Credit flows to businesses during the Great Recession

During the last recession, credit flows suffered their worst slowdown since World War II. A look at selected credit market measures gives some insight into why the slowdown was so severe. The measures also show that in spite of the size of the shock, credit flows actually recovered extremely quickly—a testament to the depth of the credit markets, and possibly the interventions that were taken to support them.Flow of funds ; Economic conditions - United States ; Recessions

The Implications of Capital-Skill Complementarity in Economies with Large Informal Sectors

In most developing nations, formal workers tend to be more experienced and educated than informal workers, a fact often interpreted as evidence that low-skill workers face barriers to entry into the formal sector. Yet, there exists little direct evidence that labor markets are segmented in those nations. This paper describes a model where significant differences arise between workers across sectors even though labor markets are perfectly competitive. In equilibrium, the informal sector emphasizes low-skill work because informal managers have access to less outside financing, and choose to substitute low-skill labor for physical capital. We argue that subsidiary implications of the model for the organization of production are borne out by the existing evidence on informal economic activities in developing countries.

Finance matters

We present a model in which the importance of financial intermediation for development can be measured. We generate financial differences by varying the degree to which contracts can be enforced. Economies where enforcement is poor employ less capital and less efficient technologies. Yet, accounting for all the observed dispersion output requires a higher capital share or a lower elasticity of substitution between capital and labor than usually assumed. We find that the effects of changes in those technological parameters on output are markedly larger when financial frictions are present. Finance, that is, matters.Financial markets ; Productivity

The spatial structure of the financial development in Brazil

This paper explores the financial development in Brazil. It focuses on the impacts of the development level of a municipality’s financial system over its neighborhood, under the light of the Central Place Theory. Using a GMM estimator for a spatial panel model with an endogenous spatial lag and spatial moving average errors we investigate the spatial structure of the financial system in Brazil. The results point to a negative spatial association between the Brazilian municipalities’ financial system, in the way that a municipality with more developed financial system tends to be surrounded by municipalities with less developed financial systems.financial development, spatial structure, bank strategy, Brazil

A multi-sectoral approach to the U.S. Great Depression

We document sectoral differences in changes in output, hours worked, prices, and nominal wages in the United States during the Great Depression. We explore whether contractionary monetary shocks combined with different degrees of nominal wage frictions across sectors are consistent with both sectoral as well as aggregate facts. To do so, we construct a two-sector model where goods from each sector are used as intermediates to produce the sectoral goods that in turn produce final output. One sector is assumed to have flexible nominal wages, while nominal wages in the other sector are set using Taylor contracts. We calibrate the model to the U.S. economy in 1929, and then feed in monetary shocks estimated from the data. We find that while the model can qualitatively replicate the key sectoral facts, it can account for less than a third of the decline in aggregate output. This decline in output is roughly half as large as the one implied by a one-sector model. Alternatively, if wages are set using Calvo-type contracts, the decline in output is even smaller.Depressions ; Wages ; Prices

Determinants of banking profitability: explaining the Nordic-Southern European divide

This paper explains the profitability gap between the better performing Nordic banks and their Southern European counterparts. The research, focused on the 2010-2017 period, ascertains that there are substantial differences in corporate governance mechanisms between the groups’ largest banks, but these either are non-significant or show mixed results when correlated with profitability. Additionally, the gap is partially explained by the higher Southern effective tax rates coupled with an increased focus on retail banking activity in the Nordics, but liquidity, proxied by total deposits over total assets, was found to positively influence profitability and to be higher in the South

Implementation of an information system for resource and process management in an industrial facility

The increasing investment in information systems for industrial production control, combined with the advent of the fourth industrial revolution, allows to improve decision making, providing a more efficient manufacturing process. However, for small and medium-sized enterprises in this sector, the complexity of existing solutions and the need to perform, in a preliminary phase, a substantial investment makes it difficult to implement these types of systems, accentuating, in terms of competitiveness, the gap between small and large companies. The proposed system, developed within the scope of this dissertation, aims to assist this types of companies, more specifically, a local business entity in the branch of the aeronautical industry, since it allows to optimize the monitoring of industrial resources and processes at the shop floor level. To support the design and implementation of the solution, an analysis on the operation of industrial facilities and techniques adopted in the field of industrial information systems is carried out. The entire development phase encompasses software engineering processes and culminates with the delivery of a prototype of a Spring web application, deployed on the partner entity’s server and positively evaluated in the execution of development and functional tests; Sumário: Implementação de sistema de informação para gestão de recursos e processos industriais O investimento crescente em sistemas de informação para controlo de produção industrial, aliado ao advento de uma quarta revolução industrial, permite aprimorar a tomada de decisões, proporcionando um processo de manufatura mais eficiente. No entanto, para pequenas e médias empresas deste sector, a complexidade das soluções existentes e a necessidade de efetuar um investimento preliminar substancial dificulta a implementação deste tipo de sistemas, acentuando, a discrepância competitiva entre pequenas e grandes empresas. O sistema proposto, desenvolvido no âmbito do trabalho da presente dissertação, visa auxiliar esta tipologia de empresas, mais concretamente, uma entidade empresarial local no ramo da indústria aeronáutica, na medida em que permite otimizar a monitorização de recursos e processos industriais ao nível do chão de fábrica. Para suporte da conceção e implementação da solução realiza-se uma análise do funcionamento de instalações industriais e de técnicas adotadas no domínio de sistemas de informação para aplicação industrial. A totalidade da fase de desenvolvimento engloba processos de engenharia de software e culmina com a entrega de um protótipo de uma aplicação web Spring, implantada no servidor da entidade parceira e, positivamente avaliada na execução de testes de desenvolvimento e funcionais