limited participation and exchange rate dynamics does theory meet the data the paper explores the empirical dimensions of a new open economy macronomy model characterized by credit market frictions we find that these frictions are essential for the model to match a large set of moments of german data moreover the simulated impulse response functions to supply and nominal shocks are consistent with var findings since the model is estimated on moments rather than on conditional irfs this underlines the ability of the model to match the data finally monetary shocks do not seem to be the primary driving force behind the aggregate dynamics which is consistent with the var literature

workers remittances and the equilibrium real exchange rate theory and evidence economic integration in the early twenty first century is coninternational ventionally thought of in terms of increased openness to trade in goods and services as well as a dramatic increase in the volume of capital flows the twenty first century experience is sometimes contrasted with that of the last wave of globalization at the end of the nineteenth century when increased integration in both of those dimensions was also accompanied by large waves of international migration however this contrast is probably overdrawn as increases in international flows of labor services have also been characteristic of the current wave of globalization and the impact of these factor movements is increasingly being felt in the international economy a particularly dramatic manifestation of this fact is the sharp recorded increase in flows of worker remittances to the large number of developing countries that have been the source of these flows of labor services in recent years many such countries have witnessed significant increases in remittance flows to the point that their scale has come to dwarf that of other types of resource inflows whether development assistance foreign direct investment or other types of capital flows in 2007 remittance flows to sub saharan africa were equal in magnitude to flows of official development assistance for example remittance flows now account for some 17 percent of gdp and 77 percent of exports in el salvador and over 20 percent of gdp and nearly 50 percent of exports in honduras in these countries remittance flows are more than five times larger than foreign direct investment flows unlike capital flows remittances do not entail the creation of external debt with future repayment obligations unlike foreign development assistance they do not come encumbered with a variety of political and economic conditions with which the recipient country must comply despite these virtues however large inflows of worker remittances have been perceived as posing 45

how important are wealth effects on consumption in canada we estimate the marginal propensity to consume from financial and housing wealth in canada the modelling framework of carroll et al 2011 that builds on the observed stickiness in consumption data is used estimations and inferences are conducted using identification robust methods the results provide support for the overall modelling strategy but there are also important differences in the identification status of the econometric equations considered based on the most informative specification we find that both types of wealthfinancial and housinghave significant effects in canada and that the former has a greater effect than the latter a simple extension of the model that also accounts for non price credit conditions shows that housing wealth may be relevant only during periods of easier access to credit finally we find support for relatively high stickiness in consumption growth in canada

remittances and the dutch disease abstract using data for el salvador and bayesian techniques we develop and estimate a two sector dynamic stochastic general equilibrium model to analyze the effects of remittances on emerging market economies we find that whether altruistically motivated or otherwise an increase in remittance flows leads to a decline in labor supply and an increase in consumption demand that is biased toward non tradables the higher non tradable prices serve as incentive for an expansion of that sector culminating in reallocation of labor away from the tradable sector a phenomenon known as the dutch disease quantitative results also indicate that remittances improve the welfare of households because they smooth income flows and increase consumption and leisure levels a bvar analysis provides results that are consistent with the dynamics of the model

reinsurance under conditions of capital market equilibrium a note having accepted a contingent liability under an insurance contract the insurer has an insurable interest in the subject of the insurance policy and can insure all or part of that liability with a second insurer this reinsurance agreement protects the first insurer known as the primary or ceding insurer against unusually large claims since it permits the risk to be broken down into smaller units which can be absorbed easily by individual insurers these agreements are commonly placed with other direct insurers and with specialist reinsurance companies usually holding internationally diversified portfolios the reinsurance agreement affects the risk return structure of the insurer s liability portfolio and consequently affects the risk return characteristics of the insurer s common stock the insurance literature has long assumed such reinsurance is an important procedure and much attention has been devoted to analyzing its use explicit statements of the objectives of reinsurance can be found in most insurance texts these texts commonly stress the portfolio risk effects of reinsurance that is the reduction in the probability of the failure or ruin of the insurance fund and the stabilization of returns to its owners 2 the subdivision of policies and the spreading of risk between insurers permits each insurer to hold a more completely diversified portfolio of liabilities than would be available without reinsurance apart from explicit statements the bulk of analytical literature on optimal reinsurance agreements has assumed risk reduction to be the objective in earlier works such as vajda 15 and ohlin 11 the benefits of reinsurance were identified in the reduction of the variance of the insurer s loss distribution subsequently writers such as borch 3 chs 1 11 buhlmann and jewell 5 du mouchel 6 and gerber 7 have used utility analysis to isolate the effects of reinsurance and to identify the properties of the optimal reinsurance treaty here reinsurance is studied as a bilateral risk reducing device arranged between two or more risk averse insurers the pareto condition has been evoked to define the optimality of a reinsurance treaty and not surprisingly it is shown to depend upon the form and parameters of the participating insurers utility functions the equilibrium conditions for reinsurance have also been established by borch 3

