Islamic Banking and Economic Growth: New Evidence

E-print/Working paper (2018)

While extensive work has shown that conventional banking development is generally conducive to economic growth, there are only a limited number of studies that investigate the impact of Islamic banking ... [more ▼]

While extensive work has shown that conventional banking development is generally conducive to economic growth, there are only a limited number of studies that investigate the impact of Islamic banking. Importantly, the literature on conventional banking claims that a reverse causality from economy performance to banking may exists, but existing studies on Islamic banking fail to address this potential endogeneity problem. This paper tackles this problem and explores the relationship between Islamic banking development and economic performance in a sample of 32 developed and developing countries based on data spanning the 2000 to 2016 period. The findings show that, although Islamic banks are considered small relative to the total size of the financial sector, Islamic banking is positively correlated with economic growth even after controlling for financial structure, macroeconomic factors and other variables. The outcome is robust across different econometric specifications like pooling OLS, fixed effects, panel data with over-identified GMM, and dynamic difference GMM. The results are confirmed on two different indicators of Islamic banking and hold for different time periods. [less ▲]

Market Skewness Risk, Risk Aversion and the Cross-Section of Stock Returns

E-print/Working paper (2018)

Previous research suggests that the cross section of stock returns has substantial exposure to risks captured by higher moments of market returns, implied by S&P500 index option prices. However, assuming ... [more ▼]

Previous research suggests that the cross section of stock returns has substantial exposure to risks captured by higher moments of market returns, implied by S&P500 index option prices. However, assuming that risk aversion is time-varying, a risk-based explanation would suggest that the exposure is priced in periods of high risk aversion, while it is not necessarily priced/weaker in periods of low risk aversion. We find that for market skewness and kurtosis, this hypothesis is not supported by the data. We find that each of the higher moment prices of risk is time-varying and has significantly different patterns under different market conditions, proxied by a measure of investors’ relative risk aversion. In particular, in line with our reasoning, our results suggest that only in down-markets (high risk aversion periods), the exposure to the market volatility innovations is priced significantly negative in the cross-section of stocks, while it is not priced in up-markets (low risk aversion periods). In contrast, we find that in down-markets, market skewness and kurtosis are not priced risk factors, while the price of market skewness risk is significantly negative and the price of kurtosis risk is positive in up-markets. However, the previously reported results for skewness and kurtosis are counterintuitive, strictly violate the risk compensation principles and, therefore, do not support a risk-based explanation. The results persist even after controlling for the Fama-French and Carhart factors. [less ▲]

Asset Pricing Implications of Good Governance

E-print/Working paper (2018)

Some of the world’s poorest countries have demonstrated that political leadership and practical policies make a difference. Good governance could help to strengthen accountability, enhance participation ... [more ▼]

Some of the world’s poorest countries have demonstrated that political leadership and practical policies make a difference. Good governance could help to strengthen accountability, enhance participation and break down inequalities. Furthermore, a country’s quality of government has a positive effect on the development of its financial market and equity returns. In particular, it lowers equity volatility and, therefore, the costs of equity financing, which further helps to reduce inequalities. While price jumps are prevalent in stock markets all over the world, previous literature provides little guidance about the international nature of jumps and its relationship with country characteristics. Jumps are found to be far less systematic than the smooth (non-jump) component of country price indexes. Hence, if jumps are more idiosyncratic, governance should primarily affect the jump risk component of stock market volatility. This is good news for international investors, because diversification provides insurance against jumps. Relying on an equilibrium asset-pricing model in an economy under jump diffusion, I decompose the moments of the returns of international stock markets into a diffusive (systematic) risk and a (idiosyncratic) jump risk part. Using stock market data for a balanced panel of 52 countries, my results suggest that risk governance is an important determinant of (idiosyncratic) jump risk. Stock markets in poorly governed countries are characterized by higher volatility and more negative return asymmetry, primarily driven by the higher jump risk. Among the different governance indicators analyzed, the regulatory quality, the government effectiveness and the control of corruption appear to be most important. Results are robust to the inclusion of various controls for other country- or market-specific characteristics. My results have important policy implications. [less ▲]

The dual Bonahon-Schläfli formula

E-print/Working paper (2018)

Given a differentiable deformation of geometrically finite hyperbolic 3-manifolds (M_t)_t, the Bonahon-Schläfli formula expresses the derivative of the volume of the convex cores (CM_t)_t in terms of the ... [more ▼]

Given a differentiable deformation of geometrically finite hyperbolic 3-manifolds (M_t)_t, the Bonahon-Schläfli formula expresses the derivative of the volume of the convex cores (CM_t)_t in terms of the variation of the geometry of its boundary, as the classical Schläfli formula does for the volume of hyperbolic polyhedra. Here we study the analogous problem for the dual volume, a notion that arises from the polarity relation between the hyperbolic space H^3 and the de Sitter space dS^3. The corresponding dual Bonahon-Schläfli formula has been originally deduced from Bonahon's work by Krasnov and Schlenker. Here, making use of the differential Schläfli formula and the properties of the dual volume, we give a (almost) self-contained proof of the dual Bonahon-Schläfli formula, without making use of Bonahon's original result. [less ▲]

Tabakkonsum von Schülern in Luxemburg / Consommation de tabac par les élèves au Luxembourg

E-print/Working paper (2018)

