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2020-09-24

• Relative Price Rigidity and Austrian Economics
  by LK in Social Democracy for the 21st Century: A Post Keynesian Perspective, 2020-09-24 11:20:00 UTC

  The purpose of this post is to examine and provide a critique of Austrian price theory, and in particular the Austrian denial of relative price rigidity in the real world. In the Austrian economist Ludwig Lachmann’s book Capital, Expectations, and the Market Process (Kansas City, 1977) there is a section where Lachmann reviews John Hicks’s book Capital and Growth (Oxford, 1965). The significance of Hick’s discussion is described by Lachmann: “Two other matters of great significance are dealt with in the first part of the book. As others have done before him, Professor Hicks finds it necessary [...]

2020-09-23

• Opportunity costs, marginal productivity, and cost-effectiveness thresholds: what are they and how are they related?
  by Rita Faria, Jessica Ochalek, jameslomas88 in The Academic Health Economists' Blog, 2020-09-23 06:00:00 UTC

  In this post, we explain key concepts of cost-effectiveness analysis in healthcare and how they are linked: opportunity cost, marginal productivity (of a healthcare system), net benefit, and cost-effectiveness threshold. In another post, to be published tomorrow, we will propose how to use cost-effectiveness thresholds and the existing estimates of marginal productivity in a cost-effectiveness analysis of policy options in healthcare. We also suggest some stock sentences to use when explaining results to audiences from an economics, medical, or lay background. Cost-effectiveness decisio [...]

2020-09-22

• The Master and the Prodigy
  by William Janeway in INET Blog, 2020-09-22 18:13:18 UTC

  Zachary D. Carter, The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes , Random House, 2020. Cheryl Misak, Frank Ramsey: A Sheer Excess of Powers , Oxford University Press, 2020. CAMBRIDGE – In January 1922, a 19-year-old University of Cambridge undergraduate challenged a recently published work of philosophy by a fellow of King’s College, Cambridge, a man twice his age and well on his way to recognition as Britain’s leading public intellectual. In the uninhibited style that is so characteristic of Cambridge argumentation, Frank Ram [...]

• Optimal Dynamic Capital Requirements and Implementable Capital Buffer Rules
  by Christian Zimmermann in NEP-DGE blog, 2020-09-22 15:50:06 UTC

  By Matthew B. Canzoneri; Behzad T. Diba; Luca Guerrieri; Arsenii Mishin http://d.repec.org/n?u=RePEc:fip:fedgfe:2020-56&r=dge We build a quantitatively relevant macroeconomic model with endogenous risk-taking. In our model, deposit insurance and limited liability can lead banks to make risky loans that are socially inefficient. This excessive risk-taking can be triggered by aggregate or sectoral shocks that reduce the return on safer loans. Excessive risk-taking can be avoided by raising bank capital requirements, but unnecessarily tight requirements lower welfare by limiting liquidity produc [...]

2020-09-21

• An Economic Zombie Survival Guide
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2020-09-21 11:58:44 UTC

  “ The dead walk among us. Zombies, ghouls—no matter what their label—these somnambulists are the greatest threat to humanity, other than humanity itself. ” Max Brooks, The Zombie Survival Guide Everyone surely hopes that zombies will remain confined to the growing list of horror movies . But unless we shut them down, insolvent firms can become economic zombies that suffocate innovation and growth. As the COVID pandemic continues, policymakers will face some difficult decisions. Many businesses are coming under increasingly severe financial stress. Some, like dry-cleaning establishments that re [...]

• Chris Sampson’s journal round-up for 21st September 2020
  by Chris Sampson in The Academic Health Economists' Blog, 2020-09-21 11:00:06 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. If you’d like to write one of our weekly journal round-ups, get in touch . Health Economics Volume 29, Issue 9 This issue of Health Economics includes six full articles and four Letters, all on applied microeconometrics (although one article on switching costs includes a CT scan image , so there may be more going on here than I think). I was drawn to some research on maternal mental health and e [...]

2020-09-19

• This one unconscious reaction may be holding women back at work
  by ? in Co.Exist, 2020-09-19 05:00:32 UTC

  Regardless of gender, employees have a hard time taking critical feedback from a woman. Imagine that your boss Ethan calls you into his office. He expresses disappointment in your recent performance and lack of commitment. How would you react? Would you ac [...]

2020-09-18

• Happy Birthday Credit Cards! Redux
  by bbatiz in The Cashless Society, 2020-09-18 21:56:56 UTC

  Photo by Paul Felberbauer on Unsplash For a long time, one of the pillars of the cashless economy has been the advent of bank-sponsored credit cards (at the time called universal payment cards). There are several books about it as well as academic papers, of these my favourite is that by Dave Stearns . You can also see a video by Lana Swartz discussing her book which touches on the genesis of Diner’s Club. Today (18.Sep.2020), David Birch reminds of the genesis of this payment medium in his column while celebrating the 58th anniversary to what was to become VISA. Throughout his writings [...]

2020-09-16

• The Skyline versus the Sprawl-line: CO2 Emissions and Building Types in New York City
  by Jason Barr in Skynomics Blog, 2020-09-16 12:35:23 UTC

  Jason M. Barr           September 16, 2020 Hong Kong on the Hudson? When we think of New York City, we think of Manhattan and its supertall skyscrapers. As a result, we believe that New York is one of the densest places on Earth: a Hong Kong on the Hudson. And yet, craning our necks upwards diverts our attention from another fact. New York is not very dense at all when you look towards the horizon. Once you get out of Manhattan and past the historical outer-borough neighborhoods, you will find a distinctly suburban city. The landscape comprises block after block of one- and two-family homes, s [...]

2020-09-15

• With No Legal Guardrails for Patients, Ambulances Drive Surprise Medical Billing
  by ? in Physician's Weekly, 2020-09-15 04:04:04 UTC

  School librarian Amanda Brasfield bent over to grab her lunch from a small refrigerator and felt her heart begin to race. Even after lying on her office floor and closing her eyes, her heart kept pounding and fluttering in her chest. The school nurse check [...]

