The optimum growth rate for population under critical-level utilitarianism

We characterize optimal consumption, capital, and population growth of a production economy under critical-level utilitarianism. First, we show that neither classical utilitarianism nor average utilitarianism can avoid a corner solution for the population growth rate, in that under the former, population grows at the maximum speed (the so-called repugnant conclusion) while under the latter, it grows at the minimum. Second, we show that critical level utilitarianism yields an interior solution for the population growth rate provided the critical level belongs to a positive, open interval. Finally, we characterize the transition to the steady state and perform comparative dynamics analysis.     

Robust inference for the stress–strength reliability

We address the problem of robust inference about the stress–strength reliability parameter R = P(X < Y), where X and Y are taken to be independent random variables. Indeed, although classical likelihood based procedures for inference on R are available, it is well-known that they can be badly affected by mild departures from model assumptions, regarding both stress and strength data. The proposed robust method relies on the theory of bounded influence M-estimators. We obtain large-sample test statistics with the standard asymptotic distribution by means of delta-method asymptotics. The finite sample behavior of these tests is investigated by some numerical studies, when both X and Y are independent exponential or normal random variables. An illustrative application in a regression setting is also discussed.     

Small-area estimation in the presence of area-level correlated responses

The Fay-Herriot area-level model for correlated response data is augmented with a between-groups-of-domains effect. Correlated-response parameters of small-area estimates no longer need the assumption of spatial contiguity. A simulation shows that area-level correlated-response observations increase the efficiency of the estimates, but do not reduce the biases.     

FINANCIAL MARKETS' SHUTDOWN AND REACCESS

We employ a discrete‐time parametric duration model on a group of 121 countries over the period 1970–2011 and find that the probability of the end of financial markets' shutdown and reaccess falls as these events become longer. We also show that: (1) shutdown episodes are longer when economic prospects are poor and the degree of financial openness falls, the chief executive has been in office for long periods, and the country has a default history and (2) spells of reaccess tend to be longer when economic growth improves and financial openness increases, there are neither government crises nor government instability, and the country did not default in the past. (JEL C41, G15)     

Italian Adult Gambling Behavior: At Risk and Problem Gambler Profiles

The present study examined adult gambling behaviours from a local perspective in order to assess the adult at risk and problem gambler’s profile stratified by genre and by different forms of game. 4773 Italian adults from 18 to 94 years old were administered a survey to assess socio-cultural information related to gambling behaviour and the SOGS to evaluate gambling behaviour severity. Logistic regression evidenced that both at risk and problem gamblers are associated with male gender, players that use to play to more than one game, gambling with strategy-based games. People with a gambler father or both parents who used to gamble were significantly more associated with problem gambling behaviour than participants with non-gambler parents. These results present adult profiles of at risk and problem providing a more clear understanding about the relationships between gambling behavior severity and type of gambling.     

Objectified conformity: working self-objectification increases conforming behavior*

The present work explores whether self-objectification triggered by doing peculiar work activities would increase people’s conforming behavior. We conducted an experimental study in which participants (N = 140) were asked to perform a high objectifying activity (vs. low objectifying activity vs. baseline condition) simulating a real computer job. Afterwards, their levels of self-objectification and conforming behavior were assessed. Results revealed that participants who performed the high objectifying activity self-objectified (i.e., perceived themselves as lacking human mental states) more than the other conditions and, in turn, conformed more to the judgments of unknown similar others. Crucially, increased self-objectification mediated the effects of the high objectifying activity on enhancing conforming behavior. Theoretical and applied implications of these findings are discussed.     

CAN LONG‐RUN RESTRICTIONS IDENTIFY TECHNOLOGY SHOCKS?

Galí's innovative approach of imposing long‐run restrictions on a vector autoregression (VAR) to identify the effects of a technology shock has become widely utilized. In this paper, we investigate its reliability through Monte Carlo simulations using calibrated business cycle models. Overall, Galí's methodology appears to be fruitful: the impulse responses derived from the artificial data generally have the same sign and qualitative pattern as the true responses, and the approach can be informative in discriminating between alternative models. However, our results reveal some important quantitative shortcomings, including considerable estimation uncertainty about the impact of technology shocks on macroeconomic variables. More generally, the conditions under which the methodology performs well appear considerably more restrictive than implied by the key identifying assumption. This underscores the importance of using economic models to guide in the implementation of the approach, in interpreting the results, and in assessing its limitations. (JEL: C32, E32, O33)     

Central Bank Autonomy without Monetary Policy

The autonomy of a country’s central bank from political authorities has been advocated both as a remedy against the inflationary bias that would otherwise be present in the conduct of the government’s monetary policy and, more recently, on the basis of empirical evidence. However, both theoretical arguments and empirical findings have associated central bank autonomy with the conduct of monetary policy, while often failing to pay attention to those institutional cases where a central bank is in place but is not responsible for the conduct of monetary policy. These cases are particularly relevant for those countries which do not possess their own currency, or where extreme monetary regimes such as dollarization, currency boards, or monetary unions are present. These institutional settings, where a central bank exists, but there is no monetary policy to be conducted, raise the issue of central bank autonomy in a framework where the inflation bias is no longer pertinent. In other words: Is central bank autonomy still a relevant objective when a country does not run its own monetary policy? The present paper addresses this question, discusses dimensions of autonomy and accountability and maintains that central bank autonomy still does matter, particularly if the central bank is responsible for bank supervision and financial regulation.     

Uncertainty and Risk in Financial Markets

This paper considers a general equilibrium model in which the distinction between uncertainty and risk is formalized by assuming agents have incomplete preferences over state‐contingent consumption bundles, as in Bewley (1986). Without completeness, individual decision making depends on a set of probability distributions over the state space. A bundle is preferred to another if and only if it has larger expected utility for all probabilities in this set. When preferences are complete this set is a singleton, and the model reduces to standard expected utility. In this setting, we characterize Pareto optima and equilibria, and show that the presence of uncertainty generates robust indeterminacies in equilibrium prices and allocations for any specification of initial endowments. We derive comparative statics results linking the degree of uncertainty with changes in equilibria. Despite the presence of robust indeterminacies, we show that equilibrium prices and allocations vary continuously with underlying fundamentals. Equilibria in a standard risk economy are thus robust to adding small degrees of uncertainty. Finally, we give conditions under which some assets are not traded due to uncertainty aversion.