In der HBSC-Studie 2014 wurden Fragen zum Tabakkonsum gestellt. Von den 11-12-Jährigen sind 2 % laut eigenen Angaben Raucher, in der Altersgruppe 17-18 steigt dieser Anteil auf knapp über ein Drittel. Bis ... [more ▼]

In der HBSC-Studie 2014 wurden Fragen zum Tabakkonsum gestellt. Von den 11-12-Jährigen sind 2 % laut eigenen Angaben Raucher, in der Altersgruppe 17-18 steigt dieser Anteil auf knapp über ein Drittel. Bis zum Alter von 14 Jahren ist der Anteil der regelmäßigen Raucher (d.h. sie rauchen mindestens einmal pro Woche) bei Jungen und Mädchen etwa gleich hoch. In der Altersgruppe 17-18 rauchen 32 % der männlichen Jugendlichen regelmäßig, aber nur 23 % der weiblichen Jugendlichen. Im Enseignement secondaire technique ist der Anteil der regelmäßigen Raucher in allen Altersgruppen ungefähr doppelt so hoch wie im Enseignement secondaire. Die Hälfte der Raucher hat mit 14 Jahren oder noch früher mit dem Rauchen angefangen, daher sollte frühzeitig über die Gefahren des Rauchens aufgeklärt werden. [less ▲]

Cannabiskonsum von Schülern in Luxemburg / Consommation de cannabis des élèves au Luxembourg

E-print/Working paper (2018)

In der HBSC-Studie 2014 wurde nach dem Cannabiskonsum der Schüler gefragt. 38 % der 17-18-Jährigen haben laut eigenen Angaben mindestens einmal in ihrem Leben Cannabis probiert, in den vergangenen 30 ... [more ▼]

In der HBSC-Studie 2014 wurde nach dem Cannabiskonsum der Schüler gefragt. 38 % der 17-18-Jährigen haben laut eigenen Angaben mindestens einmal in ihrem Leben Cannabis probiert, in den vergangenen 30 Tagen haben in dieser Altersgruppe 15 % Cannabis konsumiert. Der „Probierkonsum“ ist somit deutlich weiter verbreitet als der regelmäßige Konsum. Je älter die Schüler sind, desto höher ist der Anteil der Cannabiskonsumenten, wobei der Anstieg bei den Jungen größer ist als bei den Mädchen. Von den 17-18-Jährigen haben 20 % der Jungen in den vergangenen 30 Tagen Cannabis genommen, aber nur 11 % der Mädchen. Die Häufigkeit des Konsums unterscheidet sich kaum je nach Wohlstand der Familie oder zwischen dem Enseignement secondaire und dem Enseignement secondaire technique. Ein Viertel der Konsumenten hat bis zum Alter von rund 14 Jahren mit dem Konsum angefangen, daher sollte die Prävention frühzeitig einsetzen. [less ▲]

"Was hältst du zurzeit von der Schule?" / « Actuellement que penses-tu de l’école? »

E-print/Working paper (2018)

Die Schule ist ein wichtiger Ort der Sozialisation, an dem die Schüler viel Zeit verbringen. Positive Erfahrungen mit der Schule können die soziale und gesundheitliche Entwicklung der Schüler fördern ... [more ▼]

Die Schule ist ein wichtiger Ort der Sozialisation, an dem die Schüler viel Zeit verbringen. Positive Erfahrungen mit der Schule können die soziale und gesundheitliche Entwicklung der Schüler fördern, negative Erfahrungen können die Entwicklung beeinträchtigen. Daher wurde in der HBSC-Studie 2014 gefragt, wie sehr die Schüler ihre Schule mögen. Von den 11-12-Jährigen mögen 30 % die Schule sehr, weitere 52 % mögen sie einigermaßen. In der Gruppe der 15-16-Jährigen mögen 11 % die Schule sehr und 15 % mögen sie überhaupt nicht. Dementsprechend mögen Schüler des Fondamental ihre Schule eher als Schüler an Sekundarschulen. Zwischen den Schultypen Secondaire, Secondaire technique und Modulaire gibt es hingegen kaum Unterschiede. Je mehr sich Schüler durch die Schularbeit gestresst fühlen, desto eher mögen sie die Schule nicht. Sie mögen sie auch dann eher nicht, wenn sie vermuten, dass ihre Lehrer sie für leistungsschwach halten. Je weniger die Schüler ihre Schule mögen, desto mehr Gesundheitsbeschwerden berichten sie. [less ▲]

« Actuellement que penses-tu de l’école? »

E-print/Working paper (2018)

L'école est un lieu important de socialisation dans lequel les élèves passent beaucoup de temps. Les expériences positives en lien avec l’école peuvent favoriser leur développement social et celui de leur ... [more ▼]

L'école est un lieu important de socialisation dans lequel les élèves passent beaucoup de temps. Les expériences positives en lien avec l’école peuvent favoriser leur développement social et celui de leur santé, tandis que les expériences négatives peuvent perturber leur développement. Par conséquent, l'étude HBSC de 2014 a demandé à quel point les élèves aimaient leur école. Parmi les 11-12 ans, 30 % disent aimer beaucoup l'école et 52 % l'aiment un peu. Dans le groupe des 15-16 ans, 11 % disent aimer beaucoup l'école et 15 % ne l'aiment pas du tout. En conséquence, les élèves du fondamental sont plus nombreux à aimer beaucoup l’école que les élèves du secondaire. Cependant, il n'y a pratiquement pas de différences entre les écoles secondaires classique, technique et modulaire. En outre, plus les élèves se sentent stressés par les devoirs, moins ils aiment l'école. Ils ont également tendance à ne pas l’aimer quand ils soupçonnent que leurs enseignants les considèrent comme n’étant pas assez performants. Enfin, moins les élèves aiment leur école, plus ils signalent de problèmes de santé. [less ▲]

