References of "Koulovatianos, Christos 50002127"
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See detailSaving Rates and Portfolio Choice with Subsistence Consumption
Koulovatianos, Christos UL; Achury, Carolina; Hubar, Sylwia

in Review of Economic Dynamics (2012), 105(1), 108-126

We analytically show that a common across rich/poor individuals Stone-Geary utility function with subsistence consumption in the context of a simple two-asset portfolio-choice model is capable of ... [more ▼]

We analytically show that a common across rich/poor individuals Stone-Geary utility function with subsistence consumption in the context of a simple two-asset portfolio-choice model is capable of qualitatively and quantitatively explaining: (i) the higher saving rates of the rich, (ii) the higher fraction of personal wealth held in risky assets by the rich, and (iii) the higher volatility of consumption of the wealthier. On the contrary, time-variant "keeping-up-with-the-Joneses" weighted average consumption which plays the role of moving benchmark subsistence consumption gives the same portfolio composition and saving rates across the rich and the poor, failing to reconcile the model with what micro data say. [less ▲]

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See detailExternal Sovereign Debt in a Monetary Union: Bailouts and the Role of Corruption
Achury, Carolina; Koulovatianos, Christos UL; Tsoukalas, John

Report (2011)

We build a tractable stylized model of external sovereign debt and endogenous international interest rates. In corrupt economies with rent-seeking groups stealing public resources, a politico-economic ... [more ▼]

We build a tractable stylized model of external sovereign debt and endogenous international interest rates. In corrupt economies with rent-seeking groups stealing public resources, a politico-economic equilibrium is characterized by permanent fiscal impatience which leads to excessive issuing of sovereign bonds. External creditors envision the corrupt economy’s fiscal impatience and buy its bonds at higher interest rates. In turn, this interest-rate increase exacerbates the problem of oversupplying debt, leading the economy to a perfect-foresight trap. In incorrupt countries which have entered a high-interest-rate/high debt-GDP-ratio trap because an immediately recent disaster has caused a sudden jump to a high outstanding debt-GDP ratio, we show that bailout plans with controlled interest rates can help in reducing debt-GDP ratios after some time. On the contrary, under corruption, we show that bailouts are ineffective unless rent-seeking groups are eradicated. [less ▲]

Detailed reference viewed: 59 (7 UL)
See detailAsset Pricing under Rational Learning about Rare Disasters
Koulovatianos, Christos UL; Wieland, Volker

Report (2011)

This paper proposes a new approach for modeling investor fear after rare disasters. The key element is to take into account that investors' information about fundamentals driving rare downward jumps in ... [more ▼]

This paper proposes a new approach for modeling investor fear after rare disasters. The key element is to take into account that investors' information about fundamentals driving rare downward jumps in the dividend process is not perfect. Bayesian learning implies that beliefs about the likelihood of rare disasters drop to a much more pessimistic level once a disaster has occurred. Such a shift in beliefs can trigger massive declines in price-dividend ratios. Pessimistic beliefs persist for some time. Thus, belief dynamics are a source of apparent excess volatility relative to a rational expectations benchmark. Due to the low frequency of disasters, even an infinitely-lived investor will remain uncertain about the exact probability. Our analysis is conducted in continuous time and offers closed-form solutions for asset prices. We distinguish between rational and adaptive Bayesian learning. Rational learners account for the possibility of future changes in beliefs in determining their demand for risky assets, while adaptive learners take beliefs as given. Thus, risky assets tend to be lower-valued and price-dividend ratios vary less under adaptive versus rational learning for identical priors. [less ▲]

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See detailConfronting the Representative Consumer with Household-Size Heterogeneity
Koulovatianos, Christos UL; Schroeder, Carsten; Schmidt, Ulrich

Report (2010)

Much analysis in macroeconomics empirically addresses economy-wide incentives behind consumer/investment choices by using insights from the way a single representative household would behave ... [more ▼]

