João Ricardo Faria

TERROR SUPPORT AND RECRUITMENT

We analyse a dynamic model linking terrorist activities to popular support through a recruitment mechanism. It is shown that anti‐terrorism policies focusing on liberal ideals (reducing repression, increasing economic opportunity) are effective at abating recruitment, thereby affecting the dynamic stability of terrorist attacks. In contrast, deterrence’s comparative advantage is in counteracting hard‐core members, implying that terror eradication itself requires an emphasis on hard‐core membership, rather than popular support for terror activities.

Financial distress drivers in Brazilian banks: A dynamic slacks approach

This study applies the Dynamic Slacks Based Model (DSBM) developed by Tone and Tsutsui (2010) in order to assess the evolution of input saving/output increasing potentials in major Brazilian Banks from 1996 to 2011. We propose that these potentials or slacks can be used as proxies for an eventual financial distress situation in the future. The main research objective is to determine whether or not different characteristics of bank type – related to ownership, size, and merger and acquisition processes – are significantly related to inefficiency levels and, by extension, to an eventual financial distress situation, since higher inefficiency levels also imply lower input saving/output decreasing potentials. Based on a balanced panel model, secondary data from Economatica were collected and analyzed. Results indicate higher inefficiency levels and slacks in small public and national banks. Policy implications are also addressed.

Terrorist innovations and anti-terrorist policies

ABSTRACT This paper examines a dynamic model of terrorist attacks and innovations. Terrorist innovations are triggered by counterterrorist policies. The model allows us to compare the effectiveness of three different anti-terrorist policies: deterrence, preemption and intelligence. The paper argues that intelligence is the most effective anti-terrorist policy and deterrence is the least effective. However, this conclusion may change when one considers the possible positive effects of intelligence on terrorist innovations or when intelligence is gathered to be used for preemption and deterrence.

Government Revenues and Expenditures in Guinea-Bissau: Causality and Cointegration

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 macroeconomic model is developed to lay out the hypothesis of a spend-tax behavior in the countryi¯s public finances management system. Empirical validation is carried out by means of a traditional Granger-causality test and the estimation of an error correction model between expenditures and revenues.

Habit formation in a monetary growth model

Abstract This paper introduces the hypothesis of habit formation in consumption in the Sidrauski [Am. Econ. Rev. Papers Proc., 57 (1967) 534] model. A number of results are derived: (1) as in the Sidrauski model money is superneutral and the Friedman rule still provides the optimal quantity of money; (2) the demand for money in this model is greater than in the Sidrauski model; (3) the money demand reflects the habit persistence related to past consumption and the rate of time preference, and it is more sensitive to changes in inflation and nominal interest rates than the Sidrauski model.

Proliferation of Academic Journals: Effects on Research Quantity and Quality

There have been significant structural changes in research markets in recent years reflected in the increase in the number of academic journals. This paper uses a differential game model of authors and journal editors to examine the effects of an increase in competition among academic journals. Does an increase in the number of academic journals lead to an increase in scholarly articles published? Will an increase in publishing outlets adversely affect research quality? The results show greater competition does not affect research output and in fact enhances research quality. The number of journals and the relative discount rates of authors and editors are crucial determinants of the effects of competition.

Rent Seeking in Academia: The Consultancy Disease

The Consultancy disease is a type of rent seeking behavior in academia, and occurs when scholars spend time searching and working in public and private consultancies. It is shown that the Consultancy disease leads to lower equilibrium levels of academic work. Higher standards for scientific productivity and publications help to fight the disease.

What type of economist are you: r‐strategist or K‐strategist?

This paper proposes a simple model to classify economists according to their preferences towards quality and/or quantity of their publications. When more emphasis is placed on quantity they are defined as r‐strategists. When they put more effort in the quality of their papers targeting top journals, they are defined as K‐strategists. It is shown that prestigious departments tend to select K‐strategists. By analyzing which strategy maximizes the influence of an economist in the profession, the paper shows that neither r‐, nor K‐strategists are the winners. The paper conjectures that the economists more likely to be successful in the profession follow the Samuelson‐strategy, which is characterized by a balance between quality and quantity.

ARE USA CITIZENS AT RISK OF TERRORISM IN EUROPE

This paper analyzes the determinants of the probability of US citizens being victims of terrorist attacks in European countries, taking into account uncontrolled heterogeneity of the data. The analysis employs ITERATE data from February 1968 to December 2002 to ascertain significant characteristics that influence the probability (e.g. location, type of casualties, type of attack, and type of terrorists). To deal with the unobserved heterogeneity a random‐parameter logit model (mixed logit) is used. Some policy implications are presented.

An Economic Analysis of the Peter and Dilbert Principles

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.