Micromechanical model for sintering and damage in viscoelastic porous ice and snow. Part I: Theory

E-print/Working paper (2018)

Ice and snow have sometime been classified as a viscoelastic or viscoplastic mate- rial according to temperature, strain rate, pressure and time scale. Throughout experimental studies presented in the ... [more ▼]

Ice and snow have sometime been classified as a viscoelastic or viscoplastic mate- rial according to temperature, strain rate, pressure and time scale. Throughout experimental studies presented in the literature, it has been observed that at very low temperatures or high strain rate, porous ice and snow exhibit brittle behavior, but experience high viscous and plastic flow at temperatures closed to the melting point and low rates. At the macroscopic level nonlinearity is not necessarily attributed to material level permanent changes or yielding but mainly to micro cracks, porosity collapse and crack propagation. This paper attempts to address this complex behavior with a full microstructure based model. [less ▲]

Signaling or Marketing? The Role of Discount Control Mechanisms

E-print/Working paper (2018)

A Proof of Entropy Minimization for Outputs in Deletion Channels via Hidden Word Statistics

E-print/Working paper (2018)

From the output produced by a memoryless deletion channel from a uniformly random input of known length n, one obtains a posterior distribution on the channel input. The difference between the Shannon ... [more ▼]

From the output produced by a memoryless deletion channel from a uniformly random input of known length n, one obtains a posterior distribution on the channel input. The difference between the Shannon entropy of this distribution and that of the uniform prior measures the amount of information about the channel input which is conveyed by the output of length m, and it is natural to ask for which outputs this is extremized. This question was posed in a previous work, where it was conjectured on the basis of experimental data that the entropy of the posterior is minimized and maximized by the constant strings 𝟶𝟶𝟶… and 𝟷𝟷𝟷… and the alternating strings 𝟶𝟷𝟶𝟷… and 𝟷𝟶𝟷𝟶… respectively. In the present work we confirm the minimization conjecture in the asymptotic limit using results from hidden word statistics. We show how the analytic-combinatorial methods of Flajolet, Szpankowski and Vall\'ee for dealing with the hidden pattern matching problem can be applied to resolve the case of fixed output length and n→∞, by obtaining estimates for the entropy in terms of the moments of the posterior distribution and establishing its minimization via a measure of autocorrelation. [less ▲]

Between European Precaution and National Compensation : The Disourses of Risk Management A Critical Analysis of Giovanni Pesce and Others v. Presidenza del Consiglio dei Ministri – Dipartimento della Protezione Civile and Others

E-print/Working paper (2018)

Contemporary society can undisputably be characterized, following Ulrich Beck, as a risk society. Indeed, catastrophic risks multiply themselves, and hence also need to be managed. This paper addresses ... [more ▼]

Contemporary society can undisputably be characterized, following Ulrich Beck, as a risk society. Indeed, catastrophic risks multiply themselves, and hence also need to be managed. This paper addresses more generally the question of how and by whom decision making regarding risk management is made in the European Union. More precisely, it provides a critical analysis of the legal discourse, on the one hand, on the use of the precautionary principle in risk management, and, on the other hand, on compensation of individuals that suffer financial losses related to decisions that are taken on the behalf of this principle. This critic will here be illustrated through an analysis of the Giovanni Pesce and Others v. Presidenza del Consiglio dei Ministri – Dipartimento della Protezione Civile and Others case. [less ▲]

Wozu Mittelalterforschung? Zum 30. Jubiläum des CLUDEM

E-print/Working paper (2018)

Experimental Stock Market Dynamics: Excess bids, directional learning, and adaptive style investing in a call-auction with multiple multiperiod lived assets

E-print/Working paper (2018)

Le surpoids chez les élèves au Luxembourg

E-print/Working paper (2018)

Dans le cadre de l’enquête HBSC 2014, réalisée dans plusieurs pays de l’Union européenne, les élèves étaient interrogés concernant leur taille et leur poids pour permettre de calculer leur indice de masse ... [more ▼]

Dans le cadre de l’enquête HBSC 2014, réalisée dans plusieurs pays de l’Union européenne, les élèves étaient interrogés concernant leur taille et leur poids pour permettre de calculer leur indice de masse corporelle (IMC). Parmi les participants, 13 % sont trop maigres, 72 % ont un poids normal, 13 % sont en surpoids et 3 % sont obèses. En comparant avec les autres pays, il y a relativement peu d’enfants de 11 ans au Luxembourg en surpoids. La proportion des élèves de 15 ans en situation de surpoids se trouve au niveau de la moyenne internationale. Les enfants issus de familles de niveau socio-économique élevé ont un risque plus faible d’être en surpoids que ceux des familles avec un niveau plus bas. Les élèves de l’enseignement fondamental et du secondaire sont moins susceptibles d’être en surpoids que ceux du secondaire technique et du modulaire. [less ▲]

WWI: Kosakenmütze und roter Stern: Russische Gefangene in Luxemburg 1918

E-print/Working paper (2018)

