Working papers 2009
(including abstracts)
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The Impact of Academic Patenting on University Research and its Transfer G. Crespi, P. D'Este, R. Fontana, A. Geuna This paper
contributes to the ongoing debate on
the impact of academic patenting. On the basis of CV information and
two
separate surveys, we provide the first empirical evidence for a sample
of |
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International Strategic Choice of Minimum Quality Standards and Welfare S. Lutz, M. Pezzino We study the
influence of minimum quality standards in a two-region
partial-equilibrium model of vertical product differentiation and
trade. Three alternative standard setting arrangements are considered:
Full Harmonization, National Treatment and Mutual Recognition. The
analysis integrates the choice of a particular standard setting
alternative by governments into the model. We provide a set of
sufficient conditions for which Mutual Recognition emerges as one
regulatory alternative that always improves welfare in both regions
when compared to the case without regulation. We show that Mutual
Recognition, being the default procedure if governments do not reach a
unanimous decision, is the only possible equilibrium of the game. |
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Venture Capitalism, New Markets and Innovation-led Economic Growth C. Antonelli, M. Teubal This paper explores
the new market-mediating mechanisms linking SU invention on the one
hand and economic growth on the other. Two such mechanisms come to our
mind under venture capitalism (of which venture capitalism is directly
involved only |
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Effective Exchange Rates of the Bulgarian Lev 1879-1939 K. Dimitrova, M. Ivanov, R. Simeonova-Ganeva The paper constructs
the first series of nominal and real effectiveexchange rates of the
Bulgarian Lev from its establishment in 1879 until 1939. The dynamics
of both indicators during the Classical Gold Standard fits the general
picture of exchange rate development of other European countries while
their movements in the Interwar years reflects the exchange rate policy
of the monetary authority and the price effects of the Great
Depression. The study also provides econometric estimation of the
impact of the real effective exchange rates and foreign demand on
Bulgaria’s real export performance allowing for some policy implications |
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Social Contracts and Historical Rules E. Colombatto The public
choice-school has explained why policy- making is generally
disappointing and frequently against the very interest of the public at
large. The economics profession has put forward two kinds of allegedly
free-market remedies. On the one hand, the mainstream view underscores
the need for more expert advice and better agency rules. |
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Investigating Inflation Dynamics and Structural Change with an Adaptive ARFIMA Approach R.T. Baillie, C. Morana Previous models of monthly CPI inflation time series
have focused on possible regime shifts, non-linearities and the feature
of long memory. This paper proposes a new time series model, named
Adaptive ARFIMA; which appears well suited to describe inflation and
potentially other economic time series data. The Adaptive ARFIMA model
includes a time dependent intercept term which follows a Flexible
Fourier Form. The model appears to be capable of succesfully dealing
with various forms of breaks and discontinities in the conditional mean
of a time series. Simulation evidence justifies estimation by
approximate |
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Have Agriculture Green House Gas Emissions Converged among European Union Member States? F. Brito
Soares Panel unit root tests
are used to identify convergence of Green House Gas (GHG) emissions
among the agr icultural sectors of the European Union 27 member states.
