María José Gutiérrez

SWITCHING EQUILIBRIA. The Present Value Model for Stock Prices Revisited

This paper analyzes the different dynamic features displayed by alternative RE equilibria in the context of the present value for stock prices with feedback. In particular, it is shown that there exists a unique (bubble-free) RE equilibrium implying cointegration between stock prices and dividends and this unique equilibrium is characterized either by the fundamental or, alternatively, by the backward equilibrium solution depending on the size of the feedback parameter. Based on this result, it is illustrated a simple mechanism of switching equilibria caused by small changes in the dividend process parameters. Using historical US data and structural estimation, the hypothesis of feedback from stock prices to dividends is tested. In addition, we test for the presence of switching equilibria as suggested by Timmermann (1994). The empirical results provide evidence of a small but very significant presence of feedback from stock prices to dividends. Moreover, when analyzing different sub-samples we find evidence supporting the hypothesis of switching equilibria.

To shape or to be shaped: engaging stakeholders in fishery management advice

The purpose of this paper is to assess the effectiveness of the collaboration between stakeholders and scientists in the construction of a bio-economic model to simulate management strategies for the fisheries in Iberian Atlantic waters. For three years, different stakeholders were involved in a model development study, participating in meetings, surveys and workshops. Participatory modelling involved the definition of objectives and priorities of stakeholders, a qualitative evaluation and validation of the model for use by decision-makers, and an iterative process with the fishing sector to interpret results and introduce new scenarios for numerical simulation. The results showed that the objectives of the participating stakeholders differed. Incorporating objectives into the design of the model and prioritising them was a challenging task. We showed that the parameterization of the model and the analysis of the scenarios results could be improved by the fishers’ input: e.g. ray and skate stocks were explicitly included in the model; and the behaviour of fleet dynamics proved much more complex than assumed in any traditional modelling approach. Overall, this study demonstrated that stakeholder engagement through dialogue and many interactions was beneficial for both, scientists and the fishing industry. The researchers obtained a final refined model and the fishing industry benefited for participating in a process, which enables them to influence decisions that may affect them directly (to shape) whereas non-participatory processes lead to management strategies being imposed on stakeholders (to be shaped).