A comment on efficiency gains and myopic antitrust authority in a dynamic merger game

This paper relaxes the Motta & Vasconcelos’ (2005) short-term assumption that firms’ capital is fixed. We demonstrate that, contrary to the conclusion of that article, in the best interest of consumers, even when firms have large economies of scale, long-term forward-looking Antitrust Authorities must block firms’ merger plans whenever profits of firms are positive.Antitrust policy, Economies of scale

Integrating fire risk into the management of forests

In a standard cash-flow data-sheet analysis, the quantification of the impact of exogenous variables and management decisions on the investment’s Net Present Value is limited to only a few scenarios. This perspective is insufficient for an efficient risk management in complex business environments. In this work, I present a dynamic programming model that takes into consideration fire risk. Having applied the model to forest management, I conclude that when fire risk increases, it is optimal for the manager to increase the area used per tree and the cut-off weight of stems. Rather than increasing the business Expected Net Present Value (that, with real interest rate of 3%/year, is between 1.5€/m2 and 2.2€/m2), the optimal strategy decreases the business risk. Additionally, I conclude from the model that there is no private incentive to carry out fire risk prevention.Risk Management, Project Evaluation, Expected Net Present Val

The Impact of Monetary Shocks on Product and Wages: A neoclassical aggregated dynamic model

In this work, I present an extension of Kydland and Prescott’s (K&P) model. The extension is to consider that prices and wages are nominal and that economic agents anticipate the probability of occurrence of exogenous shocks. Once calibrated the model, I compute the nominal and real dynamic response to a monetary shock. The results observed are in agreement with the economic stylised facts: there are permanent nominal effects but only short-term real effects. An interesting issue to pursue in future research would be to quantify the influence of money in the business cycle and to compare the results obtained with those in the real model of K&P.Business Cycle, Economic nominal variable, Monetary shocks, Microfoundation.

A new economic journals’ ranking that takes into account the number of pages and co-authors

In this article, I examine whether the academics reward policy must correlate positively with the number of published articles per co-author, the number of pages and journal reputation. This is accomplished by estimating a non-linear model with a panel data from 168 economics journals covered in the ISI-Web of Knowledge database (58825 articles). The data reinforces the conjecture that published article value is slightly increasing with the number of co-authors and is proportional to the number of pages. The data also suggests that there are 4 distinct groups related to journal quality that I name A, B+, B and B–.Co-authorship, Value of articles, Assessment of output

Nuclear high-radioactive residues: a new economic solution based on the emergence of a global competitive market

Nuclear energy is economic and does not emit CO2 but has two central setbacks. First, it has not been yet implemented an efficient method of disposing the spent fuel. Second, the reactors’ complexity is expensive and turns possible the occurrence of accidents. In this paper, first I propose a very simple, economic and safe boiling heavy-water reactor that may constitute a way of mitigating these setbacks. The reactor is a container filled with a hydraulic suspension of fuel that is crossed-over by two fluxes: by one side, the fuel suspension that remains 250 days in the reactor and, by another side, the cooler that remains 50 seconds in the reactor. Second, I discuss that the solution of nuclear high-radioactive residues problem passes by the emergence of a global competitive market.Nuclear reactor; Heavy water; Boiling water; Continuous fuel feeding; IV generation; Nuclear residues pricing and trading

Introduction to the consumer theory

This textbook supports undergraduate microeconomics students. In Chapter 1, it presents the market as three Laws of Nature: i) that supply function is the result from the decision of the sellers, ii) that demand function is the result from the decisions of buyers; iii) that the market balance the decisions of buyers with that of sellers. This chapter motivates chapter 2, which rationalizes the existence of the demand function from the Consumer Theory that assumes that consumers maximize a utility function under the income restriction and market prices.Indifference curve, income restriction, utility maximization

O problema do crescente endividamento de Portugal à luz da New Macroeconomics

Neste texto apresento o modelo base da abordagem teórica denominada por New Macroeconomics aplicando-o à tendência secular, aos ciclos económicos e ao crescente endividamento de Portugal. É demonstrado que i) o endividamento crescente prejudica as exportações e favorece as importações e que, ii) não podendo o aumentar para sempre, a correcção do endividamento será feita pela subida da taxa de juro real e descida do salário nominal. A tentativa (sindical e governamental) de evitar a queda dos salários nominais terá como efeito um aumento ainda maior da taxa de juro real e uma taxa de desemprego muito elevada que levará à deslocação da mão-de-obra para o exterior (emigração). As conclusões do modelo parecem estar de acordo com a evidência empírica.Novos Clássicos, Nova Macroeconomia, Endividamento Público

O Subsídio de Desemprego e a Relação Negativa entre Salário e Risco de Falência: Uma Teoria em Equilíbrio Parcial

No mercado de trabalho, observa-se que os trabalhadores de empresas com elevado risco de falência têm salários mais baixos que a média. Aparentemente, esta observação é contrária ao previsto pela teoria financeira relativamente a agentes racionais e avessos ao risco que prevê que os activos com maior risco apenas são preferidos se a sua rentabilidade também for, em termos esperados, maior. No presente trabalho demonstro num quadro teórico neoclássico (em equilíbrio parcial) que pode ser racional para os trabalhadores que auferem salários mais baixos a preferência por empresas de maior risco de falência.Teoria do consumidor; Risco de falência; Subsídio de desemprego; Optimização inter-temporal

Matemática Financeira com aplicações em Excel e R

The text contains an introductory text to financial mathematics