remittances financial development and growth abstract despite the increasing importance of remittances in total international capital flows the relationship between remittances and growth has not been adequately studied this paper studies one of the links between remittances and growth in particular how local financial sector development influences a country s capacity to take advantage of remittances using a newly constructed dataset for remittances covering about 100 developing countries we find that remittances boost growth in countries with less developed financial systems by providing an alternative way to finance investment and helping overcome liquidity constraints this finding controls for the endogeneity of remittances and financial development does not depend on the particular measure of financial sector development used and is robust to a number of robustness tests including threshold estimation we also provide evidence that there could be an investment channel trough which remittances can promote growth especially when the financial sector does not meet the credit needs of the population

remittances monetary policy and partial sterilization author affiliation diego e vacaflores dv13 txstate edu acknowledgment the author thanks dennis w jansen for his insightful contributions and continuous guidance i also thank the editor kent kimbrough and two anonymous referees for their valuable comments and suggestions 1 introductionremittances have increased over the last several decades international estimates of official remittance flows suggest that the total amount of worker remittances have increased to us 300 billion in 2010 inter american development bank 2012 this increase may in part be attributed to the rapid growth of money transfer institutions which has reduced the average transaction cost and has made them more visible however it may also be indicative of an actual increase in these monetary transfers due to increased migration flows which now represent approximately 45 of net private capital flows to developing countries the importance of remittances for remittances receiving developing countries does not just come from their size but mainly from its potential and actual effects on both the society and the individual remittances affect labor market decisions school retention export sector competitiveness and financial deepening funkhouser 1992 glytsos 2002 cox edwards and ureta 2003 amuedo dorantes and pozo 2004 chami fullenkamp and jahjah 2005 giuliano and ruiz arranz 2009 in terms of consumption remittance flows have gone from satisfying basic needs to providing a vast array of durable goods for recipient households they can thus potentially promote economic growth and development through higher domestic demand if motivated by altruism or through enhanced productive capacity if motivated by self interest most of the literature on remittances focuses on the microeconomic implication of such flows for the sender and for the receiver of these funds on the basis of survey data this trend in the literature has examined the motivations to remit such as contractual arrangements altruism repayment of migration costs and so on and the uses of these funds in the home country e g for education health care entrepreneurial initiatives social works etc at the macro level the literature on the impact of remittances on the recipient country is sparse but growing as researchers realize that it could have important effects on the overall economy however economists have overlooked the examination of the potential influence that higher levels of remittances can have on the implementation of monetary policy and thus its understanding is still limited since remittances provide a secondary income to households they would affect decisions with respect to labor supply and consumption which can alter the effectiveness of monetary policy when this additional income is a significant portion of a household s income additionally although domestic governments usually try to sterilize capital flows to sustain a given policy the high levels of informality in some developing countries and the significant portion of remittances that continue to flow through informal channels make monetary targeting problematic given these potential complications monetary policy could potentially have a differential impact depending on the remittances share of gdp and fluctuations in remittances can affect the amount of money in circulation and therefore economic performance accounting for such influences thus became imperative for stabilization policy this study examines the potentially different impact that monetary policy can have on output depending on the relative share of remittances as a percentage of gdp and the differential effect that remittances shocks can have on the main macroeconomic aggregates when economies do not fully sterilize such inflows channels never explored before it builds on the theoretical model developed by jansen vacaflores and naufal 2010 explicitly incorporating remittances in a small open economy framework and is able to show that monetary policy has a differential effect on output depending on the relative size of these remittances