Die vorliegende Teiluntersuchung beschäftigt sich mit den 3.100 russischen Kriegsgefangenen, die 1918 Luxemburg passierten. Etwa 300 blieben nachweislich in Luxemburg, da die sowjetische Ideologie in ... [more ▼]

Die vorliegende Teiluntersuchung beschäftigt sich mit den 3.100 russischen Kriegsgefangenen, die 1918 Luxemburg passierten. Etwa 300 blieben nachweislich in Luxemburg, da die sowjetische Ideologie in ihrer neuen Heimat, die nun Russische Sowjetische Föderative Sozialistische Republik hieß, sie nicht ansprach. In einer mikrohistorischen Perspektive werden mehrere Schicksale vorgeführt, anhand derer man zum einen die Bedingungen dieser Emigration versteht, die sich zwar auf neutralen Boden vollzog, jedoch unter der stetigen Verfolgung durch die deutsche Armee, die die Unabhängigkeit Luxemburgs wenig kümmerte. Zum anderen wird gezeigt, wie “Russisch” immer mehr mit “Kommunistisch” assoziiert wurde und alle Russen unter Verdacht standen, “rot” zu sein. [less ▲]

Russians in Luxembourg, WWII: Поиски старого друга

E-print/Working paper (2018)

Спустя семьдесят лет после окончания Второй мировой войны бывший люксембургский военнопленный решил найти своего старого русского друга, которого пригнали на принудительные работы в сталелитейной ... [more ▼]

Спустя семьдесят лет после окончания Второй мировой войны бывший люксембургский военнопленный решил найти своего старого русского друга, которого пригнали на принудительные работы в сталелитейной промышленности и сельском хозяйстве Люксембурга наравне с другими 4.000 узниками. Судьбы двух пленных переплелись, как они переплетутся между советскими и люксембургскими поданными в Европе еще не раз ... [less ▲]

Le régime d’Etat providence joue un rôle dans le bien-être

E-print/Working paper (2018)

More Necessary and Less Sufficient: An Age-Period-Cohort Approach to Overeducation in Comparative Perspective

E-print/Working paper (2018)

In many countries, the skilled labor market has lagged behind educational expansion. As a result of increased competition, younger cohorts of the highly educated face decreasing returns to education or ... [more ▼]

In many countries, the skilled labor market has lagged behind educational expansion. As a result of increased competition, younger cohorts of the highly educated face decreasing returns to education or overeducation. Surprisingly, decreasing occupational outcomes do not coincide empirically with the economic returns among those with tertiary education. Regarding the process of changes in economic returns to education based on cohort transformations, we expect that the expansion of tertiary education affects specific cohorts, which find themselves facing more labor market competition. As a result, the economic returns to education should decrease over cohorts even though they remain stable and even increase during the same period. To study this process, we model economic returns with a new Age-Period- Cohort-Trended-Lag (APCTLAG) method, which allows comparing the gap in economic returns between tertiary and less than tertiary education over cohorts. Using the Luxembourg Income Study (LIS), we analyze trends over three decades in 12 countries. Our results confirm that educational returns for tertiary education have declined over time, even though the gap between the educated and the less educated has remained similar in most of the countries. For younger cohorts, tertiary education has become more necessary to survive in the competitive labor market, but the actual economic returns to it have decreased - making tertiary education less sufficient than before. [less ▲]

When Time Breaks: The Hiatus of Refugee Status

E-print/Working paper (2018)

“In the first place, we don’t like to be called ‘refugees.’ We ourselves call one another ‘newcomers’ or ‘immigrants.’” Already here, in the first sentence of Arendt’s essay “We Refugees,” does the hiatus ... [more ▼]

“In the first place, we don’t like to be called ‘refugees.’ We ourselves call one another ‘newcomers’ or ‘immigrants.’” Already here, in the first sentence of Arendt’s essay “We Refugees,” does the hiatus of refugee status become manifest. A divide already opens up between different habits of reference. Refugees refer to themselves in one way, non-refugees refer to them in another, and so does the projected or desired possibility of one world in which both refugees and non-refugees might find accommodation, split into two very different realities. Consciousness of the split is of course solely that of the refugees, at first. Initially, the hiatus is theirs only. Others – non-refugees – remain soundly oblivious to this fundamental split until such time as it brutally breaks into their world too, for instance, when the corpse of a four-year old child washes up on a beach, and washes up on every doorstep in a succession of media waves. And then the hiatus is suddenly everywhere and no one remains exempted. As the last sentence of Arendt’s essay contends forcefully, the split begins with the refugee status of some, but it ends with the bigger split of a world that begins to falter and fall apart: “The comity of European peoples went to pieces when, and because, it allowed its weakest member to be excluded and persecuted.” The comity of European peoples show all signs of going to pieces again today. When the comity of peoples goes to pieces, it is not only common space that cracks up, but also common time, the common time that warrants common space according to Kant’s Schematismuslehre. It is ultimately this breaking of time – the hiatus of time – that Arendt thematises elsewhere with reference to “the desolate aimless wanderings of Israeli tribes in the wilderness and the dangers which befell Aeneas before he reached the Italian shore.” “[T]his hiatus,” she continues, obviously creeps into all time speculations which deviate from the currently accepted notion of time as a continuous flow.” (Arendt On Revolution, 205). This text is also a supplementary discussion of my reviews of two recent monographs on Arendt. See: RECENT ARENDT SCHOLARSHIP: Review of The Wandering Thought of Hannah Arendt by Hans Jörg Sigwart, Palgrave MacMillan, 2016, ISBN: 978-1-137-48214-3, 147 pages (abbreviated as WT below), and Rightlessness in an Age of Rights. Hannah Arendt and the Contemporary Struggles of Migrants by Ayten Gündoğdu, New York: Oxford University Press: 2015, 298 pages, forthcoming in Constellations. [less ▲]

