While the overall structure of snowboard subcultures in Europe and New Zealand are similar, there are some distinct characteristics which make each one unique. References Adjouri, N. & Stastny, P. (2006). Sport-Branding: Mit Sport-Sponsoring zum Markenerfolg. Wiesbaden: Gabler. Glaser, B. & Strauss, K. (1967). The discovery of grounded theory: Strategies for qualitative research. Chicago: Aldine. Hebdige, D. (2009). Subculture; The meaning of style. New York: Routledge. Hitzler, R. & Niederbacher, A. (2010). Leben in Szenen: Formen juveniler Vergemeinschaftung heute. Wiesbaden: Verlag für Sozialwissenschaften. Mayring, P. (2010). Qualitative Inhaltsanalyse: Grundlagen und Techniken. Weinheim: Beltz. Schwier, J. (2006). Repräsentationen des Trendsports. Jugendliche Bewegungskulturen, Medien und Marketing. In: Gugutzer, R. (Hrsg.). body turn. Perspektiven der Soziologie des Körpers und des Sports. Bielefeld: transcript (S. 321-340). Stegbauer, C. (2008). Netzwerkanalyse und Netzwerktheorie. Ein neues Paradigma in den Sozialwissenschaften. Wiesbaden: VS Verlag für Sozialwissenschaften. Thorpe, H. (2011). Snowboarding bodies in theory and practice. Basingstoke: Palgrave Macmillan. Wheaton, B. (2005). Understanding lifestyle sports; consumption, identity and difference. New York: Routledge.

Essays on behavioral aspects of the design and disclosure of compensation contracts

This thesis consists of four essays on the design and disclosure of compensation contracts. Essays 1, 2 and 3 focus on behavioral aspects of mandatory compensation disclosure rules and of contract negotiations in agency relationships. The three experimental studies develop psychology- based theory and present results that deviate from standard economic predictions. Furthermore, the results of Essay 1 and 2 also have implications for firms’ discretion in how to communicate their top management’s incentives to the capital market. Essay 4 analyzes the role of fairness perceptions for the evaluation of executive compensation. For this purpose, two surveys targeting representative eligible voters as well as investment professionals were conducted. Essay 1 investigates the role of the detailed ‘Compensation Discussion and Analysis’, which is part of the Security and Exchange Commission’s 2006 regulation, on investors’ evaluations of executive performance. Compensation disclosure complying with this regulation clarifies the relationship between realized reported compensation and the underlying performance measures and their target achievement levels. The experimental findings suggest that the salient presentation of executives’ incentives inherent in the ‘Compensation Discussion and Analysis’ makes investors’ performance evaluations less outcome dependent. Therefore, investors’ judgment and investment decisions might be less affected by noisy environmental factors that drive financial performance. The results also suggest that fairness perceptions of compensation contracts are essential for investors’ performance evaluations in that more transparent disclosure increases the perceived fairness of compensation and the performance evaluation of managers who are not responsible for a bad financial performance. These results have important practical implications as firms might choose to communicate their top management’s incentive compensation more transparently in order to benefit from less volatile expectations about their future performance. Similar to the first experiment, the experiment described in Essay 2 addresses the question of more transparent compensation disclosure. However, other than the first experiment, the second experiment does not analyze the effect of a more salient presentation of contract information but the informational effect of contract information itself. For this purpose, the experiment tests two conditions in which the assessment of the compensation contracts’ incentive compatibility, which determines executive effort, is either possible or not. On the one hand, the results suggest that the quality of investors’ expectations about executive effort is improved, but on the other hand investors might over-adjust their prior expectations about executive effort if being confronted with an unexpected financial performance and under-adjust if the financial performance confirms their prior expectations. Therefore, in the experiment, more transparent compensation disclosure does not lead to more correct overall judgments of executive effort and to even lower processing quality of outcome information. These results add to the literature on disclosure which predominantly advocates more transparency. The findings of the experiment however, identify decreased information processing quality as a relevant disclosure cost category. Firms might therefore carefully evaluate the additional costs and benefits of more transparent compensation disclosure. Together with the results from the experiment in Essay 1, the two experiments on compensation disclosure imply that firms should rather focus on their discretion how to present their compensation disclosure to benefit from investors’ improved fairness perceptions and their spill-over on performance evaluation. Essay 3 studies the behavioral effects of contextual factors in recruitment processes that do not affect the employer’s or the applicant’s bargaining power from a standard economic perspective. In particular, the experiment studies two common characteristics of recruitment processes: Pre-contractual competition among job applicants and job applicants’ non-binding effort announcements as they might be made during job interviews. Despite the standard economic irrelevance of these factors, the experiment develops theory regarding the behavioral effects on employees’ subsequent effort provision and the employers’ contract design choices. The experimental findings largely support the predictions. More specifically, the results suggest that firms can benefit from increased effort and, therefore, may generate higher profits. Further, firms may seize a larger share of the employment relationship’s profit by highlighting the competitive aspects of the recruitment process and by requiring applicants to make announcements about their future effort. Finally, Essay 4 studies the role of fairness perceptions for the public evaluation of executive compensation. Although economic criteria for the design of incentive compensation generally do not make restrictive recommendations with regard to the amount of compensation, fairness perceptions might be relevant from the perspective of firms and standard setters. This is because behavioral theory has identified fairness as an important determinant of individuals’ judgment and decisions. However, although fairness concerns about executive compensation are often stated in the popular media and even in the literature, evidence on the meaning of fairness in the context of executive compensation is scarce and ambiguous. In order to inform practitioners and standard setters whether fairness concerns are exclusive to non-professionals or relevant for investment professionals as well, the two surveys presented in Essay 4 aim to find commonalities in the opinions of representative eligible voters and investments professionals. The results suggest that fairness is an important criterion for both groups. Especially, exposure to risk in the form of the variable compensation share is an important criterion shared by both groups. The higher the assumed variable share, the higher is the compensation amount to be perceived as fair. However, to a large extent, opinions on executive compensation depend on personality characteristics, and to some extent, investment professionals’ perceptions deviate systematically from those of non-professionals. The findings imply that firms might benefit from emphasizing the riskiness of their managers’ variable pay components and, therefore, the findings are also in line with those of Essay 1.