2020-09-14

• Structuring Mortgages for Macroeconomic Stability
  by Christian Zimmermann in NEP-DGE blog, 2020-09-14 23:24:18 UTC

  By John Y. Campbell, Nuno Clara and João F. Cocco http://d.repec.org/n?u=RePEc:nbr:nberwo:27676&r=dge We study mortgage design features aimed at stabilizing the macroeconomy. We model overlapping generations of mortgage borrowers and an infinitely lived risk-averse representative mortgage lender. Mortgages are priced using an equilibrium pricing kernel derived from the lender’s endogenous consumption. We consider an adjustable-rate mortgage (ARM) with an option that during recessions allows borrowers to pay only interest on their loan and extend its maturity. We find that this maturity extens [...]

• What difference did lockdowns make?
  by Michael Reddell in Croaking Cassandra, 2020-09-14 22:36:50 UTC

  I’ve written a couple of posts over the months drawing on work by Waikato economics professor John Gibson. Back in April there was this post , and then last month I wrote about an empirical piece Gibson had done using US county-level data suggesting that government-imposed restrictions in response to Covid may have made little consistent contribution to reducing death rates (in turn consistent with evidence suggesting that much of the decline in social contact, and economic activity, was happening anyway, in advance of government restrictions). Fascinating as I found that paper, I was [...]

• Rita Faria’s journal round-up for 14th September 2020
  by Rita Faria in The Academic Health Economists' Blog, 2020-09-14 11:00:07 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. Visit our Resources page for links to more journals or follow the HealthEconBot . If you’d like to write one of our weekly journal round-ups, get in touch . PharmacoEconomics Volume 38, Issue 9 A couple of the papers caught my eye in the September issue of PharmacoEconomics . The first is by Paul Catchpole and Victoria Barrett, from the APBI, who suggest three topics for the ongoing review of the N [...]

2020-09-12

• Mitos y verdades de la complejidad económica
  by César Hidalgo in Foco Económico, 2020-09-12 17:31:25 UTC

  ¿Lograremos desarrollarnos si seguimos produciendo esencialmente materias primas o necesitamos saltar a una economía más compleja? César Hidalgo, creador del concepto de complejidad económica entra a un debate que revivieron Sebastián Edwards, José Miguel Ahumada y Nicolás Grau, entre otros. Hoy por hoy, la complejidad económica ha entrado con fuerza en el debate nacional. Sin embargo, no es un concepto simple. Solemos pensar en la complejidad económica como la capacidad de producir aparatos de alta tecnología. En ese sentido, a todos nos parece evidente que economías como la de Japón o Suiz [...]

2020-09-11

• The Hayek question
  by chris in Stumbling and Mumbling, 2020-09-11 13:09:36 UTC

  Thatcher was right. This is my reaction to reports that Dominic Cummings regards Brexit as a way of getting out of limits on state aid and so enabling the government to funnel cash towards the UK’s own future big tech companies. The problem with this is that, as Thatcher said, the state cannot pick winners. Corporate growth is largely unpredictable. “The stochastic element is predominant” concluded Alex Coad in one survey. “Corporate growth rates are random” found Paul Geroski in another (pdf) . “There is low predictability [of corporate earnings growth] even with a wide variety of predictor v [...]

• Measuring court output in the pandemic: evidence from India's largest commercial tribunal
  by Anurodh in Ajay Shah's blog, 2020-09-11 04:00:00 UTC

  by Anjali Sharma and Bhargavi Zaveri . Introduction A critical element of organisational planning is the ability to anticipate and manage risks. Many organisations worry about the risk of disruptions to their operations. They spend time and resources to anticipate such events, and put in place mechanisms to mitigate their impact. This is known as business continuity planning (BCP). It can range from keeping standby suppliers for raw materials, finding alternate delivery channels to reach customers, building redundancies along networks and so on. The objective of BCP is to ensure that business [...]

• Why women bosses get different reactions than men when they criticize employees
  by ? in DJG Blogger, 2020-09-11 00:42:29 UTC

  Both men and women find critical feedback harder to take from a woman. pixelfit/E+ via Getty Images Imagine that your boss Ethan calls you into his office. He expresses disappointment in your recent performance and lack of commitment. How would you rea [...]

• Why female bosses get different reactions than men when they criticize employees
  by ? in DJG Blogger, 2020-09-11 00:42:29 UTC

  Both men and women find critical feedback harder to take from a woman. pixelfit/E+ via Getty Images Imagine that your boss Ethan calls you into his office. He expresses disappointment in your recent performance and lack of commitment. How would you rea [...]

2020-09-10

• America’s Dire Inequality Demands a New Conceptual Framework. This Economist Has One.
  by Lynn Parramore in INET Blog, 2020-09-10 19:02:00 UTC

  In Lance Taylor’s new book, Macroeconomic Inequality from Reagan to Trump , the noted economist examines how and why the United States, starting in the 80s, started to break down into a sharply divided country of haves and have-nots. How it happened is hotly debated among experts. Is it the lofty rate of return on wealth enjoyed by the affluent? Or the impact of monopolistic corporations that can charge high prices for basic goods and services? What about globalization? Technological change? Taylor, Emeritus Professor of Economics at the New School [...]

• Patience vs FAIT: Which is key in the new FOMC strategy?
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2020-09-10 11:56:35 UTC

  “ This change implies that the Committee effectively will set monetary policy to […] not preemptively withdraw support based on a historically steeper Phillips curve that is not currently in evidence and inflation that is correspondingly much less likely to materialize.” Federal Reserve Governor Lael Brainard, “ Bringing the Statement on Longer-run Goals and Monetary Policy Strategy into Alignment with Longer-Run Changes in the Economy ,” Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution, September 1, 2020. The Federal Open Market Committee’s (FOMC) policy strategy upd [...]

