Friday – March 13^th, 2020 – Cancelled due to the COVID19 emergency

Agency Contracts in Matching Markets

Inés Macho-Stadler –  Universitat Autònoma de Barcelona and Barcelona Graduate School of Economics (joint work with David Pérez-Castrillo)

Abstract:

“Considering moral hazard problems in a matching market may affect the predictions of the classical principal-agent model and it provides new insights for understanding the attributes of the partners that match and the characteristics of the incentive contracts.

From the point of view of the agency theory, the interest of this extension is easy to understand. The partial equilibrium approach characterizes the optimal incentive scheme for a given principal-agent partnership. In this approach, the bargaining power is exogenously given to principals or agents, which implies that an exogenous reservation utility condition for the agent (or for the principal) determines the distribution of surplus and the form of the contract. However, when one considers explicitly the existence of several heterogeneous principals and several heterogeneous agents, some of the properties obtained in the simple version of the agency problem do not necessarily hold.

From the point of view of matching theory, the consideration of incentives between partners is a natural extension of the assignment game, where the outcome is not only a matching and a vector of prices but a matching and a vector of incentive contracts, one for each partnership.”

 1:10 -2:10 p.m. | Room 305

March 04^th, 2020

Fiscal Governance in the EMU: What Kind of Union?

Juergen von Hagen – University of Bonn

Abstract:

Political debates over the fiscal framework of the European Monetary Union have focused on two issues, dealing with asymmetric shocks and maintaining a high degree of fiscal discipline. After reviewing the development of the EMU fiscal framework, we argue that transfers dealing with asymmetric shocks are less important than commonly argued. Fiscal discipline is the critical issue. Three stark alternatives exist, a fiscal union, a debt union with decentralized authority, and a monetary union with fiscal freedom and a sovereign default framework. The debt union is not sustainable. Choosing between fiscal union and fiscal freedom is a decision between collective coercion combined with individual safety on the one hand and the ability to choose one’s own best policies combined with individual responsibility on the other.

Whom or what do flexible exchange rates insulate?

Keith Kuester – University of Bonn (joint work with Giancarlo Corsetti, Gernot J. Müller and Sebastian Schmidt)

Abstract:

We reassess whether flexible exchange rates provide insulation against foreign shocks.

First, we establish new evidence for 20 countries in the periphery of the euro area. We find robust evidence for spillovers from euro-area shocks to real activity in the periphery, irrespective of whether the exchange rate is pegged or flexible vis-a-vis the euro. Second, we provide a rationale why the exchange-rate regime appears to have little bearing on international spillovers. We employ a New Keynesian open economy model, in which both exports and imports are priced in euros. Flexible exchange rates could insulate domestic activity from external shocks. The key to understanding the empirical facts is that countries do not choose to do so, however. We show that if floaters pursue inflation targeting (be it of consumer or producer prices), they prevent the domestic expenditure switching that would insulate activity from shocks. The global move toward inflation targeting may mask the insulation potential of flexible exchange rates.

1:00 -2:30 p.m. | Room 626

January 17^th, 2020

To change or not to change: the impact of mortgage law on loan origination

Ana Sá – CEF.UP

ABSTRACT

“Concerns on households’ over-indebtedness and mortgage default are central in the debate on how to prevent the next crisis. A tempting solution is to change the mortgage law to make it more borrower-friendly and protect households in case of default. With more borrower-friendly laws, the risk and cost of mortgages might increase, leading to a change in the supply of mortgage credit. Intuitively, lenders might react to a risk increase by charging a higher risk premium on loans or by demanding higher collateralization. By taking advantage of U.S. mortgage law heterogeneity across States, I study the direct and indirect effects of different law contexts.”

