Javier Reyes | Universidad Rafael Landivar (original) (raw)

Papers by Javier Reyes

The decision to undertake risk is often made in groups, while much of the economics literature on... more The decision to undertake risk is often made in groups, while much of the economics literature on risk taking focuses on the individual. We report the results of controlled laboratory experiments that compare behavior between individuals and pairs. Using the Holt and Laury (2002) procedure and a within–subject design, we find no evidence of group polarization, but do find significant ordering effects. Pair choices are con-sistent with a bargaining framework where gender and age impact relative bargaining weights but there is little evidence that conversational leadership or personality does. Finally, the results indicate that pair decisions and partner personality characteristics influence subsequent individual choices.

SSRN Electronic Journal

This study measures risk attitudes using two paid experiments: the Holt and Laury (2002) procedur... more This study measures risk attitudes using two paid experiments: the Holt and Laury (2002) procedure and a variation of the game show Deal or No Deal. The participants also completed a series of personality questionnaires developed in the psychology literature including the risk domains of Weber, Blais, and Betz (2002). As in previous studies risk attitudes vary within subjects across elicitation methods. However, this variation can be explained by individual personality traits. Specifically, subjects behave as though the Holt and Laury task is an investment decision while the Deal or No Deal task is a gambling decision.

Southern Economic Journal

The decision to undertake risk is often made by pairs (dyads), while much of the economics litera... more The decision to undertake risk is often made by pairs (dyads), while much of the economics literature on risk taking focuses on the individual. We report the results of controlled laboratory experiments that compare behavior between individuals and pairs. Using the Holt and Laury (2002) procedure and a within-subjects design, we find that pair choices are largely consistent with subjects bargaining over the outcome rather than the pairs taking a more extreme stance than the individual members. Further, gender and age but not personality seem to influence relative bargaining weight. We also find that individuals are more willing to take risks after making decisions as part of a pair than beforehand. Both the personality of one's partner and nontask social interaction influence subsequent individual risk-taking behavior.

Journal of Economic Behavior & Organization

Previous research has found considerable variation in risk taking behavior within individuals acr... more Previous research has found considerable variation in risk taking behavior within individuals across tasks. In this paper, we develop a hypothesis derived from the psychology literature that such apparently inconsistent behavior can be explained by a subject's domain specific risk attitudes. To test our hypothesis, we conducted a laboratory study using multiple paid risk elicitation tasks and a risk attitude survey. Consistent with previous research, our results indicated considerable within subject variation in behavior across tasks. However, we found little support for the hypothesis that this variation can be explained by domain specific risk attitudes.

Journal of Economic Dynamics and Control

As the recent crisis has forcefully suggested, understanding financial-market interconnectedness ... more As the recent crisis has forcefully suggested, understanding financial-market interconnectedness is of a paramount importance to explain systemic risk, stability and economic dynamics. In this paper, we address these issues along two related perspectives. First, we explore the statistical properties of the International Financial Network (IFN), defined as the weighted-directed multigraph where nodes are world countries and links represent debtor-creditor relationships in equities and short/long-run debt. We investigate whether the 2008 financial crisis has resulted in a significant change in the topological properties of the IFN. Our findings suggest that the crisis caused not only a reduction in the amount of securities traded, but also induced changes in the topology of the network and in the time evolution of its statistical properties. This has happened, however, without changing the disassortative, core-periphery structure of the IFN architecture. Second, we perform an economet...

SSRN Electronic Journal, 2000

We measure risk attitudes in two experiments: the Holt and Laury (2002) procedure and a variation... more We measure risk attitudes in two experiments: the Holt and Laury (2002) procedure and a variation of the game show Deal or No Deal. The participants also completed a series of personality questionnaires developed in the psychology literature. Like previous studies we find that risk attitudes vary within subjects across elicitation methods. However, we find that some of this variation can be explained by individual personality traits. Specifically, attitudes towards investment / gambling as measured by Weber, Blais, and Betz (2002) impact behavior in the Holt and Laury / Deal or No Deal task, but do not impact behavior in the Deal or No Deal /Holt and Laury task. The results suggest that a one-model fits all approach to risk even over similar sized stakes may be inappropriate.

the Mexican version of Deal or No Deal. We consider both dynamic agents who fully backward induct... more the Mexican version of Deal or No Deal. We consider both dynamic agents who fully backward induct and myopic agents that only look forward one period. Further, we vary the level of forecasting sophistication by the agents. We find substantial evidence of risk aversion, the degree of which is more modest than what is typically reported in the literature.

