CEF.UP – WiP Webinar

Friday – February 26^th, 2021 at 2:00 p.m.

“The Agglomerative Force of Education”

Jorge Saraiva – CEF.UP

Abstract:

“We find that, when skilled workers are allowed to choose their location, an economy with a higher human capital favours the agglomeration of economic activities and reduces the likelihood of a symmetric dispersion scenario. We explore the possibility that both skilled and unskilled populations remain unchanged while allowing skilled workers to increase their productivity. The choice of the productivity level turns out to be independent of spatial distribution and transportation costs. Education is higher, the higher the expenditure share in the industrial good is. Increases in education levels lead to positive externalities that affect the whole society.”

CEF.UP – ECO Webinar

Friday – January 8^th, 2021  3:00 p.m.

Comparative European Institutions and the Little Divergence, 1385-1800

Nuno Palma –   Manchester University (joint work with António Castro Henriques)

Abstract:

Why did the countries which first benefited from access to the New World –Castile and Portugal –decline relative to their followers, especially England and the Netherlands? The dominant narrative is that worse initial institutions at the time of the opening of Atlantic trade explain Iberian divergence. In this paper, we build new quantitative measures which allow for a comparison of institutional quality over time. We consider the frequency and nature of parliamentary meetings, the frequency and intensity of extraordinary taxation and coin debasement, and real interest spreads for public debt. We find no evidence that the political institutions of Iberia were worse at least until the English Civil War.

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