Displaying from 11 to 20 of 66 available piece of news category "Article"
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The Effects of High Risk on International Stock Markets
We conduct an international analysis of the cross-sectional risk premiums of uncertainty risk factors in addition to traditional risk factors. We consider international stock markets in five regions separately. We measure uncertainty by the local and US economic policy uncertainty indices. Economic policy uncertainty risk has negative risk premiums. This implies that investors get lower returns for assets with high uncertainty betas. We further analyze a nonlinear relationship between excess returns and uncertainty risk by adding the downside economic policy uncertainty risk factor which captures high levels of uncertainty, similar to downside market risk. The downside uncertainty risk factor has negative risk premiums
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Defining an ‘Epidemiological Risk Index’ to analyse COVID 19 mortality across European regions
The spread and severity of COVID-19 within the European regions have been highly heterogeneous, with significant differences in both the number of infected persons and mortality across regions. This paper improves the weak ability of welfare variables, such as the HDI, to explain COVID-19 mortality.
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Ideological alignment, public sector size and tax morale: empirical evidence from OECD economies
This paper examines the relationship between the ideological alignment of citizens with their governments, the size of the public sector, and taxpayers' intrinsic motivations to pay taxes. By analyzing data from the World Values Survey and the European Values Study for 23 OECD economies from 1995 to 2018, the study uncovers distinct patterns in tax morale based on ideological differences.
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Market power in California's water market
The authors study the extent and impact of market power in water markets. Such markets are not abundant globally but their prevalence has been increasing. They use a Nash-Cournot model and derive a closed-form solution for the extent of market power in a water market setting. The authors then use this solution to estimate market power in a newly assembled dataset on California's statewide surface water market. California is one of the world's largest water markets by quantity and value of water traded.
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Towards a risk-adjusted tourism and travel competitiveness index
The concept of Tourism Destinations Competitiveness has evolved from a price-focused perspective to the consideration of multiple factors including sustainability, residents' well-being, or destination image. Regardless of the version used, it is expected that a competitive destination should be able to convert its advantageous position into economic returns. However, the pandemic has come to upset the foundations of the sector, since many of the destinations traditionally classified as highly competitive have also been the most affected by the pandemic. In this paper, we propose to review the notion of competitiveness by considering properly the dimension of inherent risk, using specific composite indexes, and adjusting conventional competitiveness indicators including these dimensions. We revise the results of these new adjusted by risk competitiveness indexes for the organization for economic cooperation and development (OECD) and OECD partner countries. Among other relevant points, the findings indicate relevant changes in rankings when we explicitly include risk in the competitiveness calculations.
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Information and Optimal Trading Strategies with Dark Pools
In today's financial markets traders have access to competing trading venues with different levels of transparency for buying or selling assets. In addition to transparent exchanges, market participants can also trade in opaque trading venues such as dark pools. In December 2022, dark pools accounted for 13.75% of the US equity volume in the United States, and 7.50% of the total value traded in European markets. Dark pools often foster price improvement in relation to exchanges, but pose execution risks. In this context, information asymmetries play a fundamental role in investors' decision of where to trade and in the price discovery process. Therefore, a better understanding of the competition between an exchange and a dark pool with the presence of asymmetric information is essential.
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Remarks on solidarity in bankruptcy problems when agents merge or Split, Mathematical Social Sciences
In this note, we investigate the relationship between non-manipulability via merging (splitting) and strong non-manipulability via merging (splitting). Our analysis reveals that while these two non- manipulability axioms are generally not equivalent, they do coincide when the principle of solidarity is satisfied. This principle is fulfilled by a wide range of bankruptcy rules, including parametric rules. It remains open to investigate if there are rules satisfying non-manipulability via merging (splitting) and consistency but neither strong non-manipulability via merging (splitting) nor resource monotonicity. Although our intuition is that it is, this is a challenging problem since most classical bankruptcy rules exhibit resource monotonicity.
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Are destinations reverting to the pre-pandemic “normal”?
After three years since the pandemic started, it's crucial to assess how well adaptation has happened. In this research note, we looked at how Spanish provinces adapted in the years 2020 to 2022. We found that certain factors played different roles in absorbing the shock in 2020, adapting in 2021, and recovering in 2022. While some things have gone back to how they were, there are still lasting effects in 2022. For example, tourists still prefer natural destinations over urban ones, and some distant markets haven't fully recovered. Understanding these dynamics is important for the tourism industry to fully bounce back.
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How to distribute the European Regional Development Funds through a combination of egalitarian allocations: the CELmin
As Solís-Baltodano et al. (2021) figured out, almost a third of the total European Union budget was set aside for the Cohesion Policy during the 2014-2020 period. The distribution of this budget is made through three main structural and investment funds, trying to promote convergence in the level of development of EU countries. Specifically, the authors, by analysing this situation as a claims problem (O'Neill, 1982), find out the claims solution that performs better than the others by reducing inequality and promoting convergence to a greater degree (the Constrained Equal Losses rule). Nonetheless, when using this egalitarian division of losses, regions may not receive any funds. This paper defines a new way to distribute the limited resources of the European Regional Development Fund (ERDF). We propose a compromise between the egalitarian approaches, i.e., we combine the egalitarian division of the funds with an egalitarian division of the losses (what regions do not get). In doing so, our proposal applies the constrained equal losses solution while ensuring a minimum amount is allocated to each region (sustainable bound). Finally, we provide an axiomatic analysis of the new solution and we apply it to the ERDF problem.
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Regulatory commitment versus non-commitment: Electric vehicle adoption under subsidies and emission standards
The authors compare two regulatory structures in the application of emission standards and a subsidy scheme in the automobile market. The regulator can either commit to an emission standard or is not able to commit. Firms compete a ´ la Cournot and produce fuel-powered and electric vehicles. The emissions of fuel-powered vehicles can be abated by means of investing in emission-reducing innovation. Their results indicate that under commitment there are less emissions, higher subsidies and a major adoption of electric vehicles. By contrast, non-commitment yields more fuel-powered vehicles, more vehicles in total and higher consumer surplus. Electric vehicle producers obtain higher profits under commitment, whereas fuel-powered vehicle producers might be better off under both regulatory structures. Social welfare is higher under non-commitment as long as environmental damages are regarded severe. Otherwise, commitment is socially preferable. This result provides an explanation for observed differences in the duration of environmental standards between the US, the EU and China.
