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- Two New Working Papers
by firstname.lastname@example.org (David Stern) in Stochastic Trend, 2017-03-23 01:25:00 UTC
We have just posted two new working papers: Technology Choices in the U.S. Electricity Industry before and after Market Restructuring and An Analysis of the Costs of Energy Saving and CO2 Mitigation in Rural Households in China . The first paper, coauthored with Zsuzsanna Csereklyei , is the first to emerge from our ARC funded DP16 project .� Our goal was to look at the factors associated with the adoption of more or less energy efficient electricity generating technologies using a detailed US dataset. For example, combined cycle gas turbines are more energy efficient than regular ga [...]
- Socio-Economic Inequalities in Maternity Care under Political Instability: Evidence from Egypt, Jordan, and Yemen
by pmakdissi in NEP-ARA blog, 2017-03-22 22:11:21 UTC
By Mesbah Fathy Sharaf (Assistant Professor, Department of Economics, University of Alberta, Canada) and Ahmed Shoukry Rashad (Visiting Assistant Professor, Department of Economics, Frankfurt School of Finance and Management, Germany).
Medical care during pregnancy is crucial for protecting women from health risks during and after pregnancy and has been consistently linked to better child health outcomes. As part of the global efforts to curb maternal mortality, the United Nations included the reduction in maternal mortality by two-third, betw [...]
- Granger Causality and the Factors underlying the Role of Younger Generations in Economic, Social and Political Changes in Arab Countries
by pmakdissi in NEP-ARA blog, 2017-03-22 22:09:08 UTC
By Ahmed Driouchi and Tahar Harkat, Institute of Economic Analysis & Prospective Studies (IEAPS), Al Akhawayn University, Ifrane, Morocco
The youngest segments of the population are considered as the main engine of economic, social, and political change. Recent literature underlines the roles of youth in Arab countries and their contributions in conducting major changes. Thus, understanding the characteristics of the current young Arab generation are of prime importance. The latest contributions highlight major differences between new generat [...]
- Dynastic human capital, inequality and intergenerational mobility
by maximorossi in NEP-LTV blog, 2017-03-22 18:23:48 UTC
Adermon, Adrian (IFAU – Institute for Evaluation of Labour Market and Education Policy) ; Lindahl, Mikael (Department of Economics, University of Gothenburg; IFAU; IZA; UCLS; CESifo) ; Palme, Mårten (Department of economics, Stockholm University; IZA)
We study the importance of the extended family – or the dynasty – for the persistence in human capital inequality across generations. We use data including the entire Swedish population, linking four generations. This data structure enables us to – in addition to parents, grandparents and great grandparents – identify parents’ sibl [...]
- An Analysis of the Labor Market for Uberâs Driver-Partners in the United States
by maximorossi in NEP-LTV blog, 2017-03-22 18:22:00 UTC
Jonathan V. Hall ; Alan B. Krueger
Uber, the ride-sharing company launched in 2010, has grown at an exponential rate. This paper provides the first comprehensive analysis of the labor market for Uber’s driver-partners, based on both survey and administrative data. Drivers who partner with Uber appear to be attracted to the platform largely because of the flexibility it offers, the level of compensation, and the fact that earnings per hour do not vary much with the number of hours worked. Uber’s driver-partners are more similar in terms of their age and education to the general w [...]
- Whatâs the good of education on our overall quality of life?: a simultaneous equation model of education and life satisfaction for Australia
by maximorossi in NEP-LTV blog, 2017-03-22 18:20:54 UTC
Nattavudh Powdthavee ; Warn N. Lekfuangfu ; Mark Wooden
Many economists and educators favour public support for education on the premise that education improves the overall quality of life of citizens. However, little is known about the different pathways through which education shapes people’s satisfaction with life overall. One reason for this is because previous studies have traditionally analysed the effect of education on life satisfaction using single-equation models that ignore interrelationships between different theoretical explanatory variables. In order to advance our [...]
- Individual Well-Being and the Allocation of Time Before and After the Boston Marathon Terrorist Bombing
by maximorossi in NEP-LTV blog, 2017-03-22 18:19:34 UTC
Andrew Clark (PSE – Paris-Jourdan Sciences Economiques – ENS Paris – École normale supérieure – Paris – INRA – Institut National de la Recherche Agronomique – EHESS – École des hautes études en sciences sociales – École des Ponts ParisTech (ENPC) – CNRS – Centre National de la Recherche Scientifique, PSE – Paris School of Economics) ; Elena Stancanelli (PSE – Paris School of Economics, CES – Centre d’économie de la Sorbonne – UP1 – Université Panthéon-Sorbonne – CNRS – Centre National de la Recherche Scientifique)
There is a small literature on the economic costs of terrorism. We [...]
