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- Complicated Southern European recessions
by Economic Logician in Economic Logic, 2013-05-22 14:51:00 UTC
On both sides of the Atlantic, the last recession was unconventional. This has meant that the mainstream business cycle models needed to be rethought to make good sense of what is happening. By that I mean, they need to be augmented or altered, not thrown out completely, as some have claimed. In doing so, one needs to identify new channels for the transmission of shocks, and possibly new shocks as well. And because this is unconventional, it is sometimes difficult to wrap one's head around some of those models. One good example of that is the paper by Zhen Huo and Jos�-V�ctor R�os-Rull that tr [...]
- Planes and trains can deliver the growth the IMF wants
by W David McCausland, Senior Lecturer in Economics at University of Aberdeen in The Conversation, 2013-05-22 14:28:32 UTC
The International Monetary Fund’s annual report on the UK economy calls for the Chancellor to boost economic growth through investing in infrastructure .
While the IMF is right to make this point, we must ensure we do not once again become bogged down in the simplified debate around “austerity vs stimulus” that has dominated policy discussion in recent years. Economic growth will only return through what is known as “investment spending” on planes, trains and other projects with a strong “multiplier” effect.
Here’s how the argument works. If the governme [...]
- Superstars' baleful effects
by chris dillow in Stumbling and Mumbling, 2013-05-22 13:11:26 UTC
Do we over-rate the importance of individual talents to organizational performance? I ask because of this finding by Sander Hoogendoorn:
Team performance exhibits an inverse u-shaped relationship with ability dispersion.
This comes from a study of MBA students' collaborations on business projects. But it is consistent with a finding from baseball , that teams with middling levels of ability dispersion do better than those with low or high dispersion.
It's easy to hypothesise why this might be so. Where's there's middling levels of ability dispersion, less able team members can learn from the [...]
- Risk management four centuries ago
by Economic Logician in Economic Logic, 2013-05-21 13:52:00 UTC
I tend to think that financial management, and especially risk management, are modern creations that came about after the introduction of analytic accounting, information technology, and the rise of new financial instruments. In other words, you look one century back at firms and individual, they would have laughable financial setups by todays standards. How about some data? Ann Carlos, Erin Fletcher and Larry Neal look at the financial marketplace four centuries ago in London. They look at firms that were discussed in the financial press at that time and reverse-engineer their ownership struc [...]
- Wonkbook: Could the scandals help immigration reform?
by Ezra Klein, Evan Soltas in Ezra Klein's Wonkblog, 2013-05-21 12:45:29 UTC
Welcome to Wonkbook, Ezra Klein and Evan Soltas's morning policy news primer. To subscribe by e-mail, click here . Send comments, criticism, or ideas to Wonkbook at Gmail dot com. To read more by Ezra and his team, go to Wonkblog . Our thoughts and prayers are with the people of Moore, Oklahoma. The latest Washington Post/ABC News poll confirms the findings of the Gallup and CNN polls before it: President Obama's approval ratings are curiously unchanged by the ongoing furors over the IRS, DOJ, and Benghazi. His approval rating is holding at 51 percent, even as 55 percent think his administ [...]
- The Economic Nature of the Resource Curse: Evidence
by Daron Acemoglu and James Robinson in Why Nations Fail, 2013-05-21 12:02:00 UTC
So oil has been a curse for Cameroon.
Is it true more generally that natural resource wealth, or perhaps more specifically oil wealth, has a negative effect on economic growth? If it does, via what mechanisms?
Before we start thinking about mechanisms let’s focus on the cross-national evidence. In fact, the more careful evidence does not suggest that there is such an unconditional effect.
Early work by Jeffrey Sachs and his collaborators suggested that this was the case. And it is true that the discovery and exploitation of oil in the Cameroon coincided with a massive economic decline and det [...]