international evidence on sticky consumption growth abstract this paper estimates the degree of stickiness in aggregate consumption growth sometimes interpreted as reflecting consumption habits for thirteen advanced economies we find that after controlling for measurement error consumption growth has a high degree of autocorrelation with a stickiness parameter of about 0 7 on average across countries the sticky consumption growth model outperforms the random walk model of hall 1978 and typically fits the data better than the popular mankiw 1989 model though in a few countries the sticky consumption growth and campbell mankiw models work about equally well

macroeconomic interdependence under incomplete markets this paper uses a two country flexible price model with overlapping generations of infinitely lived households to study the role of net foreign asset dynamics in the propagation of productivity shocks absence of ricardian equivalence ensures existence of a unique steady state level of net foreign assets to which the economy returns following temporary shocks model dynamics are significantly different from those of a setup in which terms of trade movements perform all the international adjustment and net foreign assets do not move the difference relative to a complete markets economy in which net foreign asset movements play no role in shock transmission is smaller it is amplified if the substitutability across goods rises and if shocks are permanent

do remittances induce inflation fresh evidence from developing countries the goal of this article is to examine the determinants of inflation in both the short run and the long run for 54 developing countries using a panel data set covering the 1995 2004 period apart from the commonly used economic determinants of inflation we model the impact of remittances and institutional variables on inflation using the arellano and bond panel dynamic estimator and the arellano and bover and the blundell and bond system generalized method of moments estimator we find evidence that in developing countries remittances generate inflation the effect of remittances on inflation is more pronounced in the long run moreover we find that openness debt current account deficits the agricultural sector and the short term u s interest rate have a positive effect on inflation we also find that improvements in democracy reduce inflation

predicting catastrophe risk evidence from catastrophe bond markets abstract compared to the past literature on prediction markets that uses small scale observational field data or experiments this present research examines the efficiency of such markets by studying catastrophe cat bonds we collect actual catastrophe loss data match them with the defined trigger events of each cat bond contract and then employ an empirical pricing framework to obtain the excess cat premiums in order to represent the market based forecasts our results indeed show that market based forecasts have more significant predictive content for future cat losses than professional forecasts that use natural catastrophe risk models although the predictive information for cat events is specialized and complex our evidence supports that cat bond markets are successful prediction markets that efficiently aggregate information about future cat losses our resultsalso highlight that actual cat losses in future periods can explain the excess cat bond spreads in the primary market and provide support for market efficiency when pricing cat risk

aid volatility and real business cycles in a developing open economy this article analyzes the impact of the unpredictability of foreign aid on macroeconomic fluctuations in the recipient country i build a small open economy business cycle model that accounts for foreign aid shocks with no preference shocks the model is calibrated to reflect the structural empirical regularities of cote d ivoire a typical aid dependent developing country the parameters of the exogenous shocks are estimated using bayesian methods and time series data for cote d ivoire the model produces business cycle patterns that are consistent with the data and key stylized facts specifically the excess volatility of consumption with respect to output is successfully replicated the results suggest that the unpredictability of foreign aid contributes to explain the volatility of business cycles in the recipient economy and has negative welfare effects

house prices and credit constraints making sense of the us experience most us house price models break down in the mid 2000s due to the omission of exogenous changes in mortgage credit supply associated with the sub prime mortgage boom from house price to rent ratio and inverted housing demand models previous models lack data on credit constraints facing first time home buyers incorporating a measure of credit conditions the cyclically adjusted loan to value ratio for first time buyers into house price to rent ratio models yields stable long run relationships more precisely estimated effects reasonable speeds of adjustment and improved model fits

