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Helsinki, Finland

Itkonen J.V.A.,Bank of Finland
Climatic Change | Year: 2015

Recent research focusing on social factors affecting risk perceptions has suggested that social networks might help to explain why differences of opinion about climate change persist across segments of the lay public despite the scientific consensus. Even though concern for global warming in itself might seem irrelevant for most social ties, we show that it is significant enough to be reflected in the structure of social networks. To do this, we programmed a Facebook application that collected survey data on concerns and network data on friendships. We found that respondents tend to have friends with similar concerns as their own, the unconcerned respondents have fewer friends, and any two respondents who disagreed about the seriousness of global warming were less than half as likely to be friends. The results indicate that the structure of the social network may hinder changes in opinions, explaining why opinions persist despite the scientific consensus. The results suggest that the communication of climate science could be improved by strategies that aim to overcome these network effects. © 2015 Springer Science+Business Media Dordrecht Source


Verona F.,Bank of Finland | Verona F.,University of Porto | Wolters M.H.,Kiel Institute for The World Economy
Computational Economics | Year: 2014

Macroeconomic models with sticky information include an infinite number of lagged expectations. Several authors have developed specialized solutions algorithms to solve these models under rational expectations. We demonstrate that it is also possible to implement this class of models in Dynare-a widely used software package for solving dynamic stochastic general equilibrium (DSGE) models. Using the Dynare macro language one can easily construct and change the required large number of lagged expectation terms. We assess the accuracy of simulations run with different truncation points for the lagged expectations terms and find that the solution is reasonably precise even for moderate truncation points. © 2013 Springer Science+Business Media New York. Source


Takalo T.,Bank of Finland | Takalo T.,Catholic University of Leuven | Tanayama T.,National Audit Office of Finland | Toivanen O.,Catholic University of Leuven
International Journal of Industrial Organization | Year: 2013

We extend the theoretical basis of the empirical literature on the effects of R&D subsidies by providing an estimable model of strategic interaction among subsidy applicants, and public and private sector R&D financiers. Our model incorporates fixed R&D cost and a cost of external finance. We derive the optimal support rule. At the intensive (extensive) margin the costs of external funding reduce (increase) the optimal subsidy rate. We also establish necessary and sufficient conditions for the existence of additionality. It turns out that additionality at the intensive margin is less likely with higher spillovers. Our results suggest that the relationship between additionality and welfare may not be straightforward. © 2013 Elsevier B.V. Source


Takalo T.,Bank of Finland | Takalo T.,University of Jyvaskyla | Tanayama T.,University of Helsinki | Tanayama T.,The Research Institute of the Finnish economics ETLA
Journal of Technology Transfer | Year: 2010

We study the interaction of private and public funding of innovative projects in the presence of adverse-selection based financing constraints. Government programs allocating direct subsidies are based on ex ante screening of the subsidy applications. This selection scheme may yield valuable information to market-based financiers. We find that under certain conditions, public R&D subsidies can reduce the financing constraints of technology-based entrepreneurial firms. First, the subsidy itself reduces the capital costs related to the innovation projects by reducing the amount of market-based capital required. Second, the observation that an entrepreneur has received a subsidy for an innovation project provides an informative signal to the market-based financiers. We also find that public screening works more efficiently if it is accompanied with subsidy allocation. © Springer Science+Business Media, LLC 2009. Source

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