Connecting Personal Data of Third Country Nationals: Interoperability of EU Databases in the Light of the CJEU's Case Law on Data Retention

E-print/Working paper (2018)

On 12 December 2017, the EU Commission presented a proposal on the interoperability of EU large-scale Information Systems. The proposal seeks to enable all centralised EU databases for security, border ... [more ▼]

On 12 December 2017, the EU Commission presented a proposal on the interoperability of EU large-scale Information Systems. The proposal seeks to enable all centralised EU databases for security, border and migration management to be interconnected by 2020. The underlying IT systems retain data of Third Country Nationals (TCNs), namely travellers, applicants for international protection, information relating to visa applications or data on missing persons and criminals. With the proposal, the Commission seeks to create new possibilities to exchange information, manage migration challenges and to enhance the Union’s internal security. The interconnectivity of databases would introduce fundamental changes to the current structure of EU IT-systems and requires careful consideration and assessment of compliance with EU data protection standards. This also means that access to information in an interoperable system must be strictly aligned to the access rights of the underlying databases and that requesting authorities only obtain the data that they are authorized to access. With interoperability, data once held in silos would be retained in three new centralized databases and would be more easily accessible, also for the prevention, investigation and prosecution of crime. Where criminal investigations previously required multiple searches in separate databases, this cascading safeguard shall progressively be abandoned to streamline access to personal data by law enforcement authorities. Despite simplified access conditions, this would require new types of processing operations for which the interoperability proposal does not provide a legal basis. During recent years, several judgments of the Court of Justice of the European Union (CJEU) have highlighted the difficulty of striking a proper balance between the fundamental rights to privacy and data protection, enshrined in Article 7 and 8 of the Charter of Fundamental Rights of the European Union (EU Charter) with an increased demand for security and the surveillance of potential criminals. The Court repeatedly pointed out the need to strike a fair balance between these (allegedly) competing interests and emphasised that law enforcement authorities should not be granted access to personal data without prior authorization. Using the CJEU’s judgments as vehicle and considering the assumption that TCNs risk to become subject to data retention measures in a disproportionate manner, the following analysis seeks to assess both existing EU databases and their foreseen interoperability against the requirements established by the Court in order to evaluate their (in)-compatibility with the fundamental rights standards enshrined in the EU Charter. [less ▲]

Bayesian variable selection in linear dynamical systems

E-print/Working paper (2018)

We develop a method for reconstructing regulatory interconnection networks between variables evolving according to a linear dynamical system. The work is motivated by the problem of gene regulatory ... [more ▼]

We develop a method for reconstructing regulatory interconnection networks between variables evolving according to a linear dynamical system. The work is motivated by the problem of gene regulatory network inference, that is, finding causal effects between genes from gene expression time series data. In biological applications, the typical problem is that the sampling frequency is low, and consequentially the system identification problem is ill-posed. The low sampling frequency also makes it impossible to estimate derivatives directly from the data. We take a Bayesian approach to the problem, as it offers a natural way to incorporate prior information to deal with the ill-posedness, through the introduction of sparsity promoting prior for the underlying dynamics matrix. It also provides a framework for modelling both the process and measurement noises. We develop Markov Chain Monte Carlo samplers for the discrete-valued zero-structure of the dynamics matrix, and for the continuous-time trajectory of the system. [less ▲]

Risk and Refugee Migration

E-print/Working paper (2018)

This paper uses the experimental setup of Tanaka et al. (2010) to measure refugees’ risk preferences. A sample of 206 asylum seekers was interviewed in 2017-18 in Luxembourg. Contrary to studies which ... [more ▼]

This paper uses the experimental setup of Tanaka et al. (2010) to measure refugees’ risk preferences. A sample of 206 asylum seekers was interviewed in 2017-18 in Luxembourg. Contrary to studies which focus on risk aversion in general, we analyze its components using a cumulative prospect theory (CPT) framework. We show that refugees exhibit particularly low levels of risk aversion compared to other populations and that CPT provides a better fit for modelling risk attitudes. Moreover, we include randomised temporary treatments provoking emotions and find a small significant impact on probability distortion. Robustness of the Tanaka et al. (2010) experimental framework is confirmed by including treatments regarding the embedding effect. Finally, we propose a theoretical model of refugee migration that integrates the insights from our experimental outcomes regarding the functional form of refugees’ decision under risk and the estimated parameter values. The model is then simulated using the data from our study. [less ▲]

The Credit Structure Database

E-print/Working paper (2018)

We describe a new publicly available dataset on credit structure across the world over the period 1995-2014. The database contains two modules. The first part reports the structure of bank loan by types ... [more ▼]