1:10 – 2:10 p.m. | Room 305

December 20^th, 2019

Ratings, prices, and real effects

José Jorge – CEF.UP

ABSTRACT

“Many claim that credit rating agencies respond to financial prices (such as CDS spreads) and that changes in credit ratings have real effects. Such claims are hard to test. Simple models regressing credit ratings on financial prices, or regressing real variables on credit ratings are unlikely to provide reliable estimates because of the feedback effects between ratings, prices and real variables. Prices cause ratings inasmuch as ratings cause prices, and real variables definitely affect ratings. In this paper we propose a structural vector auto regression approach to identify both the impact of financial prices on credit ratings and the real effects of credit ratings.“

 1:10 – 2:10 p.m. | Room 305

Friday – December 13^th, 2019

Tell me who you consult with and I’ll tell you how compliant you are: Can physicians affect patient adherence?

Joana Costa – CEF.UP (joint with Joint with Nuno Sousa Pereira and Ricardo Vicente)

ABSTRACT

“Objectives: Relying on a large longitudinal matched physician-prescription-patient dataset for all Portuguese e-prescriptions (SPMS, 2015-2017) we’ve extended the paper by Koulayev et al. (2017) which analyzes the contributions of doctor-specific, patient-specific, and drug-specific factors to the adherence decision, now applied to hypoglycemic agents and their pharmacotherapeutic groups.

Methods: We considered a large longitudinal dataset for all Portuguese e-prescriptions collected from Ministério da Saúde from January 1, 2015 till December 31, 2017 that contained any pharmaceutical used to treat Type 1 and Type 2 Diabetes Mellitus. We use high-dimensional fixed-effects to assess the influence of physicians on patient compliance. The dependent variable is the medication possession ratio for a particular refill, while the explanatory variables rely on patient demographics, physician characteristics and a set of controls which includes match-specific variables.

Results: So far, we rely on 1.204.987 observations and find that physicians are able to influence patient compliance. Further results to be computed will consider the impact of a pair physician-patient on the variation of the adherence which could tell us more information regarding this relationship.

Discussion: This paper extends to antidiabetic drugs, the determinants of patient adherence which could lead us to potential relevant policy implications such as the consideration of customized interventions among physician-patient pairs that will lead us to optimal results regarding compliance.”

 1:10 – 2:10 p.m. | Room 305

December 12^th, 2019 

How do entrepreneurs use reference values during the planning process?

Armin Schwienbacher –  Skema Business School (joint work with Daniel Blaseg from ESADE)

ABSTRACT 

 “Nascent entrepreneurs often overestimate the likelihood of success when planning their own activities, which usually results in excess market entry. But how do entrepreneurs adjust their expectations when they are given historical reference values of comparable projects? Does knowing the historical odds of success help entrepreneurs to make informed decisions about starting a venture by developing more realistic plans and expectations? Drawing on a unique dataset of reward-based crowdfunding initiatives that encompasses the different development steps starting from planning to the ultimate outcome of the campaign, we investigate whether and how nascent entrepreneurs use information on historical outcomes of comparable projects. Our findings suggest that entrepreneurs irrationally use the information to adjust their estimates to account for their belief that they are better than others once they see the historical values, thus resulting in an even higher level of optimism. This result holds across different levels of education, occupation, work experience, age, and gender. Finally, we show that entrepreneurs suffering from over-optimism driven by the irrational use of reference values are more likely to eventually launch a crowdfunding campaign and are also more likely to fail, indicating that the irrational use of reference values has meaningful economic consequences for entrepreneurs.”

 1-2p.m. | Room 305

December 6^th, 2019

The effect of fruit and vegetable consumption on well-being: a causal analysis

Rui Leite – CEF.UP (joint with Li-Wei Chao,  Ana Rita Farias, Helena Szrek, Shandir Ramlagan, and Karl Peltzer)

ABSTRACT

“Fruit and vegetable consumption has been associated with reductions in mortality and better physical health, and various countries and the World Health Organization recommend a daily consumption of 5 or more servings. Recently, fruit and vegetable consumption has also been linked to better mental health and well-being. Most of the studies document a cross-sectional relationship, and a few studies control for fixed effects using longitudinal data, but nevertheless the authors caution against a causal interpretation of the results. In our study, we use longitudinal data from a survey conducted in South Africa and apply instrumental variable estimation to examine this relationship. We use three distinct instruments that are plausibly linked to fruit and vegetable consumption (time preference, ownership of a business that sells fruit or vegetable, and the CPI of fruit) and find that increased fruit and vegetable consumption is causally associated with higher self-reported life satisfaction and lower perceived stress.”

