Showing papers in "European Economic Review in 2006"

TL;DR: This paper used a gravity model to assess ex-post regional trade agreements and found that regional agreements have generated a significant increase in trade between members, often at the expense of the rest of the world.

TL;DR: In this paper, the authors present empirical evidence on the effect of process and product innovations on productivity, as well as on the role played by R&D and fixed capital investment in enhancing the likelihood of introducing innovations at the firm level.

TL;DR: In this paper, the authors developed a model that can explain why natural resources are a blessing for some countries, but a curse for others, by predicting that natural resources lower incomes in fractionalized countries but increase incomes in homogenous countries.

TL;DR: In this article, a career-concerns model with political parties is presented to analyze the effects of fiscal transparency on public debt accumulation, and the results show that a higher degree of transparency is associated with lower public debt and deficits, independent of controls for explanatory variables from other approaches.

TL;DR: This paper studied indirect reciprocity, where a cooperative action is rewarded by a third actor, not involved in the original exchange, and provided experimental evidence of indirect reciprocation. But their experiment is based on the "repeated helping game" developed by Nowak and Sigmund (J. Theoret. Biol. 194 (1998) 561; Nature 393 (1998] 573), involving random pairing in large groups.

TL;DR: The authors estimate the effect of class size on student performance in 11 countries, combining school fixed effects and instrumental variables to identify random class-size variation between two adjacent grades within individual schools, and find sizable beneficial effects of smaller classes in Greece and Iceland, while rejecting the possibility of even small effects in four countries and of large beneficial effects in an additional four countries.

TL;DR: The authors developed a model of the exchange rate in which agents use simple forecasting rules and based on an ex post evaluation of the relative profitability of these rules they decide whether to switch or not.

TL;DR: The authors examined the relation between public spending and the spread of democracy in Western Europe during the period 1830-1938 and found that the gradual lifting of socioeconomic restrictions on the voting franchise contributed to growth in government spending mainly by increasing spending on infrastructure and internal security.

TL;DR: In this paper, the authors provide complementary survey evidence of 117 German fund managers which can improve our understanding in this field and find that herding is decreasing with experience while the evidence concerning risk taking and overconfidence is mixed.

TL;DR: In this paper, the authors test the hypothesis that observably similar workers earn higher wages in the formal sector than in the informal sector in developing nations and find that on average, formal wages are higher than informal wages.

TL;DR: In this article, a partial equilibrium job search model was used to estimate a 3-year panel of individual worker data covering 10 European countries and the U.S. and found that the model fit the data surprisingly well.

TL;DR: In this paper, the authors apply a structural approach to examine the relevance of the cost channel for inflation dynamics in G7 countries by augmenting the hybrid New Keynesian Philips curve by letting firms' costs for external funds rise with the short run nominal interest rate.

TL;DR: In this paper, the role of trade credit in the transmission of monetary policy is investigated, and it is shown that when monetary policy tightens there will be a reduction in market and bank lending, and an increase in trade credit.

TL;DR: This article examined the significance of international knowledge spillovers through inward and outward foreign direct investment (FDI), intermediate goods imports, and a disembodied direct channel using panel data from 16 OECD countries for the period 1981-2000.

TL;DR: In this paper, the authors provide empirical evidence in support of competing auctions theory using online auctions data from eBay, and show that a significant proportion of bidders do bid across competing auctions and that winning bidder tend to submit bids on auctions with the lowest standing bid, as the theory predicts.

TL;DR: In this article, the authors reexamine these issues in a model that produces stable equilibria with partial agglomeration in addition to the core-periphery equilibrium.

TL;DR: The authors investigate empirically how industrialized countries and US states share consumption risk at horizons between 1 and 30 years and conclude that permanent and transitory shocks constitute two qualitatively different kinds of risk and that various forms of endogenous market incompleteness may render permanent shocks a lot harder to insure.

TL;DR: In this article, the authors analyzed the effect of the agglomeration between capital and labor in German states on migration and foreign direct investment (FDI) in the same country of origin.

TL;DR: In this article, the authors developed a strategic model of wage bargaining between a single worker and a firm that is applicable to a simple economy in which both employed and unemployed workers search for better jobs.

TL;DR: In this paper, the authors investigate a mixed market where a welfare-maximizing public research institute competes against profit-minimizing private firms and find that the innovation size (R&D expenditure) chosen by the public institute is too small (too large) from the viewpoint of social welfare.

TL;DR: In this paper, the authors show that monetary policy should be conducted by a committee instead of a single policy maker if there is uncertainty about potential output, and they examine three decision procedures (an optimal procedure, averaging and voting) and find that the latter is the appropriate way to reach decisions if policy makers are not equally skilled.

TL;DR: In this paper, the authors estimate monetary policy reaction functions for the United States, the United Kingdom, and Germany, using a Markov-switching model that allows for shifts in the coefficients of the central bank's reaction function as well as for independent shifts in residual variance.

TL;DR: In this paper, policy competition for foreign direct investment between countries of different size and different market structure is analyzed and the location decision of the foreign investor and welfare implications are derived for each country.

TL;DR: In this article, an empirically grounded version of the search and matching model is proposed for the analysis of aggregate U.S. labor market dynamics. But the model does not capture the high persistence and high volatility of most of the key variables, negative co-variation of unemployment and vacancies, and the behavior of the worker job finding rate.

TL;DR: This article proposed a model in which the US acts as principal within the IMF and seeks to maximize its impact on the policy stance of debtor countries, which leads to the testable hypothesis that the probability of an IMF loan is increasing in the amount of political concessions countries make.

TL;DR: In this article, the authors find that holding companies in Italian pyramids have higher leverage than subsidiaries and that the cash-flow share of the entrepreneur in the subsidiary does not play a significant role.

TL;DR: The authors used a self-centered inequality aversion model to predict voting outcomes in a simple redistribution experiment and found that it predicts voting outcomes far better than the standard model of voting assuming rationality and strict self-interest.

TL;DR: In this article, the authors divide the monetary frameworks of countries that use an inflation target to define their monetary framework into three different regimes: (i) full-fledged inflation targeting, (ii) implicit price stability anchor, and (iii) inflation targeting lite.

TL;DR: This article showed that the relationship between the size of the public sector and economic growth is statistically insignificant and highly unstable across specifications, and concluded that cross-country growth regressions are unlikely to come up with a reliable answer to the question of the growth effects of government spending and taxation.

TL;DR: In this paper, the authors focus on the pass-through of exchange rate changes into the prices of imports made by euro area countries originating outside the area, and estimate industry-specific rates of passthrough across and within countries for all euro members.