Dynamic Effects of Currency Depreciation on Stock Market Returns during the Asian Financial Crisis

The current international integration of financial markets provides a channel for currency depreciation to affect stock prices. Moreover, the recent financial crisis in Asia with its accompanying exchange rate volatility affords a case study to examine that channel. This paper applies a bivariate GARCH-M model of the reduced form of stock market returns to investigate empirically the effects of daily currency depreciation on stock market returns for five newly emerging East Asian stock markets during the Asian financial crisis. The evidence shows that the conditional variances of stock market returns and depreciation rates exhibit time-varying characteristics for all countries. Domestic currency depreciation and its uncertainty adversely affects stock market returns across countries. The significant effects of foreign exchange market events on stock market returns suggest that international fund managers who invest in the newly emerging East Asian stock markets must evaluate the value and stability of the domestic currency as a part of their stock market investment decisions.

Monetary Policy, Exchange Rate Overshooting, and Endogenous Physical Capital

We develop an open economy macroeconomic model with real capital accumulation and microeconomic foundations. We show that expansionary monetary policy causes exchange rate overshooting, not once, but potentially twice; the secondary repercussion comes through the reaction of firms to changed asset prices and the firms' decisions to invest in real capital. The model sheds further light on the volatility of real and nominal exchange rates, and it suggests that changes in corporate sector profitability may affect exchange rates through international portfolio diversification in corporate securities.