- On Whose Research is the Case for Austerity Mistakenly Based?
by jfrankel in Jeff Frankels Weblog, 2013-05-20 20:32:55 UTC
Several of my colleagues on the Harvard faculty have recently been casualties in the cross-fire between fiscal austerians and stimulators.Â Â Economists Carmen Reinhart and Ken Rogoff have received an unbelievable amount of press attention, ever since they were discovered by three researchers at the University of Massachusetts to have made a spreadsheet error in the first of two papers that examined the statistical relationship between debt and growth.Â Â They quickly conceded their mistake .
Then historian Niall Ferguson, also of Harvard, received much flack when — asked to comment on Keyne [...]
- The Flawed Origins of Expansionary Austerity
by Jeffrey Frankel in Project Syndicate, 2013-05-20 15:20:13 UTC
CAMBRIDGE – Several of my Harvard University colleagues have recently been casualties in the crossfire between fiscal “austerians” and fiscal stimulators. The economists Carmen Reinhart and Kenneth Rogoff have received an astounding amount of press attention since it was discovered that they made a spreadsheet error in a 2010 paper that examined the statistical relationship between debt and growth. They quickly conceded their error. Soon after, the historian Niall Ferguson – also at Harvard – received much flack when, asked to comment on Keynes’ famous phrase, “In the long run we [...]
- 238 � Ranking environmental projects 4: Environmental condition and values
by David Pannell in Pannell Discussions, 2013-05-20 15:00:59 UTC
Episode 4 in this series on principles to follow when ranking environmental projects. This one discusses how to think about environmental conditions and the resulting environmental values.�
In the previous post I said that the benefit from an environmental project is the difference between the environmental values with the project and without the project. This time I will break that down a bit. The point of this post is that there are two parts to that change in environmental values: a change in the physical condition of the environment, and a resulting change in the values generated by the en [...]
- Reducing child labor with micro-insurance
by Economic Logician in Economic Logic, 2013-05-20 14:27:00 UTC
Micro-insurance is insurance for the poorest against what sometimes seem trivial risks to us. Yet, for the poorest of this world small shocks can be devastating. It is also believed that such shocks are often the reason why parents have to send their children to work even though they know it is bad for their future. It is thus natural to study whether the introduction of micro-insurance reduces the incidence of child labor. Andreas Landmann and Markus Fr�lich benefit from a randomized experiment in rural Pakistan, where a micro-credit enterprise is also offering micro-insurance to members that [...]
- The potential of the super QALY to reconcile the key contentions in health economics
by Chris Sampson in The Academic Health Economists' Blog, 2013-05-20 06:54:41 UTC
Economics is largely about trade-offs and compromise. Academics study the former but don’t often engage in the latter. In health economics, as in other fields, a key trade-off is between equity and efficiency.Â We’ve been studying this for Â a. very .long .time . Despite this, a s Culyer Â has identified , equity is hardly considered in current health technology assessments. We all agree it should be, but just can’t seem to figure it out. Indeed, i tÂ has been argued Â that incorporating equity concerns into cost-effectiveness analyses could still be a long time coming.
But let’s be a bit [...]
- Economic Prospects for the Long Run
by Guest Author in The Big Picture, 2013-05-19 10:00:47 UTC
Economic Prospects for the Long Run
Chairman Ben S. Bernanke
At Bard College at Simon’s Rock, Great Barrington, Massachusetts
May 18, 2013
â¢ 29 KB PDF
Let me start by congratulating the graduates and their parents. The word “graduate” comes from the Latin word for “step.” Graduation from college is only one step on a journey, but it is an important one and well worth celebrating.I think everyone here appreciates what a special privilege each of you has enjoyed in attending a unique institution like Simon’s Rock. It is, to my knowledge, the only “early college” in the United States; many of [...]
- �The Institutional Causes of China�s Great Famine, 1959-1961,� X. Meng, N. Qian & P. Yared (2011)
by afinetheorem in A Fine Theorem, 2013-05-19 04:43:59 UTC
Nancy Qian, along with a big group of coauthors, has done a great amount of interesting empirical work in recent years on the economics of modern China; among other things, she has shown that local elections actually do cause policy changes in line with local preferences and that the state remains surprisingly powerful in the Chinese economy. In this paper with Xin Meng and Pierre Yared, she considers what is likely the worst famine in the history of mankind, China�s famous famine following the Great Leap Forward. After a agricultural production shock in 1959, a series of misguided policy ex [...]