2020-09-08

• Cochrane on why debt matters
  by David Andolfatto in MacroMania, 2020-09-08 18:13:00 UTC

  The stock of national debt is now larger than our annual national income in the United States. Is this something to worry about? Does it matter how big the debt-to-GDP ratio gets? Is there any limit to how large it can grow and, if so, what is it this limit and what factors determine it? A lot of people have been asking these questions lately. John Cochrane is the latest to opine on these questions here: Debt Matters .� I'm not even sure where to begin. I suppose we can start with the famous debt clock pictured on the right. Whenever I look at the debt clock, I'm reminded of James Tobin who, i [...]

• Will coronavirus accelerate the move towards a cashless economy?
  by bbatiz in The Cashless Society, 2020-09-08 16:54:28 UTC

  Note: This was originally posted in The Economics Observatory . It is reblogged verbatim under the Creative Commons licence. The use of cash fell substantially in the early days of the Covid-19 pandemic with the acceleration in online shopping and contactless payments – but cash usage has bounced back as lockdown has eased. Long-term prospects for retail payments remain uncertain. It is still too early to tell whether Covid-19 and the public health interventions implemented in response will have permanent effects on retail payments in the UK. Initially, the hoarding of cash was overs [...]

2020-09-07

• How the Collapse of Communism Has Undermined Faith in American Capitalism
  by ? in Econlog, 2020-09-07 13:01:06 UTC

  A t their presidential campaign stops, U.S. Senators Bernie Sanders and Elizabeth Warren charged that American capitalism has, since the early 1970s, been “rigged” and “corrupted” by the rich and powerful for self-aggrandizement, to the detriment of middle- and lower-income Americans. 1 The drumbeat continues in the media: The root cause of American workers’ economic problems over the past half-century has been the “disastrous” policies of the U.S. government, including the diminishment of union bargaining power, suppression of real wages by corporate elites, destruction of the country’s [...]

• Chris Sampson’s journal round-up for 7th September 2020
  by Chris Sampson in The Academic Health Economists' Blog, 2020-09-07 11:00:07 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. Visit our Resources page for links to more journals or follow the HealthEconBot . If you’d like to write one of our weekly journal round-ups, get in touch . The European Journal of Health Economics Volume 21, Issue 7 The latest issue of EJHE manages to cover many of my research interests, with papers on mental health, valuing ‘dead’, and screening for diabetic retinopathy. There’s also plenty beyon [...]

• Consumption and Income Inequality across Generations
  by Christian Zimmermann in NEP-DGE blog, 2020-09-07 03:19:30 UTC

  By Giovanni Gallipoli, Hamish Low and Aruni Mitra http://d.repec.org/n?u=RePEc:hka:wpaper:2020-061&r=dge We characterize the joint evolution of cross-sectional inequality in earnings, other sources of income and consumption across generations in the U.S. To account for cross-sectional dispersion, we estimate a model of intergenerational persistence and separately identify the influences of parental factors and of idiosyncratic life-cycle components. We find evidence of family persistence in earnings, consumption and saving behaviours, and marital sorting patterns. However, the quantitative con [...]

2020-09-01

• How to recycle a huge ship – safely and sustainably
  by ? in Forum:Blog, 2020-09-01 10:17:54 UTC

  The process of shipbreaking, breaking down old ships into spare parts, is among the most dangerous jobs in the world. It's also very harmful to the environment. [...]

2020-08-31

• Doubts about the Model and Optimal Policy
  by Christian Zimmermann in NEP-DGE blog, 2020-08-31 20:30:26 UTC

  By Anastasios Karantounias http://d.repec.org/n?u=RePEc:fip:fedawp:88478&r=dge This paper analyzes optimal policy in setups where both the leader and the follower have doubts about the probability model of uncertainty. I illustrate the methodology in two environments: a) an industry populated with a large firm and many small firms in a competitive fringe, where both types of firms doubt the probability model of demand shocks, and b) a general equilibrium economy, where a policymaker taxes linearly the labor income of a representative household in order to finance an exogenous stream of stocha [...]

• What’s happened so far with the return on safe and liquid assets?
  by ? in FRED blog, 2020-08-31 13:00:00 UTC

  Today, we use an assortment of FRED data to consider a straightforward question: What has happened to the returns on safe assets (in this case, Treasury securities) since the pandemic hit? We look especially at the possible contributions of inflation expectations and demand for liquidity. The FRED graph above shows nominal rates for the 1-year Treasury (dark blue) and the 5-year Treasury (red) the difference between the “instantaneous” 5-year-ahead Treasury rate and the 5-year, 5-year forward expected inflation rate (green) the difference between corporate bond yields and the 5-year Treasury [...]

2020-08-28

• Blackouts and Fires Caused by California’s Ineffective Green Policies
  by Joel Kotkin in The Foundry, 2020-08-28 20:47:02 UTC

  In the soft warmth of spring the swallows famously return to  Capistrano , but in recent years they are followed by what seems inevitable summer  power outages  and fires. This is not as pleasant an experience for Californians as the return of our favored feathered companions. Every summer, usually around this time of year, we get our inevitable heat waves. In the past, we used to endure them without fearing our lights–and computers–would be shut down, and our houses left in ruins. No more. Almost every year we do not just have a fire season, we have a conflagration. Millions of acres g [...]

2020-08-27

• How Transaction Costs Change the Analysis
  by ? in Econlog, 2020-08-27 19:11:32 UTC

  Hang around freedom-friendly circles long enough and you’ll eventually hear a claim like the following. “Under private ownership of roads, congestion would be eliminated through the implementation of market pricing.” Claims like this range the gamut of sophistication. In the more sophisticated, truly dynamic pricing would adjust in real time as cars enter and exit the roadway. A somewhat less sophisticated idea still improves on the current non-price means of allocation under public ownership: the private road owner charges a higher fee during hours when he anticipates more demand for the road [...]