Total Factor Productivity, Human Capital and Outward Orientation: Differences by Stage of Ddevelopment and Geographic Regions

Do openness and human capital accumulation promote economic growth? While intuition argues yes, the existing empirical evidence provides mixed support for such assertions. We examine Cobb-Douglas production function specifications for a 30-year panel of 83 countries representing all regions of the world and all income groups. We estimate and compare labor and capital elasticities of output per worker across each of several income and geographic groups, finding significant differences in production technology. Then we estimate the total factor productivity series for each classification. Using determinants of total factor productivity that include, among many others, human capital, openness, and distortion of domestic prices relative to world prices, we find significant differences in results between the overall sample and sub-samples of countries. In particular, a policy of outward orientation may or may not promote growth in specific country groups. even if geared to reducing price distortion and increasing openness. Human capital plays a smaller role in enhancing growth through total factor productivity.

Risk sharing with Multilateral Financial Institutions in infrastructure and energy project financing : effect on capital relief for commercial banks

(Matsukawa and Habeck, 2007) analyse the main instruments for risk mitigation in infrastructure financing with Multilateral Financial Institutions (MFIs). Their review coincided with the global financial crisis of 2007-08, and is highly relevant in current times considering the sovereign debt crisis, the lack of available capital and the increases in bank regulation in Western economies. The current macroeconomic environment has seen a slowdown in the level of finance for infrastructure projects, as they pose a higher credit risk given their requirements for long term investments. The rationale for this work is to look for innovative solutions that are focused on the credit risk mitigation of infrastructure and energy projects whilst optimizing the economic capital allocation for commercial banks. This objective is achieved through risk-sharing with MFIs and looking for capital relief in project finance transactions. This research finds out the answer to the main question: "What is the impact of risk-sharing with MFIs on project finance transactions to increase their efficiency and viability?", and is developed from the perspective of a commercial bank assessing the economic capital used and analysing the relevant variables for it: Probability of Default, Loss Given Default and Recovery Rates, (Altman, 2010). An overview of project finance for the infrastructure and energy sectors in terms of the volume of transactions worldwide is outlined, along with a summary of risk-sharing financing with MFIs. A review of the current regulatory framework beneath risk-sharing in structured finance with MFIs is also analysed. From here, the impact of risk-sharing and the diversification effect in infrastructure and energy projects is assessed, from the perspective of economic capital allocation for a commercial bank. CreditMetrics (J. P. Morgan, 1997) is applied over an existing well diversified portfolio of project finance infrastructure and energy investments, working with the main risk capital measures: economic capital, RAROC, and EVA. The conclusions of this research show that economic capital allocation on a portfolio of project finance along with risk-sharing with MFIs have a huge impact on capital relief whilst increasing performance profitability for commercial banks. There is an outstanding diversification effect due to the portfolio, which is combined with risk mitigation and an improvement in recovery rates through Partial Credit Guarantees issued by MFIs. A stress test scenario analysis is applied to the current assumptions and credit risk model, considering a downgrade in the rating for the commercial bank (lender) and an increase of default in emerging countries, presenting a direct impact on economic capital, through an increase in expected loss and a decrease in performance profitability. Getting capital relief through risk-sharing makes it more viable for commercial banks to finance infrastructure and energy projects, with the beneficial effect of a direct impact of these investments on GDP growth and employment. The main contribution of this work is to promote a strategic economic capital allocation in infrastructure and energy financing through innovative risk-sharing with MFIs and economic pricing to create economic value added for banks, and to allow the financing of more infrastructure and energy projects. This work suggests several topics for further research in relation to issues analysed. (Matsukawa and Habeck, 2007) analizan los principales instrumentos de mitigación de riesgos en las Instituciones Financieras Multilaterales (IFMs) para la financiación de infraestructuras. Su presentación coincidió con el inicio de la crisis financiera en Agosto de 2007, y sus consecuencias persisten en la actualidad, destacando la deuda soberana en economías desarrolladas y los problemas capitalización de los bancos. Este entorno macroeconómico ha ralentizado la financiación de proyectos de infraestructuras. El actual trabajo de investigación tiene su motivación en la búsqueda de soluciones para la financiación de proyectos de infraestructuras y de energía, mitigando los riesgos inherentes, con el objeto de reducir el consumo de capital económico en los bancos financiadores. Este objetivo se alcanza compartiendo el riesgo de la financiación con IFMs, a través de estructuras de risk-sharing. La investigación responde la pregunta: "Cuál es el impacto de risk-sharing con IFMs, en la financiación de proyectos para aumentar su eficiencia y viabilidad?". El trabajo se desarrolla desde el enfoque de un banco comercial, estimando el consumo de capital económico en la financiación de proyectos y analizando las principales variables del riesgo de crédito, Probability of Default, Loss Given Default and Recovery Rates, (Altman, 2010). La investigación presenta las cifras globales de Project Finance en los sectores de infraestructuras y de energía, y analiza el marco regulatorio internacional en relación al consumo de capital económico en la financiación de proyectos en los que participan IFMs. A continuación, el trabajo modeliza una cartera real, bien diversificada, de Project Finance de infraestructuras y de energía, aplicando la metodología CreditMet- rics (J. P. Morgan, 1997). Su objeto es estimar el consumo de capital económico y la rentabilidad de la cartera de proyectos a través del RAROC y EVA. La modelización permite estimar el efecto diversificación y la liberación de capital económico consecuencia del risk-sharing. Los resultados muestran el enorme impacto del efecto diversificación de la cartera, así como de las garantías parciales de las IFMs que mitigan riesgos, mejoran el recovery rate de los proyectos y reducen el consumo de capital económico para el banco comercial, mientras aumentan la rentabilidad, RAROC, y crean valor económico, EVA. En escenarios económicos de inestabilidad, empeoramiento del rating de los bancos, aumentos de default en los proyectos y de correlación en las carteras, hay un impacto directo en el capital económico y en la pérdida de rentabilidad. La liberación de capital económico, como se plantea en la presente investigación, permitirá financiar más proyectos de infraestructuras y de energía, lo que repercutirá en un mayor crecimiento económico y creación de empleo. La principal contribución de este trabajo es promover la gestión activa del capital económico en la financiación de infraestructuras y de proyectos energéticos, a través de estructuras innovadoras de risk-sharing con IFMs y de creación de valor económico en los bancos comerciales, lo que mejoraría su eficiencia y capitalización. La aportación metodológica del trabajo se convierte por su originalidad en una contribución, que sugiere y facilita nuevas líneas de investigación académica en las principales variables del riesgo de crédito que afectan al capital económico en la financiación de proyectos.

