We consider the small mass asymptotic (Smoluchowski–Kramers approximation) for the Langevin equation with a variable friction coefficient. The friction coefficient is assumed to be vanishing within certain region. We introduce a regularization for this problem and study the limiting motion for...

The study is motivated by the observation that a striking convergence of real wages has taken place, among many countries now in the OECD. What drives this phenomenal convergence, and is the experience unique in recorded economic history? In order to quantify the process, we explore a novel...

While policies encouraging diffusion of new technologies provide incentives for adopting the focal good, they typically ignore the ecosystem of complementary goods and services. Based on existing literature on indirect network effects, we argue that when there is less availability of...

The aim of this paper is to analyse the relationship between large firms’ knowledge spillovers and small and medium enterprises’ absorptive capacities. We build ad hoc indicators for these two concepts following a factor analysis methodology, and carry out a structural equations analysis to...

In financial modelling, filtering and other areas the underlying dynamics are often specified via stochastic differential equations (SDEs) of jump-diffusion type. The class of jump-diffusion SDEs that admits explicit solutions is rather limited. Consequently, there is a need for the systematic...

One approach to oil markets is to treat oil as an asset, besides its role as a commodity. Speculative and nonspeculative activity by investors in the derivatives markets could be responsible for a sizable increase in oil prices. This paper recognizes both the consumption and investment aspects...

Option prices provide valuable information on market expectations. This paper attempts to extract market expectations, as conveyed by an implied risk-neutral probability distribution, from option prices for the dollar-euro exchange rate. Returns' volatilities are inferred from observed and...