Although a clear cut conclusion on the existence of convergence could
not be established, it looks like there is some evidence of convergence
for EU 27 during the entire 1973-2007 period. This same evidence exists
for EU15 but only for the shorter 1996-2006 time period. If emissions
are to converge, then it will be easier to make EU members to accept
policy measures aimed at reducing the negative impact on environment. |
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Some Implications of Multilateral Financing to the Private Sector without Sovereign Guarantee E. Londero Direct lending by
multilateral development banks to the private sector without sovereign
guarantee raises two important issues. First, their presence in the
financial markets alters the perception of risk, and that difference in
perceived risk carries a market value; the question becomes who
appropriates it. Second, by advising on policy matters related to
activities that they are or may become interested in financing, or in
which they have outstanding balances without sovereign guarantee,
multilaterals put themselves in a conflict of interest that may affect
their performance in informational and conditionality functions. |
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On the Measurement of Long-Term Income Inequality and Income Mobility R. Aaberge, M. Mogstad This paper proposes a
two-step aggregation method for measuring long-term income inequality
and income mobility, where mobility is defined as an equalizer of
long-term income. First, the income stream of each individual is
aggregated into a measure of permanent income, which accounts for the
costs associated with income fluctuations. Consequently, mobility will
have an unambiguously positive impact on social welfare in the sense
that for two societies that have identical short term income
distributions, the social welfare will be greatest for the socie ty
which exhibits most mobility. The second step consists of aggregating
permanent incomes across individuals into measures of social welfare,
inequality and mobility. To this end, we employ an axiomatic approach
to justify the introduction of a generalized family of rank-dependent
measures of inequality, where the distributional weights, as opposed to
the Mehran-Yaari family, depend on income shares as well as on
population shares. Moreover, a subfamily is shown to be associated with
social welfare functions that have intuitively appealing interpretatio
ns. Further, the generalized family of inequality measures provides
several new interpretations of the Gini-coefficient. The proposed
family of income mobility also proves to encompass standard measures of
income mobility, depending on the assumptions made about the
interpersonal preferences and the credit market. |
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Modeling the short-term effect of traffic on air pollution in Torino with generalized additive models P. Bertaccini, V. Dukic, R. Ignaccolo Vehicular traffic
typically plays an important role in atmospheric pollution. This is
especially true in urban areas, where high pollutant concentrations are
often observed. In this paper, we consider hourly measures of
concentrations of nitrogen oxides (NO, NO2 and NOx), carbon oxide (CO)
and particulate matter (PM), collected at the stations distributed
throughout the city of Turin. To help explain the short-term behavior
of the concentrations of these pollutants, we propose using generalized
additive models (GAM), focusing in particular on traffic along with the
meteorological predictors. All the data are collected during the period
from December 2003 to April 2005. |
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Production Knowledge. A Marshallian Perspective on post-Coasian Theories of the Firm C. Cristiano In 1937, Coase
published ‘The Nature of the Firm’, in which the idea that using the
market has a cost was introduced for the first time. Later developed by
Williamson, the transaction costs theory of the firm served to provide
an explanation in which efficiency, rather than the power of monopoly,
is the rationale for the complex managerial structures of the ‘modern
corporation’. Along with Coase, Simon’s idea of bounded rationality and
Chandler’s historical reconstructions of the managerial revolution in
the US during the 20th century were behind Williamson’s work. However,
fundamental criticisms of Williamson's came directly from Simon and
Chandler and, although indirectly, from Coase himself. What is of great
interest from the standpoint of the history of economic thought is the
re-emergence, in recent literature, of a few concepts that were at the
base of Marshall’s analysis of industrial organization. Marshall’s
theory, which Coase rejected during the 1930s as merely descriptive, is
now associated with a model of industrial development, that of England
during the 19th century, considered obsolete. However, the pillars of
Marshall’s theory – Smith’s theorem, coordination costs and, most
importantly, ‘production knowledge’ as opposed to ‘transaction
knowledge’ – are pivotal in Simon’s as well as in Chandler’s proposals
for an alternative to, or an extension of, transaction costs analysis.
Moreover, and notwithstanding their opposite views of the innovative
power of large managerial structures, there is a strong analogy between
Marshall’s and Chandler’s accounts of the evolution of capitalism,
viewed as a process of innovation triggered by individual agents
endowed with heterogeneous competences. The latter are employed in
coordinating specialised productive capabilities and providing the
marketing connection between innovative production processes and
consumer demand. |
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On Money as an
Institution N. Nenovsky In this
paper I am going to explore some of the major theoretical concepts and
ideas in
Luca Fantacci’s work devoted to the
history of money. As a historical
check on Fantacci’s theory I will present various moments in Russian
monetary
history interpreted in the light of the ideas of the La
moneta: storia di un’instituzione mancata. I will compare
Fantacci’s theory of division between the unit of account and the
medium of
exchange with those of Walther Eucken and the |
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The Allocation and Dissipation of Resource Rents: Implications for Fishery Reform T. L.
