Fall Semester 2023-2024

Wednesday, December 20, 2023

Title: "Self-Enforcing Climate Coalitions for Farsighted Countries: Integrated Analysis of  Heterogeneous Countries"

Speaker: Assistant Professor Maria Arvaniti, University of Bologna

Host: Assistant Professor Efthymios Athanasiou, Department of Economics, Athens University of Economics and Business

Time: 15.30 -17.00

Room: A36

Attachments:  PDF of Relevant Paper

Abstact: We study formation of international climate coalitions. Countries are farsighted and rationally predict the consequences of their membership decisions in climate negotiations. Within the context of an integrated assessment model of the economy and the climate, we characterise the equilibrium number of coalitions and their number of signatories independent of certain types of heterogeneity, and show that the resulting treaties are robust to renegotiation. With a richer structure of energies we investigate possible coalition outcomes for a calibrated model. We confirm our heterogeneity results and in contrast to earlier approaches based on internal and external stability, much larger coalitions can be sustained in equilibrium.

Thursday, December 07, 2023

Title:  "Competition & Pass-through: Lessons from the Greek Islands"

Speaker: Professor Christos Genakos, University of Cambridge

Host: Assistant Professor Efthymios Athanasiou, Department of Economics, Athens University of Economics and Business

Time: 15.30 -17.00

Room: A36

Abstract: A fundamental issue in economics is how firms pass cost shocks (taxes, exchange rates, input prices) through to prices. Theoretical analysis shows that competition is a key determinant of pass-through. However, in existing empirical studies competition is generally measured by the number of competitors located within a given geographical area around each firm. This arbitrary geographical market definition ignores the market structure endogeneity. We measure how pass-through varies with competition in isolated oligopolistic markets with captive consumers. Using daily pricing data from gas stations on small Greek islands, we study how unanticipated and exogenous changes (increases and decreases) in excise duties and VAT rates are passed through to consumers in markets with different numbers of retailers.

Thursday, November 23, 2023

Title: "Sparse spanning portfolios and under-diversification with second-order stochastic dominance"

Speaker: Professor Stelios Arvanitis, Athens University of Economics and Business

Host: Assistant Professor Alexopoulos Angelos, Department of Economics, Athens University of Economics and Business

Time: 15.30 -17.00

Room: A36

Attachments:  PDF of Relevant Paper

Abstact: We develop and implement methods for determining whether relaxing sparsity constraints on portfolios improves the investment opportunity set for risk-averse investors. We formulate a new estimation procedure for sparse second-order stochastic spanning based on a greedy algorithm and Linear Programming. We show the optimal recovery of the sparse solution asymptotically whether spanning holds or not. From large equity datasets, we estimate the expected utility loss due to possible under-diversification, and find that there is no benefit from expanding a sparse opportunity set beyond 30 assets. The optimal sparse portfolio invests in 10 industry sectors with a larger weighting on small size, high book-to-market, and momentum stocks from the S&P 500 index and cuts tail risk when compared to a sparse mean-variance portfolio. On a rolling-window basis, the number of assets shrinks to 10 assets in crisis periods.

Thursday, November 02, 2023

Title: "Staggered Contracts and Unemployment
during Recessions"

Speaker: Dr. Εffrosyni Adamopoulou, University of Mannheim

Host: Assistant Professor Kospentaris Ioannis, Department of Economics, Athens University of Economics and Business

Time: 15.30 -17.00

Room: A36

Attachments:  PDF of Relevant Paper

Abstact: This paper studies the impact of downward wage rigidity on wage dynamics and employment flows after the outbreak of major recessions over the last 30 years in Spain. Downward wage rigidity stems from collective agreements, which set province-industry-skill specific minimum wage floors for all workers. We show that agreements signed after the onset of the 1993 and 2009 recessions settled on average for a 1.0-1.5 pp lower nominal wage growth than the agreements signed before. By exploiting variation in the renewal of collective contracts and leveraging Social Security data and the distribution of the workerlevel bite of minimum wage floors, we find that in both recessions actual wage growth was indeed higher among workers covered by collective contracts signed during expansions and with wages close to the floors. However, employment responses vary across recessions. In the low-inflation recession of 2009, job losses are highly persistent and entirely driven by workers with pre-recession wages close to the minimum wage floors while in the high inflation recession of 1993, job losses were limited and short-lived. Using Labour Force Survey data in a similar setting we find that downward wage rigidity during the first year of the COVID-19 pandemic triggered adjustments at the intensive margin of labor (short time work). Our findings highlight the interplay between rigidity at different parts of the wage distribution, macroeconomic environment and labor market institutions and identify conditions under which collective contract staggering and the inability to renegotiate may amplify aggregate shocks.