identification robust analysis of dsge and structural macroeconomic models abstract full and limited information identification robust methods are proposed for structural systems notably dsge models which are valid whether identification is weak or strong theory intrinsic or data specific the proposed methods are applied to a standard new keynesian system for the u s single and multi equation estimation and fit are also compared when a unique rational expectation stable equilibrium is imposed the model is rejected in contrast limited information inference produces informative results regarding forward looking behavior in the nkpc and precise conclusions on feedback coefficients in the reaction function which cannot be reached via single equation methods

motivations to remit evidence from botswana in this article a theory of motivations to send remittances is described and tested with data from botswana altruism is one of the motivations tested and found to be an insufficient explanation for remittances among migrants in botswana a refinement of the model stipulates a modified altruism or enlightened self interest in this model the relationship between the migrant and family is tempered by an implicit understanding of mutual benefit the household strategy may be to encourage some members to migrate as a means of spreading risk and sharing gains the household strategy is similar to an insurance policy where migration is to places where market potential is high the risks incurred might be high the example is given of migration during a drought in botswana migrant remittances were greater in households with more cattle or households with more to lose drought alone was not statistically related to remittances increases in remittances were related to increased levels of education it is suggested that repayment was the motive for parents investment in migrants education migrants gains are identified as the potential for an inheritance the security of channeling investments through a trusted family member and security in having a home to return to it is pointed out that the altruism and family remittances from urban migration were strategies that bridged the simple dynamic of either urban development or rural development impacting on family welfare it is suggested that household models of economy adopt some measure to express the relationship of household wealth to remittances from urban migrants

can insurers pay for the big one measuring the capacity of the insurance market to respond to catastrophic losses abstract this paper presents a theoretical and empirical analysis of the capacity of the us property liability insurance industry to finance catastrophic property losses in the 100 billion range in our theoretical analysis we show that the sufficient condition for capacity maximization given a level of total resources in the industry is for all insurers to hold a net of reinsurance underwriting portfolio which is perfectly correlated with aggregate industry losses this result leads to a natural definition of industry capacity as the amount of industry resources that are deliverable conditional on an industry loss of a given size estimating capacity using insurer financial statement data we find that the industry could adequately fund a 100 billion event however such an event would cause numerous insolvencies and severely destabilize insurance markets

workers remittances and the real exchange rate a paradox of gifts abstract we test the impact of workers remittances on the real exchange rate using a panel of 13 latin american and caribbean countries the analysis reveals that workers remittances have the potential to inflict economic costs on the export sector of receiving countries by reducing its international competitiveness our findings raise concerns parallel to those raised by dutch disease or resource boom models where resource discoveries result in real exchange rate appreciation and shifting of resources from the traded to the nontraded sectors of the economy

catastrophic risk and credit markets we provide a model of the effects of catastrophic risk on real estate financing and prices and demonstrate that insurance market imperfections can restrict the supply of credit for catastrophe susceptible properties using unique micro level data we find that earthquake risk decreased commercial real estate bank loan provision by 22 in california properties in the 1990s with more severe effects in african american neighborhoods we show that the 1994 northridge earthquake had only a short term disruptive effect our basic findings are confirmed for hurricane risk and our model and empirical work have implications for terrorism and political perils

migration from nicaragua some recent evidence abstract i utilize two unique data sources to examine migration from and remittance flows to the capital city of managua nicaragua approximately 10 12 of the population has emigrated these emigrants tend to be disproportionately of working age better educated and more often white collar workers than nonmigrants in addition emigrants are more likely to come from larger premigration households and higher income households remittance flows to managua are quite large the second largest source of foreign exchange earnings after coffee in addition remittances have a negative income effect on labor force participation and a positive effect on self employment of nonmigrants

wealth effects and macroeconomic dynamics the effect of wealth on consumption is an issue of long standing interest to economists conventional wisdom suggests that fluctuations in household wealth have driven major swings in economic activity both in the united states and abroad this paper considers the so called consumption wealth effects there is an extensive existing literature on wealth effects that has yielded some insights for example research has documented the relationship between aggregate household wealth and aggregate consumption over time and a large number of household level studies suggest that wealth effects are larger for households facing credit constraints however there are also many unresolved issues regarding the influence of household wealth on consumption we review the most important of these issues and argue that there is a need for much more research in these areas as well as better data sources for conducting such analysis

