Functional income distribution in a small European country: The role of financialisation and other determinants

JEL CLASSIFICATION C22, D33, E25 and E44This paper makes an empirical analysis of the relationship between financialisation and the evolution of labour income share in Portugal from 1978 to 2012. We estimate an equation for the labour income share that includes standard variables (technological progress, globalisation, education and business cycle) and variables to capture the effect of financialisation. We formulate the hypothesis that the financialisation process may lead to a rise in the inequality of functional income distribution through three channels: the change in the sectorial composition of the economy (due to the increase in the weight of the financial activity and the decrease in government activity), the diffusion of shareholder value governance practices and the weakening of trade unions. Our results show that there is a long-term relationship between all variables and that the financialisation process indirectly affects the labour income share through its impact on government activity and trade union density. The paper also finds evidence supporting the traditional explanations for functional income distribution, namely globalisation, education and business cycle.FC

Financialisation and inequality in the semi-periphery: Evidence from Portugal

Despite being a disputed concept in the literature, financialisation broadly refers to the growing weight of finance in modern economies. This chapter looks at how the evolution of inequality in Portugal is related to financialisation. It analyses functional income distribution, looking at the wage share and rentier income. The chapter focuses on personal income distribution and poverty. It approaches briefly other effects of financialisation and other factors explaining functional and personal income inequality and poverty. Wage inequality is relevant to analyse the distribution of income before state intervention with taxes and social policies. When analysing income inequality, the focus is on relative differences between households, without concern for poverty, that is, for the incapacity of some households for having a minimum income that ensures an ordinary living pattern. In conclusion, the Portuguese experience shows that the financialisation process has some direct and indirect effects on income inequality.info:eu-repo/semantics/acceptedVersio

Financialisation and the Portuguese real investment: a supportive or a disruptive relationship?

JEL CLASSIFICATION C22, D20, E22 and E44This paper aims to address empirically the relationship between financialisation and real investment by Portuguese non-financial corporations from 1977 to 2013. An equation to describe aggregate investment is estimated, which includes the traditional or standard variables (profitability, debt, cost of capital, savings rate and business cycle) and two further measures to capture the phenomenon of financialisation (financial receipts and financial payments). Financialisation, on the one hand, leads to a rise of financial investments by non-financial corporations, which deviates funds from real investment (“crowding out” effect). On the other hand, the pressure to intensify financial payments restrains the available funds for real investments. The paper concludes that there is a long-term relationship between all variables, and also finds evidence that the process of financialisation has hampered real investment, mainly through financial payments.FC

A contribution to the study of the German treasury bills market

We study the yields in the German treasury bills market. We take a detailed look at the yield banks require to buy treasury bills in the primary market, and we also examine the yield households and nonbank firms demand to buy these bills in the secondary market. We use data from real world tenders to show that the bids set by banks are in accordance with the predictions of our theoretical framework. In particular, we show that current monetary policy and the market's expectations regarding the future path of monetary policy can be used to define an interval in which the bids from banks lie. Our theoretical predictions for the secondary market also match the data.info:eu-repo/semantics/publishedVersio

Exploring bioactive compounds present in international patents targeting brain functions

The interest in nervous system disorders is an evident fact with more than 60 000 articles published on PUBMED only in the year of 2016. Actually, in our daily life we are constantly exposed to different environmental factors known to be prejudicial to the health of our nervous system. In this context, a holistic view of food consumption is gaining increasing importance with the perspective of using functional components of specific foods to improve our health or diminish the risk of disease. The aim of our work is to evaluate the use of nutritional food components of traditional Portuguese diet in international patents of dietary supplements or the so called functional foods described to improve brain functions. The WIPO platform was used to collect data of these patents, and from the last 3 years we identified 35 patents using more than 150 different components. We selected the most frequent components and the indications described in the patents, and then examined the possible bioactive compounds for each component. The prevalent functional components described were walnuts, peanuts, wolfberries, mulberries, dates, jujube, creatine, carnitine, ginseng and soybean. Other components rich in omega-3, such as docosahexaenoic acid and superba oil, were also identified. These patents were described to target brain functions such as intelligence, memory, concentration and in some cases compounds are indicated to traumatic brain injury. Regarding local sources, we found several nutritional components of traditional Portuguese diet that have similar compounds of those found in the international components described in patents. We believe this information will help in the valorisation of national products.info:eu-repo/semantics/publishedVersio

Determinant factors of bank customers' demand for liquidity

In contexts of economic instability investors show an increase in aversion to risk and prefer high liquidity and low-risk financial products. In this paper, we study the reasons behind bank customers holding wealth in the form of immediate liquidity. Using micro data on clients’ portfolios of a Portuguese bank, we ask whether there is a relationship between the bank’s capital ratio and the proportion of wealth that clients allocate to demand deposits, which is a relatively unexplored topic in the literature. Special attention is also paid to the impact of investors' financial knowledge by looking at professional group and age. Results indicate that when banks’ capital ratio decreases, savers put a larger fraction of their investment into demand deposits, especially savers with greater risk aversion and knowledge. Finally, we find evidence of an “age effect” and also that investors belonging to professional groups with more skills follow more sophisticated investment strategies.FC

The eurozone target-system from the perspective of Portugal

Payment systems make a significant contribution to the flow of transactions and financial stability. In this paper, we start by applying the principles of the gravity model to explain the TARGET flows of banking transactions between Portugal and other eurozone countries. The main explanatory variables tested are a composite indicator of economic and financial activities, distance, membership of the Eurozone (EZ), and country risk measured by treasury bond yields. The results indicate that Portugal has a high level of integration in the European banking market as distance is not statistically significant, and that the membership of the EZ facilitates the financing of the economy. The economic size of the partner country becomes non-significant after controlling for country fixed effects. The increase in the Portuguese country risk during the European sovereign debt crisis led to a marked decline in external financing, indicating that this is an important channel of transmission of crises

Near-Earth asteroid (3200) Phaethon. Characterization of its orbit, spin state, and thermophysical parameters

The near-Earth asteroid (3200) Phaethon is an intriguing object: its perihelion is at only 0.14 au and is associated with the Geminid meteor stream. We aim to use all available disk-integrated optical data to derive a reliable convex shape model of Phaethon. By interpreting the available space- and ground-based thermal infrared data and Spitzer spectra using a thermophysical model, we also aim to further constrain its size, thermal inertia, and visible geometric albedo. We applied the convex inversion method to the new optical data obtained by six instruments and to previous observations. The convex shape model was then used as input for the thermophysical modeling. We also studied the long-term stability of Phaethon's orbit and spin axis with a numerical orbital and rotation-state integrator. We present a new convex shape model and rotational state of Phaethon: a sidereal rotation period of 3.603958(2) h and ecliptic coordinates of the preferred pole orientation of (319$^{\circ}$, $-$39$^{\circ}$) with a 5$^{\circ}$ uncertainty. Moreover, we derive its size ($D$=5.1$\pm$0.2 km), thermal inertia ($\Gamma$=600$\pm$200 J m$^{-2}$ s$^{-1/2}$ K$^{-1}$), geometric visible albedo ($p_{\mathrm{V}}$=0.122$\pm$0.008), and estimate the macroscopic surface roughness. We also find that the Sun illumination at the perihelion passage during the past several thousand years is not connected to a specific area on the surface, which implies non-preferential heating.Comment: Astronomy and Astrophysics. In pres