Fractional integration and impulse responses: a bivariate application to real output in the USA and four Scandinavian countries

This article analyzes impulse response functions in the context of vector fractionally integrated time series. We derive analytically the restrictions required to identify the structural-form system. As an illustration of the recommended procedure, we carry out an empirical application based on a bivariate system including real output in the USA and, in turn, in one of the four Scandinavian countries (Denmark, Finland, Norway, and Sweden). The empirical results appear to be sensitive, to some extent, to the specification of the stochastic process driving the disturbances, but generally a positive shock to US output has a positive effect on the Scandinavian countries, which tend to disappear in the long run.     

ESTIMATING MARKET POWER IN HOMOGENOUS PRODUCT MARKETS USING A COMPOSED ERROR MODEL: APPLICATION TO THE CALIFORNIA ELECTRICITY MARKET

This study proposes a novel econometric approach to estimating market power in homogenous product markets. We use a composed error model to estimate the stochastic part of firms' strategic pricing equation. This part is formed by two random variables: a traditional error term, which captures random shocks, and a random conduct term, which measures the degree of market power. This approach allows for the conduct parameter to vary flexibly across firms and within firms over time, and avoids ad hoc structural restrictions for identifying firms' conduct. The empirical application of our approach is based on a well‐known California wholesale electricity market data set, which has been rigorously used to study market power. Our results suggest that realization of market power varies over both time and firms, and reject the assumption of a common or time‐invariant conduct parameter. (JEL C34, C51, L13, L94)     

“The Cowl <Emphasis Type="Italic">Does</Emphasis> Make The Monk”: Understanding the Emergence of Social Entrepreneurship in Times of Downturn

In order to contribute to the debate about social entrepreneurship, we take an empirical perspective and describe the phenomenon in Catalonia, Spain, during the financial crises of the early twenty-first century. For this aim, we conducted 43 in-depth interviews with social entrepreneurs, launched a web-based survey with 90 responses, and built a database with 347 organizations and/or ventures settled in Catalonia with an explicit social/environmental goal. The data show that many social/environmental initiatives emerged during the economic crisis, either as a self-employment alternative to unemployment, or as a commercial venture started by nonprofit organizations as a reaction to the reduction in public expense in this sector. In addition, the crisis fueled the emergence of ventures oriented to non-market exchange and social currencies. As a whole, we argue that this new reality can be conceptualized as the emergence of an unsettled Strategic Action Field where banks, business schools and public administrations alike promote the label of “social entrepreneurship” through awards and startup services, whereas other groups claiming the same social/environmental goals contest this market-oriented definition of the field.     

Minimum local distance density estimation

We present a local density estimator based on first-order statistics. To estimate the density at a point, x, the original sample is divided into subsets and the average minimum sample distance to x over all such subsets is used to define the density estimate at x. The tuning parameter is thus the number of subsets instead of the typical bandwidth of kernel or histogram-based density estimators. The proposed method is similar to nearest-neighbor density estimators but it provides smoother estimates. We derive the asymptotic distribution of this minimum sample distance statistic to study globally optimal values for the number and size of the subsets. Simulations are used to illustrate and compare the convergence properties of the estimator. The results show that the method provides good estimates of a wide variety of densities without changes of the tuning parameter, and that it offers competitive convergence performance.     

A theory of “popular political legitimation”: A dual-process model approach to legitimation and political socialization

How do everyday people—or actors who do not occupy positions of political authority—legitimate political systems? Responding to this question, I use work from sociology, political science, and cognitive science to build a theory of “Popular Political Legitimation” (PPL)—defined as everyday people's legitimation of a political system. To answer how PPL happens, we must answer two sub-questions that address legitimacy as a normative phenomenon: 1) What are the processes of socialization through which individuals learn the norms, widely held beliefs, and values that legitimate a political system? 2) How do individuals subsequently use these norms, widely held beliefs, and/or values in their own legitimations of a political system? Thus, we see that a model of socialization is central to understanding how PPL happens. I proceed in four steps. First, I review the literature on political legitimation. Next, I review the literature on political socialization. Third, to address gaps in the two aforementioned literatures concerning a model of socialization that explains legitimation, I turn to neuroscience (for reviews see Greene, 2017; Cushman, 2020) and psychology to review models of socialization and rationalization. Finally, I synthesize these literatures to develop a theory of political socialization and how it generates PPL.     

Labour market turnover in Latin America: How intensive is it and to what extent does it differ across countries?

The study of labour market turnover is particularly significant in Latin America, which is characterized by marked economic cycles and limited social protection coverage. This article estimates the intensity of transitions from employment in six countries in Latin America in the new millennium and decomposes the differences observed, furthermore evaluating the employment destinations of workers making such transitions. The countries under analysis show very different turnover rates, which are mostly explained by a dissimilar incidence of informal and temporary employment. In all cases, a large share of job exits imply transitions to precarious jobs or unemployment.     

La flexibilité, une arme contre le chômage? Analyse empirique du marché du travail espagnol

L'Espagne a connu en 2010 et 2012 deux réformes majeures du marché du travail. Celles-ci reposaient sur l'idée qu'il suffisait d'accroître la flexibilité du travail et de décentraliser la négociation collective pour faire baisser le chômage (thèse de la flexibilité). Les auteurs estiment pour leur part que le comportement du chômage dépend largement de la demande et de la structure sectorielle de l'économie (thèse structurelle). Ils évaluent l'apport de ces deux hypothèses dans une analyse reposant sur des données de panel de niveau infranational. Leurs résultats tendent à infirmer la thèse de la flexibilité et font ressortir le rôle primordial des facteurs cycliques et structurels.     

The Moral Economy of Neoliberalism: How Voters Use Neoliberal Ideology to (De)Legitimate Undocumented Worker Access to Labor Markets

Neoliberalism is prevalent in American life. While researchers have documented the use of neoliberal ideology in institutional and macrolevel policy contexts, they have yet to investigate how voters use neoliberal ideology to legitimate their position on economic policy. I use data from semi‐structured interviews with 85 Tucsonans about why they voted the way they did on Proposition 202 (2008): “Arizona Stop Illegal Hiring”—which sought to reregulate undocumented worker labor market access—to address this gap. I found evidence of two distinct neoliberal ideological legitimations: “fair market competition” and “individual responsibility.” Furthermore, I use these data to shed light on the debate over whether neoliberalism spans partisan affiliation or converges with American conservatism. I found that voters across party lines who supported the measure paired neoliberal legitimations with conservative legitimations. We can interpret this bipartisan use of neoliberal ideology as evidence of a neoliberal “moral economy”—or consensus about the moral principles in which market action is embedded. Evidence of this moral economy indicates that moral principles from neoliberal ideology are simultaneously bipartisan and converge with American conservatism. These findings suggest that there could be a broader moral consensus among voters concerning the legitimacy of anti‐immigration economic policies.