remittances and the migration development nexus challenges for the sustainable governance of migration abstract this paper argues that possible effects of international migration on the environment have to be analysed with respect to both the three dimensions of sustainability and the migration stakeholders it has recently been put forward that immigration has to be reduced for environmental reasons in contrast this paper embarks from the view that reducing immigration is costly ineffective and ethically troublesome it argues that there are strong interrelations between development and migration suggesting that one has to consider development problems when discussing migration in this context the enormous amount of remittances of migrant workers could yield considerable potential for promoting sustainable development sustainable governance is needed to manage this potential wisely in doing so it is essential to consider the migration stakeholders sending and receiving countries and the migrants themselves and balance the three dimensions of sustainability

the demand and liquidity effects of monetary shocks abstract this paper examines the effect of a monetary shock in a stochastic growth model with a cash in advance constraint and a financial intermediary it explores the differences between the results of restrictions on nominal price adjustment the demand effect and restrictions on savings behavior the liquidity effect it is found that the model that produces the appropriate response to a temporary monetary shock includes both demand and liquidity effects

overshooting and the exchange rate disconnect puzzle a reappraisal transitions to floating exchange rate regimes have led to sharp increases in exchange rate volatilities with no corresponding changes in the distribution of macroeconomic fundamentals in the spirit of dornbusch 1976 we assess whether nominal exchange rate overshooting is responsible for this phenomenon as long as uncovered interest rate parity holds nominal exchange rate overshooting is linked to a persistent fall in the spread between domestic and foreign nominal interest rates we thus develop a limited participation model in a small open economy setting with small adjustment costs on money holdings overshooting substantially contributes to the nominal exchange rate volatility

money prices interest rates and the business cycle the mechanisms governing the relationship of money prices and interest rates to the business cycle are the most studied and most disputed topics in macroeconomics in this paper we first document key empirical aspects of this relationship we then ask how well three benchmark rational expectations macroeconomic models a real business cycle model a sticky price model and a liquidity effect model account for these central facts while the models have diverse successses and failures none can account for the fact that real and nom inal interest rates are inverted leading indicators of real economic activity that is none of the models captures the post war u s business cycle fact that a high real or nominal interest rate in the current quarter predicts a low level of real economic activity two to four quarters in the future i introduction the positive correlation of monetary aggregates and real economic activity over the course of many business cycles is a key empirical fact about the u s economy indeed the dynamic dimension of this covariation is so strong and stable that a monetary variable has long been included in the commerce department s index of leading economic indica tors while this pattern of cyclical comovement is widely agreed upon its interpretation is not some macroeconomists view money as purely passive with a positive response to varying levels of economic activity producing the positive correlation others view changes in the quantity of money as an important perhaps dominant source of economic fluctua tions frequently the real effects of monetary changes are suggested to arise from frictions in commodity labor or financial markets in economic theories that describe the influence of these frictions the transmission mechanism from monetary changes to real activity is typically viewed as involving interest rates and the price level the primary goal of this paper is to evaluate three models that explain the link between money prices interest rates and the business cycle we do this in three steps first we docu ment the cyclical behavior of these variables in the united states over the postwar period second we construct three quantitative rational expectations models of macroeconomic activity i a real business cycle model with endogenous money ii a model of commodity market frictions with mon etary non neutralities arising from gradual adjustment of goods prices and iii a model of financial market frictions with monetary non neutralities arising from gradual adjust ments of portfolios finally we compare the models predic tion for the business cycle behavior of money prices and interest rates with the data in exploring the predictions of these models we take the stock of money to be one of several exogenous variables in the system all of our models are capable of generating a forecasting role for money relative to real economic activity similar to that found in the u s data in the real business model monetary changes can forecast real activity because productivity is related to many underlying sources of shocks and because these real shocks also affect the money stock in the models with sticky prices and liquidity effects short hand names for the models with frictions in the com modity and financial markets monetary changes have an additional direct positive effect on aggregate output the outline of the paper is as follows section ii describes the data and documents its business cycle characteristics section iii outlines the three macroeconomic models and develops the particular quantitative versions of the models used in our analysis our main empirical results are pre sented in section iv and section v summarizes our results and concludes