• Climate Finance Intermediation: Interest Spread Effects in a Climate Policy Model
  by Christian Zimmermann in NEP-DGE blog, 2020-08-27 03:44:19 UTC

  By Kai Lessmann and Matthias Kalkuhl http://d.repec.org/n?u=RePEc:ces:ceswps:_8380&r=dge Interest rates are central determinants of saving and investment decisions. Costly financial intermediation distort these price signals by creating a spread between the interest rates on deposits and loans with substantial effects on the supply of funds and the demand for credit. This study investigates how interest rate spreads affect climate policy in its ambition to shift capital from polluting to low-carbon sectors of the economy. To this end, we introduce financial intermediation costs in a dynamic gen [...]

2020-08-25

• If only monetary policy in 2008 had been what it was in 2020.
  by Marcus Nunes in Historinhas, 2020-08-25 19:01:30 UTC

  Many like to compare the Covid19 contraction with the Great Depression. In addition to the nature of the two contractions being completely unrelated, while in the first two months of the Covid19 crisis (from the February peak to the April trough) RGDP dropped 15%, it took one year from the start of the Great Depression for RGDP to drop by that amount. Although the Covid19 shock has also no common element with the Great Recession, a comparison between the two is instructive from the monetary policy point of view. This is so because the Great Recession was the “desired outcome” of the Fed´s mone [...]

2020-08-24

• How Does the COVID Recession Compare?
  by Michael J. Boskin in Project Syndicate, 2020-08-24 14:00:36 UTC

  STANFORD – The historically deep COVID-19 recession appears to have turned the corner in most countries. But current private and official forecasts , if correct, imply that most economies will not return to their previous performance peaks until late 2022. Much will depend not only on the evolution of the pandemic and effective therapeutic and vaccine deployment, but also on the monetary, fiscal, trade, and regulatory policies that are pursued. Policymakers and commentators are thus examining previous episodes in search of an effective response. All recessions differ in terms of their proximat [...]

• Chris Sampson’s journal round-up for 24th August 2020
  by Chris Sampson in The Academic Health Economists' Blog, 2020-08-24 11:00:07 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. Visit our Resources page for links to more journals or follow the HealthEconBot . If you’d like to write one of our weekly journal round-ups, get in touch . American Economic Journal: Economic Policy Volume 12, Issue 3 Of the 14 articles in the latest issue of AEJ:EP , there are three that focus on health care. A study from Taiwan estimates price elasticities to identify the impact of cost-shari [...]

• Average Inflation Targeting
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2020-08-24 10:57:02 UTC

  “To achieve buy-in by households and businesses, a comprehensible, credible, and actionable makeup strategy will need to be followed by years of central bank policy consistent with that strategy.” FRB Chair Jerome H. Powell, Opening Remarks at the Conference on Monetary Policy Strategy, Tools and Communications Practices,”  June 4, 2019.  The Federal Open Committee’s first-ever comprehensive monetary policy review looks to be coming to an end. Since the announcement on November 15, 2018, the Fed has focused on strategies, tools, and communications practices, and engaged the public through nume [...]

2020-08-20

• Thesis Thursday: Chris Sampson
  by captaincanaway in The Academic Health Economists' Blog, 2020-08-20 06:00:04 UTC

  On the third Thursday of every month, we speak to a recent graduate about their thesis and their studies. This month’s guest is Dr Chris Sampson who has a PhD from the University of Nottingham . If you would like to suggest a candidate for an upcoming Thesis Thursday, get in touch. Title Optimising the cost-effectiveness of risk-based screening for diabetic retinopathy Supervisors Marilyn James , David Whynes Repository link http://eprints.nottingham.ac.uk/60411/ Congratulations on finally finishing your PhD and thank you for acknowledging my ‘spiritual guidance’ in your thesis. First t [...]

• Macroeconomic effects of tariffs shocks: the role of the effective lower bound and the labour market
  by Christian Zimmermann in NEP-DGE blog, 2020-08-20 00:28:29 UTC

  By Pascal Jacquinot, Matija Lozej and Massimiliano Pisani http://d.repec.org/n?u=RePEc:ecb:ecbwps:20202434&r=dge We simulate a version of the EAGLE, a New Keynesian multi-country model of the world economy, to assess the macroeconomic effects of US tariffs imposed on one country member of the euro area (EA), and the rest of the world (RW). The model is augmented with an endogenous effective lower bound (ELB) on the monetary policy rate of the EA and country-specific labour markets with search-and-matching frictions. Our main results are as follows. First, tariffs produce recessionary effects [...]

• Choices and options, public and private
  by ? in croaking cassandra, 2020-08-20 00:25:00 UTC

  I was going to move on to another topic, but last night University of Waikato economics academic John Gibson sent me the links to a couple of other papers I hadn’t seen, and I thought it might be worth writing about them. Gibson is one of New Zealand [...]

2020-08-19

• Making the Treasury Market Resilient
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2020-08-19 11:50:39 UTC

  “ [A]ny significant disruption in the Treasury market would likely impact financial stability .” Treasury Market Practices Group, “ White Paper on Clear and Settlement in the Secondary Market for U.S. Treasury Securities ,” July 11, 2019. “Having pushed for the move to greater central clearing, global authorities have a responsibility to ensure that CCPs do not themselves become a point of failure for the system.” Then-FRB Governor Jerome H. Powell, Speech at the FRB Chicago Symposium on Central Clearing , June 23, 2017. Ensuring financial stability requires both resilient institutions and res [...]

2020-08-18

• Does India need a public procurement law?
  by Shubho Roy in Ajay Shah's blog, 2020-08-18 19:36:00 UTC

  by Shubho Roy and Diya Uday. One of the proposed solutions to India’s public procurement problems is new legislation to govern how the government buys goods and services from the private sector. Will a law help India? We connect two data sources to test this idea. Instead of a new law, monitoring public procurement, identifying failures, and then building state capacity may be a better solution. Legislation may not be the silver bullet for our problems. In India, legislation is often viewed as a panacea when faced with policy problems. Whether it is bankruptcy , privacy , warehousing, or [...]