Anderson, G.D. Libecap In the move to adopt rights based
arrangements for renewable resources to avoid the losses of open access
and the
inefficiencies of prescriptive regulation, we argue that grandfathering
the
allotments of local users can be the most efficient distribution
mechanism. We
differ from the standard support among economists for auctions which
contends
that auctions allocate rights to the highest valued users and thereby
maximize
rents. Our contention is that rents are not a fixed stock as is commonly
assumed, but rather depend upon the actions of those who use the
natural resource
and convert it into valuable goods and services. First-possession
allocation
assigns ownership and rents to existing users, reinforcing their
incentives for
stewardship and rent maximization. Resource rents are an important
source of
wealth and well being, especially in developing countries. By contrast
the
alternative, auction allocation, assigns ownership to winning bidders,
but the
rents are captured by the auctioneer, often the state, not local
agents.
We argue that there can be important efficiency
effects. Our empirical focus is on fisheries, but the implications
extend to
other settings.
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The Demarcation of Land and the Role of Coordinating Institutions G. D.
Libecap, D. Lueck This paper examines the economic effects
of the two dominant land demarcation systems: metes and bounds (MB) and
the rectangular system (RS). Under MB property is demarcated by its
perimeter as indicated by natural features and human structures and
linked to surveys within local political jurisdictions. Under RS land
demarcation is governed by a common grid with uniform square shapes,
sizes, alignment, and geographically-based addresses. In the U.S. MB is
used principally in the original 13 states, Kentucky, and Tennessee.
The RS is found elsewhere under the Land Ordinance of 1785 that divided
federal lands into square-mile sections. We develop an economic
framework for examining land demarcation systems and draw predictions.
Our empirical analysis focuses on a 39-county area of Ohio where both
MB and RS were used in adjacent areas as a result of exogenous
historical factors. The results indicate that topography influences
parcel shape and size under a MB system; that parcel shapes are aligned
under the RS; and that the RS is associated with higher land values,
more roads, more land transactions, and fewer legal disputes than MB,
all else equal. The comparative limitations of MB appear to have had
negative long-term effects on land values and economic activity in the
sample area. |
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Markets - Water Markets: Australia's Murray-Darling Basin and the US Southwest R. Q.
Grafton, C. Landry, G. Libecap, R. J. O'Brien Worldwide supplies of fresh water are
increasingly scarce relative to demand. This problem is likely to be
exacerbated with climate change. In this paper, we examine water
markets in both Australia’s Murray Darling Basin and the western US and
their prospects for addressing water scarcity. The two regions share a
number of important similarities including: climate variability that
requires investment in reservoirs to make water available in
low-rainfall periods; the need for internal and cross-border (state)
water management; an historical major allocation of water to
irrigators; increasing competition among different uses (agricultural,
environmental and recreational in situ uses, urban demand); and the
potential for water trading to more smoothly and quickly allocate water
across these competing uses. A comparison of the two regions provides
important insights about how economic factors can encourage more
efficient water allocation, market structure and government regulation. |
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European Union Direct Payments to Farmers Revisited F. Brito
Soares A logistic function framework is used to
allocate European Union Common Agricultural Policy (CAP) direct
payments to farmers among the different member states. Total CAP
expenditure is the starting point for the process, which contemplates
two phases. In Phase 1 expenditure is allocated by taking into
consideration the economic dimension of farms in each country. In Phase
2 the amount allocated to each member state is further modulated to
