To surcharge or not to surcharge? A two-sided market perspective of the no-surchage rule

In Electronic Payment Networks (EPNs) the No-Surcharge Rule (NSR) requires that merchants charge the same final good price regardless of the means of payment chosen by the customer. In this paper, we analyze a three-party model (consumers, merchants, and proprietary EPNs) to assess the impact of a NSR on the electronic payments system, in particular, on competition among EPNs, network pricing to merchants and consumers, EPNs' profits, and social welfare. We show that imposing a NSR has a number of effects. First, it softens competition among EPNs and rebalances the fee structure in favor of cardholders and to the detriment of merchants. Second, we show that the NSR is a profitable strategy for EPNs if and only if the network e¤ect from merchants to cardholders is sufficiently weak. Third, the NSR is socially (un)desirable if the network externalities from merchants to cardholders are sufficiently weak (strong) and the merchants' market power in the goods market is sufficiently high (low). Our policy advice is that regulators should decide on whether the NSR is appropriate on a market-by-market basis instead of imposing a uniform regulation for all markets. JEL Classification: L13, L42, L80American Express, Discover, Electronic payment system, market power, MasterCard, network externalities, no-surcharge rule, regulation, two-sided markets, Visa

Sticky wages: evidence from quarterly microeconomic data

This paper documents nominal wage stickiness using an original quarterly firm-level dataset. We use the ACEMO survey, which reports the base wage for up to 12 employee categories in French firms over the period 1998 to 2005, and obtain the following main results. First, the quarterly frequency of wage change is around 35 percent. Second, there is some downward rigidity in the base wage. Third, wage changes are mainly synchronized within firms but to a large extent staggered across firms. Fourth, standard Calvo or Taylor schemes fail to match micro wage adjustment patterns, but fixed duration "Taylor-like" wage contracts are observed for a minority of firms. Based on a two-thresholds sample selection model, we perform an econometric analysis of wage changes. Our results suggest that the timing of wage adjustments is not state-dependent, and are consistent with existence of predetermined of wage changes. They also suggest that both backward- and forward-looking behavior is relevant in wage setting. JEL Classification: E24, J3wage predetermination, Wage stickiness

Employment fluctuations in a dual labor market

In light of the huge cross-country differences in job losses during the recent crisis, we study how labor market duality - meaning the coexistence of "temporary" contracts with low firing costs and "permanent" contracts with high firing costs - affects labor market volatility. In a model of job creation and destruction based on Mortensen and Pissarides (1994), we show that a labor market with these two contract types is more volatile than an otherwise-identical economy with a single contract type. Calibrating our model to Spain, we find that unemployment fluctuates 21% more under duality than it would in a unified economy with the same average firing cost, and 33% more than it would in a unified economy with the same average unemployment rate. In our setup, employment grows gradually in booms, due to matching frictions, whereas the onset of a recession causes a burst of firing of "fragile" low-productivity jobs. Unlike permanent jobs, some newly-created temporary jobs are already near the firing margin, which makes temporary jobs more likely to be fragile and means they play a disproportionate role in employment fluctuation

Green shoots in the euro area : a real time measure

We show that an extension of the Markov-switching dynamic factor models that accounts for the speci cities of the day to day monitoring of economic developments such as ragged edges, mixed frequencies and data revisions is a good tool to forecast the Euro area recessions in real time. We provide examples that show the nonlinear nature of the relations between data revisions, point forecasts and forecast uncertainty. According to our empirical results, we think that the real time probabilities of recession are an appropriate statistic to capture what the press call green shoot

Reglas proporcionales en problemas de árboles de mínimo costo

En este trabajo se presenta una nueva familia de reglas de distribución para problemas de árboles  de mínimo costo. Se utilizan criterios de proporcionalidad para estas reglas y a través de un ejemplo clásico se observa un mejor comportamiento que las reglas de Bird, Kar y Dutta-Kar. Se prueban algunas propiedades que cumplen estas reglas proporcionales y se concluye que comparativamente, desde el punto de vista de las propiedades que cumplen, se encuentran bien posicionadas.Fil: Cesco, Juan Carlos. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - San Luis. Instituto de Matemática Aplicada de San Luis "Prof. Ezio Marchi". Universidad Nacional de San Luis. Facultad de Ciencias Físico, Matemáticas y Naturales. Instituto de Matemática Aplicada de San Luis "Prof. Ezio Marchi"; ArgentinaFil: Pepa Risma, Eliana Beatriz. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - San Luis. Instituto de Matemática Aplicada de San Luis "Prof. Ezio Marchi". Universidad Nacional de San Luis. Facultad de Ciencias Físico, Matemáticas y Naturales. Instituto de Matemática Aplicada de San Luis "Prof. Ezio Marchi"; ArgentinaFil: Quintas, Luis Guillermo. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - San Luis. Instituto de Matemática Aplicada de San Luis "Prof. Ezio Marchi". Universidad Nacional de San Luis. Facultad de Ciencias Físico, Matemáticas y Naturales. Instituto de Matemática Aplicada de San Luis "Prof. Ezio Marchi"; Argentin