2020-08-17

• Boon or Boondoggle? The Long Run Economics of the Empire State Building
  by Jason Barr in Skynomics Blog, 2020-08-17 12:28:49 UTC

  Jason M. Barr and Gabriel Ahlfeldt                       August 17, 2020 The Bricks of Ego When most people look up at supertall skyscrapers , like the Burj Khalifa or the Shanghai Tower, they assume they have been constructed for irrational purposes . The most common belief is that they are built by ego-driven developers seeking to build monuments to themselves. This certainly seemed like the case in 1931, when the two developers of the Empire State Building, former New York governor and 1928 Democratic presidential candidate, Al Smith, and former General Motors executive, John J. Raskob, bui [...]

2020-08-12

• ‘Preference-based measure’ is misleading – can we agree on something better?
  by Nancy Devlin in The Academic Health Economists' Blog, 2020-08-12 06:00:08 UTC

  From time to time, a little puff of steam emerges from my Twitter feed as Paul Kind (one of the founding members of the EuroQol Group and a key figure in the development of the EQ-5D) objects to yet another paper describing the EQ-5D as a ‘preference-based measure’ (PBM). I find myself agreeing with Paul. Of course, this may simply mean I have become old and cranky. While nomenclature isn’t a very exciting topic, I thought it might be useful to set out the reasons why I think the term ‘preference-based measure’ (PBM) is unhelpful and potentially misleading. What do health economists mean w [...]

2020-08-11

• Dynamic General Equilibrium modelling of tiny countries
  by Christian Zimmermann in NEP-DGE blog, 2020-08-11 14:47:26 UTC

  Fiscal Policy Multipliers in Small States By Ali Alichi, Ippei Shibata and Kadir Tanyeri http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/072&r=dge Government debt in many small states has risen beyond sustainable levels and some governments are considering fiscal consolidation. This paper estimates fiscal policy multipliers for small states using two distinct models: an empirical forecast error model with data from 23 small states across the world; and a Dynamic Stochastic General Equilibrium (DSGE) model calibrated to a hypothetical small state’s economy. The results suggest that fiscal policy [...]

2020-08-10

• Density Forecasts and Density Realizations
  by Francis Diebold in No Hesitations, 2020-08-10 18:53:00 UTC

  Check out the interesting new paper below.   Of course I am a fan of predictive densities (e.g., GDP fan charts).  Usually I compare them to the "realization" (e.g., "published GDP").  But of course, as the authors emphasize, the realization is just a point estimate of true GDP, whereas in reality true GDP is itself uncertain and has its own density, which can be estimated (maybe...) from revisions.  Very interesting.  I wonder, for example, how predictive density assessments based on the probability integral transform (e.g., here ) would need to be modified to account for uncertainty in the m [...]

• Chris Sampson’s journal round-up for 10th August 2020
  by Chris Sampson in The Academic Health Economists' Blog, 2020-08-10 11:00:11 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. Visit our Resources page for links to more journals or follow the HealthEconBot . If you’d like to write one of our weekly journal round-ups, get in touch . Health Care Analysis Volume 28, Issue 3 Health Care Analysis is a journal that I would like to spend more time reading. This issue contains the usual crop of thoughtful articles on matters of fairness in health care. Leading the way is an ar [...]

• PÃ¥vebesök förbättrar de mänskliga rättigheterna
  by Niclas Berggren in Nonicoclolasos, 2020-08-10 05:22:00 UTC

  Som läsare av denna blogg väl känner till är jag ingen större vän av Katolska kyrkan och påven. Icke desto mindre måste jag erkänna att denna kyrka och dess högste företrädare ibland kan föra med sig förbättringar i världen. Ett exempel på detta ges i den nya studien ”Pacem in Terris: Are Papal Visits Good News for Human Rights?” av Marek Endrich och Jerg Gutmann: Our estimated causal treatment effect of papal visits indicates an increase in human rights protection. This effect sets in before the pope’s visit, which can be explained by the pope’s ability and frequently demonstrated willing [...]

2020-08-05

• Truth, utility & education
  by chris in Stumbling and Mumbling, 2020-08-05 13:10:01 UTC

  Katharine Birbalsingh, headteacher of Michaela Community School, says the Black Lives Matter movement is a distraction. I think her claim is defensible – albeit because it raises an issue many of us would rather ignore. The Times quotes her: The problem with getting angry about racism is it’s distracting. It leaves you with less energy to help you succeed, like working hard. This alerts us to a nasty conflict – between beliefs that are true and those that are useful. It is true that black people face discrimination: for example, the ONS says that Black Britons earn 7.7 per cent less than the [...]

• Abandoning a Paper
  by noreply@blogger.com (David Stern) in Stochastic Trend, 2020-08-05 00:26:00 UTC

  Now and then it's time to give up on a project. In September 2018, I attended a climate econometrics conference at Frascati near Rome. For my presentation, I did some research on the performance of different econometric estimators of the equilibrium climate sensitivity (ECS) including the multicointegrating vector autoregression (MVAR) that we used in our paper in the Journal of Econometrics . The paper included estimates using historical time series observations (from 1850 to 2014), a Monte Carlo analysis, estimates using output of 16 Global Circulation Models (GCMs), and a meta-analysis of t [...]

2020-08-04

• A replication database for economics and social sciences: The ReplicationWiki
  by repecblogguest in RePEc blog, 2020-08-04 14:43:54 UTC

  This is a guest post by Jan H. Höffler The ReplicationWiki currently offers a database of 4,484 studies from the social sciences for which empirical methods were used. It lists which of the studies have data and code available online. In cases where replications are known they are classified by their type and results. The topic of replication has become more and more prominent in the scholarly discourse in recent years. Yet, much needs to be done to make the availability of code and data more mainstream. To highlight how much work still lies ahead, even recent publications on the topic of repl [...]

