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Abstract:
The derivation of the Balassa-Samuelson effect allows for different empirical specifications that may have important economic implications. Problems related to spurious regression could arise from the mixed order of integration of the series used and from the lack of a long run stable relationship among the variables of the model. This paper addresses these problems by using the bounds testing approach developed by Pesaran, Shin and Smith (1999). Our empirical results do not show supportive evidence for the Balassa-Samuelson effect in the long run. This seems to suggest that PPP holds. However, one of the implications of PPP is that the real exchange rate does not have any real impact on the economy. Further empirical analysis rejects this implication. In fact, the real exchange rate seems to have a long run impact on relative growth rates.

Real Exchange Rate, Output, Causality

Abstract:
The paper discusses how the Peter and Dilbert Principles can occur and what are the consequences for a profit maximizing firm. A competence frontier is constructed as a linear combination of the maximum levels of technical and social skills that are difficult to measure and evaluate. The Peter Principle holds when managers are chosen from workers that are in the competence frontier and the Dilbert Principle when they are below the competence frontier. It is shown that the profitability under the Dilbert Principle is less than under the Peter Principle. The introduction of new technologies is one form to avoid the Dilbert Principle.

Abstract:
This paper derives an optimal investment function that combines Tobin's q with Goodwin's nonlinear accelerator. It provides microfoundations to the backward looking behavior of investment in Goodwin's model, and simultaneously allows the study of Tobin's q into a business cycle model.

Abstract:
The intertemporal substitution model of labor supply has been based on closed economy models. This paper studies the intertemporal substitution hypothesis in an open economy. It derives the long run labor supply as a function of the real wage, real interest rate and real exchange rate from a standard open economy optimizing representative agent model. The paper tests the steady state solution of the model for the US and, in order to avoid the Lucas critique, it tests for the superexogeneity of the interest rate and exchange rate. In accordance with the theory, the empirical evidence is supportive of the intertemporal substitution hypothesis, the significant impact of the real exchange rate, and is robust to the Lucas critique.

Intertemporal substitution, Labor supply, Interest rate, Exchange rate

Abstract:
The paper establishes empirically the temporal causality and long run relationship between government expenditures and government revenues for the case of Guinea-Bissau - a low income country under stress (LICUS) in Africa. A simple macroeconomic model is developed to lay out the hypothesis of a spend-tax behavior in the country's public finances management system. Empirical validation is carried out by means of a traditional Granger-causality test and the estimation of a simple error correction model between expenditures and revenues.

Public finances, causality tests, cointegration analysis

Abstract:
Work ethics affects labor supply. This idea is modeled assuming that work is habit forming. This paper introduces working habits in a neoclassical growth model and compares its outcomes with a model without habit formation. In addition, it analyzes the impact of different forms of technical progress. The findings are that i) labor supply in the habit formation case is higher than in the neoclassical case; ii) unlike in the neoclassical case, labor supply in the presence of habit formation will depend on the kind of technical progress experienced by the economy and iii) the kind of technical progress will hence affect the steady state levels of consumption, capital stock and output.

labour supply, habit formation, work ethics, technological progress

Abstract:
This paper analyses an overlapping generations model with absolute bequest motive. It is shown that the widely accepted criterion to verify dynamic efficiency does not apply to this case. In our model the social planner maximizes welfare by choosing a capital stock larger than the golden rule and a real rate of interest smaller than the rate of growth of the economy.

Abstract:
This paper examines a model with habit formation in consumption. The model leads to higher equilibrium values in consumption, output, capital accumulation and labor supply than the neoclassical growth model with elastic labor supply. Comparative static analysis shows that an increase in the importance of consumption in the recent past in habit formation is associated with a decrease in growth and labor supply. On the other hand, an increase of the importance of habit stock relatively to present consumption, is found to stimulate growth and labor supply.

Consumption behavior, Labor supply, Economic growth

Abstract:
A naive model of cannibalism assumes that it decreases intra-species competition, increasing per capita supply of resources. As a result, there is a cycle between prey population and carrying capacity of the environment, which oscillates around cannibals' population. The model is applied to examine the behaviour of firms in an oligopolistic industry. From this exercise emerges a general model of cannibalism which shows the economic rationale for the existence of cannibalistic strategies and has stronger properties than the naive model.

Cannibalism, Entry and exit, Predation, Monopolization strategies

Abstract:
This paper studies the impact of wage and employment taxes in an intertemporal efficiency wage model. The cases with fixed, linear and quadratic adjustment costs associated with job creation are considered. In general, the model shows that an increase in the employment tax leads to an increase in unemployment, reducing job creation, and has ambiguous effect on wages. While an increase in the wage tax reduces wages and has ambiguous impact on unemployment and job creation.

Unemployment, Efficiency wages, Job creation

Abstract:
This article studies a game between authors and editors. Editors play as leaders while authors are the followers. Authors maximize the number of publications seeking to increase the impact of their work in the literature, captured by citations. Editors maximize the quality of papers they publish in order to increase the reputation of their journals. The main results are: (i) rules aimed at increasing scholars productivity, such as requirements to obtain tenure, increase author's citations and journal's quality; (ii) editors willingness to build journal's reputation hurt journal's quality and increase author's publications; (iii) journal's reputation increases citations and journal's quality.

Abstract:
This paper studies the impact of wage and employment taxes in an intertemporal efficiency wage model. Cases with fixed, linear and quadratic adjustment costs associated with job creation are considered. In general, the model shows that an increase in the employment tax leads to an increase in unemployment, reducing job creation, and has ambiguous effect on wages; whereas an increase in the wage tax reduces wages and has ambiguous impact on unemployment and job creation.

Abstract:
Work ethics affect labour supply. This idea is modelled assuming that work is habit forming. We introduce working habits in a neoclassical growth model and compare its outcomes with a model without habit formation. In addition, we analyse the impact of different forms of technical progress. The findings are that (i) labour supply in the habit formation case is higher than in the neoclassical case; (ii) unlike in the neoclassical case, labour supply in the presence of habit formation depends on the kind of technical progress; and (iii) the kind of technical progress will hence affect the steady-state levels of consumption, capital stock and output.

Abstract:
This paper investigates the relationship between inflation and output in the context of an economy facing persistent high inflation. By analyzing the case of Brazil, we find that inflation does not impact real output in the long run, but that in the short run there exists a negative effect from inflation on output. These results support Sidrauski's (1967) superneutrality of money in the long run, but cast doubt on the short run implications of the model for separable utility functions in consumption and real money balances, as exposed by Fischer (1979). The results are more likely to support a class of utility functions in which real money balances and consumption are perfect complements.

Inflation, growth, output

Abstract:
This paper proposes a new modeling strategy as regards the definition of an optimal level of unemployment benefits. While the traditional methodology privileges labor market equilibrium to derive optimal employment, wage and unemployment benefit levels, we present a model in which the optimal level of unemployment benefits is a function of the government's macroeconomic objectives in terms of inflation and output fluctuations. In a second stage, the model allows for the investigation of unemployment insurance effects on labor market equilibrium.

Macroeconomic Constraints, Unemployment Insurance, Collective Bargaining, Trade Union Objectives

Abstract:
The Solow condition is examined in an intertemporal model that blends the shirking and the turnover models of efficiency wages with managerial supervision. It is shown that the Solow condition does not hold when shirking and turnover costs are considered. The Solow condition can be a possible outcome when managerial productivity offsets shirking and turnover costs.

labor-management relations, efficiency wages, unemployment, turnover