The HP-filter in cross-country comparisons

Many empirical studies of business cycles have followed the practise ofapplying the Hodrick-Prescott filter for cross-country comparisons. Thestandard procedure is to set the weight \lambda, which determines the'smoothness' of the trend equal to 1600. We show that if this value isused for against common wisdom about business cycles. As an example, weshow that the long recession occurred inSpain between 1975 and 1985 goesunnotoced by the HP filter. We propose a method for adjusting \lambda byreinterpreting the HP-filter as the solution to a constrained minimizationproblem. We argue that the common practice of fixing \lambda across countriesamounts to chankging the constraints on trend variability across countries.Our proposed method is easy to apply, retains all the virtues of thestandard HP-filter and when applied to Spanish data the results are inthe line with economic historian's view. Applying the method to a numberof OECD countries we find that, with the exception of Spain, Italy andJapan, the standard choice of \lambda=1600 is sensible.

Bands width, credibility and exchange risk: Lessons from the EMS experience

This paper presents an analysis of the credibility of the EMScurrencies that covers the period before and after the increase in thebands of fluctuation. Our credibility indicator is based on the inferredprobabilities derived from the estimation of a Markov-switching model(Hamilton (1989)) applied to the expected rate of depreciation. Theresults show that, for most of the currencies, credibility has improved,at least transitorily, after the increase in the bands. However, for allcurrencies, the credibility measured by the indicator proposed in thispaper has been eroded recently even with the widened bands.

The economics of anti-parasite defences in animal societies

RESUME : De nombreuses espèces animales vivent en groupe. Du simple grégarisme aux colonies hautement intégrées de fourmis, la vie sociale a atteint des degrés divers de complexité. Les nombreuses interactions entre membres d'une société favorisent la transmission de parasites. Cela représente un coût potentiel de la vie sociale. Cette thèse s'intéresse aux défenses permettant de réduire le coût du parasitisme dans les colonies de fourmis ainsi qu'à la manière dont le parasitisme a pu façonner certains aspects de ces sociétés. Les colonies de fourmis des bois (Forimica paralugubris) contiennent de grandes quantités de résine de conifères. Cette résine réduit la densité microbienne dans le nid et augmente la survie des ouvrières lors d'infections parasitaires. Dans cette thèse, nous montrons, d'une part, que les ouvrières collectent activement la résine et que ce comportement est plutôt préventif que curatif et, d'autre part, que la résine permet aux ouvrières une utilisation moindre de leurs défenses immunitaires. Ces résultats permettent de conclure que ce comportement réduit l'exposition au parasitisme et qu'il a une fonction adaptative. L'émergence d'un tel comportement de médication chez une espèce d'insectes sociaux illustre le fait que la socialité, bien yue provoquant une exposition accrue au parasitisme, permet également l'émergence de mécanismes sociaux de défense. II a été suggéré que la présence de plusieurs reines au sein d'un même nid (polygynie) améliore la résistance aux parasites en augmentant la diversité génétique au sein de la colonie. En accord avec cette hypothèse, nous montrons qu'une augmentation de la diversité génétique au sein de groupes expérimentaux de Formica selysi améliore leur survie lors d'une infection parasitaire. Cependant, nous suggérons également que sur le terrain, d'autres facteurs corrélés à la polygynie ont des effets antagoniques sur la résistance. Nous montrons par exemple que les ouvrières polygynes semblent avoir une capacité moindre à monter une réponse immunitaire. Certains aspects de la reproduction des fourmis ont pu également être façonnés par le parasitisme. L'accouplement n'a lieu que lors d'une courte période au début de la vie adulte, généralement à l'extérieur de la colonie. Les reines stockent ensuite le sperme et l'utilisent parcimonieusement au cours de leur vie alors que les males meurent rapidement. Nous montrons que les défenses immunitaires des reines de fourmis des bois (F. paralugubris) sont fortement affectées par l'accouplement. Ces modulations immunitaires sont probablement liées à une augmentation de l'exposition au parasitisme lors de l'accouplement ainsi qu'à des blessures copulatoires. I1 semble donc que l'accouplement soit accompagné de coûts immunitaires pour les reines. Dans son ensemble, cette thèse illustre la diversité des mécanismes de défenses contre les parasites dans les sociétés de fourmis. La vie sociale, en offrant un nouveau niveau d'interaction, permet en effet l'émergence d'adaptations originales. Cela explique probablement le grand succès écologique des espèces sociales. SUMMARY : Sociality is widespread among animals and has reached variable degrees of complexity, from loose social Groups to highly integrated ant colonies. The many interactions between members of a social group promote the spread of parasites, but social life also permits the evolution of original defence mechanisms. This thesis sheds light on how ant colonies defend themselves against parasites, and on how parasitism shapes certain aspects of these societies. Wood ants nests (Formica paralugubris) contain large amounts of conifer resin which reduces the microbial density in ant nests and enhances the survival of ants challenged by some pathogens. We show that resin is actively collected by workers and that resin collection is rather a prophylactic than a curative behaviour. Moreover, we suggest that resin reduces the use of the immune defences of workers. Altogether, these results indicate that the use of resin is a collective adaptation to prevent the spread of parasites. The emergence of medication in a social insect species illustrates that sociality does not only increase the exposure to parasites but also allows the emergence of social mechanisms to counter this threat. The number of reproducing queens per colony is a variable trait in ants. It has been suggested that polygyny (the occurrence of multiple queens within a colony), by increasing the colonial genetic diversity, improves disease resistance. In line with this hypothesis, we show that in a socially polymorphic ant (Formica selysi), an experimental increase of colony genetic diversity enhances disease resistance. However, we also suggest that factors covarying with queen number variation in the field have antagonistic effects on parasite resistance. We show for instance that polygyne workers seem to have lower immune defences. Parasites may also shape some aspects of ant queen reproductive biology. Ant queens mate at the beginning of their adult life, usually outside of the colony, and store sperm for several years to fertilize eggs. Males die shortly after mating and queens never remate later in life, which drastically reduces sexual conflicts. Moreover, mating and nest founding occur away from the collective defence mechanisms of the natal colony and might be associated with an increased risk of parasitism. We show that mating affects the immune defences of wood ant queens (F. paralugubris) in multiple ways that are consistent with mating wounds and increased risk of parasitism. We suggest that mating is associated with immunity costs in ants, despite the reduced level of sexual conflicts. Altogether, my thesis illustrates the diversity of anti-parasite mechanisms in ant societies. This sheds light on how sociality, by offering a new level of interactions, allows the evolution of original adaptations, which may explain the wide ecological success of social species.