Much analysis in macroeconomics empirically addresses economy-wide incentives behind consumer/investment choices by using insights from the way a single representative household would behave. Heterogeneity at the micro level can jeopardize attempts to back up the representative consumer construct with microfoundations. One complex aspect of micro-level heterogeneity is household size, as individuals living in multi-member households have the potential to share goods within the household, benefiting from household-size economies. Theoretically, we show that validating the role of a representative consumer would require that the way individuals benefit from intra-household sharing is strictly aligned across the rich and the poor: once expenditures for subsistence needs are subtracted from disposable household income, household-size economies the remainder (discretionary) household incomes entail must be the same across the rich and the poor. We have designed a survey method that allows the testing of this stringent property of intra-household sharing and find that it holds. [less ▲]

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See detailEvidence on the Insurance Effect of Redistributive Taxation
Koulovatianos, Christos UL; Grant, Charles; Michaelides, Alexander et al

in Review of Economics and Statistics (2010), 92(1), 965-973

If households face uninsurable idiosyncratic earnings risk, theory predicts that re- distributive tax and transfer systems have both an insurance and a distortionary e®ect. Exploiting the substantial ... [more ▼]

If households face uninsurable idiosyncratic earnings risk, theory predicts that re- distributive tax and transfer systems have both an insurance and a distortionary e®ect. Exploiting the substantial variation of tax and transfer systems across US states and over time we investigate the necessary traces of these two effects in the data: that state-level measures of redistributive taxation should correlate negatively with, (a) the standard deviation, and (b) the mean, of the within-state consumption distribution. We find that the first correlation is robust, supporting strongly the presence of an insurance effect. The distortionary effect can also be detected in the data but it is less precisely estimated. [less ▲]

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See detailOptimal Growth and Uncertainty: Learning
Koulovatianos, Christos UL; Mirman, Leonard; Santugini, Marc

in Journal of Economic Theory (2009), 144

We introduce learning in a Brock-Mirman environment and study the effect of risk generated by the planner’s econometric activity on optimal consumption and investment. Here, learning introduces two ... [more ▼]

We introduce learning in a Brock-Mirman environment and study the effect of risk generated by the planner’s econometric activity on optimal consumption and investment. Here, learning introduces two sources of risk about future payoffs: structural uncertainty and uncertainty from the anticipation of learning. The latter renders control and learning nonseparable. We present two sets of results in a learning environment. First, conditions under which the introduction of learning increases or decreases optimal consumption are provided. The effect depends on the strengths and directions of the two sources of risk, which may pull in opposite directions. Second, the effects of changes in the mean and riskiness of the distribution of the signal and initial beliefs on optimal consumption are studied. [less ▲]

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See detailNon-Market Household Time and the cost of Children
Koulovatianos, Christos UL; Schröder, Carsten; Schmidt, Ulrich

in Journal of Business and Economic Statistics (2009), 27(1), 42-51

Raising children demands a considerable amount of parental time, obliging working parents either to reduce their leisure time further or to buy childcare services in the market. Parents may face ... [more ▼]

Raising children demands a considerable amount of parental time, obliging working parents either to reduce their leisure time further or to buy childcare services in the market. Parents may face additional opportunity costs upon deciding to participate in the labor market, but these are difficult to measure. Using a survey instrument in Belgium and Germany, we estimate the income compensation needed to maintain family well-being when adults work versus when they do not enter the labor market. In both countries we find that full-time working parents face extra child costs and require higher labor market participation compensation compared with childless adults. [less ▲]

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See detailPer Capita Income Versus Household-Need Adjusted Income: A Cross-country Comparison
Koulovatianos, Christos UL; Minkovski, Polina; Schroeder, Carsten

in Journal of Income Distribution (2009), 18(3-4), 11-23

We use data from the Luxembourg Income Study in order to quantify the economy-wide monetary gains achieved by Household-Size Economies, due to the within-household sharing of goods by individuals living ... [more ▼]

