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In this article, we analyze how inflation affects firms’ price-setting behavior. For a class of menu cost models, we derive several predictions about how price-setting changes with inflation at very high and at near-zero inflation rates. Then, we present evidence supporting these predictions using product-level data underlying Argentina’s consumer price index from 1988 to 1997—a unique experience where monthly inflation ranged from almost 200% to less than zero. For low inflation rates, we find that (i) the frequency and absolute size of price changes as well as the dispersion of relative prices do not change with inflation, (ii) the frequency and size of price increases and decreases are symmetric around zero inflation, and (iii) aggregate inflation changes are mostly driven by changes in the frequency of price increases and decreases, as opposed to the size of price changes. For high inflation rates, we find that (iv) the elasticity of the frequency of price changes with respect to inflation is close to two-thirds, (v) the frequency of price changes across different products becomes similar, and (vi) the elasticity of the dispersion of relative prices with respect to inflation is one-third. Our findings confirm and extend available evidence for countries that experienced either very high or near-zero inflation. We conclude by showing that a hyperinflation of 500% a year is associated with a cost of approximately 8.5% of aggregate output a year as a result of inefficient price dispersion alone.

This article analyzes the response of earnings to payroll tax rates using a cohort-based reform in Greece. Individuals who started working on or after 1993 face permanently a much higher earnings cap for payroll taxes, creating a large and permanent discontinuity in marginal payroll tax rates by date of entry in the labor force for upper earnings workers. Using full-population administrative social security data and a regression discontinuity design, we estimate the long-term labor supply effects and incidence of payroll tax rates on earnings. Standard theory predicts that in the long run, new regime workers should bear the entire burden of the payroll tax increase (relative to old regime workers). In contrast, we find that employers compensate new regime workers for the extra employer payroll taxes but not for the extra employee payroll taxes. We do not find any evidence of labor supply responses along the extensive or intensive margins around the discontinuity, suggesting low efficiency costs of payroll taxes. We discuss various possible explanations for those results.

Using dealer's quotes and transactions prices on straight industrial bonds, we investigate the determinants of credit spread changes. Variables that should in theory determine credit spread changes have rather limited explanatory power. Further, the residuals from this regression are highly cross-correlated, and principal components analysis implies they are mostly driven by a single common factor. Although we consider several macroeconomic and financial variables as candidate proxies, we cannot explain this common systematic component. Our results suggest that monthly credit spread changes are principally driven by local supply/ demand shocks that are independent of both credit-risk factors and standard proxies for liquidity.

This paper examines whether investor sentiment about the stock market affects prices of the S&P 500 options. The findings reveal that the index option volatility smile is steeper (flatter) and the risk-neutral skewness of monthly index return is more (less) negative when market sentiment becomes more bearish (bullish). These significant relations are robust and become stronger when there are more impediments to arbitrage in index options. They cannot be explained by rational perfect-market-based option pricing models. Changes in investor sentiment help explain time variation in the slope of index option smile and risk-neutral skewness beyond factors suggested by the current models.

A sumptuous history of Golden Age Spain that explores the irresistible tension between heavenly and earthly realms. Incomparable Realms offers a vision of Spanish culture and society during the so-called Golden Age, the period from 1500 to 1700 when Spain unexpectedly rose to become the dominant European power. But in what ways was this a Golden Age, and for whom? The relationship between the Habsburg monarchy and the Roman Catholic Church shaped the period, with both constructing narratives to bind Spanish society together. Incomparable Realms unpicks the impact of these two historical forces on thought and culture and examines the people and perspectives such powerful projections sought to eradicate. The book shows that the tension between the heavenly and earthly realms, and in particular the struggle between the spiritual and the corporeal, defines Golden Age culture. In art and literature, mystical theology and moral polemic, ideology, doctrine, and everyday life, the problematic pull of the body and the material world is the unacknowledged force behind early modern Spain. Life is a dream, as the title of Calderón's famous play of the period proclaimed, but there is always a body dreaming it.

Simone Weil abandona París, declarada ciudad abierta, en junio de 1940. Acompaña a sus padres en un éxodo incierto que, en septiembre, los conduce hasta Marsella, obligada estación de paso para quienes se ven en la necesidad de abandonar la Europa en guerra. Se relaciona ahí con grupos de resistentes y abriga la idea de escapar a Londres para continuar la lucha. Pero la salida, finalmente con destino a Nueva York y siempre con sus padres, no se producirá hasta mayo de 1942. Durante ese tiempo de espera forzada, Marsella y su entorno se convierten, sin embargo, en una especie de patria de acogida, en un lugar propicio para experiencias y encuentros.Marsella es una de las etapas más ricas de la escritura de Simone Weil, la que trae la maduración de su pensamiento en la luz del Mediterráneo. Tiempo de amistad, como reflejan las cartas aquí reunidas a Déodat Roché, Antonio Atarés, Gustave Thibon, Joë Bousquet y Jean Wahl, interlocutores y a veces confidentes, como también lo fue el padre Perrin. Tiempo de trabajo filosófico, en el venero de sus «Cuadernos», como testimonian los textos aquí reunidos sobre la noción de lectura, el método de la filosofía o la noción de valor. Tiempo entre cuyos frutos más granados sobresalen los dos ensayos sobre el país de Oc y la cruzada albigense, «La agonía de una civilización vista a través de un poema épico» y «¿En qué consiste la civilización occitana?», de belleza y maestría solo comparables a las de su texto sobre la «Ilíada».

The book presents the sum of research of an outstanding art historian Prof. Pavel Stěpánek, a specialist on Spanish and Ibero-American culture, especially the visual arts. The publication collects eleven studies that display in notable scope of topics the relations between Spanish culture and Bohemian lands. These studies covers the extensive chronological space since the Middle Ages up to 20th century.

This paper studies a recent British reform that allowed public high schools to opt out of local authority control and become autonomous schools funded directly by the central government. Schools seeking autonomy had only to propose and win a majority vote among current parents. Almost one in three high schools voted on autonomy between 1988 and 1997, and using a version of the regression discontinuity design, I find large achievement gains at schools in which the vote barely won compared to schools in which it barely lost. Despite other reforms that ensured that the British education system was, by international standards, highly competitive, a comparison of schools in the geographic neighborhoods of narrow vote winners and narrow vote losers suggests that these gains did not spill over.

This book offers a new interpretation of the Roman historian Sallust: it reads his works as complex and engaged contributions to the intellectual life of his period, offering a coherent and contemporary perspective on the end of the Roman Republic.

This book offers a collection of essays on Byzantine Italy which provides a fresh synthesis of current research as well as new insights on various aspects of its local societies from the 6th to the 11th century.