international migration remittances and schooling evidence from el salvador abstract we examine the effect of remittances from abroad on households schooling decisions using data for el salvador following the massive war related emigration of the 1980s remittances became a significant source of household income throughout the 1990s we use the cox proportional hazard model to examine the determinants of school attendance measuring income from a source that is uncorrelated with parental schooling remittances we find that remittances have a large significant effect on school retention we estimate that while household income net of remittances has a small though significant impact on the hazard of leaving school in rural and urban areas remittances have a much larger impact on the hazard of leaving school in urban areas the effect of remittances is at its smallest 10 times the size of the effect of other income in rural areas the effect of remittances is about 2 6 times that of other income our finding is of interest in that it suggests that subsidizing school attendance particularly in poor areas may have a large impact on school attendance and retention even if parents have low levels of schooling

identification weak instruments and statistical inference in econometrics we discuss statistical inference problems associated with identification and testability in econometrics we consider inference in non parametric models and weakly identified structural models weak instruments we point out that many ill defined statistical problems such as non testable hypotheses occur in these areas and are typically associated with asymptotic approximations in non parametric models such problems include testing moments and inference under heteroscedasticity or serial dependence of unknown form for weakly identified structural models difficulties are typically associated with improper pivots and we review recent developments aimed at proposing more reliable procedures including alternative proposed statistics bounds projection split sampling conditioning monte carlo tests jel classification c1 c12 c14 c15 c3 c5 identification instruments faibles et inference statistique en econometrie nous analysons les problemes d inference associes a l identification et a la testabilite en econometrie nous considerons l inference dans les modeles non parametriques et les modeles structurels faiblement identifies instruments faibles nous remarquons que beaucoup de problemes mal poses tels que des hypotheses non testables apparaissent dans ces domaines et que ceux ci sont typiquement associes a l emploi d approximations asymptotiques dans les modeles non parametriques de tels problemes incluent les tests sur les moments et l inference sous heteroscedasticite ou dependance serielle de forme non specifiee dans les modeles structurels faiblement identifies ces difficultes sont habituellement associees a l emploi de fonctions pivotales impropres et nous presentons un survol des methodes recentes ayant pour objectif d obtenir des procedures plus fiables ce qui comprend les differentes statistiques proposees l emploi de bornes la subdivision d echantillon les techniques de projection le conditionnement et les tests de monte carlo

identifying the new keynesian phillips curve phillips curves are central to discussions of inflation dynamics and monetary policy the hybrid new keynesian phillips curve nkpc describes how past inflation expected future inflation and a measure of real aggregate demand drive the current inflation rate this paper studies the potential weak identification of the nkpc under generalized method of moments and traces this syndrome to a lack of higher order dynamics in exogenous variables we employ analytic methods to understand the economics of the nkpc identification problem in the canonical three equation new keynesian model we revisit the empirical evidence for the usa the uk and canada by constructing tests and confidence intervals based on the anderson and rubin 1949 statistic which is robust to weak identification we also apply the guggenberger and smith 2008 lm test to the underlying nkpc pricing parameters both tests yield little evidence of forward looking inflation dynamics copyright 2008 john wiley sons ltd

remittances and labor force participation in mexico an analysis using propensity score matching summary about 2 5 million mexicans migrated to the united states during 1997 2002 and 1 6 million of them sent remittances to their families did recipients change their labor force status in response to these remittances this question has been examined before unlike the previous studies we separate persistent from sporadic remittances and we use propensity score matching to measure differences in behavior we find limited evidence of labor force participation effects of persistent remittances which is broadly consistent with remittances being an integral part of household s income generation strategy

remittance outflows and inflation the case of the gcc countries abstract we examine the effect of remittance outflows on inflation in the remitting countries the growth of remittance outflows depresses inflation rate

consumption smoothing and housing capital gains evidence from australia canada and new zealand using regional level panel data of three developed countries comprising australia canada and new zealand the study investigates the response of consumption smoothing to housing capital gains t