We use data from the Luxembourg Income Study in order to quantify the economy-wide monetary gains achieved by Household-Size Economies, due to the within-household sharing of goods by individuals living in multi-member households. In most of the twenty countries we examine, we observe a decline in monetary gains achieved by Household-Size Economies over time. This decline is the result of a demographic trend towards smaller-sized household units, rather than a change in the shares of aggregate disposable income earned by household types of different size. [less ▲]

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See detailArbeitslosengeld II: Arbeitsanreize und Verteilungsgerechtigkeit
Koulovatianos, Christos UL; Schröder, Carsten; Schmidt, Ulrich

in Wirtschaftsdienst (Hamburg, Germany : 1949) (2008), 88(7), 461-466

Die Zusammenlegung von Arbeitslosen- und Sozialhilfe hatte unter anderem das Ziel, die Arbeitsanreize für arbeitsfähige Leistungsempfänger zu stärken. Wie sind die Anreizwirkungen zu bewerten? Wirkt ... [more ▼]

Die Zusammenlegung von Arbeitslosen- und Sozialhilfe hatte unter anderem das Ziel, die Arbeitsanreize für arbeitsfähige Leistungsempfänger zu stärken. Wie sind die Anreizwirkungen zu bewerten? Wirkt der durch Arbeitslosengeld II erreichbare Lebensstandard negativ bei der Entscheidung für eine Arbeitsaufnahme? Werden kinderreiche Familien bei den ALG-II-Leistungen benachteiligt? [less ▲]

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See detailEvidence on the Insurance Effect of Marginal Income Taxes
Grant, Charles; Koulovatianos, Christos UL; Michaelides, Alexander et al

Report (2008)

Marginal income taxes may have an insurance effect by decreasing the effective fluctuations of after-tax individual income. By compressing the idiosyncratic component of personal income fluctuations ... [more ▼]

Marginal income taxes may have an insurance effect by decreasing the effective fluctuations of after-tax individual income. By compressing the idiosyncratic component of personal income fluctuations, higher marginal taxes should be negatively correlated with the dispersion of consumption across households, a necessary implication of an insurance effect of taxation. Our study empirically examines this negative correlation, exploiting the ample variation of state taxes across US states. We show that taxes are negatively correlated with the consumption dispersion of the within-state distribution of non-durable consumption and that this correlation is robust. [less ▲]

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See detailThe Effects of Market Structure on Industry Growth: Rivalrous Non-excludable Capital
Koulovatianos, Christos UL; Mirman, Leonard

in Journal of Economic Theory (2007), 133

We analyze imperfect competition in dynamic environments where firms use rivalrous but nonexcludable industry-specific capital that is provided exogenously. Capital depreciation depends on utilization, so ... [more ▼]

We analyze imperfect competition in dynamic environments where firms use rivalrous but nonexcludable industry-specific capital that is provided exogenously. Capital depreciation depends on utilization, so firms influence the evolution of the capital equipment through more or less intensive supply in the final-goods market. Strategic incentives stem from, (i) a dynamic externality, arising due to the non-excludability of the capital stock, leading firms to compete for its use (rivalry), and, (ii) a market externality, leading to the classic Cournot-type supply competition. Comparing alternative market structures, we isolate the effect of these externalities on strategies and industry growth. [less ▲]

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See detailFamily-Type Subsistence Incomes
Koulovatianos, Christos UL; Schroeder, Carsten; Schmidt, Ulrich

Report (2006)

Different family types may have a fixed flow of consumption costs, related to subsistence needs. We use a survey method in order to identify and estimate such a fixed component of spending for different ... [more ▼]