An analysis of the accounting principles applied by the European Farm Accountancy Data Network

In spite of its relative importance in the economy of many countriesand its growing interrelationships with other sectors, agriculture has traditionally been excluded from accounting standards. Nevertheless, to support its Common Agricultural Policy, for years the European Commission has been making an effort to obtain standardized information on the financial performance and condition of farms. Through the Farm Accountancy Data Network (FADN), every year data are gathered from a rotating sample of 60.000 professional farms across all member states. FADN data collection is not structured as an accounting cycle but as an extensive questionnaire. This questionnaire refers to assets, liabilities, revenues and expenses, and seems to try to obtain a "true and fair view" of the financial performance and condition of the farms it surveys. However, the definitions used in the questionnaire and the way data is aggregated often appear flawed from an accounting perspective. The objective of this paper is to contrast the accounting principles implicit in the FADN questionnaire with generally accepted accounting principles, particularly those found in the IVth Directive of the European Union, on the one hand, and those recently proposed by the International Accounting Standards Committee’s Steering Committeeon Agriculture in its Draft Statement of Principles, on the other hand. There are two reasons why this is useful. First, it allows to make suggestions how the information provided by FADN could be more in accordance with the accepted accounting framework, and become a more valuable tool for policy makers, farmers, and other stakeholders. Second, it helps assessing the suitability of FADN to become the starting point for a European accounting standard on agriculture.

Elaboração de um modelo de previsão de falência nas empresas cotadas na bolsa de valores em Cabo Verde-Estudo empírico de ano 2010-2011