We describe a new publicly available dataset on credit structure across the world over the period 1995-2014. The database contains two modules. The first part reports the structure of bank loan by types of borrowers (households vs. firms). Data are available for 143 countries. Household credit is breakdown between mortgage loans and other household loans (credit cards, car loans, student loans, etc.). Firm credit is decomposed into six sectors (agriculture, industry, construction, transport, trade and other services). The second module contains credit by maturity for 85 countries. Short-term credit is defined as loans with a maturity of one year or less and long-term credit as loans whose maturity exceeds one year. Database is freely available and downlable in Excel and Stata format at the following link: https://sites.google.com/site/florianleon/research/data [less ▲]

Digitalisierung der Arbeit in Luxemburg - Teil 3

E-print/Working paper (2018)

Arbeitnehmer unterscheiden sich hinsichtlich dem Grad durch den ihre Arbeit von der Digitalisierung betroffen ist sowie durch die Auswirkungen, die die Digitalisierung auf ihre Arbeit und ihr Arbeits(er ... [more ▼]

Arbeitnehmer unterscheiden sich hinsichtlich dem Grad durch den ihre Arbeit von der Digitalisierung betroffen ist sowie durch die Auswirkungen, die die Digitalisierung auf ihre Arbeit und ihr Arbeits(er)leben haben. Arbeitnehmer, deren Arbeit stärker durch die Digitalisierung beeinflusst ist, erleben tendenziell mehr Partizipation, Feedback und Autonomie auf ihrer Arbeit. Gleichzeitig weisen sie auch mehr emotionale und mentale Anforderungen, sowie mehr Zeitdruck auf. Arbeitnehmer, deren Arbeit nur in geringem Maß von der Digitalisierung betroffen ist, sind dagegen weniger von emotionalen und mentalen Anforderungen, sowie von Zeitdruck, Konkurrenz und Mobbing betroffen. Insbesondere die geringere Planbarkeit von Arbeitszeit und Freizeit sowie die stärkere Überwachung und Kontrolle der Arbeitsleistung sind negative Konsequenzen der Digitalisierung, die zu einem verstärkten Erleben von emotionalen und mentalen Anforderungen sowie von Zeitdruck, Konkurrenz und Mobbing führt. Die Möglichkeit durch die Digitalisierung auch von zuhause oder von unterwegs arbeiten zu können führt einerseits zu mehr wahrgenommener Autonomie, andererseits ist dieses Potenzial der Digitalisierung auch mit negativen Konsequenzen verknüpft (z.B. erhöhter Zeitdruck). [less ▲]

A test of the Modigliani Miller Invariance Theorem and Arbitrage in Experimental Asset Markets

E-print/Working paper (2018)

Modigliani and Miller (1958) show that a repackaging of asset return streams to equity and debt has no impact on the total market value of the firm if pricing is arbitrage-free. We test the empirical ... [more ▼]

Modigliani and Miller (1958) show that a repackaging of asset return streams to equity and debt has no impact on the total market value of the firm if pricing is arbitrage-free. We test the empirical validity of this invariance theorem in experimental asset markets with simultaneous trading in two shares of perfectly-correlated returns. Our data support value invariance for assets of identical risks when returns are perfectly correlated. However, exploiting price discrepancies has risk when returns have the same expected value but are uncorrelated, and we find that the law of one price is violated in this case. Discrepancies shrink in consecutive markets, but seem to persist even with experienced traders. In markets where overall trader acuity is high, assets trade closer to parity. [less ▲]

Méthodologie de l’étude « Health Behaviour in School-aged Children »

E-print/Working paper (2018)

De novo Variants in Neurodevelopmental Disorders with Epilepsy

E-print/Working paper (2018)

Neurodevelopmental disorders (NDD) with epilepsy constitute a complex and heterogeneous phenotypic spectrum of largely unclear genetic architecture. We conducted exome-wide enrichment analyses for protein ... [more ▼]

Neurodevelopmental disorders (NDD) with epilepsy constitute a complex and heterogeneous phenotypic spectrum of largely unclear genetic architecture. We conducted exome-wide enrichment analyses for protein-altering de novo variants (DNV) in 7088 parent-offspring trios with NDD of which 2151 were comorbid with epilepsy. In this cohort, the genetic spectrum of epileptic encephalopathy (EE) and nonspecific NDD with epilepsy were markedly similar. We identified 33 genes significantly enriched for DNV in NDD with epilepsy, of which 27.3 were associated with therapeutic consequences. These 33 DNV-enriched genes were more often associated with synaptic transmission but less with chromatin modification when compared to NDD without epilepsy. On average, only 53 of the DNV-enriched genes were represented on available diagnostic sequencing panels, so our findings should drive significant improvements of genetic testing approaches. [less ▲]

Demographics and FDI: Lessons from China's One-Child Policy

E-print/Working paper (2018)

Lucas (1990) argues that the neoclassical adjustment process fails to explain the relative paucity of FDI inflows from rich to poor countries. In this paper we consider a natural experiment: using China ... [more ▼]

Lucas (1990) argues that the neoclassical adjustment process fails to explain the relative paucity of FDI inflows from rich to poor countries. In this paper we consider a natural experiment: using China as the treated country and India as the control, we show that the dynamics of the relative FDI flows subsequent to the implementation of China's one-child policy, as seen in the data, are consistent with neoclassical fundamentals. In particular, following the introduction of the one-child policy in China, the capital-labor (K/L) ratio of China increased relative to that of India, and, simultaneously, relative FDI inflows into China vs. India declined. These observations are explained in the context of a simple neoclassical OLG paradigm. The adjustment mechanism works as follows: the reduction in the (urban) labor force due to the one-child policy increases the savings per capita. This increases the K/L ratio and reduces the marginal product of capital (MPK). The reduction in MPK (relative to India) reduces the relative attractiveness of investment in China and is thus associated with lower FDI/GDP ratios. Our paper contributes to the nascent literature exploring demographic transitions and their effects on FDI flows. [less ▲]