what s different about monetary policy transmission in remittance dependent countries abstract despite welfare and poverty reducing benefits for recipient households remittance inflows have been shown to entail macroeconomic challenges producing dutch disease type effects reducing the quality of institutions delaying fiscal adjustment and having an indeterminate effect on long run growth this paper explores an additional challenge for monetary policy although remittances expand bank balance sheets providing a stable flow of interest insensitive funding they tend to increase banks holdings of liquid assets this both reduces the need for an interbank market and severs the link between policy rate and banks marginal cost of funds thus shutting down a major transmission channel we develop a stylized model based on asymmetric information and a lack of transparent borrowers and undertake econometric analysis providing evidence that increased remittance inflows are associated with weaker transmission as independent monetary policy becomes impaired this result is consistent with earlier findings that recipient countries tend to favor fixed exchange rate regimes

the allocation of catastrophe risk the potential losses from catastrophes have led financial researchers to address the following questions 1 to what extent is catastrophe risk being shared insured and is the allocation of catastrophe risk consistent with notions of optimal risk sharing 2 if not what market imperfections hinder the efficient allocation of catastrophe risk and 3 are there government policies or private market solutions that could lead to a more efficient allocation of catastrophe risk this paper summarizes the research that has been conducted on these questions 2002 elsevier science b v all rights reserved

crop insurance policies and purchases in france while many crop insurance systems have been reformed around the world few academic researches have addressed the determinants of the decision on crop insurance at the farm s micro level in this article both the financial and the agricultural literature lead to the identification of many rationales for the crop insurance decision using data from the period 2003 2006 on a representative survey of french farms fadn rica we investigate the different factors that incite farmers to insure against crop risk we emphasize that the highest risk farms are more likely to have insurance and this decision is positively related to the past amount of claims insurance is subscribed by larger farms because insurance appears too expensive for smaller farms which are indeed naturally less diversified interestingly financial variables such as capital structure or return on investment do not significantly determine the insurance decision

do house prices drive consumption growth the coincident cycles of house prices and consumption in the uk this paper uses a realistic structural lifecycle model of consumption and housing decisions to understand how data might distinguish different mechanisms that explain the correlation between house prices and consumption the model includes price and earnings shocks estimated from data the latter including aggregate and idiosyncratic components and incorporates realistic features of the uk mortgage market we simulate the model using more than 30 years of realized shocks and under counterfactual scenarios our results confirm the intuition of earlier studies house price shocks should have a larger effect on the consumption of older households and earnings shocks on young households

the risk of a mortality catastrophe we develop a continuous time model for analyzing and valuing catastrophe mortality contingent claims based on stochastic modeling of the force of mortality we derive parameter estimates from a 105 year time series of u s population mortality data using a simulated maximum likelihood approach based on a particle filter relying on the resulting parameters we calculate loss profiles for a representative catastrophe mortality transaction and compare them to the official loss profiles that are provided by the issuers to investors and rating agencies we find that although the loss profiles are subject to great uncertainties the official figures fall significantly below the corresponding risk statistics based on our model in particular we find that the annualized incidence probability of a mortality catastrophe defined as a 15 increase in aggregated mortality probabilities is about 1 4 compared to about 0 1 according to the official loss profiles

remittances output and exchange rate regimes theory with an application to latin america immigrant remittances have a broad effect on the receiving economies we show this impact on the main macroeconomic aggregates is dependent on the policy arrangements in place that manage capital flows we look at remittance inflows in a small open economy to examine their influence on output under alternative exchange rate regimes using a simple stochastic limited participation model we are able to reproduce dynamics consistent with the empirical literature we find that the dynamics of labor inflation and output are dependent on the parameterization of the utility function and on the monetary rule governing the evolution of the interest rate and in particular with respect to the response of interest rates to exchange rate movements we find that the initial drop of output resulting from a remittances shock is similar under alternative exchange rate regimes but the subsequent recovery of output is faster and stronger under more flexible exchange rate regimes we provide suggestive empirical evidence from a panel vector autoregression specification for 17 latin american countries that corroborates our results