Seismic Risk Scenarios in Puerto Principe (Haiti). A Tool for Reconstruction and Emergency Planning

The 12 January 2010, an earthquake hit the city of Port-au-Prince, capital of Haiti. The earthquake reached a magnitude Mw 7.0 and the epicenter was located near the town of Léogâne, approximately 25 km west of the capital. The earthquake occurred in the boundary region separating the Caribbean plate and the North American plate. This plate boundary is dominated by left-lateral strike slip motion and compression, and accommodates about 20 mm/y slip, with the Caribbean plate moving eastward with respect to the North American plate (DeMets et al., 2000). Initially the location and focal mechanism of the earthquake seemed to involve straightforward accommodation of oblique relative motion between the Caribbean and North American plates along the Enriquillo-Plantain Garden fault system (EPGFZ), however Hayes et al., (2010) combined seismological observations, geologic field data and space geodetic measurements to show that, instead, the rupture process involved slip on multiple faults. Besides, the authors showed that remaining shallow shear strain will be released in future surface-rupturing earthquakes on the EPGFZ. In December 2010, a Spanish cooperation project financed by the Politechnical University of Madrid started with a clear objective: Evaluation of seismic hazard and risk in Haiti and its application to the seismic design, urban planning, emergency and resource management. One of the tasks of the project was devoted to vulnerability assessment of the current building stock and the estimation of seismic risk scenarios. The study was carried out by following the capacity spectrum method as implemented in the software SELENA (Molina et al., 2010). The method requires a detailed classification of the building stock in predominant building typologies (according to the materials in the structure and walls, number of stories and age of construction) and the use of the building (residential, commercial, etc.). Later, the knowledge of the soil characteristics of the city and the simulation of a scenario earthquake will provide the seismic risk scenarios (damaged buildings). The initial results of the study show that one of the highest sources of uncertainties comes from the difficulty of achieving a precise building typologies classification due to the craft construction without any regulations. Also it is observed that although the occurrence of big earthquakes usually helps to decrease the vulnerability of the cities due to the collapse of low quality buildings and the reconstruction of seismically designed buildings, in the case of Port-au-Prince the seismic risk in most of the districts remains high, showing very vulnerable areas. Therefore the local authorities have to drive their efforts towards the quality control of the new buildings, the reinforcement of the existing building stock, the establishment of seismic normatives and the development of emergency planning also through the education of the population.

