Econometrics of network models

View of road and industry from Cumbala Hill.GrayscaleSorensen Safety Negatives, Binder: Asia

The Informal Sector

This paper investigates the determinants of informal economic activity. We present two equilibrium models of informality and test their implications using a survey of 48,000+ small firms in Brazil. We define informality as tax avoidance; firms in the informal sector avoid tax payments but suffer other limitations. In the first model there is a single industry and informal firms face a higher cost of capital and a limitation on size. As a result informal firms are smaller and have a lower capital labor ratio. When education is an imperfect proxy for ability, we show that the interaction of the manager's education and formality has a positive correlation with firm size. These implications are supported by our empirical analysis. The second model highlights the role of value added taxes in transmitting informality. It predicts that the informality of a firm is correlated to the informality of firms from which it buys or sells. The model implies that higher tolerance for informal firms in one production stage increases tax avoidance in downstream and upstream sectors. Empirical analysis shows that, in fact, various measures of formality of suppliers and purchasers (and its enforcement) are correlated with the formality of a firm. Even more interestingly, when we look at sectors where Brazilian firms are not subject to the credit system of value added tax, this chain effect vanishes.

Identifying network ties from panel data: theory and an application to tax competition

Social interactions determine many economic behaviors, but information on social ties does not exist in most publicly available and widely used datasets. We present results on the identi…cation of social networks from observational panel data that contains no information on social ties between agents. In the context of a canonical social interactions model, we provide su¢cient conditions under which the social interactions matrix, endogenous and exogenous social e¤ect parameters are all globally identi…ed. While this result is relevant across di¤erent estimation strategies, we then describe how high-dimensional estimation techniques can be used to estimate the interactions model based on the Adaptive Elastic Net GMM method. We employ the method to study tax competition across US states. We …nd the identi…ed social interactions matrix implies tax competition di¤ers markedly from the common assumption of competition between geographically neighboring states, providing further insights for the long-standing debate on the relative roles of factor mobility and yardstick competition in driving tax setting behavior across states. Most broadly, our identi…cation and application show the analysis of social interactions can be extended to economic realms where no network data exists. JEL Codes: C31, D85, H71

Crimes contra o sistema financeiro nacional e o mercado de capitais: comentários à lei 7.492/86 e aos artigos incluídos pela lei 10.303/01 à lei 6.385/76: doutrina e jurisprudência

Divulgação dos SUMÁRIOS das obras recentemente incorporadas ao acervo da Biblioteca Ministro Oscar Saraiva do STJ. Em respeito à lei de Direitos Autorais, não disponibilizamos a obra na íntegra. 343.35(81) P324c STJ00080014 4.ed. STJ00085449 5.ed. / STJ00093816 6.ed. (2012

Inference in a synchronization game with social interactions

This paper studies inference in a continuous time game where an agent's decision to quit an activity depends on the participation of other players. In equilibrium, similar actions can be explained not only by direct influences but also by correlated factors. Our model can be seen as a simultaneous duration model with multiple decision makers and interdependent durations. We study the problem of determining the existence and uniqueness of equilibrium stopping strategies in this setting. This paper provides results and conditions for the detection of these endogenous effects. First, we show that the presence of such effects is a necessary and sufficient condition for simultaneous exits. This allows us to set up a nonparametric test for the presence of such influences, which is robust to multiple equilibria. Second, we provide conditions under which parameters in the game are identified. Finally, we apply the model to data on desertion in the Union Army during the American Civil War, and find evidence of endogenous influences.Duration Optimal stopping Game estimation Coordination

A note on the optimum composition of public debt: reflections on the Brazilian case

Esta nota visa resumir, de forma não-técnica, as considerações levantadas pela literatura econômica acerca da composição ótima da dívida pública, concentrando-se em aspectos mais aplicados da teoria para a política da escolha ótima da composição da dívida. Segundo a literatura, o gestor da dívida pública deve ter em mente objetivos como a minimização do risco orçamentário (ligada ao objetivo de suavização de impostos), a manutenção de credibilidade, sinalização, a minimização do risco de rolagem, a provisão de liquidez ao mercado e a minimização de riscos ligados à indexação da economia. Faz-se uma breve análise para o caso brasileiro, onde se indicam as prescrições de política recomendadas pela literatura aqui resumida.This note surveys, in a non-technical manner, the considerations brought up by the economic literature concerning optimal public debt composition and focuses in applied issues of the theory. According to the literature, the public debt manager must bear in mind objectives such as budget risk minimization (linked to tax smoothing objectives), the maintenance of credibility, signaling, the minimization of roll-over risk, the provision of liquidity to the market and the minimization of risks linked to indexation in the economy. A brief analysis is pursued for the Brazilian case, indicating the policy prescriptions recommended by the literature

Undocumented Migration with Endogenous Coyote Prices

This research investigates the location decision of undocumented migrants from Mexico. It models different fictitious policies aimed at affecting the costs and benefits of migration, assessing how each affects the decisions of potential migrants as to whether and where to migrate. Particularly, it focuses on the formation of prices for coyotes, or the individuals hired to smuggle undocumented migrants across the border