 1:10 – 2:10 p.m. | Room 305

November 29^th, 2019

Some recent research using info-metrics

Pedro Macedo – Universidade de Aveiro

ABSTRACT

“Info-metrics is a research area at the intersection of statistics, computer science and decision theory, where the maximum entropy principle established by Edwin Jaynes plays an important role. Maximum entropy provides a tool for solving ill-posed problems that occur in diverse areas of science and it can be seen as an extension of the Bernoulli’s principle of insufficient reason. Some recent research in regularization, variable selection, large-scale data and stochastic frontier analysis will be discussed, along with some applications.”

 1-2p.m. | Room 305

November 22^th, 2019

The Local Impact of Containerization

Gisela Rua – Senior Economist – Board of Governors of the Federal Reserve System

ABSTRACT

“We investigate how containerization impacts local economic activity. Containerization is premised on a simple insight: packaging goods for waterborne trade into a standardized container makes them cheaper to move. We use a novel cost-shifter instrument — port depth pre-containerization — to contend with the non-random adoption of containerization by ports. Container ships sit much deeper in the water than their predecessors, making initially deep ports cheaper to containerize. We find that counties near containerized ports grew about twice as fast as other coastal port counties between 1950 and 2010 because of containerization. Gains are concentrated in areas with initially low land values.”

1-2p.m. | Room 305

November 15^th, 2019

Structural breaks in gasoline and diesel elasticities: a dynamic analysis of the Portuguese case

Susana Silva – CEF.UP (joint with Isabel Soares and Carlos Pinho)

ABSTRACT

“Fuel consumption is strongly associated with environmental pollution. Several policies have been implemented in an attempt to mitigate these problems, among which fuel taxes are the most common. It is, therefore, crucial to know if those taxes are effective to moderate demand. In this paper we calculate price and income elasticities of gasoline and diesel demand for Portuguese consumers using a dynamic perspective. We cover the period from 1995 to 2015 as it corresponds to a critical macroeconomic period which comprehends International Monetary Fund (IMF) financial intervention in the country. Results for the whole period show that long-run price elasticities are -0.368 for diesel and -0.911 for gasoline while long-run income elasticities are 2.338 for diesel and 0.877 for gasoline. Hence, taxes are then relatively effective to moderate gasoline demand but not diesel demand. Using rolling windows, we perform a dynamic analysis and conclude that there is a certain degree of variability of those elasticities around the values estimated with the full sample. It is evident that diesel consumption responses were affected by the economic crisis. Our results show no evidence of an effect of the market liberalization.”

 1-2p.m. | Room 305

November 8^th, 2019

The Macroeconomic Effects of Structural Reforms in Developing Countries

João Tovar Jalles – Economist at Conselho das Finanças Públicas | Portuguese Public Finance Council (joint work with Gabrielle Ciminelli, Davide Furceri and Giovanni Melina)

ABSTRACT

The paper estimates the dynamic macroeconomic effects of structural reforms on output, employment and productivity in a sample of developing countries, and explores how these vary with prevailing macroeconomic conditions and policies. We apply a local projection method to a new dataset of major country- and country-sector-level reform shocks in various areas of labor market institutions, product market regulation, financial and trade liberalization over the past four decades. In the medium run, structural reforms can help lift income and employment levels. Domestic finance reforms implemented when economic conditions are strong are associated with an increase in output that is twice as large as the that estimated for the baseline—unconditional—reform. Trade reforms are associated with a slow but non-negligible increase in output. Labor market reforms generally have positive macroeconomic effects. Finally, product market reforms have statistically significant, although rather small, effects on output. These materialize at a quicker pace relative to other reforms. These findings suggest that prioritizing and sequencing reforms can prove particularly useful for optimizing their beneficial effects on macroeconomic outcomes.

1-2p.m. | Room 305