An endogenous rate of time preference, the Penrose effect, and dynamic optimality of environmental quality.

In the present paper, the endogenous theory of time preference is extended to analyze those processes of capital accumulation and changes in environmental quality that are dynamically optimum with respect to the intertemporal preference ordering of the representative individual of the society in question. The analysis is carried out within the conceptual framework of the dynamic analysis of environmental quality, as has been developed by a number of economists for specific cases of the fisheries and forestry commons. The duality principles on intertemporal preference ordering and capital accumulation are extended to the situation where processes of capital accumulation are subject to the Penrose effect, which exhibit the marginal decrease in the effect of investment in private and social overhead capital upon the rate at which capital is accumulated. The dynamically optimum time-path of economic activities is characterized by the proportionality of two systems of imputed, or efficient, prices, one associated with the given intertemporal ordering and another associated with processes of accumulation of private and social overhead capital. It is particularly shown that the dynamically optimality of the processes of capital accumulation involving both private and social overhead capital is characterized by the conditions that are identical with those involving private capital, with the role of social overhead capital only indirectly exhibited.

Technology diffusion and its effects on social inequalities

We develop a dynamic general-equilibrium framework in which growth is driven by skill-biased technology diffusion. The model incorporates leisure–labor decisions and human capital accumulation through education. We are able to reproduce the trends in income inequality and labor and skills supplies observed in the United States between 1969 and 1996. The paper also provides an explanation for why more individuals invest in human capital when the investment premium is going down, and why the skill-premium goes up when the skills supply is increasing.

Member State BITS after the Treaty of Lisbon: solid foundation or first victims of EU investment policy? Research Paper in Law, 02/2012

[Introduction.] This paper discusses the uncertain future of Member State BITs with third countries in the light of the developing EU investment policy. The question will be examined on the basis of the proposed Regulation establishing transitional arrangements for bilateral investment agreements between Member States and third countries presented by the Commission on 7 July 20101 and the European Parliament’s Position adopted at first reading on 10 May 2011.2 The proposed Regulation and the Commission Communication of the same day are meant to be the “first steps in the development of an EU international investment policy”.3 The first chapters present the legal framework relevant for this question and its evolution to better understand the particular challenges of this transition process. The second chapter examines the relationship of EU law and investment law, with a brief introduction of the notion of investment law and the scope of the EU’s new investment competence. The third chapter outlines the legal framework for the continuation and termination of treaties under international and EU law. The fourth chapter concerns BITs, first covering the particular nature of BITs and then the CJEU’s judgments in the BIT Cases of 2009. The fifth chapter consists of a step by step analysis of the different provisions of the proposed Regulation.

Fiscal policy, banks and the financial crisis. National Bank of Belgium Working Paper No. 234, October 2012

This paper studies the effectiveness of Euro Area (EA) fiscal policy, during the recent financial crisis, using an estimated New Keynesian model with a bank. A key dimension of policy in the crisis was massive government support for banks—that dimension has so far received little attention in the macroeconomics literature. We use the estimated model to analyze the effects of bank asset losses, of government support for banks, and other fiscal stimulus measures, in the EA. Our results suggest that support for banks had a stabilizing effect on EA output, consumption and investment. Increased government purchases helped to stabilize output, but crowded out consumption. Higher transfers to households had a positive impact on private consumption, but a negligible effect on output and investment. Banking shocks and increased government spending explain half of the rise in the public debt/GDP ratio since the onset of the crisis.