Fragebogen HBSC 2018 (enseignement fondamental)

E-print/Working paper (2018)

Do banks and microfinance institutions compete? Microevidence from Madagascar

E-print/Working paper (2018)

In recent years, both microfinance institutions (MFIs) and banks across the world have been converging towards the financing of small enterprises with high financing needs. This paper scrutinizes whether ... [more ▼]

In recent years, both microfinance institutions (MFIs) and banks across the world have been converging towards the financing of small enterprises with high financing needs. This paper scrutinizes whether banks and MFIs compete each other as a result of recent transformations in both industries. In doing so, we study whether the loan strategy of a microfinance institution is shaped by the local presence of a bank. Specifically, we investigate whether bank proximity influences loan conditions provided by one of the largest microfinance institutions in Madagascar. We employ an original panel dataset of 32,374 loans granted to 14,834 borrowers over the period 2008-2014. We find that the closer a bank is located to a given MFI borrower, the larger the loan obtained and the less collateral required. These results are insensitive to several robustness tests for possible endogeneity of distance, sample selection issue, and alternative specifications. In addition, findings are stronger for larger and more established (older) firms in line with our hypothesis. [less ▲]

„Blutsauger“ und „Hyänen“. Die jüdische Einwanderung aus Osteuropa nach Luxemburg und die Figur des galizischen Juden

E-print/Working paper (2018)

Hybrid model for word prediction using naive bayes and latent information

E-print/Working paper (2018)

Positiv desintegriert: Krise als Chance

E-print/Working paper (2018)

La production en céramique dans la Grande Région SaarLorLux

E-print/Working paper (2018)

Consisting of four entities, regions or states, located in the heart of Europe, the Greater Region SaarLorLux has long been considered a territory with a rich industrial past of great dynamism. Among the ... [more ▼]

Consisting of four entities, regions or states, located in the heart of Europe, the Greater Region SaarLorLux has long been considered a territory with a rich industrial past of great dynamism. Among the many branches of activity, there is one that has long been a flagship of its skills: ceramics. The term "ceramics" covers a certain number of very different products in terms of their appearance and properties, all made from fired clay. Over time, manufacturing techniques have evolved to produce less and less porous and finer designs. The applications of this material have thus expanded considerably. Working with clay is a long-standing tradition in this region, as the first ceramics discovered at archaeological sites are 7 000 years old. So, for thousands of years, potters made objects out of fired clay. [less ▲]

Income Inequality, Productivity, and International Trade

E-print/Working paper (2018)

This paper discusses the effect of income inequality on selection and aggregate productivity in a general equilibrium model with non-homothetic preferences. It shows the existence of a negative ... [more ▼]

This paper discusses the effect of income inequality on selection and aggregate productivity in a general equilibrium model with non-homothetic preferences. It shows the existence of a negative relationship between the number and quantity of products consumed by an income group and the earnings of other income groups. It also highlights the negative effect of a mean-preserving spread of income on aggregate productivity through the softening of firms’ selection. This effect is however mitigated in the presence of international trade. In a quantitative analysis, it is shown that an excessively large mean-preserving spread of income may harm the rich as it raises firms’ markups on their purchases. This is contrary to the general belief that income inequality benefits the rich. [less ▲]

Mono-to-multilayer transition in growing bacterial colonies

E-print/Working paper (2018)

The transition from monolayers to multilayered structures in bacterial colonies is a fundamental step in biofilm development. Observed across different morphotypes and species, this transition is ... [more ▼]

The transition from monolayers to multilayered structures in bacterial colonies is a fundamental step in biofilm development. Observed across different morphotypes and species, this transition is triggered within freely growing bacterial microcolonies comprising a few hundred cells. Using a combination of numerical simulations and analytical modeling, here we demonstrate that this transition originates from the competition between growth-induced in-plane active stresses and vertical restoring forces, due to the cell-substrate interactions. Using a simple chain-like colony of laterally confined cells, we show that the transition is triggered by the mechanical instability of individual cells, thus it is localized and mechanically deterministic. Asynchronous cell division renders the process stochastic, so that all the critical parameters that control the onset of the transition are continuously distributed random variables. Upon modeling cell division as a Poisson process, we can approximately calculate the probability distribution function of the position and time associated with the first extrusion. The rate of such a Poisson process can be identified as the order parameter of the transition, thus highlighting its mixed deterministic/stochastic nature. [less ▲]

On the Hilbert eigenvariety at exotic and CM classical weight 1 points

E-print/Working paper (2018)

Démographie et migration: Attractivité versus contraction

E-print/Working paper (2018)

This working paper includes analyses of demography and migration in the Greater region. It has a special view on cross-border mobility, ageing and health infrastructure in rural areas.

Newforms mod p in squarefree level with applications to Monsky's Hecke-stable filtrations (with an appendix by Alexandru Ghitza)

E-print/Working paper (2018)

Demographie und Migration: Anziehung versus Schrumpfung

E-print/Working paper (2018)

This working paper includes analyses of demography and migration in the Greater region. It has a special view on cross-border mobility, ageing and health infrastructure in rural areas.

