Financial Frictions, Investment and Tobin's q

We develop a model of investment with financial constraints and use it to investigate the relation between investment and Tobin’s q. A firm is financed partly by insiders, who control its assets, and partly by outside investors. When insiders’ wealth is scarce, they earn a rate of return higher than the market rate of return, i.e. insiders earn a quasi-rent on invested capital. This rent is priced into the value of the firm, so Tobin’s q is driven by two forces: changes in the value of invested capital, and changes in the value of the insiders’ future rents. The second effect weakens the correlation between q and investment. We calibrate the model and show that, thanks to this effect, the model can generate realistic correlations between investment, q and cash flowFinancial constraints, Tobin's q, limited enforcement, investment, optimal capital structure

Financial Frictions, Investment and Tobin's q

We develop a model of investment with financial constraints and use it to investigate the relation between investment and Tobin's q. A firm is financed partly by insiders, who control its assets, and partly by outside investors. When their wealth is scarce, insiders earn a rate of return higher than the market rate of return, i.e., they receive a quasi-rent on invested capital. This rent is priced into the value of the firm, so Tobin's q is driven by two forces: changes in the value of invested capital, and changes in the value of the insiders' future rents per unit of capital. This weakens the correlation between q and investment, relative to the frictionless benchmark. We present a calibrated version of the model, which, due to this effect, generates realistic correlations between investment, q, and cash flow.

Involuntary unemployment and the business cycle

We propose a monetary model in which the unemployed satisfy the official US definition of unemployment: they are people without jobs who are (i) currently making concrete efforts to find work and (ii) willing and able to work. In addition, our model has the property that people searching for jobs are better off if they find a job than if they do not (i.e., unemployment is ‘involuntary’). We integrate our model of involuntary unemployment into the simple New Keynesian framework with no capital and use the resulting model to discuss the concept of the ‘non-accelerating inflation rate of unemployment’. We then integrate the model into a medium sized DSGE model with capital and show that the resulting model does as well as existing models at accounting for the response of standard macroeconomic variables to monetary policy shocks and two technology shocks. In addition, the model does well at accounting for the response of the labor force and unemployment rate to the three shocks. JEL Classification: E2, E3, E5, J2, J6Bayesian estimation, business cycles, DSGE, monetary policy, Unemployment

Man, Death & Ethics

Aim of work: the research of the determination and destination of human for nature and cognition. The basis of the research is Karl Raimund Popper's article «Evolutionary epistemology». A critical analysis of Popper's proposed theses and the scheme of theory evolution is conducted. The signifi-cance of the occurrence of the system of tenses of the language as an implication of the descriptive function of the language is noted. The issue with which the cycle of evolution of life and cognition begins is revealed. The language is included in the scheme proposed by Popper. As a result of the reasoning the pivotal feature of the human essence is identified: awareness the problem of death. This awareness makes it possible to relate oneself to the problem, which is the reason for the presence of the most aggregate evaluation categories: «good» and «evil». This is how a person may determine the purpose of evolution: overcoming the problem. In contrast to nature, the evolution of which is aimed at avoiding the problem. Having reached the goal, a person will go beyond himself as a phe-nomenon defined by the awareness of the problem. In this case, self-transcendence is a person's tran-sition to a new quality. The role of philosophy in the procedures of self-transcendence occurring in contemporary society is discussed

