CUBE - Working Papers / Preprints
URI permanente para esta coleção:
Navegar
Entradas recentes
- Judicial enforcement, credit frictions, and the transmission of bankruptcy through firm networksPublication . Cerqueiro, Geraldo; Nogueira, GilWe show that weak judicial enforcement and credit frictions jointly govern the transmission of corporate distress through trade-credit networks. Weak judicial enforcement increases the losses associated with defaulted trade credit, while credit frictions limit trade creditors’ ability to absorb those losses. We exploit variation in court congestion generated by a nationwide reform that reassigned pending bankruptcy cases across courts. Trade creditors are more likely to go bankrupt when their trade debtor’s case is handled by a congested court and when they face binding credit frictions. Bank relationships mitigate these frictions and insulate trade creditors from distress transmission. A counterfactual exercise shows that moving from the least to the most efficient courts would reduce bankruptcy propagation by 40% and increase aggregate sales by 2%.
- When trade compresses: the impact of liberalization on wage inequalityPublication . Martinez, Victor Hernandez; Kozeniauskas, Nicholas; Merga, RomanWe study the effects of trade liberalization on the full wage distribution, exploiting Spain’s 1993 entry into the European Single Market. Using employer-employee data, we identify the causal effects of trade across the entire wage distribution, using a novel shift-share instrument embedded in an unconditional quantile regression. We find that the liberalization reduced wage inequality, leading to wage compression through earnings gains at the bottom of the distribution and wage losses at the top. We trace this compression to two asymmetric channels: import competition disproportionately harmed high earners, while export opportunities benefited low earners. The key mechanism is an import-driven “skill-downgrading.” A multiregion multi-sector model shows that the key insight for understanding these empirical results is that trade’s distributional effects depend on the skill intensity of a country’s tradable sector, and Spain’s was relatively low-skill intensive back then.
- Regulating artificial intelligencePublication . Guerreiro, João; Rebelo, Sérgio; Teles, PedroAdvances in AI offer substantial benefits but also pose societal risks. We analyze optimal regulation under uncertainty about societal costs, differing expectations regarding risks, and opportunities to reduce uncertainty through beta testing. Pigouvian taxes fail to achieve the first-best outcome due to heterogeneous beliefs about risks and the regulator’s inability to observe developers’ expectations. We propose a two-stage optimal policy: first, deciding between immediate release or sandbox experimentation; second, using gathered information to determine whether to publicly release or withdraw the algorithm. This approach achieves the socially optimal outcome.
- Altruism, human capital and environmental preservation in a globalized economyPublication . Bouché, Stéphane; Modesto, LeonorThis paper analyzes the impact of trade openness on education and environmental preservation choices in a two country model where both countries only differ in their shares of skilled workers. Parents may invest in their children's education increasing their probability to become skilled and in maintenance investment in order to preserve present and future environmental quality. Under autarky, unskilled individuals in the skill scarce economy are unable to invest in education due to borrowing constraints. Moreover, only skilled individuals of the latter economy choose to invest in environmental preservation. Openness to trade modifies relative factor prices and increases pollution. This allows for human capital convergence between both economies and induces all skilled individuals to contribute to environmental preservation in the free trade equilibrium. However, overall environmental quality decreases, suggesting a potential trade-off between income convergence at the global level and environmental preservation. We also focus on the optimal allocation under free trade and conclude that a maintenance investment subsidy should be implemented for skilled individuals but not necessarily for unskilled ones.
- Learning in bank runsPublication . Schliephake, Eva; Shapiro, JoelWe examine a model in which depositor learning exacerbates bank runs. Informed depositors can quickly withdraw when the bank has low-quality assets. Uninformed depositors may decide to wait, which allows them to learn by observing informed depositors' actions. However, learning that the bank has low-quality assets will spark a run ex-post, which increases the incentives of uninformed depositors to run ex-ante. Moreover, when there are more informed depositors, uninformed depositors have a fear of missing out, which also makes preemptive runs more likely. Learning may, thus, increase the likelihood of panic runs and decrease surplus.
- The risk-return tradeoff among equity factorsPublication . Barroso, Pedro; Maio, PauloWe examine the time-series risk-return trade-off among equity factors. We obtain a positive tradeoff for profitability and investment factors. Such relationship subsists conditional on the covariance with the market factor, which represents consistency with Merton’s ICAPM. Critically, we obtain an insignificant risk-return relationship for the market factor. The factor risk-return trade-off tends to be weaker among international equity markets. The out-of-sample forecasting power (of factor variances for future own returns) tends to be economically significant for the investment and profitability factors. Our results suggest that the risk-return trade-off is stronger within segments of the stock market than for the whole.
- Human capital spillovers and returns to educationPublication . Portugal, Pedro; Reis, Hugo; Guimarães, Paulo; Cardoso, Ana RuteIn this paper, we quantify the impact of co-workers’ human capital on a worker’s productivity and, more specifically, the spillovers of co-workers’ education within the workplace. We identify the impact of peer quality and provide an unambiguous decomposition of the impact of unobserved heterogeneity on the estimated returns to education. We find that peer effects are quite sizeable. A one standard deviation increase in the measure of peer quality leads to a wage increase of 2.1 percent. We also unveil that an additional year of average education of co-workers yields a 0.5 percent increase in the individual own wage.
- Risk and heterogeneity in benefits from vocational versus general secondary education: estimates for early and mature career stages in PortugalPublication . Hartog, Joop; Raposo, Pedro; Reis, HugoWe estimate a dynamic model of individual labour market careers (turnover and search, wage development) on Portuguese panel data of graduates from vocational and general secondary education. We find that vocational graduates benefit more from the internal labour market than from the external market. This holds even more for mature than for young individuals. This hurts as among the mature, vocational has higher lay-off probability. To the common result that vocational education trades early employment advantage for later disadvantage we add a decomposition of employment status in its dynamic components. To the literature on wage effects we add a breakdown of variances in heterogeneity and risk.
- Learning through repetition? A dynamic evaluation of grade retention in PortugalPublication . Boghesan, Emilio; Reis, Hugo; Todd, Petra E.High rates of grade retention are a matter of much controversy and debate worldwide. Although some students may learn more with extended classroom time, other students get discouraged and drop out of school. This paper develops and implements a dynamic value-added modeling approach for estimating grade retention effects in Portuguese high schools where over 40% of students were retained. The statistical model is derived from an education production function that describes how knowledge cumulates with sequential years of school attendance, including repeated grades. Model parameters are obtained using simulated method of moments applied to nationwide administrative test score data. The estimated model is used to simulate achievement in math and Portuguese under the existing grade retention and compulsory schooling policies and under alternative policies. Results show that the average impact of the current policy on 12th grade test scores of retained students is positive, 0.2 standard deviations in math and 0.5 s.d. in Portuguese. However, we find that the test score impacts are heterogeneous and roughly one third of students experience learning loss. Retention also significantly increases school dropout, especially for male youth and older students. We compute policy-relevant treatment effects for retention’s effects on lifetime earnings, taking into account retention’s simultaneous effects on educational attainment, knowledge, and age of labor market entry, and we solve for the optimal retention policy that maximizes average lifetime earnings in the population.
- Is macroprudential policy driving savings?Publication . Teixeira, André; Venter, ZoëThis paper assesses the impact of macroprudential policy (MaPP) on aggregate demand in the EU between 2000-2019. Using a difference-in-differences approach, we find that MaPP reduces household consumption and increases firm investment. These effects are relatively mild in the short run but become more pronounced in the long run. Our findings point to a weaker macroeconomic impact than suggested in previous studies.
- «
- 1 (current)
- 2
- 3
- »