The daily market for funds in Europe: what has changed with the EMU?

This paper presents evidence that the existence of deposit and lending facilities combined with an averaging provision for the reserve requirement are powerful tools to stabilize the overnight rate. We reach this conclusion by comparing the behavior of this rate in Germany before and after the start of the EMU. The analysis of the German experience is useful because it allows to isolate the effects on the overnight rate of these particular instruments of monetary policy. To show that this outcome is a general conclusion and not a particular result of the German market, we develop a theoretical model of reserve management which is able to reproduce our empirical findings.

The provision of quality in a bilateral search market

We accomplish two goals. First, we provide a non-cooperative foundation for the use of the Nash bargaining solution in search markets. This finding should help to close the rift between the search and the matching-and-bargaining literature. Second, we establish that the diversity of quality offered (at an increasing price-quality ratio) in a decentralized market is an equilibrium phenomenon - even in the limit as search frictions disappear.

Can competition in the credit market be excessive?

We study how market power affects investment and welfare when banks choose between restricting loan sizes and monitoring, in order to alleviate an underlying moral hazard problem. The impact of market power on aggregate welfare is the result of two countervailing effects. An increase in banks' market power results in: (i) higher lending rates, which worsens the borrower's incentive problem and reduces investment by unmonitored firms, (ii) higher monitoring effort, which reduces the proportion of credit-constrained firms. Whenever the second effect dominates, it is optimal to provide banks with some degree of market power.

Do market conditions affect gift exchange? Evidence from experimental markets with excess supply and excess demand

We study whether people's behavior in unbalanced gift exchange markets with repeated interaction are affected by whether they are on the excess supply side or the excess demand side of the market. Our analysis is based on the comparison of behavior between two types of experimental gift exchange markets, which vary only with respect to whether first or second movers are on the long side of the market. The direction of market imbalance could influence subjects' behavior, as second movers (workers) might react differently to favorable actions by first movers (firms) in the two cases. While our data show strong deviations from the standard game-theoretic prediction, we find mainly secondary treatment effects. Wage offers are not higher when there is an excess supply of firms, and workers do not respond more favorably to a given wage when there is an excess supply of labor. The state of competition does not appear to have strong effects in our data. We also present data from single-period sessions that show substantial gift exchange even without repeated interactions.

I want you! An experiment studying the selection effect when assigning distributive power.

We study whether selection affects motivation. In our experiment subjects first answer a personality questionnaire. They then play a 3-person game. One of the three players decides between an outside option assigning him a positive amount, but leaving the two others empty-handed and allowing one of the other two players to distribute a pie. Treatments differ in the procedure by which distributive power is assigned: to a randomly determined or to a knowingly selected partner. Before making her decision the selecting player could consult the personality questionnaire of the other two players. Results show that knowingly selected players keep less for themselves than randomly selected ones and reward the selecting player more generously.

Interactions between product and labour market reforms

Labour market reforms face very often opposition from the employed workers, because it normally reduces their wages. Also product market regulations are regularly biased towards too much benefitting the firms. As a result there remain many frictions in both the labour and product markets that hinder an optimal functioning of the economy. These issues have recently received a lot of attention in the economics literature and scholars have been looking for politically viable reforms in both markets. However, despite its potential importance, there has been done virtually no research on the interaction between reforms in product and labour markets. We find that when combining reforms, the opposition for reforms decreases considerably. This is because there exist complementarities and the gains in total welfare can be more evenly distributed over the interest groups. Moreover, the interaction of reforms offers a way out for the so-called 'sclerosis' effect.

General equilibrium with asymmetric information: a dual approach

We study markets where the characteristics or decisions of certain agents are relevant but not known to their trading partners. Assuming exclusive transactions, the environment is described as a continuum economy with indivisible commodities. We characterize incentive efficient allocations as solutions to linear programming problems and appeal to duality theory to demonstrate the generic existence of external effects in these markets. Because under certain conditions such effects may generate non-convexities, randomization emerges as a theoretic possibility. In characterizing market equilibria we show that, consistently with the personalized nature of transactions, prices are generally non-linear in the underlying consumption. On the other hand, external effects may have critical implications for market efficiency. With adverse selection, in fact, cross-subsidization across agents with different private information may be necessary for optimality, and so, the market need not even achieve an incentive efficient allocation. In contrast, for the case of a single commodity, we find that when informational asymmetries arise after the trading period (e.g. moral hazard; ex post hidden types) external effects are fully internalized at a market equilibrium.

The principal-agent matching market

We propose a model based on competitive markets in order to analyze an economy with several principals and agents. We model the principal-agent economy as a two-sided matching game and characterize the set of stable outcomes of this principal-agent matching market. A simple mechanism to implement the set of stable outcomes is proposed. Finally, we put forward examples of principal-agent economies where the results fit into.

Implementation of the Walrasian correspondence by market games

In this paper we present a set of axioms guaranteeing that, in exchange economies with or without indivisible goods, the set of Nash, Strong and active Walrasian Equilibria all coincide in the framework of market games.