2020-08-03

• Windowing, anti-competition and the Amendments to the 6th Edition of the Nigerian Broadcasting Code
  by Chijioke Okorie in The IPKat, 2020-08-03 15:33:00 UTC

  Earlier in June, Nigeria’s National Broadcasting Commission (NBC) published Amendments to the 6th Edition of the Nigerian Broadcasting Code (NBC Code amendments), after public presentation of the amendments to stakeholders in the broadcast media industry in Nigeria. The NBC Code amendments provide inter alia for web/online broadcasting, prohibition of agreements in restraint of trade; requirements for acquisition of sports rights; local content requirements and compulsory sub-licensing. The NBC Code amendments have attracted both strong support and critici [...]

• Has the U.S. Distribution of Wealth Worsened?
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2020-08-03 11:48:13 UTC

  “ [T]he ratio of the wealth of the wealthy to the wealth of the less wealthy …may reflect something about the adequacy or inadequacy of social insurance arrangements…” Lawrence Summers, comments at Peterson Institute panel, October 17, 2019 . Wealth inequality in the United States is obvious to everyone. The Federal Reserve’s triennial Survey of Consumer Finance (SCF) documents the glaring and persistent divide between rich and poor, confirming that ownership of financial and real assets in the United States has been highly concentrated for decades (see our earlier post ). The most recent 2016 [...]

• Chris Sampson’s journal round-up for 3rd August 2020
  by Chris Sampson in The Academic Health Economists' Blog, 2020-08-03 11:00:00 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. Visit our Resources page for links to more journals or follow the HealthEconBot . If you’d like to write one of our weekly journal round-ups, get in touch . PharmacoEconomics Volume 38, Issue 8 Leading the way in the latest issue of PharmacoEconomics is some ICER bashing. Mike Paulden thinks it’s time to abandon the ICER , while James O’Mahony provides us with some reasons to be less drastic. In th [...]

• The New DAC Method of Reporting Debt Relief as ODA: HIPC Redux?
  by ReibReisen in ShiftingWealth, 2020-08-03 09:01:00 UTC

  Donors have agreed on a new accounting method aid treatment of debt relief on 24/07/2020. At first glance, these are good news for Covid-stricken poor countries. Debt write-offs have helped in the past stimulate new investment and lower funding cost as a debt overhang has been removed, most notably via the HIPC and MDRI initiatives [1] . But to what extent does the new DAC method of reporting debt relief as aid improve funding prospects for the poorest countries? To help alleviate funding shortfalls among the world’s poorest economies, many of which are in sub-Saharan Africa (SSA), internation [...]

• Columbia. Economics PhD alumnus. Milton Moss, 1962
  by Irwin Collier in Economics in the Rear-View Mirror, 2020-08-03 07:39:41 UTC

    The previous post provided a transcription of the 1986 syllabus for Milton Moss’s course at the University of Maryland “The Development of Economic Ideas” that turned up in the J. Herbert Furth papers at the Hoover Institution Archives. Since Milton Moss is hardly a household name, today’s post introduces the minor Milton as our newest entry to the Meet-an-Economics-PhD-Alumna/us series. His “greatest hit” appears to be the 1973 NBER volume that he edited, The Measurement of Social and Economic Performance . Fun Fact:  Moss’s father-in-law (Naum Jasny) was a renowned expert on Soviet agricul [...]

• TvÃ¥ Ã¥tgärder som pÃ¥verkar anställdas beteende
  by Niclas Berggren in Nonicoclolasos, 2020-08-03 05:22:00 UTC

  De två forskarna John List och Fatemeh Momeni har i två spännande fältexperiment undersökt hur anställdas beteende påverkas av två åtgärder: när företaget tar socialt ansvar och när företaget betalar lön i förväg. I studien ”When Corporate Social Responsibility Backfires: Evidence from a Natural Field Experiment” undersöker de vilken effekt på anställdas beteende som ett explicit socialt ansvarstagande får. Resultatet: This paper uses a natural field experiment to connect corporate social responsibility (CSR) to an important but often neglected behavior: employee misconduct and shirking. Throu [...]

2020-08-02

• Les coulisses économiques des sites de rencontres
  by The Conversation in Contrepoints, 2020-08-02 03:35:44 UTC

  Par François Lévêque 1 . Un article de The Conversation Vous êtes en quête d’une relation durable ou d’une rencontre sans lendemain ? Inscrivez-vous à Tinder ou à Bumble. Ou encore, si vos préférences sont nettement plus ciblées, à GlutenfFreeSingles ou ClownDating. Les algorithmes ont remplacé les agences matrimoniales et la drague à l’ancienne. L’analyse économique s’était risquée sans données à échafauder une théorie du mariage, l’explosion des sites de rencontres a depuis tourné la tête de bien des économètres. Savez-vous qu’un mariage sur trois aujourd’hui aux États-Unis débute par une mi [...]

2020-07-30

• Are jobs in education still recession-proof? : Studying employment data in the education sector
  by ? in FRED blog, 2020-07-30 13:00:00 UTC

  The U.S. economy is in recession, and the unemployment rate is above 10%. But the start of the school year is around the corner, and teachers are going back to work. Historically, student enrollment in colleges and universities increases during recessions,* but what do the data on educational employment show us? Here, we look at two graphs—one for New York City (the most populous U.S. city) and one for California (the most populous U.S. state)—to see if employment in the education sector really is recession-proof. Both FRED graphs above show there was no noticeable change in college, univers [...]

2020-07-28

• The role of demographics and migration for the future of economic growth in China
  by Christian Zimmermann in NEP-DGE blog, 2020-07-28 03:33:58 UTC

  By Juan Carlos Conesa and Yan Wang http://d.repec.org/n?u=RePEc:nys:sunysb:20-08&r=dge China’s real GDP has been growing by almost 10 percent a year for the last three decades. For how long should we expect this spectacularly high growth to continue? We evaluate in a quantitative two sector model with segmented labor markets and financial frictions the prospects for China’s future growth under different policy scenarios. In our model the high growth rate observed in China since the early 1990s is fueled by the large increase in urban labor supply, because of rural-urban migration, and the eme [...]

