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See detailStochastic petropolitics: The dynamics of institutions in resource-dependent economies
Boucekkine, Raouf; Prieur, Fabien; Vasilakis, Chrysovalantis et al

in European Economic Review (2021)

We investigate the link between resource revenues volatility and institutions. We build a stochastic differential game with two players (conservatives vs . liberals) lobbying for changing the institutions ... [more ▼]

We investigate the link between resource revenues volatility and institutions. We build a stochastic differential game with two players (conservatives vs . liberals) lobbying for changing the institutions in their preferred directions. First, uncertainty surrounds the dynamics of institutions and the resource revenues. Second, the lobbying power is asymmetric, the conservatives’ power being increasing with resource revenues. We show the existence of a unique equilibrium in the set of affine strategies. We then examine to which extent uncertainty leads to more liberal institutions in the long run, compared to the deterministic case. We finally explore the institutional impact of volatility using a database covering 91 countries over the period 1973–2005. Focusing on financial liberalization, we find that as oil revenue volatility increases, liberalization goes down. This result is robust to different specifications and sample distinctions. [less ▲]

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See detailThe role of labor-income risk in household risk-taking
Hubar, Sylwia; Koulovatianos, Christos UL; Li, Jian

in European Economic Review (2020), 129(C),

In fifteen European countries, China, and the US, stocks and business equity as a share of total household assets are represented by an increasing and convex function of income/wealth. A parsimonious ... [more ▼]

In fifteen European countries, China, and the US, stocks and business equity as a share of total household assets are represented by an increasing and convex function of income/wealth. A parsimonious model fitted to the data shows why background labor-income risk can explain much of this risk-taking pattern. Uncontrollable labor-income risk stresses middle-income households more because labor income is a larger fraction of their total lifetime resources compared with the rich. In response, middle-income households reduce (controllable) financial risk. Richer households, having less pressure, can afford more risk-taking. The poor take low risk because they avoid jeopardizing their subsistence consumption. [less ▲]

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See detailDo demographics prevent consumption aggregates from reflecting micro-level preferences?
Koulovatianos, Christos UL; Schroeder, Carsten; Schmidt, Ulrich

in European Economic Review (2019), 111(C),

Most simulated micro-founded macro models use solely consumer-demand aggregates in order to estimate preference parameters of a representative consumer, for use in policy evaluation. Focusing on dynamic ... [more ▼]

Most simulated micro-founded macro models use solely consumer-demand aggregates in order to estimate preference parameters of a representative consumer, for use in policy evaluation. Focusing on dynamic models with time-separable preferences, we show that aggregation holds if, and only if, momentary utility functions fall in the Identical-Shape Harmonic Absolute-Risk Aversion (ISHARA) utility class, identifying which parameters of ISHARA utility functions are allowed to vary over time. Given this theoretical result, it should be easy to empirically reject the aggregation properties that the macroeconomic representative-consumer identification approach requires: it suffices to show that permanent incomes guaranteeing the same living standard across households of different size violate an affine relationship. In order to test the validity of this affine equation, we develop a vignette survey that produces appropriate data without demand-estimation restrictions imposed by models. Surprisingly, in six countries, this equation is not rejected, lending support to using consumer-demand aggregates. [less ▲]

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See detailKnowledge Creates Markets: The Influence of Entrepreneurial Support and Patent Rights on Academic Entrepreneurship
Czarnitzki, Dirk; Doherr, Thorsten; Hussinger, Katrin UL et al

in European Economic Review (2016)

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See detailWith a Little Help from My Friends? Quality of Social Networks, Job Finding and Job Match Quality
Cappellari, Lorenzo; Tatsiramos, Konstantinos UL

in European Economic Review (2015), 78

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See detailMicroeconomic Uncertainty and Macroeconomic Indeterminacy
Fagnart, Jean-François; Pierrard, Olivier; Sneessens, Henri UL

in European Economic Review (2007), 51(6), 1564-1588

We construct a stylised intertemporal macroeconomic model to illustrate how the combination of decentralised trading and microeconomic uncertainty can generate coordination problems and indeterminacy of ... [more ▼]

We construct a stylised intertemporal macroeconomic model to illustrate how the combination of decentralised trading and microeconomic uncertainty can generate coordination problems and indeterminacy of the macroeconomic equilibrium. With a competitive labour market and a fixed labour supply, the range of equilibria depends mainly on the variance of the idiosyncratic shocks and may thus remain fairly narrow. The situation is different when there is imperfect competition on the labour market. The existence of real rigidities is apt to considerably increase the size of the interval of indeterminacy, for a given variance of the shocks. [less ▲]

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See detailUnions and Firms Agglomeration
Toulemonde, Eric; Picard, Pierre M UL

in European Economic Review (2006), 50(3), 669-694

Economic geography models predict the agglomeration of manufacturing activies only if the workforce is mobile. Still, as the E.U.’s experience shows, core–periphery patterns exist even though the ... [more ▼]

Economic geography models predict the agglomeration of manufacturing activies only if the workforce is mobile. Still, as the E.U.’s experience shows, core–periphery patterns exist even though the workforce is rather immobile. The paper provides a theoretical explanation for such core–periphery patterns through the effect that unions have on firms’ incentive to agglomerate in a region. The paper offers fully analytical results about location equilibria and some interesting welfare properties. [less ▲]

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See detailShopping hours and price competition
Inderst, Roman; Irmen, Andreas UL

in European Economic Review (2005), 49(5), 1105-1124

This Paper develops an argument explaining why retail prices may rise in response to the deregulation of opening hours. We make this point in a model of imperfect duopolistic competition. In a deregulated ... [more ▼]

This Paper develops an argument explaining why retail prices may rise in response to the deregulation of opening hours. We make this point in a model of imperfect duopolistic competition. In a deregulated market retailers view the choice of opening hours as a means to increase the degree of perceived product differentiation thus relaxing price competition. If the opportunity costs of the time spent on shopping are sufficiently high the equilibrium configuration has asymmetric shopping hours where one retailer stays open for longer than the other does. Both retailers charge higher prices than under regulation, and both are strictly better off.<P>(This abstract was borrowed from another version of this item.) [less ▲]

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See detailNote on duopolistic vertical restraints
Irmen, Andreas UL

in European Economic Review (1997), 41(8), 1559-1567

No abstract is available for this item.

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See detailInvestment and the Inflation-Unemployment Trade-off in a Macroeconomic Rationing Model with Monopolistic Competition
Sneessens, Henri UL

in European Economic Review (1987), 31(3), 781-815

This paper develops a stylized macroeconomic rationing (or disequilibrium) model where the three well-known regimes of Keynesian Unemployment, Classical Unemployment and Repressed Inflation’ are ... [more ▼]

This paper develops a stylized macroeconomic rationing (or disequilibrium) model where the three well-known regimes of Keynesian Unemployment, Classical Unemployment and Repressed Inflation’ are explicitly distinguished and wherein prices and the capital stock are endogenously determined by profit maximizing firms. The framework is one of monopolistic competition. The macroeconomic price and employment relationships are derived by explicit aggregation over individual firms. Because different firms can be in different regimes, the three regimes mentioned above always coexist at the aggregate level and do so in proportions that may vary through time. This is exactly the picture conveyed by business survey results. As a result of competition, the number of firms, hence the aggregate production capacity, adjusts in the long run until pure profits are equal to zero. [less ▲]

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