- Hall and Sargent: Fiscal Prioritization: Lessons from Three Wars
by Mark Thoma in Economist's View, 2013-05-18 17:49:18 UTC
George Hall and Thomas Sargent advise Republicans who support the idea of debt
prioritization to "ponder the
actions" of Hamilton, Madison, and Grant:
Fiscal prioritisation: Lessons from three wars, by George Hall, Thomas J.
Sargent,�Vox EU : With the temporary suspension on the US Treasury’s
statutory debt limit set to expire in late May, Republicans in the US House
of Representatives have advanced the idea of debt prioritization. This
proposal, put forward in the Full Faith and Credit Act (HR 807), would
"require that the government prioritize all obligations on the debt h [...]
- Bernanke: Economic Prospects for the Long Run
by Mark Thoma in Economist's View, 2013-05-18 10:14:38 UTC
Chairman Ben S. Bernanke is an optimist when it comes to our long-run
economic prospects (i.e. he does not endorse the notion that productivity is
slowing). I'm with him. (This is a graduation speech Bernanke gave at Bard College at Simon's
Rock, Great Barrington, Massachusetts):
Economic Prospects for the Long Run : Let me start by congratulating the
graduates and their parents. The word "graduate" comes from the Latin word
for "step." Graduation from college is only one step on a journey, but it is
an important one and well worth celebrating.
I think everyone here appreciates [...]
- Structural transformation and stylised business cycle facts
by Ajay Shah in Ajay Shah's blog, 2013-05-18 06:13:00 UTC
The first step in the economics of business cycles is to establish `stylised facts' about the characteristics of business cycle fluctuations. Once these are know, alternative models can be judged on the extent they are able to predict these stylised facts. This is routine in mainstream macroeconomics, which is largely about the United States economy.
When we think about India, however, there is the question of structural transformation of the economy. �There was an old Indian macroeconomics which worried about different things. In recent decades, the economy has changed in fundamental ways: [...]
- Pledgability and Liquidity: A New Monetarist Model of Financial and Macroeconomic Activity
by Christian Zimmermann in NEP-DGE blog, 2013-05-18 01:18:47 UTC
By Venky Venkateswaran and Randall Wright
When limited commitment hinders unsecured credit, assets help by serving as collateral. We study models where assets differ in pledgability – the extent to which they can be used to secure loans – and hence liquidity. Although many previous analyses of imperfect credit focus on producers, we emphasize consumers. Household debt limits are determined by the cost households incur when assets are seized in the event of default. The framework, which nests standard growth and asset-pricing theory, is ca [...]
- Is There a Curse of Resources? The Case of the Cameroon
by Daron Acemoglu and James Robinson in Why Nations Fail, 2013-05-16 20:45:20 UTC
Are natural resources really a curse? Before discussing cross-country regressions analysis let’s begin with a case study that appears to illustrate exactly what people have in mind when they talk about the resource curse. In their recent edited volume “ Plundered Nations? Successes and Failures in Natural Resource Extraction ” Paul Collier and Anthony Venables have a very interesting chapter by Bernard Gauthier and Albert Zeufack called “ Governance and Oil Revenues in Cameroon ”. There is no better place to start to study the resource curse.
Oil was discovered in Cameroon in 1977. At the time [...]
- The tax payer as a tax enforcer
by Economic Logician in Economic Logic, 2013-05-15 14:25:00 UTC
I am fine with paying my fair share of taxes as long as the others do, too. I do not like it when people hide their income and thus have me pay the taxes for them. The ones gaming the system are the rich (especially where filing taxes is very complex) and the independents, who can skimp on both income and sales tax. And this is why I always insist for a receipt or an otherwise documented transaction. Marcelo Arbex and Enlinson Mattos consider my behavior like that of an auditor looking out for tax evasion. Except that I would need to be rewarded in some way for my requesting receipts, as I gue [...]