2020-07-27

• Chris Sampson’s journal round-up for 27th July 2020
  by Chris Sampson in The Academic Health Economists' Blog, 2020-07-27 11:00:01 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. Visit our Resources page for links to more journals or follow the HealthEconBot . If you’d like to write one of our weekly journal round-ups, get in touch . The European Journal of Health Economics Volume 21, Issue 5 Most journals are publishing articles relevant to the COVID pandemic, and this issue of EJHE is no exception. There’s an editorial on modelling and uncertainty in the context of COVID. [...]

2020-07-26

• Cyber Risk, Financial Stability and the Payments System
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2020-07-26 15:50:41 UTC

  “ I view cyber security as one of the most serious financial stability concerns facing central banks .” Federal Reserve Bank of Boston President Eric Rosengren, January 30, 2015 . Cyber risk remains at the top of the list of risks to the financial system, and the financial system is well known as the primary target for hackers (see here , here and here ). In response, financial institutions expend huge resources on protecting their information systems—by one estimate , well over $100 billion. Yet, the losses may be even larger: a recent European Systemic Risk Board report suggests they could b [...]

2020-07-25

• Academic spotlight (I): Sterzi, Rameshkoumar and Van der Pol on NPE activity
  by Merpel McKitten in The IPKat, 2020-07-25 10:30:00 UTC

  In between chasing birds and lounging on her editors' desks, Merpel occasionally reads some of the materials that pass over them. Recently, she came across two academics publications that may be of particular interest to patent-oriented readers of IPKat. This post, therefore, kicks off a two-part miniseries, which will summarize both papers and offer a reflection. Merpel has selected these two papers because each was picked up by industry groups that (very) actively participate in the debate on the contours of contemporary patent law. Such strong interest in academic studies shows that a lot i [...]

2020-07-24

• Housing prices and credit constraints in competitive search
  by Christian Zimmermann in NEP-DGE blog, 2020-07-24 20:24:39 UTC

  By Juan Pablo Rincón-Zapatero, Maria Belen Jerez Garcia-Vaquero and Antonia Diaz Rodriguez http://d.repec.org/n?u=RePEc:cte:werepe:30623&r=dge We embed a competitive search model of the real estate market into a heterogeneous agent setting where households face credit constraints and idiosyncratic turnover shocks. Households can accumulate a risk-free asset to build a down payment and to smooth non-housing consumption.There is an inelastic supply of identical homes. The model is “block recursive”. In equilibrium wealthier home buyers sort into submarkets with higher prices and shorter buying t [...]

• Populism Returns
  by Don Boudreaux in Cafe Hayek, 2020-07-24 20:12:24 UTC

  (Don Boudreaux) Tweet Here’s a letter to someone who works for a most ironically named outfit. Ms. Robyn Shapiro American Economic Liberties Project Ms. Shapiro: I received today your mass e-mail detailing the many harms that Amazon allegedly inflicts on the American economy. With respect, the economic theory that motivates your colleagues’ findings was all the rage in the 1950s, but has since been thoroughly debunked – a debunking about which your colleagues are apparently unaware. Before they write again about such matters, I recommend that they consult the research of (among other schol [...]

2020-07-22

• The Adverse Effect of the COVID-19 Labor Market Shock on Immigrant Employment
  by maximorossi in NEP-LTV blog, 2020-07-22 18:06:38 UTC

  By: Borjas, George J.  (Harvard University);  Cassidy, Hugh  (Kansas State University) Abstract: Employment rates in the United States fell dramatically between February 2020 and April 2020 as the initial repercussions of the COVID-19 pandemic reverberated through the labor market. This paper uses data from the CPS Basic Monthly Files to document that the employment decline was particularly severe for immigrants. Historically, immigrant men were more likely to be employed than native men. The COVID-related labor market disruptions eliminated the immigrant employment advantage. By April 2 [...]

• Non Cognitive Skills and Childcare Attendance
  by maximorossi in NEP-LTV blog, 2020-07-22 18:01:29 UTC

  By: Daniela Del Boca ;  Enrica Maria Martino ;  Chiara Pronzato Abstract: While several studies have explored the determinants of cognitive outcomes, this paper focuses on non-cognitive skills, for which there is less empirical evidence. Non- cognitive skills have been recognized as important determinants of cognitive skills and later life outcomes. We analyze the impact of attending formal childcare at ages 0-2 on attitudes toward schooling and on the social behavior of children at the end of their first year of primary school and at the end of high school. We find that attendance of ch [...]

• Immigration, Legal Status and Fiscal Impact
  by Christian Zimmermann in NEP-DGE blog, 2020-07-22 15:27:35 UTC

  By Andri Chassamboulli and Xiangbo Liu http://d.repec.org/n?u=RePEc:ucy:cypeua:07-2020&r=dge How do legal and illegal immigrants affect the fiscal balance and welfare of natives in the host country? To answer this question we develop a general equilibrium model with search frictions in the labor market that accounts for both the direct net contribution of immigrants to the fiscal balance and their indirect fiscal effects through their labor market impact. We calibrate the model to the US economy and find that legal immigrants increase native welfare, mainly due to their positive direct net co [...]

2020-07-21

• The Cultural Origin of Saving Behavior
  by maximorossi in NEP-LTV blog, 2020-07-21 18:00:09 UTC

  By: Costa Font, Joan ;  Giuliano, Paola ;  Ozcan, Berkay Abstract: Traditional economic interpretations have not been successful in explaining differences in saving rates across countries. One hypothesis is that savings respond to cultural specific social norms. A seminal paper in economics (1) however did not find any effect of culture on savings. We revisit this evidence using a novel dataset, which allows us to study the saving behavior of up to three generations of immigrants in the United Kingdom. Against the backdrop of existing evidence, we find that cultural preferences are an im [...]