Ser capaz de prever a solidez financeira de uma empresa, tem levado a muitos trabalhos de pesquisa. Rácios financeiros são indicadores chave de solidez financeira de um negócio e ferramentas para determinar a eficiência operacional & financeira de empresas e negócios. Existe um grande número de relações, proposto por vários autores. Altman desenvolveu um modelo de z-score utilizando rácios como sua fundação. Com a ajuda do modelo Z - Score, Altman conseguia prever a eficiência financeira /Falência até 2-3 anos de antecedência. O trabalho de pesquisa a seguir descreve em detalhes os estudos realizados por Altman para prever a falência de empresas. Altman fez mudanças regulares para obter a equação perfeita que poderia prever a falência. O trabalho de pesquisa a seguir resume a pesquisa de Altman para desenvolver o modelo de Pontuação de Altman Z, aplicadas as empresas cotadas na bolsa de valores de Cabo Verde. Pode-se seguramente dizer que o modelo de Z-score de Altman pode ser aplicado a economia moderna para prever a angústia e a falência, dois e três anos de antecedência.Businesses are enterprises which produce goods or render services for profit motive. To be able to predict the financial soundness of a business has led to many research works. Financial ratios are a key indicator of financial soundness of a business. Financial ratios are a tool to determine the operational & financial efficiency of business undertakings. There exist a large number of ratios propounded by various authors. Altman developed a z-score model using ratios as its foundation. With the help of the Z- Score model, Altman could predict financial efficiency /Bankruptcy up to 2-3 years in advance. The following research paper describes in detail the studies carried out by Altman to predict business bankruptcy. Altman made regular changes to achieve the perfect equation which could predict bankruptcy. The The following research paper summaries the research of Altman that have being made to develop the model of Altman Z score, applied to companies listed on stock exchanges in Cape Verde. One can safely say that the model of Altman Z-Score can be applied to modern model economics to predict distress and bankruptcy, two and three years advance.

Ethics outside, within or beyond OR models

Since ethical concerns are calling for more attention within OperationalResearch, we present three approaches to combine Operational Researchmodels with ethics. Our intention is to clarify the trade-offs faced bythe OR community, in particular the tension between the scientificlegitimacy of OR models (ethics outside OR models) and the integrationof ethics within models (ethics within OR models). Presenting anddiscussing an approach that combines OR models with the process of OR(ethics beyond OR models), we suggest rigorous ways to express the relationbetween ethics and OR models. As our work is exploratory, we are trying toavoid a dogmatic attitude and call for further research. We argue thatthere are interesting avenues for research at the theoretical,methodological and applied levels and that the OR community can contributeto an innovative, constructive and responsible social dialogue about itsethics.

15 years of new growth economics: What have we learnt?

This paper evaluates the empirical and theoretical contributions of theEconomic Growth Literature since the publication of Paul Romer s seminalpaper in 1986.

Influence activity and the organization of research and development

The organizational design of research and development conditions theincentives of the researchers of the research project. In particular,the organizational form determines the allocation of effort of theresearcher between time spent on research and time spent lobbying management. Researchers prefer to spend their time on research. However,the researchers only get utility from performing research if theproject is approved for its full duration. Spending time lobbyingmanagement for the continuation of the researcher s project increasesthe probability that the management observes a favorable signal aboutthe project. Organizing a research joint venture increases theflexibility of the organizational form with respect to the continuationdecision. For low correlation between the signals of the partners aboutthe expected profitability of the project, we find that the organizationof a research joint venture reduces influence activity by the researchersand increases expected profits of the partners. For high correlationbetween the signals, internal research projects lower influence activityby the researchers. We try to relate the correlation of the partnerssignals to the characteristics of basic research versus more appliedresearch projects, and find that the model is consistent with theobservation that research joint ventures seem involved in more basicresearch projects compared to internal R&D departments, whichconcentrate on more applied research.

Population based resource allocation: The use of hybrid risk adjustment

The emphasis on integrated care implies new incentives that promote coordinationbetween levels of care. Considering a population as a whole, the resource allocation systemhas to adapt to this environment. This research is aimed to design a model that allows formorbidity related prospective and concurrent capitation payment. The model can be applied inpublicly funded health systems and managed competition settings.Methods: We analyze the application of hybrid risk adjustment versus either prospective orconcurrent risk adjustment formulae in the context of funding total health expenditures for thepopulation of an integrated healthcare delivery organization in Catalonia during years 2004 and2005.Results: The hybrid model reimburses integrated care organizations avoiding excessive risktransfer and maximizing incentives for efficiency in the provision. At the same time, it eliminatesincentives for risk selection for a specific set of high risk individuals through the use ofconcurrent reimbursement in order to assure a proper classification of patients.Conclusion: Prospective Risk Adjustment is used to transfer the financial risk to the healthprovider and therefore provide incentives for efficiency. Within the context of a National HealthSystem, such transfer of financial risk is illusory, and the government has to cover the deficits.Hybrid risk adjustment is useful to provide the right combination of incentive for efficiency andappropriate level of risk transfer for integrated care organizations.