The World Economy, 2014

This paper uses a complex network approach for the analysis of bilateral trade data between count... more This paper uses a complex network approach for the analysis of bilateral trade data between countries over the period 1970-2000. We compute the network community structure for every year between 1970 and 2000 and compare it to null community structures that emerge from various models based on regional and geographic classifications, the implementation of RTA's and/or on gravity models of trade. Our results show that RTA formation appears to have a cyclical pattern on the world trade network community structure. We document periods where bilateral trade flows and the structure of the world trade network are consistent with those predicted by formation of RTAs. These cycles occur in 1980-86 and 1990-96. Conversely, we also find periods in which the pattern in the world trade network is not explained by RTA formation. Two periods, 1986Two periods, -1990Two periods, and 1997Two periods, -2000, show a pattern of bilateral trade flows that moves away from the prediction that results from assuming RTA-formation as the driving force in the determination of the world trade network structure. Factors contributing to the latter parts of the cycle we document may be due to the growing role of foreign investment and decreased trade costs over the sample period.

The Journal of International Trade & Economic Development, 2010

Over the past four decades the High Performing Asian Economies (HPAE) have followed a development... more Over the past four decades the High Performing Asian Economies (HPAE) have followed a development strategy based on the exposure of their local markets to the presence of foreign competition and on an outward oriented production. In contrast, Latin American Economies (LATAM) began taking steps in this direction only in the late eighties and early nineties, but before this period these countries were more focused in the implementation of import substitution policies. These divergent paths have led to sharply different growth performance in the two regions. Yet, standard trade openness indicators fall short of portraying the peculiarity of the Asian experience, and to explain why other emerging markets with similar characteristics have been less successful over the last 25 years. This paper offers an alternative perspective on the issue by exploiting recently-developed indicators based on weighted network analysis. This allows us to investigate the whole structure of international trade relationships and to determine both the position of HPAE countries in the network and its evolution over time. We show that HPAE countries are more integrated into the world economy, as they have moved -over the past 25 years -from the periphery of the network towards its core. In contrast, the LATAM region seems to be loosing presence within the network or, at best, its integration process has remained stagnant.

Spatial Economic Analysis, 2009

The world has lived through an accelerated globalization process over the last 15 years. Global t... more The world has lived through an accelerated globalization process over the last 15 years. Global trade relative to world GDP has grown from 39% in 1992 to 52% in 2005. At the same time, the share of world trade of OECD countries has gone down from 73% in 1992 to 64% in 2005. These shifts have led to changes in

Quantitative Finance, 2010

In this paper we compare the degree and patterns of trade and financial integration exploiting ne... more In this paper we compare the degree and patterns of trade and financial integration exploiting network analysis. We start from a simple binary analysis and then move to a more appropriate weighted approach, presenting a detailed overview of international goods and financial markets integration, and compare their main characteristics. Moving from binary to weighted analysis changes considerably the properties of the networks, and with them the picture of the integration process. Limiting to a binary approach can thus lead to a misrepresentation of the underlying economic phenomena. We find that the trade network is almost fully connected while international financial integration is less pervasive. Also, regional links continue to play a relevant role.

Physical Review E, 2009

This paper studies the statistical properties of the web of import-export relationships among wor... more This paper studies the statistical properties of the web of import-export relationships among world countries using a weighted-network approach. We analyze how the distributions of the most important network statistics measuring connectivity, assortativity, clustering and centrality have co-evolved over time. We show that all node-statistic distributions and their correlation structure have remained surprisingly stable in the last 20 years -and are likely to do so in the future. Conversely, the distribution of (positive) link weights is slowly moving from a log-normal density towards a power law. We also characterize the autoregressive properties of network-statistics dynamics. We find that network-statistics growth rates are well-proxied by fat-tailed densities like the Laplace or the asymmetric exponential-power. Finally, we find that all our results are reasonably robust to a few alternative, economically-meaningful, weighting schemes.

