Multipliers and Capital: What is the role of Imperfect Competition?

In static general equilibrium models considering imperfectly competitive goods markets, the effectiveness of fiscal policy to stir output is shown to be greater than in the walrasian case. However, labour is the only input in these models. Here, I develop a simple intertemporal model allowing us to study the steady-state role of optimal capital stock in the fiscal policy transmission mechanism. I demonstrate the results depend strongly on the set of parameter values chosen and on the output definition. Using plausible calibrations the multiplier is larger in the walrasian case for small initial government purchases, and smaller for intermediate values.Multiplier, Fiscal Policy, Imperfect Competition

Share the Fame or Share the Blame? The Reputational Implications of Partnerships

We use an adverse selection model to study the dynamics of ?rms?reputations when ?rms implement joint projects. We show that in contrast with projects implemented by a single ?rm, in the case of joint projects a ?rm?s reputation does not necessarily increase following a success and does not necessarily decrease following a failure. We also study how reputation considerations a¤ect ?rms? decisions to participate in joint projects. We show that a high quality partner may not be preferable to a low quality partner, and that a high reputation partner is not necessarily preferable to a low reputation partner. JEL codes: L14, L15, L24, D82, D85

Business Cycles with Endogenous Mark-ups

Endogenous mark-ups have been a matter of interest in macroeconomics, especially from the middle 1990’s onwards. However, the complexity of this class of models, does not allow general ualitative conclusions in most cases, and there is plenty of room for investigation, especially in the reasons driving the emergence of multiple equilibria and non-saddle-point dynamics. In this article we extend a simple dynamic general equilibrium model to include the possibility of strategic interaction between producers in each industry, and entry affects the level of macroeconomic efficiency through an endogenous mark-up. We demonstrate multiple equilibria is a likely outcome even in an exogenous labour-supply framework. A pair of equilibria exists (a stable and an unstable one) and they are connected through a heteroclinic orbit. When we allow labour supply to vary, a third equilibrium may emerge if the government is present in the economy, and local indeterminacy may existEndogenous mark-ups, Multiple equilibria, Local dynamics

A Simple Business-Cycle Model with Schumpeterian Features

We develop a dynamic general equilibrium model of imperfect competition where a sunk cost of creating a new product regulates the type of entry that dominates in the economy: new products or more competition in existing industries. Considering the process of product innovation is irreversible, introduces hysteresis in the business cycle. Expansionary shocks may lead the economy to a new ‘prosperity plateau,’ but contractionary shocks only affect the market power of mature industriesEntry, Hysteresis, Mark-up

A Simple Business-Cycle Model with Schumpeterian Features

We develop a dynamic general equilibrium model of imperfect competition where a sunk cost of creating a new product regulates the type of entry that dominates in the economy: new products or more competition in existing industries. Considering the process of product innovation is irreversible, introduces hysteresis in the business cycle. Expansionary shocks may lead the economy to a new 'prosperity plateau,' but contractionary shocks only affect the market power of mature industries.Entry; hysteresis, mark-up

Anomaly-free U(1) gauge symmetries in neutrino seesaw flavor models

Adding right-handed neutrino singlets and/or fermion triplets to the particle content of the Standard Model allows for the implementation of the seesaw mechanism to give mass to neutrinos and, simultaneously, for the construction of anomaly-free gauge group extensions of the theory. We consider Abelian extensions based on an extra U(1)_X gauge symmetry, where X is an arbitrary linear combination of the baryon number B and the individual lepton numbers L_{e,mu,tau}. By requiring cancellation of gauge anomalies, we perform a detailed analysis in order to identify the charge assignments under the new gauge symmetry that lead to neutrino phenomenology compatible with current experiments. In particular, we study how the new symmetry can constrain the flavor structure of the Majorana neutrino mass matrix, leading to two-zero textures with a minimal extra fermion and scalar content. The possibility of distinguishing different gauge symmetries and seesaw realizations at colliders is also briefly discussed.Comment: 12 pages, 2 figures, 7 tables; comments and references added, a new subsection with nonstandard interactions of neutrinos included; final version to appear in Phys. Rev.

A Generalized Approach to Complex Networks

This work describes how the formalization of complex network concepts in terms of discrete mathematics, especially mathematical morphology, allows a series of generalizations and important results ranging from new measurements of the network topology to new network growth models. First, the concepts of node degree and clustering coefficient are extended in order to characterize not only specific nodes, but any generic subnetwork. Second, the consideration of distance transform and rings are used to further extend those concepts in order to obtain a signature, instead of a single scalar measurement, ranging from the single node to whole graph scales. The enhanced discriminative potential of such extended measurements is illustrated with respect to the identification of correspondence between nodes in two complex networks, namely a protein-protein interaction network and a perturbed version of it. The use of other measurements derived from mathematical morphology are also suggested as a means to characterize complex networks connectivity in a more comprehensive fashion.Comment: 10 pages, 2 figur

Afinity, Animosity and Organizational Design

The behavior of the members of an organization is determined, not only by the objective situation facing them, but also by their attitudes. Thus, the objective of aligning collective goals and individual behavior translates into a problem of alignment of attitudes. An important dimension of the problem of organizational design is, therefore, to choose the organization that best contributes to the alignment of attitudes. This paper shows that the existence of animosity, as opposed to afinity, affects the optimal organizational design.

Adverse Selection and Risk Aversion in Capital Markets

We generalize the Boadway and Keen (2006) model of adverse selection in a capital market to allow for risk aversion on the part of entrepreneurs. We show that the Boadway and Keen conclusion-that adverse selection leads to excessive investment-does not necessarily hold when entrepreneurs are risk averse. We use their framework, with the additional assumption of risk aversion, to analyze the effect of policies that would reduce entrepreneurs' reliance on debt or equity financing by outside investors. We show that such policies, by exposing entrepreneurs to more down-side risk, may reduce the level of investment in risky projects, increase inequality and potentially reduce social welfare.adverse selection; capital markets; inefficiency; risk and entrepreneurship