Location models in the public sector

The past four decades have witnessed an explosive growth in the field of networkbased facilitylocation modeling. This is not at all surprising since location policy is one of the mostprofitable areas of applied systems analysis in regional science and ample theoretical andapplied challenges are offered. Location-allocation models seek the location of facilitiesand/or services (e.g., schools, hospitals, and warehouses) so as to optimize one or severalobjectives generally related to the efficiency of the system or to the allocation of resources.This paper concerns the location of facilities or services in discrete space or networks, thatare related to the public sector, such as emergency services (ambulances, fire stations, andpolice units), school systems and postal facilities. The paper is structured as follows: first,we will focus on public facility location models that use some type of coverage criterion,with special emphasis in emergency services. The second section will examine models based onthe P-Median problem and some of the issues faced by planners when implementing thisformulation in real world locational decisions. Finally, the last section will examine newtrends in public sector facility location modeling.

Wealth, financial intermediation and growth

This paper presents empirical support for the existence of wealth effects in the contribution of financial intermediation to economic growth, and offers a theoretical explanation for these effects. Using GMM dynamic panel data techniques applied to study the growth-promoting effects of financial intermediation, we show that the exogenous contribution of financial development on economic growth has different effects for different levels of income per capita. We find that this contribution is generally increasing with thelevel of income per capita of the economy, up to a relatively high level of income. This contribution is consistently lower for poor countries; and for some low levels of income per capita it can be negative. We provide a model to account for these wealth effects. The model is a overlapping generations growth model where financial intermediaries implement liquidity risk sharing among depositors. We show that at early stages of economic development, a bank can increase welfare of its depositors only at the cost of lowering investment and growth. However, once the economy has crossed certain wealth threshold, the liquidity role of banks becomes unambiguously growth enhancing. As wealth increases, banks offer improving liquidity insurance, and higher growth; however, for high levels of wealth, growth generated byfinancial intermediation declines as the economy attains the optimal level of consumption risk sharing.

The challenge of representative design in psychology and economics

The demands of representative design, as formulated by Egon Brunswik (1956), set a high methodological standard. Both experimental participants and the situations with which they are faced should be representative of the populations to which researchers claim to generalize results. Failure to observe the latter has led to notable experimental failures in psychology from which economics could learn. It also raises questions about the meaning of testing economic theories in abstract environments. Logically, abstract tests can only be generalized to abstract realities and these may or may not have anything to do with the empirical realities experienced by economic actors.

Forest fires: Evaluation of government intervention measures

The purpose of this paper is to examine the relation between government measures, volunteer participation, climate variables and forest fires. A number of studies have related forest fires to causes of ignition, to fire history in one area, to the type of vegetation and weathercharacteristics or to community institutions, but there is little research on the relation between fire production and government prevention and extinction measures from a policy evaluation perspective.An observational approach is first applied to select forest fires in the north east of Spain. Taking a selection of fires with a certain size, a multiple regression analysis is conducted to find significant relations between policy instruments under the control of the government and the number of hectares burn in each case, controlling at the same time the effect of weather conditions and other context variables. The paper brings evidence on the effects of simultaneity and the relevance of recurring to army soldiers in specific days with extraordinary high simultaneity. The analysis also brings light on the effectiveness of twopreventive policies and of helicopters for extinction tasks.

Solving heterogeneous-agent models by projection and perturbation

The paper proposes a numerical solution method for general equilibrium models with a continuum of heterogeneous agents, which combines elements of projection and of perturbation methods. The basic idea is to solve first for the stationary solutionof the model, without aggregate shocks but with fully specified idiosyncratic shocks. Afterwards one computes a first-order perturbation of the solution in the aggregate shocks. This approach allows to include a high-dimensional representation of the cross-sectional distribution in the state vector. The method is applied to a model of household saving with uninsurable income risk and liquidity constraints. The model includes not only productivity shocks, but also shocks to redistributive taxation, which cause substantial short-run variation in the cross-sectional distribution of wealth. If those shocks are operative, it is shown that a solution method based on very few statistics of the distribution is not suitable, while the proposed method can solve the model with high accuracy, at least for the case of small aggregate shocks. Techniques are discussed to reduce the dimension of the state space such that higher order perturbations are feasible.Matlab programs to solve the model can be downloaded.