CEF.UP – WiP Seminar

Tuesday – December 3^rd, 2024 at 13:00h (1 pm) | Room 305

Agglomeration in an urban corridor

José Gaspar – FEP – School of Economics and Management, University of Porto and Cef.Up

Abstract:

We study agglomeration within a corridor characterized by a continuous path connecting a finite number of places where cities may locate. As economic integration changes, a corridor may undergo successive bifurcations whereby the number of cities increases (decreases) two by two in a way that preserves the bilateral symmetry of places around the central place. We focus on the bifurcation from the state of full agglomeration in the central place occurring at a critical level of economic integration, called the sustain point. For a particular model, full agglomeration becomes unstable below the sustain point and two identical cities may emerge stably with the same distance to the central city. The existence and uniqueness of both the sustain point and the optimal distance to the central city are determined analytically. We find that cities can only emerge optimally at places that are sufficiently far away from the central place, thereby generating a polycentric structure. As integration increases, a preexisting state of twin cities may engender a central city, which grows in size and may eventually develop further into a core city. Finally, we draw a comparison of our model with its discrete–space analogue and discuss the impact of local dispersion forces (e.g. congestion costs) on agglomeration.

CEF.UP – ECO Seminar

Friday – December 6^th 2024, at 13:00h | Room 305

Flight to Safety and New Keynesian Demand Recessions

Sebastian Merkel –  School of Economics, University of Bristol (England, United Kingdom)

Abstract:

“This paper builds a tractable New Keynesian model with idiosyncratic risk, incomplete markets, and nominal safe assets to study the transmission of uncertainty shocks through investors’ portfolio decisions and how monetary-fiscal policy can stabilize fluctuations in the demand for safe assets. A sudden increase in uncertainty triggers a flight to safety: investors reallocate portfolios from productive assets to safe assets. When prices are sticky, the real value of nominal safe assets cannot flexibly adjust. Instead, the flight to safety gives rise to aggregate demand recessions and overshooting in capital price adjustments. Conventional monetary policy that operates through interest rate changes alone has limited power in influencing household portfolios. Instead, fiscal policy plays a crucial role in price stabilization and optimal policy.”

CEF.UP – FIN Seminar

Thursday – December 12^th, 2024 at 13:00h (1:00 p.m.) | Room 305

Matching for Risk-Taking: Overconfident Bankers and Government-Protected Banks

Andreas Haufler – Ludwig-Maximilians University – Munich (Germany)

Abstract:

“We set up a simple theoretical model in which banks with varying degrees of government support are matched with CEOs that have different degrees of over-
confidence. The channel through which the matching occurs is the share of bonus payments offered by the bank in its profit-maximizing contract. This yields a sequence of hypotheses: banks with more government support incentivize their CEOs more and this disproportionately attracts overconfident CEOs. In equilibrium this in turn leads to an assortative matching between overconfident managers and banks with a larger bailout probability. We then test the hypotheses derived from this model empirically. Our regression results confirm the hypotheses from our theoretical model for normal years, but not during crises and periods of enhanced regulation. In these times, overconfident CEOs do not behave differently from non-overconfident CEOs.”

CEF.UP – WiP Seminar

Tuesday – December 17^th, 2024 at 13:00h (1 pm) | Room 305

Nurturing the sustainable and circular economy: An integrated ecosystems model

Cristina Fernandes – FEP – School of Economics and Management – University of Porto, CEF.UP and NECE

Abstract:

“Environmental sustainability and the circular economy are receiving regular mention in literature as paradigms capable of addressing major social challenges. However, understanding how best to assist ecosystem transition toward a sustainable and circular economy ecosystem and which strategic variables are effective levers in nurturing its adoption, remaining elusive. This research investigates factors contributing to a successful transition towards green innovations. The study employed a four-study research designto achieve a holistic understanding across the multiple levels of the ecosystem. Firstly, a systematic literature review was conducted to develop a conceptual model for identifying variables to nurture the transition (study 1) across the interrelated layers of the ecosystem. Secondly, a micro-level analysis was undertaken using ANCOVA to examine the strategic orientations (market and product) that impacts green innovations of companies (study 2). Thirdly, a meso-level analysis was conducted, applying logistics regression to identify the moderating effect of industry type on the relationship between strategic orientations and green innovations (study 3). Finally, the study evaluated the impact of environmental assets on economic growth and the mediating role of Industry 4.0 on this relationship, using multiple regression panel data models. The development and empirical testing of the multi-level model contributes to this emerging field, to better reflect the integrated nature of ecosystems and identify advantageous strategies for nurturing ecosystem transition towards increased sustainable and the circular economy.”