Disc atmospheres and winds in X-ray binaries

We review the current status of studies of disc atmospheres and winds in low mass X-ray binaries. We discuss the possible wind launching mechanisms and compare the predictions of the models with the existent observations. We conclude that a combination of thermal and radiative pressure (the latter being relevant at high luminosities) can explain the current observations of atmospheres and winds in both neutron star and black hole binaries. Moreover, these winds and atmospheres could contribute significantly to the broad iron emission line observed in these systems.Comment: Accepted for publication in Acta Polytechnica. Invited review talk at the Vulcano Workshop 2012: "Frontier Objects in Astrophysics and Particle Physics

Does the Product Quality Hypothesis Hold True? - Service Quality Differences between Independent and Exclusive Insurance Agents

Insurance products are distributed both by independent and dependent agents, although the use of independent agents is more costly. The product quality hypothesis states that independent agents provide both insurers and customers with higher service quality and therefore, remain on the market. On the contrary, according to the market imperfections hypothesis both intermediary types offer the same quality, and only coexist due to information asymmetries. Having conducted a written survey, we measure service quality differences by multivariate regression analysis. Our analysis shows that the higher level of service quality of independent agents supports the product quality hypothesis. The result is a separating equilibrium on the market.Insurance intermediation, service quality, distribution systems

Happiness, Economic Well-being, Social Capital and the Quality of Institutions

Since Jeremy Bentham, utilitarians have argued that happiness, not just income or wealth, is the maximand of individual and social welfare. By contrast, Rawls and followers argue that to share a common perception of living in a just society is the “ultimate good” and that individuals have a moral ability to evaluate just institutions. In this paper we argue that just institutions, apart from their intrinsic value, also have an instrumental value, both in economic performance and in happiness. Thus happiness -- or subjective well being -- is analyzed as being a function of economic well-being, the quality of public institutions and social ties. Cross section individual data from citizens in OECD countries show that income, education and the perceived quality of institutions have the highest impact on life satisfaction, followed by social capital. Country analysis shows a non linear but positive influence of per capita GDP on life satisfaction, but also that unemployment and inflation reduce average happiness, the former effect being stronger. Finally, better quality public institutions and having more social capital also bring more happiness. We conclude with some policy implications.Happiness; Democracy; Social Capital; Quality of Institutions

Intergovernmental grant rules, the "golden rule" of public finance and local expenditures

The Stability and Growth Pact and the process of fiscal consolidation in several European countries have enhanced the role of fiscal rules at sub-national level. This paper analyzes the combined effect of a rule to allocate capital and current block grants to local governments and the “golden rule” of public finance (surplus of current balance). We argue that the two fiscal rules introduce significant rigidities and distortions in local governments’ expenditures structure since these mimic the structure of revenues. This effect is particularly relevant in municipalities that are more dependent of intergovernmental grants, mainly rural. On the other hand, urban municipalities with greater tax revenues (current revenues) are constrained in their ability to make capital investments because they receive per capita capital grants below what economies of scale would suggest. An empirical analysis of Portuguese local governments shows that it is no longer the median voter, but fiscal rules, that command the broad pattern of expenditure (current versus capital) at a local level. This paper is a contribution to the literature on the perverse effects of fiscal rules.Intergovernmental block grants; Fiscal Rules; Local Government Expenditure; “Golden Rule”