Self-selection consistent functions

This paper studies collective choice rules whose outcomes consist of a collection of simultaneous decisions, each one of which is the only concern of some group of individuals in society. The need for such rules arises in different contexts, including the establishment of jurisdictions, the location of multiple public facilities, or the election of representative committees. We define a notion of allocation consistency requiring that each partial aspect of the global decision taken by society as a whole should be ratified by the group of agents who are directly concerned with this particular aspect. We investigate the possibility of designing envy-free allocation consistent rules, we also explore whether such rules may also respect the Condorcet criterion.

Unemployment, growth and fiscal policy: new insights on the hysteresis hypothesis

We develop a growth model with unemployment due to imperfections in the labor market. In this model, wage inertia and balanced budget rules cause a complementarity between capital and employment capable of explaining the existence of multiple equilibrium paths. Hysteresis is viewed as the result of a selection between these diferent equilibrium paths. We use this model to argue that, in contrast to the US, those fiscal policies followed by most of the European countries after the shocks of the 1970’s may have played a central role in generating hysteresis.

The relevance of post-match LTC: why has the Spanish labor market become as volatile as the US one?

We present a Search and Matching model with heterogeneous workers (entrants and incumbents) that replicates the stylized facts characterizing the US and the Spanish labor markets. Under this benchmark, we find the Post-Match Labor Turnover Costs (PMLTC) to be the centerpiece to explain why the Spanish labor market is as volatile as the US one. The two driving forces governing this volatility are the gaps between entrants and incumbents in terms of separation costs and productivity. We use the model to analyze the cyclical implications of changes in labor market institutions affecting these two gaps. The scenario with a low degree of workers’ heterogeneity illustrates its suitability to understand why the Spanish labor market has become as volatile as the US one.

Demand elasticity and market power in the spanish electricity market

In this paper we check whether generator's bid behavior at the Spanish whosale electricity market is consistent with the hypothesis of profit maximization on their residual demands. Using OMEL data, we find the arc-elacticity of the residual demand around the system marginal price. The results suggest thet the larger firms are not actually profit-msximization. We argue how the regulatory environment may drive these results. Finally, we repeat the analysis for the first session of the intra-day market where presumably firms may not have the same incentives as in the day-ahead market.

The Adolpho Lutz collection of Tabanidae: (Diptera): I. The described genera and species, condition of the collection, and selection of lectotypes

A study of the Adolpho Lutz Collection of Tabanidae at the Instituto Oswaldo Cruz and of additional Lutz material at the Instituto Butantan in São Paulo is reported. Of the ninety-four species of Tabanidae validly described by Lutz, type material of eighty-four was recognized, either holotypes, allotypes or syntypes. Lectotypes were selected from among syntype series or remaining specimens and all type material was labelled. Of the ten species of which no type material could be found, neotypes were designated in the case of two species, Erephosis nigricans and Erephosis pseudo-aurimaculata. Types of three species, Chrysops ecuadoriensis, Dichelacera salvadorensis and Esenbeckia nigricorpus are believed to have been in Hamburg and destroyed during the last war. Types of two species, Esenbeckia biscutellata and E. dubia, and additional type material of several others are believed to have been in Montevideo. A request for information about them remains unanswered. Types of the remaining three species, Dichelacera intermedia, Dichelacera laceriascia and Esenbeckia distinguenda could not be found, and it is believed that at least the type of the last species was accidentally destroyed. Three specific of subspecific names proposed by Lutz but palaced by others in synonymy have been revalidated, Acanthocera intermedia, Erephosis brevistria and Esenbeckia fenestrata. Generic placement of two names has been changed, Esenbeckia arcuata ricardoae to Proboscoides, and Selasoma giganteum to Stibasoma. Seven specific names proposed by Lutz appear to be synonyms of earlier names, as follows: Bombylopsis juxtaleonina Lutz and Castro, 1936 = B. leonina Lutz, 1909. Bombylopsis pseudoanalis Lutz, 1909 = B. erythronotata (Bigot, 1892). Esenbeckia fuscipennis var. flavescens Lutz, 1909 = Esenbeckia fuscipennis Wied., 1828. Fidena chrysopyga Lutz and Castro, 1936 = F. atra Lutz and Castro, 1936. Laphriomyia longipalpis Lutz and Castro, 1937 = L. mirabilis Lutz, 1911. Stibasoma semiflavum Lutz, 1915 = St. bicolor Bigot, 1892. Tabanus hesperus Lutz, 1912 = Chlorotabanus (Cryptolylus) innotescens (Walker, 1854). Four Lutz names appear to antedate names proposed by others, viz.: Diachlorus angustifrons Kröber, 1930 and D. ochraceus Kröb., 1928 not Macquart, 1850 = Diachlorus fuscistigma Lutz, 1913. Psalidia fairchildi Barretto, 1950 = dicladocera conspicua Lutz and Neiva, 1914. Fidena pseudo-fulvithorax Kröb., 1931 = Erephopsis flavicrinis Lutz, 1909. Esenbeckia lemniscata Enderlein, 1925 = Esenbeckia clari Lutz, 1909. Some comments on Lutz' system of classification are given together with notes on the genotypes and included species of his genera as revaled by his collection and notes.