Economics serving society

(October 2016) 5 papers... in 5 minutes!

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The Interest Rate Unbound?- Jean-Pierre Danthine
Central banks have always considered an interest rate of zero to be the lowest possible limit. Since 2014, this limit has, however, been passed in five currency zones – the euro zone, Japan, Denmark, Sweden and Switzerland. The tax directors of the corresponding central banks have gone into negative territory ...
Short link: http://bit.ly/2ehtjKh

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Which combination of fiscal and external imbalances to determine the long-run dynamics of sovereign bond yields? - Mélika Ben Salem and Barbara Castelletti-Font
In the aftermath of the crisis, sovereign risk premium differentials have been increasingly widening. Although the perceived risk for core countries of the Euro area remains relatively low, financial markets seem to discriminate ...
Short link: http://bit.ly/2eNb8Qj

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Optimal sharing with an infinite number of commodities in the presence of optimistic and pessimistic agents

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- Aloisio Araujo, Jean-Marc Bonnisseau, Alain Chateauneuf and Rodrigo Novinski
In the existing literature, the study of the sharing of risk essentially gives centre stage to actors known as pessimists. In this context, optimal risk sharing is such that global (macroeconomic) risk is supported by each individual, the degree of which depends on her tolerance for risk ...
Short link: http://bit.ly/2dNY9ON

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Evaluation de l’effet d’une politique spatialisée d’accès au logement : la loi SRU - Laurent Gobillon and Benjamin Vignolles
The law of 13 December 2000 relating to Solidarity and Urban renewal (Solidarité et au Renouvellement Urbains, SRU) requires local medium and large local councils to provide 20% of social housing, on pain of being fined. The goal is to encourage them to develop their public housing stock in order to ensure better integration ...
Short link: http://bit.ly/2e3tRFU

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Monopoly Power and Endogenous Product Variety: Distortions and Remedies - Florin Bilbiie, Fabio Ghironi and Marc Melitz
Structural reforms and deregulation as a means of lowering entry barriers and promoting entry are perennial topics for macroeconomic policy around the world both in recent (1) and historical studies (2). In their seminal study, Dixit and Stiglitz (1977) derive an important benchmark neutrality result ...
Short link: http://bit.ly/2eYdfNz


Read the previous “5 papers... in 5 minutes!” (since November 2013)