A Model of Equilibrium Institutions

Institutions that serve the interests of an elite are often cited as an important reason for poor economic performance. This paper builds a model of institutions that allocate resources and power to maximize the payoff of an elite, but where any group that exerts sufficient fighting effort can launch a rebellion that destroys the existing institutions. The rebels are then able to establish new institutions as a new elite, which will similarly face threats of rebellion. The paper analyses the economic consequences of the institutions that emerge as the equilibrium of this struggle for power. High levels of economic activity depend on protecting private property from expropriation, but the model predicts this can only be achieved if power is not as concentrated as the elite would like it to be, ex post. Power sharing endogenously enables the elite to act as a government committed to property rights, which would otherwise be time inconsistent. But sharing power entails sharing rents, so in equilibrium power is too concentrated, leading to inefficiently low investment.institutions, political economy, power struggle, property rights, time inconsistency

Fiscal Policy and National Saving in Mexico, 1980-2006

This paper uses structural vector autoregression (SVAR) models to characterize the dynamic impact of fiscal policy on national saving. SVARs have extensively been used in case of monetary policy. Data adjusted for inflation, capital flight, the value loss of debt and cyclical effects, is used rather than traditional measures. Our results suggest that fiscal policy that increases the structural surplus has a positive impact on national saving, some negative impact on private savings in shorter horizons but any significant e_ect over longer horizons, and a negative effect on the output gap.fiscal policy, national saving, private saving

Complex delay dynamics on railway networks: from universal laws to realistic modelling

Railways are a key infrastructure for any modern country. The reliability and resilience of this peculiar transportation system may be challenged by different shocks such as disruptions, strikes and adverse weather conditions. These events compromise the correct functioning of the system and trigger the spreading of delays into the railway network on a daily basis. Despite their importance, a general theoretical understanding of the underlying causes of these disruptions is still lacking. In this work, we analyse the Italian and German railway networks by leveraging on the train schedules and actual delay data retrieved during the year 2015. We use {these} data to infer simple statistical laws ruling the emergence of localized delays in different areas of the network and we model the spreading of these delays throughout the network by exploiting a framework inspired by epidemic spreading models. Our model offers a fast and easy tool for the preliminary assessment of the {effectiveness of} traffic handling policies, and of the railway {network} criticalities.Comment: 32 pages (with appendix), 28 Figures (with appendix), 2 Table

Bayesian hierarchical model for the prediction of football results

The problem of modelling football data has become increasingly popular in the last few years and many different models have been proposed with the aim of estimating the characteristics that bring a team to lose or win a game, or to predict the score of a particular match. We propose a Bayesian hierarchical model to fulfil both these aims and test its predictive strength based on data about the Italian Serie A 1991-1992 championship. To overcome the issue of overshrinkage produced by the Bayesian hierarchical model, we specify a more complex mixture model that results in a better fit to the observed data. We test its performance using an example of the Italian Serie A 2007-2008 championship

Shrinking Point Bifurcations of Resonance Tongues for Piecewise-Smooth, Continuous Maps

Resonance tongues are mode-locking regions of parameter space in which stable periodic solutions occur; they commonly occur, for example, near Neimark-Sacker bifurcations. For piecewise-smooth, continuous maps these tongues typically have a distinctive lens-chain (or sausage) shape in two-parameter bifurcation diagrams. We give a symbolic description of a class of "rotational" periodic solutions that display lens-chain structures for a general $N$-dimensional map. We then unfold the codimension-two, shrinking point bifurcation, where the tongues have zero width. A number of codimension-one bifurcation curves emanate from shrinking points and we determine those that form tongue boundaries.Comment: 27 pages, 6 figure