Different family types may have a fixed flow of consumption costs, related to subsistence needs. We use a survey method in order to identify and estimate such a fixed component of spending for different families. Our method involves making direct questions about the linkup between aggregate disposable family income and well-being for different family types. Conducting our survey in six countries, Germany, France, Cyprus, China, India and Botswana, we provide evidence that fixed costs of consumption are embedded in welfare evaluations of respondents. More precisely, we find that the formalized relationship between welfare-retaining aggregate family incomes across different family types, suggested by Donaldson and Pendakur (2005) and termed “Generalized Absolute Equivalence Scale Exactness,” is prevalent and robust in our data. We use this relationship to identify subsistence needs of different family types and to calculate income inequality. [less ▲]

Detailed reference viewed: 82 (2 UL)
See detailInvestment in a Monopoly with Bayesian Learning
Koulovatianos, Christos UL; Mirman, Leonard J.; Santugini, Marc

Report (2006)

We study how learning affects an uninformed monopolist's supply and investment decisions under multiplicative uncertainty in demand. The monopolist is uninformed because it does not know one of the ... [more ▼]

We study how learning affects an uninformed monopolist's supply and investment decisions under multiplicative uncertainty in demand. The monopolist is uninformed because it does not know one of the parameters defining the distribution of the random demand. Observing prices reveals this information slowly. We first show how to incorporate Bayesian learning into dynamic programming by focusing on sufficient statistics and conjugate families of distributions. We show their necessity in dynamic programming to be able to solve dynamic programs either analytically or numerically. This is important since it is not true that a solution to the infinite-horizon program can be found either analytically or numerically for any kinds of distributions. We then use specific distributions to study the monopolist?s behavior. Specifically, we rely on the fact that the family of normal distributions with an unknown mean is a conjugate family for samples from a normal distribution to obtain closed- form solutions for the optimal supply and investment decisions. This enables us to study the effect of learning on supply and investment decisions, as well as the steady state level of capital. Our findings are as follows. Learning affects the monopolist's behavior. The higher the expected mean of the demand shock given its beliefs, the higher the supply and the lower the investment. Although learning does not affect the steady state level of capital since the uninformed monopolist becomes informed in the limit, it reduces the speed of convergence to the steady state. [less ▲]

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See detailPreferences and the Dynamic Representative Consumer
Koulovatianos, Christos UL

Report (2005)

This paper provides families of time-separable, twice continuously differentiable, and strictly concave utility functions of a group of consumers that are both suffcient and necessary in order to have ... [more ▼]

This paper provides families of time-separable, twice continuously differentiable, and strictly concave utility functions of a group of consumers that are both suffcient and necessary in order to have linear aggregation in a single-commodity-type deterministic dynamic environment, in the presence of consumer wealth-, labor-productivity, and preference heterogeneity, for alternative settings where the rates of time preference can be the same or different across consumers. The employed concept of linear aggregation pertains the existence of a representative consumer with a time-separable utility function. It is proved that when the rates of time preference are choice-independent and heterogeneous across consumers, a representative consumer exists if, and only if, the momentary utility functions of all consumers are exponential. Results are also provided for, (i) common across consumers choice-independent rates of time preference, and, (ii) heterogeneous choice-dependent rates of time preference, and compared with previously identified sufficient conditions for aggregation in the existing literature. [less ▲]

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See detailA Glance at Some Fundamental Public Economics Issues Through a Parametric Lens
Koulovatianos, Christos UL

in Schmidt, Ulrich; Traub, Stefan (Eds.) Advances in Public Economics: Utility, Choice and Welfare, 38 (2005)

Detailed reference viewed: 58 (3 UL)
See detailThe Effects of Market Structure on Industry Growth: Rivalrous Non-excludable Capital
Koulovatianos, Christos UL; Mirman, Leonard J.