accommodate both economic efficiency and green |
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Are Antidumping Duties an Antidote for Predation? J. Gaisford,
S.V. Jiang, S. Lutz Since price discrimination and selling
below cost arise in the normal course of business and are usually legal
for home firms, countering these practices by foreign firms provides a
very weak rationale for antidumping duties. If antidumping duties were
to provide a systematic defense against predation by foreign firms,
however, a strong ''fair-trade'' justification would remain. This paper
adapts the classic entry-deterrence analysis of Dixit (1979) and
Brander and Spencer (1981) to provide a simple treatment of predation,
which is applicable with price leadership as well as quantity
leadership. Although situations of cross-border predation appear to be
quite rare, foreign firms may sometimes find themselves in leadership
positions if they have to make shipments and/or set prices before their
home rivals. This paper shows that, in the context of such an
international leadership game, predation ma y occur without dumping and
vice versa. Further, when dumping and predation do coexist, a
sophisticated form of antidumping duty would prevent predation, but the
simple antidumping duties that are generally observed in practice will
often be insufficient. Consequently, the paper challenges the
''fair-trade'' view of antidumping policy as an antidote for predation
and strengthens the foundation of the counter-argument that antidumping
constitutes a new insidious form of protectionism and trade harassment,
which is of particularly serious concerns for small countries. |
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Elites, Education and Reforms M. Baliamoune
Lutz We analyze the interplay of
political elites’ de facto power, democracy and education based on a
theoretical framework inspired by the model in Acemoglu and Robinson
(2006). We
identify conditions under which the elite may overcompensate the loss
of de
jure power (as a result of political reform) by investing too much in
de facto
power so that the probability to have de facto power is higher under
democracy
than under non-democracy. The analysis also shows that depending on
whether the
income effect of education is strong or weak and whether citizens’
education
has increasing or decreasing returns, the elite may or may not support
education subsidy under democracy. We show that under certain
assumptions the
political elites may treat democracy and spending on citizens’
education as
substitutes. We comment on the implications of the results for
understanding
why countries that started from comparable initial conditions may
follow
divergent development paths.
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Policy Reform and Aid Effectiveness in Africa M. Baliamoune
Lutz This paper re-examines the
‘good policy environment’ argument for aid effectiveness and allocation
in Africa. It does so while controlling for the role of social cohesion
and its interplay with aid. The empirical results indicate that once we
account for the role of social cohesion the impact of policy
disappears. This casts doubt on the conclusions in Burnside and Dollar
(2000) and the policy lessons derived from their findings. Our results
have important policy implications as they suggest that conditioning
aid allocation on ‘good policy environment’ may not necessarily lead to
higher aid effectiveness.
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Preemption, Predation, and Minimum Quality Standards M. Baliamoune
Lutz, S. Lutz We present a model of
vertical product differentiation and exit where a domestic and a
foreign firm face fixed setup costs and quality-dependent costs of
production and compete in quality and price in the domestic market.
Quality-dependent costs are quadratic in qualities, but independent of
the quantities produced. The domestic government may impose a minimum
quality standard binding for both foreign and domestic firms. In the
presence of an initial cost advantage of the domestic firm, a
sufficiently high minimum quality standard set by the domestic
government will enable the domestic firm to induce exit of the foreign
firm, i.e. to engage in predation. However, the same standard would
lead to predation by the foreign firm, if the foreign firm had the
initial cost advantage!
