1. Huggett, M., and G. Ventura, "On the Distributional Effects of Social Security Reform," Review of Economic Dynamic, 2 (1999): 498-531.
How will the distribution of welfare, consumption and leisure across households be affected by social security reform? This paper addresses this question for social security reforms with a two-tier structure by comparing steady states under a realistic version of the current US system and under the two-tier system. The first tier is a mandatory, defined-contribution pension offering a retirement annuity proportional to the value of taxes paid, whereas the second tier guarantees a minimum retirement income. Our findings, which are summarized in the introduction, do not in general favor the implementation of pay-as-you go versions of the two-tier system for the US economy.
2. Huybens, E., and B. Smith, "Inflation, Financial Markets and Long-Run Real Activity," Journal of Monetary Economics, 43 (1999): 283-315.
Empirical evidence suggests that real activity, the volume of bank lending activity, and the volume of trading in equity markets are strongly positively correlated. At the same time, inflation and the volume of financial market activity are strongly negatively correlated (in the long-run), as are inflation and the real rate of return on equity. Inflation and real activity are also negatively correlated in the long-run, particularly for economies with relatively high rates of inflation. We present a monetary growth model in which banks and secondary capital markets play a crucial allocative function. We show that - at least under certain configurations of parameters - the predictions of the model are consistent with these and several other observations about finance, inflation and long-run real activity.
3. Lobato, I., "A Semiparametric Two-Step Estimator in a Multivariate Long Memory Model," Journal of Econometrics, 90 (1999): 129-153.
This paper analyzes a two step estimator of the long memory parameters of a vector process. The objective function considered is a semiparametric version of the multivariate Gaussian likelihood function in the frequency domain. In our context, semiparametric refers to the fact that only periodogram ordinates evaluated in a degenerating neighborhood of zero frequency are employed in the estimation procedure. Asymptotic normality is established under mild conditions that do not include Gaussianity. Furthermore, the simplicity of the form of the covariance matrix of the estimates facilitates statistical inference. We include an application of these estimates to exchange rate data.
4. Maurer, N., "Banks and Entrepreneurs in Porfirian Mexico: Inside Exploitation or Sound Business Strategy," Journal of Latin American Studies, 31 (1999): 331-361.
Banks in Porfirian Mexico widely engaged in the practice of making long-term loans to their own directors, a practice known as "auto-préstamo." This was neither pernicious nor fraudulent. Rather, Porfirian banks behaved as the financial arms of extended kinship and personal business groups. These groups used banks to raise impersonal capital for their diversified enterprises and give their networks a more permanent institutional base. Investors in these banks knew full well that they were investing in the businesses of a particular group and developed sophisticated techniques to monitor bank directors. However, because Porfirian law severely restricted entry into banking, the system concentrated economic power in a few hands and contributed to Mexico’s concentrated industrial structure.