Starting from the Merton framework for firm defaults, we provide the analytics and robustness of the relationship between default correlations. We show that loans with higher default probabilities will not only have higher variances but also higher correlations between loans. As a consequence,...

We show why considering a number of education-dependent covariates in the wage equation decreases coefficient of education in the wage equation. We use a meta-analysis of results for Portugal to show, empirically, that this is the case. The coefficient decreases when we use covariates that can...

In this paper, the concept of Income Satisfaction Inequality is operationalized on the basis of individual responses to an Income Satisfaction question posed in the German Socio-Economic Panel (GSOEP). Income satisfaction is the subjective analogue of the objective income concept and includes...

We prove that the elementwise product of two quadratic symmetric and positive semidefinite matrices is symmetric and positive semidefinite. This property allows us to formulate a sufficient condition for the positive definiteness of the covariance matrix of the diagonal multivariate GARCH model

The Representational Theory of Measurement conceives measurement as establishing homomorphisms from empirical relational structures into numerical relation structures, called models. Models function as measuring instruments by transferring observations of an economic system into quantitative...