Sovereign debt markets in turbulent times : creditor discrimination and crowding-out effects

En 2007, los países de la periferia europea disfrutaban de un crecimiento estable, y défi cits fi scales y primas de riesgo reducidos. Sin embargo, la crisis fi nanciera global empujó a estas mismas economías a profundas recesiones, aumentando sus défi cits públicos y volúmenes de deuda pública de tal forma que en 2010 estas economías comenzaron a sufrir episodios de crisis de deuda soberana muy severos. Al tiempo que las primas de riesgo aumentaban, también lo hizo la proporción de la deuda pública en manos de inversores residentes. De esta forma, el crédito disponible fue reasignado del sector privado al sector público, lo que vino acompañado de una caída en la inversión privada y un agravamiento de la recesión económica. En este trabajo proponemos un modelo de riesgo soberano, en el que la deuda pública se negocia en mercados secundarios, y que es capaz de racionalizar todos estos hechos estilizados. El modelo tiene dos ingredientes principales: discriminación entre acreedores y «efecto expulsión» (crowding-out effect, en inglés)..In 2007, countries in the euro periphery were enjoying stable growth, low defi cits and low spreads. Then the fi nancial crisis erupted and pushed them into deep recession, raising their defi cits and debt levels. By 2010, they were facing severe debt problems. Spreads increased and, surprisingly, so did the share of the debt held by domestic creditors. Credit was reallocated from the private to the public sector, reducing investment and deepening the recession even further. To account for these facts, we propose a simple model of sovereign risk in which debt can be traded in secondary markets. The model has two key ingredients: creditor discrimination and crowding-out effects.

Fixed and variable-rate mortgages, business cycles and monetary policy

The aim of this paper is twofold. First, I study how the proportion of fixed and variable-rate mortgages in an economy can affect the way shocks are propagated. Second, I analyze optimal implementable simple monetary policy rules and the welfare implications of this proportion. I develop and solve a New Keynesian dynamic stochastic general equilibrium model that features a housing market and a group of constrained individuals who need housing collateral to obtain loans. A given proportion of constrained households borrows at a variable rate, while the rest borrows at a fixed rate. The model predicts that in an economy with mostly variable-rate mortgages, an exogenous interest rate shock has larger effects on borrowers than in a fixed-rate economy. Aggregate effects are also larger for the variable-rate economy. For plausible parametrizations, differences are muted by wealth effects on labor supply and by the presence of savers. More persistent shocks, such as inflation target and technology shocks, cause larger aggregate differences. From a normative perspective I find that, in the presence of collateral constraints, the optimal Taylor rule is less aggressive against inflation than in the standard sticky-price model. Furthermore, for given monetary policy, a high proportion of fixed-rate mortgages is welfare enhancin

Docking and Molecular Dynamics Simulation of Carbonic Anhydrase II Inhibitors from Phenolic and Flavonoid Group

AbstractCarbonic Anhydrase II (CAII) has role in pH regulation, water transport and hydration of CO2. In addition, CAII is also related to many diseases, including glaucoma, tumours, epilepsy, diabetes and osteopetrosis. Various inhibitors for CAII have been developed and commercialized as a drug. Recent development of CAII inhibitors drive the invention of novel inhibitors based on natural product structures and their derivatives. This research aim to screen potential inhibitors from phenolic and flavonoid groups by in silico approach. The screening of natural products compounds was performed by a molecular docking method. The best ligand derived from the molecular docking selection was further refined with a molecular dynamics simulation and the resulted structure was used to evaluate the stability of CAII-ligand complex. By using the upper mentioned procedures, fisetin (Fic) and 6-(3,4-dihydroxyphenyl)-5,6,7,8-tetrahydronaphthalene-1,3,7-triol (Afr3) were strongly suggested to be a potent inhibitor for CAII