Andre C. Silva

LEY!: persuasive pervasive gaming on domestic energy consumption-awareness

Nowadays, energy consumption (and wastage) is particularly a major issue in our society. It has been a challenge to find ways of educating people to follow better attitudes towards energy savings. This paper proposes a pervasive-based serious game approach to help people understand household energy usage and to persuade them to change negative energy consumption habits. The mechanics of the game are based on real-time domestic energy consumption information, presenting a collaborative-competitive approach.

Taxes and labor supply: Portugal, Europe, and the United States

I relate hours worked with taxes on consumption and labor for Portugal, France, Spain, United Kingdom and United States. From 1986 to 2001, hours per worker in Portugal decreased from 35.1 to 32.6. With the parameters for Portugal, the model predicts hours worked in 2001 with an error of only 12 minutes from the actual hours. Across countries, most predictions differ from the data by one hour or less. The model is not sensible to special assumptions on the parameters. I calculate the long run effects of taxes on consumption, hours, capital and welfare for Portugal. I extend the model to discuss implications for Social Security. I discuss the steady state and the transition from a pay-as-yougo to a fully funded system. JEL codes:E6, H3

Government financing, inflation, and the financial sector

We calculate the effects of an increase in government spending under two financing alternatives: labor income taxes or inflation. A standard cash-inadvance model implies that it is optimal to finance the increase in spending with inflation rather than with taxes. However, when we allow agents to select the moment in which they rebalance their portfolio, this conclusion is reversed. The welfare cost of financing the government with inflation becomes higher. The robustness of this result is studied by considering government spending in the form of transfers or consumption expenditures and alternative definitions of seigniorage. JEL Codes: E52, E62, E63.We calculate the effects of an increase in government spending financed with labor income taxes or inflation. Government spending takes the form of government consumption or transfers. Agents increase the use of financial services to avoid losses from inflation. The financial sector increases with inflation, in accordance with the data. In standard cash-in-advance models, in the presence of government transfers, it is optimal to finance the government with inflation. In our framework, it is optimal to use taxes. We reverse the result from standard cash-in-advance models. The reason is the additional costs from the increase in the financial sector.

Individual and Aggregate Money Demands

I construct a model in which money and bond holdings are consistent with individual decisions and aggregate variables such as production and interest rates. The agents are infinitely-lived, have constant-elasticity preferences, and receive a fraction of their income in money. Each agent solves a Baumol-Tobin money management problem. Markets are segmented because financial frictions make agents trade bonds for money at different times. Trading frequency, consumption, government decisions and prices are mutually consistent. An increase in inflation, for example, implies higher trading frequency, more bonds sold to account for seigniorage, and lower real balances.

Prices and Money After Interest Rate Shocks With Endogenous Market Segmentation

I obtain a slow response of prices and money, and a decrease in the quantity of money after interest rate shocks. Market segmentation causes the slow response. Endogenous segmentation causes the decrease in the quantity of money. I study two shocks: a permanent and a temporary increase in the nominal interest rate. Market segmentation is endogenous because agents decide when to trade bonds for money. I compare the transition with fixed and endogenous segmentation. The transition with endogenous segmentation reproduces the following two empirical facts: money decreases after shocks and the real quantity of money decreases with the interest rate.

The Effect of Firm Cash Holdings on Monetary Policy

Firm cash holdings increased substantially from 1980 to 2013. The overall distribution of firm cash holdings changed in the same period. We study the implications of these changes for monetary policy. We use Compustat data and a model with financial frictions that allows the calculation of the monetary policy effects according to the distribution of cash holdings. We find that the interest rate channel of the transmission of monetary policy has become more powerful, as the impact of monetary policy over real interest rates increased. With the observed changes in firm cash holdings, the real interest rate takes 3.4 months more to return to its initial value after a shock to the nominal interest rate.

Spending a Windfall: American Precious Metals and Euro-Asian Trade 1531-1810

Asia ran a large current account surplus with Europe during 1500-1800. What can explain this large surplus? We show that the critical factor was not the new trading routes to Asia, but the access to American precious metals. We use a model of international trade with money to reproduce data and simulate alternative scenarios. We find that imports of Asian goods by Europe were up to thirteen times higher than what they would have been without new routes and without precious metals. The effect of American precious metals is six times larger than that of the new trading routes.

Sub-Optimality of the Friedman Rule with Distorting Taxes

We find that the Friedman rule is not optimal with real government transfers and distortionary taxation. As transfers cannot be taxed, a positive nominal net interest rate is the indirect way to tax the additional income derived from transfers. This result holds for heterogeneous agents, standard homogeneous preferences, and constant returns to scale production functions. The presence of real transfers changes the standard optimal taxation result of uniform taxation. Higher transfers imply higher optimal inflation rate. We calibrate a model with transfers to the US economy and obtain optimal values for inflation substantially above the Friedman rule.

A Test of an Equilibrium Search Model

We test the predictions of an equilibrium search model about the effects of an increase in the maximum duration of unemployment benefits. We use the 1999 unemployment insurance reform of Portugal, a quasi-natural experiment. The reform increased the maximum duration of benefits for three groups of agents and maintained all features of the unemployment insurance for two other groups. We isolate the effects of the increase in the maximum duration of benefits and test the model. The model successfully predicts the effects on the unemployment rate, the labor force participation, and the levels of unemployment and employment.

Taxes and Labor Supply: Portugal, Europe, and the United States (Conference Version)

I relate hours worked with taxes on consumption and labor. I propose a model and compare its predictions for Portugal, France, Spain, United Kingdom and United States. Hours per worker in Portugal decreased from 35.1 in 1986 to 32.6 in 2001. With only the parameters and the taxes for Portugal, the model predicts the hours worked in 2001 with an error of only 12 minutes from the actual hours. Across countries, most predictions differ from the data by one hour or less. The model is able to explain the trend in hours with only the changes in taxes.