Report (2005)

We analyze imperfect competition in dynamic environments where firms use rivalrous but nonexcludable industry-specific capital that is provided exogenously. Capital depreciation depends on utilization, so ... [more ▼]

We analyze imperfect competition in dynamic environments where firms use rivalrous but nonexcludable industry-specific capital that is provided exogenously. Capital depreciation depends on utilization, so firms influence the evolution of the capital equipment through more or less intensive supply in the final-goods market. Strategic incentives stem from, (i) a dynamic externality, arising due to the non-excludability of the capital stock, leading firms to compete for its use (rivalry), and, (ii) a market externality, leading to the classic Cournot-type supply competition. Comparing alternative market structures, we isolate the effect of these externalities on strategies and industry growth. [less ▲]

Detailed reference viewed: 74 (2 UL)
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See detailOn the Income Dependence of Equivalence Scales
Koulovatianos, Christos UL; Schröder, Carsten; Schmidt, Ulrich

in Journal of Public Economics (2005), 89(5-6), 967-996

Household consumption exhibits economies of scale as the number of household members increases. We collect survey data from two countries, Germany and France, in order to obtain direct subjective ... [more ▼]

Household consumption exhibits economies of scale as the number of household members increases. We collect survey data from two countries, Germany and France, in order to obtain direct subjective estimates of household consumption economies of scale, and, in particular, to examine an additional dimension: whether household consumption economies of scale change as living standards go up. Our data from both countries indicate strongly that household economies of scale increase as the living standard goes up. We discuss the robustness of our survey method and compare our results to these of alternative estimation methods in the literature. [less ▲]

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See detailProperties of Equivalence Scales in Different Countries
Koulovatianos, Christos UL; Schröder, Carsten; Schmidt, Ulrich

in Journal of Economics (2005), 86

Recent studies in high-income industrialized countries have shown that equivalence scales are income-dependent. We investigate whether this dependence also holds in poorer, services oriented countries, by ... [more ▼]

Recent studies in high-income industrialized countries have shown that equivalence scales are income-dependent. We investigate whether this dependence also holds in poorer, services oriented countries, by considering the example of Cyprus. We also examine whether household economies of scale and relative children costs differ. [less ▲]

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See detailThe Effects of Market Structure on Industry Growth
Koulovatianos, Christos UL; Mirman, Leonard J.

Report (2004)

We study the behavior of firms in an imperfectly competitive environment in which firms influence the evolution of the stock of capital equipment. Our model enables us, using analytical characterizations ... [more ▼]

We study the behavior of firms in an imperfectly competitive environment in which firms influence the evolution of the stock of capital equipment. Our model enables us, using analytical characterizations, to show the effect of key ingredients of dynamic competition on firm strategies and industry dynamics in addition to the usual static interaction. These effects are the static market externality (implicit in the static Cournot Equilibrium) as well as the dynamic market externality due to the effect on the market outputs of a capital stock and a dynamic externality that stems from the competition between firms for the capital stock. These strategic elements justify our conclusions, based on the study of four market structures, for the link between industrial organization and industry growth [less ▲]

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See detailEndogenous Public Policy and Long-Run Growth
Koulovatianos, Christos UL; Mirman, Leonard J.

Report (2004)

. We study the determinants of voting outcomes on the provision of public consumption through marginal income taxes in the context of the simple linear growth model. We focus on how the dynamic ... [more ▼]

. We study the determinants of voting outcomes on the provision of public consumption through marginal income taxes in the context of the simple linear growth model. We focus on how the dynamic politicoeconomic equilibrium maps the economic fundamentals to policies and long-run growth. We find that in a deterministic growth environment voters internalize, although imperfectly, the deadweight losses of taxation and vote for lower taxes when the productivity of capital is higher. Therefore, the politicoeconomic channel reinforces the positive role of productivity for growth. In a stochastic environment, we find that if business cycles are driven by productivity shocks in the endogenous growth framework, equilibrium policies imply that taxes should fall in high growth periods and rise in low-growth periods. In line with existing evidence, our model predicts procyclical public consumption and countercyclical public consumption GDP shares. [less ▲]

Detailed reference viewed: 79 (1 UL)