R. "Local Costs of
Distribution, International Trade Costs and Micro Evidence
on the Law of One Price".
Abstract: Using retail price survey data, I investigate
whether international goods' market segmentation implied
by dispersion in goods' prices is consistent with market
segmentation implied by observed trade flows. A Ricardian
trade model, with heterogeneous and asymmetric bilateral
trade costs, accounts for 85 percent of the average price
dispersion and 21 percent of the across good variation
in it. Adding good-specific distribution costs reproduces
96.5 percent of the average and 32 percent of the variation
in price dispersion. Allowing for good-specific trade
costs enables the model to match the average perfectly
and explain 48 percent of the variation. While trade and
distribution costs explain price dispersion of an average
retail good, they account for only half of the across
P., and N. Melissas. "Technology
Adoption, Social Learning, and Economic Policy"
Abstract: We study a two-player dynamic investment
model with information externalities
and provide necessary and sufficient conditions for
a unique switching equilibrium. When the public information
is sufficiently high and a social planer therefore expects
an investment boom, investments should be taxed. Conversely,
any positive investment tax is suboptimally high if
the public information is sufficiently unfavorable.
We also show that an investment tax may increase overall
T., and R. Vadovic. "Axiom
of Monotonicity: An Experimental Test"
Abstract: The Axiom of Monotonicity (AM) is a necessary
condition for a number of expected utility representations,
including those obtained by de Finetti (1930), von Neumann
and Morgenstern (1944) and Savage (1954). The paper reports
on experiments that directly test AM by eliminating strategic
uncertainty, context, and peer effects. In this sterile
and simple environment we do not observe AM violations
under uncertainty but we do observe violations under ambiguity.
L. "Monotone Implementation"
Abstract: We study a class of direct revelation
mechanisms which implement outcome functions satisfying
a monotonicity condition. Monotone implementation is in
dominant strategy equilibrium when values are private
and in ex post Nash equilibrium when values are interdependent.
The original Vickrey-Clarke-Groves mechanism is not a
monotone implementation mechanism although its many extensions
to interdependent value models are. The extraction mechanisms
of Cremer and McLean (1985) are a special form of monotone
implementation mechanisms for finite type spaces.
M. and I. Lobato. "Consistent
Inference in Models Defined by Conditional Moment Restrictions:
An Alternative to GMM"
Abstract: This article introduces a unified methodology
for estimating and testing nonlinear econometric models
defined by conditional moment restrictions. These models
are very common in econometrics, such as nonlinear rational
expectation models. The current approach for inference
in these models is the generalized method of moments (GMM)
methodology, as proposed by Hansen and Singleton (1982).
Although GMM provides a unified methodology for statistical
inference that is simple to implement, it may yield inconsistent
statistical procedures because it just employs a finite
number of moments. This is a very important theoretical
and applied problem, as illustrated by a simplified consumption-based
asset pricing model. Contrary to GMM, the methodology
proposed in this article delivers consistent statistical
procedures because it employs an infinite number of moments
that characterizes the conditional moment. In addition,
the proposed methodology is widely applicable for general
time series data and easy to implement. In particular,
the proposed specification test relies on a novel and
very simple wild bootstrap procedure.
E. and P. Suárez Becerra. "The
Relationship between Civil Unions and Fertility in France:
Abstract: This paper explores the relationship
between fertility and the introduction of new laws regulating
cohabitation, in a context of low fertility and high out
of wedlock childbearing. We show that in France, while
fertility and marriage rates moved closely together before
1999, since the introduction (in 1999) of the "Pacte
Civil de Solidarité" (PACS) - a cohabitation
contract less binding than marriage - this relationship
is much weaker. Surprisingly, legal unions (defined as
marriage plus PACS) and fertility continue to move together
after this date. We provide evidence of the relationship
between the introduction of PACS and fertility, utilizing
the regional variation in the number of PACS per woman
(PACS intensity) and the differences in fertility before
and after 1999. We show that French Departments with high
PACS intensity (excluding Metropolitan Paris). However,
they did experience and increase in their fertility levels
after the introduction of PACS. This suggests the need
to collect better and more detailed data, in order to
assess whether the recent increases in French fertility
can be partially explained by the availability of PACS.
J. "Social Security and Retirement across the OECD"
Abstract: Employment to population ratios differ markedly across OECD countries relative to rates in the U.S., especially for persons aged 55-69. Social security features also differ across the OECD, particularly with respect to replacement rates, entitlement ages and earnings tests. I conjecture that differences in social security features explain many differences in employment to population ratios at older ages. I assess my conjecture quantitatively with a life cycle general equilibrium model of retirement. At ages 60-64 the correlation between my model’s simulations and observed data is about two thirds. The replacement rate and the earnings test explain 90% of observed variability, implying that differences in entitlement ages do not explain differences in employment to population rates at older ages.