Geografia klasyczna w czasach postprawdy. Artykuł polemiczny

The article answers to the polemic paper ‘About the importance of geographical naming’ by Witold Wilczyński. The discussion refers to some problems of classical and contemporary humanistic geography, i.e. the relations between civilisations, geographical regions and geographical names. The issues raised in this article are discussed in terms of the concept of post-truth. W. Wilczyński claims that during the period of classical geography and according to the clas-sical geographers, ‘Europe was not a „continent”, but a “homogeneous region, populated by Western (Latin) civilisation’”. These ideological abuses are based only on his own imagination, without refer-ring to any historical sources, as well as without indicating a map from the period of classical geogra-phy. Those ideological theses ignore the works of many ancient cartographers and historians. Their maps, texts and other documents confirmed that Sarmatia always included lands from contemporary Poland and its neighbouring countries of Eastern Europe. Both classical and contemporary scientific maps show that Europe is a western part of Eurasia that covers lands and cultures of Orthodox, Latin, and other civilisations. Some of the most early populated and oldest regions of Europe, e.g. Trace, Macedonia, Dacia, Thessaly, Attica, Beotia, Arcadia, Epirus, etc., represent other civilisations and cul-tural spheres. Moreover, W. Wilczyński states that Sarmatia is a 'historical region located on the east from Poland’. According to his suggestions, the Eastern Slavs (Byelorussians, Ukrainians and Russians) are not Europeans, but they are 'ancestors' of old Sarmatia and Sarmatians. The eastern border of Poland in various periods was not a boundary which divided Europe from Sarmatia. The largest part of Sar-matia (Sarmatia Europeana) was regarded as a part of Europe. Over the last centuries, the Polish social thought, e.g. historiosophy, antropology and literature, regards sarmatism as a genuine trend of the national history and culture. The present author shows a series of arguments against imaginations of Europe and Sarmatia presented by W. Wilczyński, which have nothing to do with the achievements of both classical and contemporary geography. Another line of critique is drown by the problem of the lack of humanistic values in the way in which W. Wilczyński treats different civilisations and cultures

Involuntary unemployment and the business cycle

Can a model with limited labor market insurance explain standard macro and labor market data jointly? We construct a monetary model in which: i) the unemployed are worse off than the employed, i.e. unemployment is involuntary and ii) the labor force participation rate varies with the business cycle. To illustrate key features of our model, we start with the simplest possible framework. We then integrate the model into a medium-sized DSGE model and show that the resulting model does as well as existing models at accounting for the response of standard macroeconomic variables to monetary policy shocks and two technology shocks. In addition, the model does well at accounting for the response of the labor force and unemployment rate to these three shocks

Der innere Konflikt Tadschikistans als regionales Sicherheitsproblem

'Der vorliegende Bericht untersucht den tadschikischen Bürgerkrieg vor dem Hintergrund der unterschiedlichen Interessen in der Region Mittelasien. Aufgrund der Besonderheiten der tadschikischen sozialen und ökonomischen Entwicklung und gefördert durch das dominierende Ideensystem des Islam in seiner spezifisch mittelasiatischen Ausprägung wurde Tadschikistan zum schwächsten Glied der sich in der Region herausbildenden neuen Staatlichkeiten. Die soziale Explosion des Jahres 1992 nahm die Form eines Bürgerkriegs an, in den vielen Staaten dieses Raumes verwickelt wurden. Im folgenden soll untersucht werden, welche Faktoren den Konflikt innerhalb Tadschikistans nähren und wie dieser Konflikt auf die Region ausstrahlt.' (Autorenreferat)'This report examines the civil war in Tajikistan in terms of the differing interests of the states of the Central Asian region. The peculiarities of socio-economic developments in Tajikistan and the domination of Isalmic ideology of a specifically Central Asian kind have made it the weakest of a civil war in which many states in the area became involved. The report proposes to examine which factors are fuelling the conflict within Tajikistan and how this conflict has radiated into the surrounding region.' (author's abstract

Die Viehwirtschaft im Gebiet Kaliningrad: zum Transformationsprozeß im ländlichen Raum

The livestock economy played an important role in the agriculture of the area around Kaliningrad until the end of the eighties. Particularly the milk economy, but also the breeding of beef and pork were significant sources of income for the large agricultural firms. The changes in the economic situation of the agricultural firms went hand in hand with the changes in the economic and political situation. The privatisation of the old combines primarily lead to them taking on a new legal form. All other changes and transformations took longer to assert themselves. New, private agricultural firms were also founded, however, these are equipped with a small amount of land and, above all, very little capital resources. This shortage of finances which affects all companies, regardless of their legal forms, has considerable effects on the lives tock industry. The livestock figures which, during the period of the socialist planned economy, were distributed relatively evenly across the entire area, are dropping and are concentrated on certain favourable areas. The newly created private firms generally have low numbers of cattle, due to the fact that they are unable to invest in barns, breeding animals and high performance fodder. Should the urgently required measures for the support of the animal production fail to be im plemented by the regional administration over a long period of time, then the fear would be justified that the agriculture will suffer a setback which it will hardly be able to compensate. The continued exodus of young and well educated specialists from the agricultural sector will continue further and the percentage of old people in the village population will increase. To a growing extent, a subsistence economy is being operated which will further hinder the competitiveness of the agriculture in the region around Kaliningrad in comparison to, e.g. the neighbouring states of Poland and Lithuania