Hazardous Times for Monetary Policy: What Do Twenty‐Three Million Bank Loans Say About the Effects of Monetary Policy on Credit Risk‐Taking?

We identify the effects of monetary policy on credit risk‐taking with an exhaustive credit register of loan applications and contracts. We separate the changes in the composition of the supply of credit from the concurrent changes in the volume of supply and quality, and the volume of demand. We employ a two‐stage model that analyzes the granting of loan applications in the first stage and loan outcomes for the applications granted in the second stage, and that controls for both observed and unobserved, time‐varying, firm and bank heterogeneity through time*firm and time*bank fixed effects. We find that a lower overnight interest rate induces lowly capitalized banks to grant more loan applications to ex ante risky firms and to commit larger loan volumes with fewer collateral requirements to these firms, yet with a higher ex post likelihood of default. A lower long‐term interest rate and other relevant macroeconomic variables have no such effects.     

Fast food and unnatural experiments: Another perspective on the New Jersey minimum wage

Conclusion  We have argued that the difference-in-differences method of examining the effects of the New Jersey minimum wage, especially when the differences in differences are measured shortly after the change, is questionable. That being the case, if we nonetheless take this method seriously, and if following Card and Krueger we look at the data shortly before and after the New Jersey minimum was imposed, then the only statistically significant evidence we can find supports the conclusion that the New Jersey minimum reduced employment of young workers.     

Forced Migration,Climate Change,Mitigation and Adaptive Policies in Mexico: Some Functional Relationships

Natural disasters related to hydro-meteorological events have increased during the last few decades, both in frequency and severity. Mexico is heavily exposed to climate change, but has also suffered in the past from climate variability ( Blümel, 2009 ). The new risks oblige the government to develop mitigation processes, while the affected people are implementing strategies of adaptation and resilience-building, mostly at the family and community level. This includes forced migration due to climate change into the slums of megacities or illegal immigration to the United States. The arid, semi-arid and subhumid condition of 49.2 per cent of the territory of Mexico is seriously affected by climate change. In addition, poverty and the lack of jobs have created complex livelihood situations, in which young people leave rural areas, partly due to socio-economic pull factors. In this paper, we address the functional relationships between climate patterns and migration processes in Mexico, highlighting the linkages between the origin of migrants, their economic activity and their vulnerability to extreme events and we discuss long-term climate patterns. Agriculture still uses 78 per cent of the available water in Mexico. In the drylands the competition for water use requires an integrated policy to deal with the new threats from climate change, including mitigation from the top down and adaptation processes from the bottom up to reduce the social vulnerability of the rural population in the highly affected drylands of the central and northern parts of Mexico. The new policy for administering water resources, which promotes the efficient use of an increasingly scarce and polluted resource, still suffers from a lack of participation by the affected rural population. In this paper, we propose an integrated management system from the watershed onwards, involving socio-economic, political, cultural and hydrological variables, to deal with the rising scarcity of water, and the uncertainty and complexity of climate change.     

Race and Reciprocity: Inter‐household Exchanges in a Multiracial Neighborhood

This study investigates the degree to which African‐American households are socially integrated into a multiracial, middle‐class suburban neighborhood near Dallas, Texas. Although U.S. neighborhoods are becoming increasingly heterogeneous in composition, little is known about black households' participation in social and informational networks within multiracial middle‐class neighborhoods. Drawing on theories of the gift and social capital, we view neighborhoods in terms of complex patterns of inter‐household exchanges of material and symbolic goods. We predict that black‐led households will exchange at a lower rate with their neighbors than will other households and test this prediction using survey data collected from 119 households and from follow‐up interviews with eight black heads of household. Our main finding from the survey is that black households exchanged at a significantly lower rate than did other households, ceteris paribus. The follow‐up interviews found little evidence of black racial homophily in neighboring or of racism within the neighborhood. However, the low rate of black inter‐household exchanges may be partly explained by black head of households' personal experiences of racism outside the neighborhood and by a racially constituted disposition against borrowing from neighbors. We discuss implications of our findings for research on racial integration and segregation.     

Do colored cells in risk matrices affect decision-making and risk perception? Insights from randomized controlled studies

Risk matrices communicate the likelihood and potential impact of risks and are often used to inform decision-making around risk mitigations. The merits and demerits of risk matrices in general have been discussed extensively, yet little attention has been paid to the potential influence of color in risk matrices on their users. We draw from fuzzy-trace theory and hypothesize that when color is present, individuals are likely to place greater value on reducing risks that cross color boundaries (i.e., the boundary-crossing effect), leading to sub-optimal decision making. In two randomized controlled studies, employing forced-choice and willingness-to-pay measures to investigate the boundary-crossing effect in two different color formats for risk matrices, we find preliminary evidence to support our hypotheses that color can influence decision making. The evidence also suggests that the boundary-crossing effect is only present in, or is stronger for, higher numeracy individuals. We therefore recommend that designers should consider avoiding color in risk matrices, particularly in situations where these are likely to be used by highly numerate individuals, if the communication goal is to inform in an unbiased way.     

The resilient frugivorous fauna of an urban forest fragment and its potential role in vegetation enrichment

Urban Ecosystems - Anthropocentric defaunation affects critical ecological processes, such as seed dispersal, putting ecosystems and biomes at risk, and leading to habitat impoverishment. Diverse...     

Linking Ethnic Identification to Organisational Solidarity

Public Organization Review - This paper investigates the process through which ethnic identification (EI) influences employees’ sense of organisational solidarity (OS). A survey of 1525...     

Linear statistical inference for global and local minimum variance portfolios

Traditional portfolio optimization has often been criticized for not taking estimation risk into account. Estimation risk is mainly driven by the parameter uncertainty regarding the expected asset returns rather than their variances and covariances. The global minimum variance portfolio has been advocated by many authors as an appropriate alternative to the tangential portfolio. This is because there are no expectations which have to be estimated and thus the impact of estimation errors can be substantially reduced. However, in many practical situations an investor is not willing to choose the global minimum variance portfolio but he wants to minimize the variance of the portfolio return under specific constraints for the portfolio weights. Such a portfolio is called local minimum variance portfolio. Small-sample hypothesis tests for global and local minimum variance portfolios are derived and the exact distributions of the estimated portfolio weights are calculated in the present work. The first two moments of the estimator for the expected portfolio returns are also provided and the presented instruments are illustrated by an empirical study.     

A Bayesian analysis of directional data using the projected normal distribution

This paper presents a Bayesian analysis of the projected normal distribution, which is a flexible and useful distribution for the analysis of directional data. We obtain samples from the posterior distribution using the Gibbs sampler after the introduction of suitably chosen latent variables. The procedure is illustrated using simulated data as well as a real data set previously analysed in the literature.