Macroeconomic and Financial Crisis Management in the Southern and Eastern Mediterranean: Diagnosis and Prospects. CEPS Paperbacks. December 2013

The global financial crisis, which started in the summer of 2007 and deepened in the aftermath of the Lehman failure in September 2008, has led to a virtual collapse in economic activity and increased financial volatility worldwide. For the developing countries, the main channel of transmission has been a drop in external transactions, such as trade, financial and capital flows, and remittances. The emerging economies in the southern and eastern Mediterranean have also faced declining economic activity, although there seems to be considerable variation in the relative magnitude and timing. Most of these economies have shown a delayed but more lasting response to the crisis, driven mostly by their close trade and investment ties with the EU and the Gulf Cooperation Council (GCC) countries. This book explores the fiscal, monetary and financial effects of the crisis in the region and provides an in-depth analysis of the fiscal, monetary and banking policies in the post-crisis era, the viability of their exit strategies and the future of reforms in the region. These analyses not only provide a comprehensive comparison between the countries but also provide a solid basis for assessing future economic and financial developments and reforms in the region.

Drivers of Agricultural Physical Capital Development: Theoretical Framework and Hypotheses. Factor Markets Working Paper No. 18, February 2012

This paper aims to identify drivers of physical capital adjustments in agriculture. It begins with a review of some of the most important theories and modelling approaches regarding firms’ adjustments of physical capital, ranging from output-based models to more recent approaches that consider irreversibility and uncertainty. Thereafter, it is suggested that determinants of physical capital adjustments in agriculture can be divided into three main groups, namely drivers related to: i) expected (risk-adjusted) profit, ii) expected societal benefits and costs and iii) expected private nonpecuniary benefits and costs. The discussion that follows focuses on the determinants belonging to the first group and covers aspects related to product market conditions, technological conditions, financial conditions and the role of firm structure and organization. Furthermore, the role of subjective beliefs is emphasized. The main part of this paper is concerned with the demand side of the physical capital market and one section also briefly discusses some aspects related to supply of farm assets.

Effects of Economic Factors on Adoption of Robotics and Consequences of Automation for Productivity Growth of Dairy Farms. Factor Markets Working Paper No. 32, December 2012

In the long term, productivity and especially productivity growth are necessary conditions for the survival of a farm. This paper focuses on the technology choice of a dairy farm, i.e. the choice between a conventional and an automatic milking system. Its aim is to reveal the extent to which economic rationality explains investing in new technology. The adoption of robotics is further linked to farm productivity to show how capital-intensive technology has affected the overall productivity of milk production. The empirical analysis applies a probit model and an extended Cobb-Douglas-type production function to a Finnish farm-level dataset for the years 2000–10. The results show that very few economic factors on a dairy farm or in its economic environment can be identified to affect the switch to automatic milking. Existing machinery capital and investment allowances are among the significant factors. The results also indicate that the probability of investing in robotics responds elastically to a change in investment aids: an increase of 1% in aid would generate an increase of 2% in the probability of investing. Despite the presence of non-economic incentives, the switch to robotic milking is proven to promote productivity development on dairy farms. No productivity growth is observed on farms that keep conventional milking systems, whereas farms with robotic milking have a growth rate of 8.1% per year. The mean rate for farms that switch to robotic milking is 7.0% per year. The results show great progress in productivity growth, with the average of the sector at around 2% per year during the past two decades. In conclusion, investments in new technology as well as investment aids to boost investments are needed in low-productivity areas where investments in new technology still have great potential to increase productivity, and thus profitability and competitiveness, in the long run.