Selective hiring and welfare analysis in labor market models

Firms select not only how many, but also which workers to hire. Yet, in standardsearch models of the labor market, all workers have the same probability of being hired.We argue that selective hiring crucially affects welfare analysis. Our model is isomorphicto a search model under random hiring but allows for selective hiring. With selectivehiring, the positive predictions of the model change very little, but the welfare costsof unemployment are much larger because unemployment risk is distributed unequallyacross workers. As a result, optimal unemployment insurance may be higher and welfareis lower if hiring is selective.

Determining underlying macroeconomic fundamentals during emerging market crises: Are conditions as bad as they seem?

Emerging market crises are characterized by large swings in both macroeconomic fundamentalsand asset prices. The economic significance of observed movements in macroeconomicvariables is obscured by the brief and extreme nature of crises. In this paper we propose to study the macroeconomic consequences of crises by studying the behavior of effective fundamentals, constructed by studying the relative movements of stock prices during crises. We find that these effective fundamentals provide a different picture than that implied by observed fundamentals. First, asset prices often reflect expectations of improvement in fundamentals after the initial devaluations; specifically, effective depreciations are positive but not as large as the observed ones. Second, crises vary in their effect on credit market conditions, with investors expecting tightening of credit in some cases (Mexico 1994, Philippines 1997), but loosening of credit in others (Sweden 1992, Korea 1997, Brazil 1999).

Information revelation and market incompleteness

\documentstyle[portada,11pt]{article}This paper shows that the presence of private information in aneconomy can be a source of market incompleteness even when it is feasibleto issue a set of securities that completely eliminates the informationalasymmetries in equilibrium. We analyze a simple security design model in which avolume maximizing futures exchange chooses not only the characteristics ofeach individual contract but also the number of contracts. Agents have rationalexpectations and differ in information, endowments and, possibly, attitudestoward risk. The emergence of complete or incomplete markets in equilibriumdepends on whether the {\it adverse selection effect} is stronger or weakerthan the {\it Hirshleifer effect}, as new securitiesare issued and prices reveal more information. When the Hirshleifer effectdominates, the exchange chooses an incomplete set of financial contracts, andthe equilibrium price is partially revealing.

Market versus limit orders in an imperfectly competitive security

This paper analyzes the choice between limit and market orders in animperfectly competitive noisy rational expectations economy. There is a uniqueinsider, who takes into account the effect their trading has on prices. If theinsider behaves as a price taker, she will choose market orders if her privateinformation is very precise and she will choose limit orders otherwise. On thecontrary, if the insider recognizes and exploits her ability to affect themarket price, her optimal choice is to place limit orders whatever the precisionof her private information.

Impact of antiretroviral therapy (ART), immunosuppression and viraemia on lipid levels: the D:A:D study

Purpose of the study: To investigate the impact of ART, HIV viremia and immunosuppression on triglyceride (TG), total cholesterol (TC) and high density lipoprotein cholesterol (HDL-C) levels. Methods: We considered the cross-sectional associations between TG, TC and HDL-C (mmol/l; first available measurement on/after enrolment in the D:A:D study) and use of ART, HIV viral load (VL; copies/ml), and CD4 count (cells/mm3) measured at the same time. TG was log10 transformed to ensure normality. Analyses were performed using linear regression and adjusted for other factors known to impact lipid levels (table footnote). ART and VL status were combined (off ART&VL _100,000, off ART&VL B100,000, on ART&VL B500, on ART&VL _500), current and nadir CD4 count were categorised as B200, 200_349, 350_499 and _500. Summary of results: 44,322/49,734 participants in the D:A:D Study (89.1%) contributed a TG measurement (median; IQR 1.52; 1.00_ 2.45), 45,169 (90.8%) a TC measurement (4.80; 4.00_5.70) and 38,604 (77.6%) a HDL-C measurement (1.12; 0.90_1.40). Most participants were male (74%), of white ethnicity (51%), without AIDS (78%), were not receiving lipid-lowering drugs (4%) and were ART experienced (61%) with 47% previously exposed to PIs, 61% previously exposed to NRTIs and 29% previously exposed to NNRTIs. The median (IQR) age, current CD4 count and CD4 nadir were 38 (36_45) years, 400 (242_590) cells/ml and 240 (100_410) cells/ml respectively. Compared to those on ART with a suppressed VL, all lipids were lower for those off ART (Table); non-suppressive ART was also associated with lower TC and HDL-C levels (no impact on TG). A low current CD4 count was associated with lower lipid levels, whereas a low nadir CD4 count was associated with higher TC and TG levels. Prior AIDS diagnosis was associated with higher TG and TC, but lower HDL-C levels. Conclusion: Although specific drug classes were not considered, lipid levels are considerably higher in those on a suppressive ART regimen. The higher TC/TG and lower HDL-C levels seen among those with low nadir CD4 count and with a prior AIDS diagnosis suggests severe immunosuppression may be associated with dyslipidaemia over the long-term.

The impact of the reference price system on the pharmaceutical market: A theoretical approach

This article analyses the impact of the reference pricesystem on the price-setting strategies of thepharmaceutical firms and on the level of generic usage.This model is the first to take explicitly into accountthe impact of the reference price mechanism on the levelof competition between brand-name and generic drugs andnational pharmaceutical spending. We consider aduopolistic model with one firm producing the brand-namedrug, whose patent has already expired, and the otherproducing the corresponding generic version. We work ina partial equilibrium framework where firms set pricessequentially and consumers face heterogeneous switchingcosts.We show that brand producers compensate thedecline of profits by selling greater quantities insteadof charging higher prices, thus fostering pricecompetition in the pharmaceutical market. This result isa consequence of both the assumption of a verticallydifferentiated model and the introduction of thereference price system.