RISK AVERSION AND PLANNING HORIZONS

A number of empirical studies seem to reject the additive separability of preferences that is assumed in most theoretical models of the life cycle. We show that, when additive separability is abandoned and interactions between consumptions at different dates are taken into account, an interesting relation emerges between risk aversion and length of the planning horizon. Specifically, we show that when consumptions at different dates are specific substitutes, risk aversion increases with horizon length. This may explain the surprising empirical finding that individuals seem to increase the share of wealth held in risky assets as they become older. (JEL: D11, D91, G11)     

The Management of Redundancies in Europe: The Case of the Netherlands

The paper presents the findings of comparative and interdisciplinary legal and economic study on managing labour redundancies in seven EU member countries. It is structured for comparability between the systems examined. The introductory section contains an account of the evolution of the Dutch labour market, with special reference to redundancy trends, of the features of the programmes for managing redundancies, of the roles of firms and the ‘external environment’ in handling workforce adjustments. The second section presents a map of policies that work to prevent labour redundancies (preventive measures) such as flexibility, training etc. Next, the instruments for handling temporary labour redundancies (retentive measures) are examined (e.g. short-time working, temporary layoffs etc.). The following section is devoted to instruments and programmes involved in the management of permanent labour redundancies (expulsive measures), e.g. collective dismissals, severance pay etc. The final section provides an overall assessment of the Dutch system for managing labour redundancies, and briefly discusses the national debate on the prospects for reform, in light of the principles and policies of convergence set forth by the European Union.     

A Spatio‐Temporal Exposure‐Hazard Model for Assessing Biological Risk and Impact

We developed a simulation model for quantifying the spatio‐temporal distribution of contaminants (e.g., xenobiotics) and assessing the risk of exposed populations at the landscape level. The model is a spatio‐temporal exposure‐hazard model based on (i) tools of stochastic geometry (marked polygon and point processes) for structuring the landscape and describing the exposed individuals, (ii) a dispersal kernel describing the dissemination of contaminants from polygon sources, and (iii) an (eco)toxicological equation describing the toxicokinetics and dynamics of contaminants in affected individuals. The model was implemented in the briskaR package (b iological risk a ssessment with R ) of the R software. This article presents the model background, the use of the package in an illustrative example, namely, the effect of genetically modified maize pollen on nontarget Lepidoptera, and typical comparisons of landscape configurations that can be carried out with our model (different configurations lead to different mortality rates in the treated example). In real case studies, parameters and parametric functions encountered in the model will have to be precisely specified to obtain realistic measures of risk and impact and accurate comparisons of landscape configurations. Our modeling framework could be applied to study other risks related to agriculture, for instance, pathogen spread in crops or livestock, and could be adapted to cope with other hazards such as toxic emissions from industrial areas having health effects on surrounding populations. Moreover, the R package has the potential to help risk managers in running quantitative risk assessments and testing management strategies.     

When Decentralized Trade Unions are Better for their Members than Centralized Ones

ABSTRACT: The aim of this paper is to localize situations where decentralized trade unions are better for their members than centralized ones. This phenomenon does not appear inside the internal game between oligopolistic firms and between firms and trade unions. It appears only when we introduce feed-back effects from an external game between these oligopolistic firms and a foreign public supplier, in a foreign country where these firms export and sell the goods they produce. The proof of theorems 1. 2, 3 and 4, and of Corollary 4, can be found in the mathematical appendix, available on request from the author. Write to Professor Antoine Soubeyran, Clos Saint Louis, Chemin des Lauves, Aix en Provence, 13100 France.     

Residential Segregation and the Electoral Participation of Immigrants in Australia1

This paper investigates whether immigrants in Australia residing in situations of residential segregation (federal constituencies with high concentrations of immigrants) participate more in electoral politics than other immigrants. The results indicate that immigrants participate more when living in federal constituencies with high concentrations of immigrants and also exhibit greater homogeneity in their partisan preferences. The analysis also indicates that the impact of residential segregation is primarily observed among immigrants from non‐English‐speaking countries. Immigrants from visible minority background, such as those from South East Asia as well as those from Southern and South Eastern Europe, tend to be more strongly affected by the ethnic composition of their constituencies than other immigrants such as those from the United Kingdom and Ireland.     

On the relevance of weaker instruments

ABSTRACT

We study the asymptotic properties of the standard GMM estimator when additional moment restrictions, weaker than the original ones, are available. We provide conditions under which these additional weaker restrictions improve the efficiency of the GMM estimator. To detect “spurious” identification that may come from invalid moments, we rely on the Hansen J-test that assesses the compatibility between existing restrictions and additional ones. Our simulations reveal that the J-test has good power properties and that its power increases with the weakness of the additional restrictions. Our theoretical characterization of the J-test provides some intuition for why that is.     

Fielding supranationalism: the European Central Bank as a field effect

The European Central Bank (ECB), like all European institutions, poses basic problems of definition and comparability. Mobilizing Bourdieusian field theory (BFT) to resolve them, we map out the ECB's deep investments in scientific prestige and scholarly productivity – that is, its hyper-scientization – and the ambiguities therein, and then set out to explain them. Mobilizing diverse sources that include official documents, on-site interviews, and comparative data, we argue that hyper-scientization is a field effect expressing the ECB's origins and cross-location in three worlds: financial institutions, professional economics, and European politics. We then trace out the signs and symptoms of cross-location. First, we trace the origins of the ECB's directorate for research, DGR, which differentiated the ECB from most other European central banks at the time of its founding. Thus invested, the ECB accelerated its scholarly activities in step with the internationalization and scientization of economics. But this also expressed the ECB's stake in European authority struggles: research exchanges are a means of building relationships with national central banks, which was especially crucial in the lead-up to the European Union's (EU) 2004 enlargement. We thus argue that there is more to the ECB than its independence and policy operations, and that some of its most striking features are best explained as effects of its multiple field locations.