- Health and Retirement
by UDADISI in UDADISI, 2013-05-14 22:48:00 UTC
Source .� [...]
- Sports, Gender Equality, and Development
by Terra Lawson-Remer in Development Channel, 2013-05-14 18:37:14 UTC
As my colleague Isobel Coleman wrote last week, Saudi Arabia has just leaped a small hurdle towards gender equality: announcing last week that it will allow female athletics in private schools. Until now girls have been prohibited from playing sports as a part of formal education. The move comes on the heels of last year�s decision to allow two Saudi women to compete in the Olympics for the first time in the country�s history.
While allowing a few girls to play sports may seem inconsequential, it is a small step that may have ripple effects for gender equality in the country. And while a valu [...]
- Development that Works: 4 views on evaluation challenges
by Guest blogger in Eval Central, 2013-05-14 16:39:55 UTC
By Guest blogger originally posted at Development that Works
By Paloma Acevedo*
Conducting an impact evaluation (IE) is a complex exercise full of challenges – if you donât agree, you probably have not worked on one yet! Some publications, such as âLearning About Experiments That Never Happened â or blogs about common mistakes in evaluations , talk about some of these challenges. In the workshop âSurveys and Impact Evaluation of Public Policiesâ recently held in Chile, the session called âLearning from Experienceâ devoted some time to talk about these difficulties. We asked an I [...]
- Reduced form welfare
by Economic Logician in Economic Logic, 2013-05-14 14:13:00 UTC
It is not uncommon to find theory papers that assume quadratic utility or loss functions. They are the most tractable functions that allow to find an optimum, yet there is no reason to believe they have anything to do with reality. If you are designing an optimal policy where trade-offs are important, the results hinges quite a bit on the functional forms you choose. Jasper Lukkezen and Coen Teulings look at optimal fiscal policy and go a step further. They attach a VAR (vector autoregression) to a quadratic welfare function. Not only do they assume an analytically tractable but very likely un [...]
- big data and economic research
by Ren� B�heim in Econ Tidbits, 2013-05-14 05:38:00 UTC
Liran Einav and Jonathan D. Levin highlight how "big data" could change economic research. Being a regular data cruncher myself, this is a welcome contribution as (applied micro-)economists have been skilled in the use of large data for quite some time. Some highlights: "Government administrative data are almost certainly under-utilized, both by government agencies and, because of limited and restricted access , by researchers" [my emphasis!]--hear, hear! "Many government agencies are increasingly smart about using data analytics to improve their operations and services. However, most agencies [...]
- Links for 05-14-2013
by Mark Thoma in Economist's View, 2013-05-14 00:03:00 UTC
Labor Force Participation and the Unemployment Threshold - macroblog
Capital Controls, Currency Wars, and Cooperation - Liberty Street
Keynes and Keynesianism - Economix
Time travel in Euroland - Antonio Fatas
This Is No Time to Cut Food Stamps - NYT
Crowding Out Watch, Heritage Edition - Econbrowser
Working Conditions in Bangladesh - EconoSpeak
Inflation Continues to Make Itself Scarce - WSJ
The Partial Faith and Dubious Credit Act - Alan Blinder
Misunderstanding the Neyman-Pearson Hypothesis - Brad DeLong
Can FTAs support ‘Factory Asia’? - Vox EU
Utopophobophilia - Crooked Timber [...]
- Does Social Judgment Diminish Rule Breaking?
by UDADISI in UDADISI, 2013-05-13 15:54:00 UTC
We conducted an experiment simulating three rule-breaking situations, theft, bribery and embezzlement, where we varied the extent to which the actions of the potential rule-breaker are visible to others and are subject to social judgment in the form of informal approval and disapproval messages. We involved a US student sample characterized by cultural heterogeneity due to the immigration of their ancestors to the US from a multitude of countries characterized by different levels of rule of law, as measured by the World Bank’s Rule of Law index. We found significant differences in the res [...]