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Efficiency of Commercial Banks in Bulgaria in the Wake of EU Accession N. Nenovsky,
K. Tochkov The paper examines the efficiency of
Bulgarian banks and its determinants over the period 1999-2007. The
levels of technical, allocative, and cost efficiency are first
estimated using a nonparametric methodology and then regressed upon a
number of bank-specific, institutional, and EU-related factors. The
findings indicate that foreign banks were more efficient than domestic
private banks, although the gap between them narrowed over time. State-owned banks ranked last on average but their privatization resulted in efficiency gains. Capitalization, liquid ity, and enterprise restructuring enhanced bank efficiency, while banking reforms had an adverse effect. The Treaty of Accession and EU membership were associated with significant efficiency improvements. |
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Distributional Properties of means of Random Probability Measures A. Lijoi, I. Pruenster The present paper provides a review of the results
concerning distributional properties of means of random probability
measures. Our interest in this topic has originated from inferential
problems in Bayesian Nonparametrics. Nonetheless, it is worth noting
that these random quantities play an important role in seemingly
unrelated areas of research. In fact, there is a wealth of
contributions both in the statistics and in the probability literature
that we try to summarize in a unified framework. Particular attention
is devoted to means of the Dirichlet process given the relevance of the
Dirichlet process in Bayesian Nonparametrics. We then present a number
of recent contributions concerning means of more general random
probability measures and highlight connections with the moment problem,
combinatorics, special functions, excursions of stochastic processes
and statistical physics. |
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Models Beyond the Dirichlet Process A. Lijoi, I. Pruenster Bayesian nonparametric inference is a relatively young area of research and it has recently undergone a strong development. Most of its success can be explained by the considerable degree of flexibility it ensures in statistical modelling, if compared to parametric alternatives, and by the emergence of new and efficient simulation techniques that make nonparametric models amenable to concrete use in a number of applied statistical problems. The Dirichlet process is, since its introduction in 1973 by T.S. Ferguson, a cornerstone in Bayesian nonparametrics. Nonetheless, in some cases of interest for statistical applications the Dirichlet process is not an adequate prior choice and alternative nonparametric models need to be devised. In this paper we provide a review of Bayesian nonparametric models that go beyond the Dirichlet process. |
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Knowledge, Capabilities and the Poverty Trap: The Complex Interplay Between Technological, Social and Geographical Factors J. Fagerberg,
M. Srholec This paper explores the possibility that
technological capabilities, to lead to development, need to be
accompanied by a broader set of “social capabilities”, reflecting not
only the quality of governance but also the spread of values, beliefs
and institutions that encourage members of society to actively
contribute to the development process. To investigate this issue, a set
of empirical indicators, reflecting the capabilities that have been
emphazised in the literature as being important for development, was
identified. We also take into account the possibility that these
capabilities (and their impact) may be conditioned by historically
given factors (related to, for example, geography, demography and
history). The paper uses factor
analysis to analyse the question of how these indicators interrelate and explores their relationship with economic development. We find that technological and social capabilities are indeed strongly related and, moreover, strongly correlated with economic development. The same does not apply for the second factor suggested by the analysis, which mainly reflects the character of countries’ political systems. Thus it is more important economically what countries do than how they decide on it. A strong negative relationship with development was found for the third factor, reflecting the combined effect of high fertility rates, low education and high frequency of serious disease. Arguably, this contributes to a “vicious circle” that makes it difficult for some very poor countries, especially in the tropics, to escape from poverty.. |
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Models Beyond the Dirichlet Process R. H. Mena, S. G. Walker This paper studies a novel idea for constructing continuous-time stationary Markov models. The approach undertaken is based on a latent representation of the corresponding transition probabilities that conveys to appealing ways to study and simulate the dynamics of the constructed processes. Some well-known models are shown to fall within this construction shedding some light on both theoretical and applied properties. As an illustration of the capabilities of our proposal a simple estimation problem is posed. |
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Geometric Stick-Breaking Processes for Continuous-Time Nonparametric Modeling R. H. Mena, M. Ruggiero, S. G. Walker This paper is concerned with the construction of a continuous parameter sequence of random probability measures and its application for modeling random phenomena evolving in continuous time. At each time point we have a random probability measure which is generated by a Bayesian nonparametric hierarchical model, and the dependence structure is induced through a Wright-Fisher diffusion with mutation. The sequence is shown to be a stationary and reversible diffusion taking values on the space of probability measures. A simple estimation procedure for discretely observed data is presented and illustrated with simulated and real data sets. |