Increasing taxes after a financial crisis: Not a bad idea after all

E-print/Working paper (2018)

Based on OECD evidence, equity/housing-price busts and credit crunches are followed by substantial increases in public consumption. These increases in unproductive public spending lead to increases in ... [more ▼]

Based on OECD evidence, equity/housing-price busts and credit crunches are followed by substantial increases in public consumption. These increases in unproductive public spending lead to increases in distortionary marginal taxes, a policy in sharp contrast with presumably optimal Keynesian fiscal stimulus after a crisis. Here we claim that this seemingly adverse policy selection is optimal under rational learning about the frequency of rare capital-value busts. Bayesian updating after a bust implies massive belief jumps toward pessimism, with investors and policymakers believing that busts will be arriving more frequently in the future. Lowering taxes would be as if trying to kick a sick horse in order to stand up and run, since pessimistic markets would be unwilling to invest enough under any temporarily generous tax regime. [less ▲]

La réponse au défi migratoire : «Europe souveraine» ou «souverainisme de repli» ?

E-print/Working paper (2018)

La migration est probablement le « défi majeur » de l’Europe, aujourd’hui et dans les années qui viennent, comme le reconnaît Emmanuel Macron dans son discours de la Sorbonne de septembre 2017. On peut ... [more ▼]

La migration est probablement le « défi majeur » de l’Europe, aujourd’hui et dans les années qui viennent, comme le reconnaît Emmanuel Macron dans son discours de la Sorbonne de septembre 2017. On peut noter, par ailleurs, que la gestion de ce défi est à présent inadéquate : si 285.000 migrants ont été sauvés par des opérations coordonnées par l’Union européenne, 3.139 sont morts en 2017 ; en outre, l’état des droits des migrants dans l’Union et, surtout, dans les pays partenaires, reste problématique. Le « souverainisme de repli » n’assure aucune solution : « l’Europe seule peut, en un mot, assurer une souveraineté réelle » (Macron). Et la souveraineté de l’Europe – conçue comme la « capacité à exister dans le monde actuel pour y défendre nos valeurs et nos intérêts » – ne peut que s’assurer par la « solidarité » entre les Etats membres. Emmanuel Macron propose deux solutions au défi de la migration, qui paraissent toutefois insuffisantes ou illusoires : la création d’un « espace commun des frontières » vis-à- vis de l’extérieur et une gestion plus efficace de l’asile à l’intérieur de l’Union. [less ▲]

The low-dimensional algebraic cohomology of the Virasoro algebra

E-print/Working paper (2018)

Corruption and tax compliance: Evidence from small retailers in Bamako, Mali

E-print/Working paper (2018)

We investigate the impact of corruption on tax compliance using a sample of 700 small business in Bamako, Mali. Our results show that paying bribes reduced tax compliance by almost ten percentage points.

L’industrie textile dans la Grande Région SaarLorLux

E-print/Working paper (2018)

The textile industry has had a long time to transform the industrial landscape of the Greater Region SaarLorLux, as it is one of the earliest industrialised economic activities. Often born on a proto ... [more ▼]

The textile industry has had a long time to transform the industrial landscape of the Greater Region SaarLorLux, as it is one of the earliest industrialised economic activities. Often born on a proto-industrial basis, it was mechanised very early on in most of its branches (from spinning to weaving, dyeing, bleaching and printing to clothing) and thus formed, sometimes, vast industrial concentrations, which imposed themselves alongside more modest establishments. However, this pioneering industry is now often presented in Europe as an activity of the past, the bulk of which has been relocated to low labour cost countries in the South. [less ▲]

Big Moves of Mutual Funds

E-print/Working paper (2018)

Health and Pollution in a Vertically Differentiated Duopoly

E-print/Working paper (2018)

« Aus dem Wartezimmer des Krieges »: The Non-Experience of World War One in Luxembourg

E-print/Working paper (2018)

This article aims to contribute to the reconstruction of Luxembourg’s war experience and to analyse Weber’s literary and theoretical renditions of these events. It will investigate Weber’s experience of ... [more ▼]

This article aims to contribute to the reconstruction of Luxembourg’s war experience and to analyse Weber’s literary and theoretical renditions of these events. It will investigate Weber’s experience of non-experience and highlight the ways in which he sought to describe and overcome the sense of ineffectuality and uselessness that came with being ‘put on hold’ by the war as a nation and as a human being. Weber’s reflections mix physical, mental, and intellectual pain, creating a sense of absurdist, non-productive suffering, which he, with wavering conviction, seeks to counteract by drawing on the physicality of the personal and collective body. [less ▲]

Heterogeneity in Conformism, Firm Selection, and Home Bias

E-print/Working paper (2018)

This paper discusses the impact of conformism on product quality, firm selection, and trade patterns. It shows that when consumers have a higher degree of conformism and/or their distribution of ... [more ▼]

This paper discusses the impact of conformism on product quality, firm selection, and trade patterns. It shows that when consumers have a higher degree of conformism and/or their distribution of conformism becomes more concentrated, the equilibrium average demand falls while product quality rises in a closed economy. In an international trade context, this strengthens the home consumption bias when consumers conform to the behavior of local people. The home bias is mitigated under globalization where individuals tend to conform to people worldwide. The paper also discusses the conditions under which conformism and conspicuousness are reconciled. [less ▲]