Prague Economic Papers, 2009 (vol. 18), issue 3

Original contributions, Original article, Research article

What Do Productivity Shocks Tell Us About the Saving-Investment Relationship?

Lutfi Erden, Ibrahim Ozkan, Burak Gunalp

Prague Economic Papers 2009, 18(3):195-208 | DOI: 10.18267/j.pep.349  

This study is a contribution to the empirical literature on the significance of productivity shocks in explaining a high saving-investment correlation, using data from a panel of 21 OECD countries over the period 1970-2003. The study looks at the distributional properties of the productivity shocks in order to test if productivity shocks can relate saving to investment. To this end, we divide the countries into three groups with respect to the distributional characteristics of productivity shocks in each country with an application of the Fuzzy-c-means (FCM) clustering technique. The results provide some support for the productivity shock argument,...

Smart Agents and Sentiment in the Heterogeneous Agent Model

Lukáš Vácha, Jozef Barunik, Miloslav Vošvrda

Prague Economic Papers 2009, 18(3):209-219 | DOI: 10.18267/j.pep.350  

In this paper we extend the original heterogeneous agent model by introducing smart traders and changes in agents' sentiment. The idea of smart traders is based on the endeavor of market agents to estimate future price movements. By adding smart traders and changes in sentiment we try to improve the original heterogeneous agents model so that it provides a closer description of real markets. The main result of the simulations is that the probability distribution functions of the price deviations change significantly when smart traders are added to the model, and they also change significantly when changes in sentiment are introduced. We also use the...

Praiseworthiness and Endogenous Growth

David M. Levy, Dalibor Roháč

Prague Economic Papers 2009, 18(3):220-234 | DOI: 10.18267/j.pep.351  

This paper demonstrates that increasing returns to scale can be sustained when agents care about praiseworthiness of their conduct. Unlike the desire to attain approbation from external sources, the notion of praiseworthiness seems to have been neglected by contemporary economic literature. Yet the relevance of praiseworthiness as an internal motivational force was stressed by a number of classical economists. We construct an endogenous growth model in which agents derive utility not only from their consumption but also from praiseworthiness of their action. In such a setting, the motivation by praiseworthiness is able to generate positive and accelerating...

Labour Market Participation: The Impact of Social Benefits in the Czech Republic and Selected European Countries

Kamila Fialová, Martina Mysíková

Prague Economic Papers 2009, 18(3):235-250 | DOI: 10.18267/j.pep.352  

This paper aims to quantify the impact of social benefits on labour market participation in the Czech Republic and provides a comparison with selected European countries. It applies the logistic regression to estimate the probability of labour market participation depending on social benefits related to net wage of the individuals, controlling for individual and household characteristics. Our results indicate that the work disincentives via social benefits do exist in most of the included countries and they proved to be relatively strong in the Czech Republic. When trying to understand the reasons for recently decreasing participation rate in the Czech...

Nonparametric Approach to Patent Citations

Petr Mariel, Susan Orbe

Prague Economic Papers 2009, 18(3):251-266 | DOI: 10.18267/j.pep.353  

The present article reexamines some of the issues regarding the benchmarking of patents using the NBER data base on U.S. patents by generalizing a parametric citation model and by estimating it using Generalized Additive Models (GAM) methodology. The main conclusion is that the estimated effects differ considerably from sector to sector, and the differences can be estimated nonparametrically but not by the parametric dummy variable approach.

Altruism, Paternalism and Transfers

Jérôme Ballet, Philippe Meral, Dawidson Razafimahatolotra

Prague Economic Papers 2009, 18(3):267-282 | DOI: 10.18267/j.pep.354  

Discussions regarding the form that state transfers should take generally focus on the relative efficiency of transfers in kind vis-à-vis transfers in cash. This article, however, proposes a different approach - to determine the optimal structure of a donation, i.e. its optimal composition. Hence, the problem no longer lies in attempting to figure out whether a donation in kind is either more or less efficient than a donation in cash, but rather, to determine, through various hypotheses relative to the agent's behaviour, the most preferable structure for the donor.