Journal of Public Economics, 2005

Past theoretical work predicts that higher corporate tax rates should decrease economic growth ra... more Past theoretical work predicts that higher corporate tax rates should decrease economic growth rates, while the effects of high personal tax rates are less clear. In this paper, we explore how tax policies in fact affect a country's growth rate, using cross-country data during 1970-1997. We find that statutory corporate tax rates are significantly negatively correlated with cross-sectional differences in average economic growth rates, controlling for various other determinants of economic growth, and other standard tax variables. In fixed-effect regressions, we again find that increases in corporate tax rates lead to lower future growth rates within countries. The coefficient estimates suggest that a cut in the corporate tax rate by 10 percentage points will raise the annual growth rate by one to two percentage points.

Journal of Macroeconomics, 2008

Calvo and Reinhart [Calvo, G., Reinhart, C., 2002. Fear of floating. Quarterly Journal of Economi... more Calvo and Reinhart [Calvo, G., Reinhart, C., 2002. Fear of floating. Quarterly Journal of Economics 117, 379–408] argue that many countries claim to float but actually display a “fear of floating” (FF) and that credible inflation targeting (IT) and FF are identical regimes. We analyze exchange rates, reserves, interest rates and inflation across 88 exchange rate regimes for 20 countries.

Journal of International Business Studies, 2007

We combine data on international trade linkages with network methods to examine the global tradin... more We combine data on international trade linkages with network methods to examine the global trading system as an interdependent complex network. We map the topology of the international trade network and suggest new network based measures of international economic integration, at both a global system-wide level and a local country-level. We develop network based measures that incorporate not only the volume of trade but also the influence that a country has on the international trading system. These measures incorporate the structure and function of the network and may provide a more meaningful approach to globalization than current measures based on trade volumes. We find that in terms of participation and influence in the network, global trade is hierarchical with a core-periphery structure at higher levels of trade, though integration of smaller countries into the network increased considerably over the 1990's. The network is strongly "balkanized" according to geography of trading partners but not as strongly by income or legal origin. Using these new measures we find that a country's position in the network has substantial implications for economic growth. We therefore suggest that a network approach to international economic integration has potential for useful applications in international business, finance and development.

Journal of Evolutionary Economics, 2010

This paper employs a weighted network approach to study the empirical properties of the web of tr... more This paper employs a weighted network approach to study the empirical properties of the web of trade relationships among world countries, and its evolution over time. We show that most countries are characterized by weak trade links; yet, there exists a group of countries featuring a large number of strong relationships, thus hinting to a core-periphery structure. Also, better-connected countries tend to trade with poorly-connected ones, but are also involved in highly-interconnected trade clusters. Furthermore, rich countries display more intense trade links and are more clustered. Finally, all network properties are remarkably stable across the years and do not depend on the weighting procedure.

International Journal of Finance & Economics, 2004

Page 1. Copyright © 2004 John Wiley &amp;amp;amp;amp; Sons, Ltd. INTERNATIONAL JOURNAL OF... more Page 1. Copyright © 2004 John Wiley &amp;amp;amp;amp; Sons, Ltd. INTERNATIONAL JOURNAL OF FINANCE AND ECONOMICS Int. J. Fin. Econ. 9: 4969 (2004) Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/ijfe.221 ...

Economic Inquiry, 2010

We combine data on international trade linkages with a network approach to map the global trading... more We combine data on international trade linkages with a network approach to map the global trading system as an interdependent complex network. This enables us to obtain indicators of how well connected a country is into the global trading system. We use these network-based measures of connectedness to explain stock market returns during recent episodes of financial crisis. We find that a crisis is amplified if the epicenter country is better integrated into the trade network. However, target countries affected by such a shock are in turn better able to dissipate the impact if they are well integrated into the network. A network approach can help explain why the Mexican, Asian, and Russian financial crises were highly contagious, while the crises that originated in Venezuela and Argentina did not have such a virulent effect. We suggest that a network approach incorporating the cascading and diffusion of interdependent ripples when a shock hits a specific part of the global trade network provides us with an improved explanation of financial contagion. (JEL F10, F36, F40, G15) *We are grateful to Jon Johnson, Jungmin Lee, two anonymous referees, and the editor for comments that improved the article. We thank seminar participants at the Harvard Business School, the University of Arkansas, and the 2008 CIBIF conference in Groningen for their comments. Viktoria Riiman provided outstanding research assistance.

Applied Economics, 2008