• What Accounts for the Rising Share of Women in the Top 1%?
  by maximorossi in NEP-LTV blog, 2020-07-21 17:46:52 UTC

  By: Richard V. Burkhauser ;  Nicolas Hérault ;  Stephen P. Jenkins ;  Roger Wilkins Abstract: The share of women in the top 1% of the UK’s income distribution has been growing over the last two decades (as in several other countries). Our first contribution is to account for this secular change using regressions of the probability of being in the top 1%, fitted separately for men and women, in order to contrast between the sexes the role of changes in characteristics and changes in returns to characteristics. We show that the rise of women in the top 1% is primarily accounted for by thei [...]

2020-07-20

• Grace Li’s journal round-up for 20th July 2020
  by Grace Li in The Academic Health Economists' Blog, 2020-07-20 11:00:08 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. Visit our Resources page for links to more journals or follow the HealthEconBot . If you’d like to write one of our weekly journal round-ups, get in touch . Health Economics Volume 29, Issue 8 Accurately measuring the number of unauthorised migrants living in the UK has been a long-standing challenge for the UK Home Office. Estimates vary, however the Pew Research Centre thinks that there may be be [...]

2020-07-17

• Experts: the Caprice challenge
  by chris in Stumbling and Mumbling, 2020-07-17 12:19:20 UTC

  What do experts know? This question arises from the reposting the other day of an exchange between Caprice and Dr Sarah Jarvis, wherein Caprice argued for an early lockdown and mask-wearing, only to be opposed by the doctor. In hindsight, it looks as if Caprice might have been more correct. Which poses the question, for economists as much as other scientists: how should we talk to lay-people? Here are some suggestions. First, know what you know and what you don’t. As Charlie Munger said , “it’s not a competency if you don’t know the edge of it.” Economists, for example, do not know how to fore [...]

• Nella crisi cresce il risparmio per precauzione*
  by Valerio Ercolani in La Voce, 2020-07-17 09:23:43 UTC

  Gli ultimi mesi hanno visto un aumento senza precedenti del tasso di risparmio negli Stati Uniti. In gran parte è stato generato dal lockdown. Ma potrebbero esserci anche motivi precauzionali, dettati dalle difficili prospettive del mercato del lavoro. Il legame tra tasso di disoccupazione e tasso di risparmio Per gli effetti del Covid-19, negli Stati Uniti l’occupazione è diminuita di circa 15 milioni di unità, con un tasso di disoccupazione che ha raggiunto quasi il 15 per cento in aprile. Nello stesso mese, il tasso di risparmio è aumentato di quasi 20 punti percentuali (al 32,2 per cento) [...]

• The OECD Development Centre in the 1990s
  by ReibReisen in ShiftingWealth, 2020-07-17 08:10:00 UTC

  This post is a follow-up to https://shiftingwealth.blogspot.com/2020/06/the-oecd-development-centre-in-1980s.html for the 1990s. If you have not done so, I recommend to read the post on the 1980s first. The focus here is on my time at the OECD Development Centre and on its bosses. So do not expect a balanced presentation of the history of the Centre. These are my personal perspectives only. Table 1: One female & six male heads of the OECD Development Centre, from 1983 Period Development Centre OECD Period 1983-85 Justus Faaland (†2017), N Emile van Lennep ( [...]

• How Large is the Economy-Wide Rebound Effect?
  by noreply@blogger.com (David Stern) in Stochastic Trend, 2020-07-17 02:35:00 UTC

  Last year, I published a blogpost about our research on the economy-wide rebound effect. The post covers the basics of what the rebound effect is and presents our results. We found that energy efficiency improvements do not save energy. In other words, the rebound effect is 100%. This doesn't mean that improving energy efficiency is a bad thing. It's a good thing, because consumers get more energy services as a result. But it probably doesn't help the environment very much. I now have a new CAMA working paper , which surveys the literature on this question. Contributions to the literature are [...]

2020-07-15

• Now Would Be a Terrible Time to Raise the Minimum Wage
  by Rachel Greszler in The Foundry, 2020-07-15 21:27:33 UTC

  Imagine that your monthly mortgage payment suddenly increased by 50%. And that it happened now, in the wake of COVID-19-related job and income losses. That’s what some policymakers are now suggesting lawmakers should do by raising minimum wages at the worst possible time. As unemployment is high , many jobs have disappeared, and the lowest-wage industries, such as restaurants and hotels, have already experienced significant business failures. Many that remain are struggling just to stay afloat. Lower-wage industries have been the hardest hit. According to a recent survey by Yelp , 35 [...]

• Star Trek and the Economics of Hate
  by Jason Barr in Skynomics Blog, 2020-07-15 12:13:07 UTC

  Jason M. Barr                  July 15, 2020 Captain Kirk : It exists on the hate of others. Mr. Spock : To put it simply. And it has acted as a catalyst, creating this situation in order to satisfy that need. –In “Day of the Dove,” Star Trek (S3:E7) E Pluribus Unum? America in the 21 st century is a deeply divided country. Looking back at the nation’s long history of economic growth and technological improvements, one might have thought that the political, social, and economic divisions among us would have been considerably lessened by now. There are, to be sure, many bright elements. Healthc [...]

2020-07-14

• Spurious Factor Analysis
  by Francis Diebold in No Hesitations, 2020-07-14 17:50:00 UTC

  This abstract definitely produced one of those great "ah ha!" moments, at least for me.  So obvious once someone points it out.  Thanks Alexei and Chen. I'm hungry for more. With I(1) regression we have: Q: When will regressions with I(1) variables not produce spurious results? A: When the variables are not only integrated but also co integrated. What is the analog here, with PCA?  That is: Q: When will PCA with high-dim I(1) variables  not produce spurious results? A: ??? (I'm not yet sure.  Maybe it's addressed in the paper, which I look forward to reading.  Cointegration should again be par [...]

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