Moral codes are produced and enforced by more or less specialized means and are subject to standard economic forces. This paper argues that the intermediary role played by the Catholic Church between God and Christians, a key difference from Protestantism, faces the standard trade-off of...

In this paper we explore the mechanisms that allow securities analysts to value companies in contexts of Knightian uncertainty, that is, in the face of information that is unclear, subject to unforeseeable contingencies or to multiple interpretations. We address this question with a...

Using econometric evidence, this article confirms that distribution of medicines online is split into two market segments of very diverse quality, and identifies the factors that drive quality and quality assurance in this activity. Unlike fraudulent, ‘rogue,’ websites, which offer scant...

We develop a theory of news coverage in environments of information abundance that include both new and traditional news media, from online and print newspapers to radio and television. News consumers are time-constrained and browse through news items that are available across competing outlets,...

This paper proposes to estimate the covariance matrix of stock returns by an optimally weighted average of two existing estimators: the sample covariance matrix and single-index covariance matrix. This method is generally known as shrinkage, and it is standard in decision theory and in empirical...

This paper extends multivariate Granger causality to take into account the subspaces along which Granger causality occurs as well as long run Granger causality. The properties of these new notions of Granger causality, along with the requisite restrictions, are derived and extensively studied...

We apply a multilevel hierarchical model to explore whether an aggregation fallacy exists in estimating the income elasticity of health expenditure by ignoring the regional composition of national health expenditure figures. We use data for 110 regions in eight OECD countries in 1997: Australia,...

In this paper I explore the issue of nonlinearity (both in the data generation process and in the functional form that establishes the relationship between the parameters and the data) regarding the poor performance of the Generalized Method of Moments (GMM) in small samples. To this purpose I...

We apply a multilevel hierarchical model to explore whether an aggregation fallacy exists in estimating the income elasticity of health expenditure by ignoring the regional composition of national health expenditure figures. We use data for 110 regions in eight OECD countries in 1997: Australia,...

The goal of this paper is to estimate time-varying covariance matrices. Since the covariance matrix of financial returns is known to change through time and is an essential ingredient in risk measurement, portfolio selection, and tests of asset pricing models, this is a very important problem in...