- Is Global Equality the Enemy of National Equality?
by maximorossi in NEP-LTV blog, 2017-03-21 19:57:23 UTC
The bulk of global inequality is accounted for by income differences across countries rather than within countries. Expanding trade with China has aggravated inequality in some advanced economies, while ameliorating global inequality. But the ‘China shock’ is receding and other low-income countries are unlikely to replicate China’s export-oriented industrialization experience. Relaxing restrictions on cross-border labor mobility might have an even stronger positive effect on global inequality. However it also raises a similar tension. While there would likely be adve [...]
- Segregation of women into low-paying occupations in the US
by maximorossi in NEP-LTV blog, 2017-03-21 19:56:06 UTC
Carlos Gradín (Universidade de Vigo and EQUALITAS, Spain)
We present an approach to measure the stratification of occupations by sex. For that, we extend the conventional framework for measuring gender segregation to take into account the quality of jobs (e.g. average earnings) predominantly held by each sex. We complement segregation curves and measures derived from them, with their associated concentration curves and indices, to determine whether women are segregated into low-paying jobs. We investigate with this approach the long-term trends of gender segregation and stratifi [...]
- Estimation and Inference for Actual and Counterfactual Growth Incidence Curves
by maximorossi in NEP-LTV blog, 2017-03-21 19:55:01 UTC
Ferreira, Francisco H. G. (World Bank) ; Firpo, Sergio (Insper, São Paulo) ; Galvao, Antonio F. (University of Iowa)
Different episodes of economic growth display widely varying distributional characteristics, both across countries and over time. Growth is sometimes accompanied by rising and sometimes by falling inequality. Applied economists have come to rely on the Growth Incidence Curve, which gives the quantile-specific rate of income growth over a certain period, to describe and analyze the incidence of economic growth. This paper discusses the identification conditions, an [...]
- Early childcare, child cognitive outcomes and inequalities in the UK
by maximorossi in NEP-LTV blog, 2017-03-21 19:53:22 UTC
Daniela Del Boca (University of Turin and Collegio Carlo Alberto) ; Daniela Piazzalunga (IRVAPP) ; Chiara Pronzato (University of Turin, CHILD and Collegio Carlo Alberto)
In this empirical analysis, we estimate the link between formal childcare and child cognitive outcomes, controlling for a large number of variables. We use the Millennium Cohort Survey (MCS) for the United Kingdom, which provides very detailed information about several modalities of childcare as well as several child outcomes. We also simulate how an increase in formal childcare attendance can affect inequaliti [...]
- Earnings and Consumption Dynamics: A Nonlinear Panel Data Framework
by maximorossi in NEP-LTV blog, 2017-03-21 19:52:08 UTC
Manuel Arellano (CEMFI, Centro de Estudios Monetarios y Financieros) ; Richard Blundell (University College London) ; Stéphane Bonhomme (University of Chicago)
We develop a new quantile-based panel data framework to study the nature of income persistence and the transmission of income shocks to consumption. Log-earnings are the sum of a general Markovian persistent component and a transitory innovation. The persistence of past shocks to earnings is allowed to vary according to the size and sign of the current shock. Consumption is modeled as an age-dependent nonlinear function o [...]
- Relax: Gutting the EPA Won't Make Your Air Dirtier and Water More Polluted
by Ronald Bailey in Hit & Run blog, 2017-03-21 18:35:00 UTC
President Donald Trump's proposed cuts in the Environmental Protection Agency's budget "will not 'Make America Great Again', " asserted Conrad Schneider, the advocacy director at Clean Air Task Force activist group. "It will 'Make America Gag Again.'" Schneider and other alarmed activists are conjuring the bad old days of the mid-20th century when America's cities were blanketed with smog and its streams clotted with filth. In his new budget blueprint , Trump wants to cut back Environmental Protection Agency funding by 31 percent and fire 3,200 of agency's bureaucrats.
But would such [...]
- Is R&D Getting Harder, or Are Companies Just Getting Worse At It?
by Anne Marie Knott in HBR Blog Network, 2017-03-21 16:00:31 UTC
We know innovation drives corporate growth. As Strategy& reported in its 2015 survey of 1,757 executives, “innovation today is a key driver of organic growth for all companies — regardless of sector or geography.” According to that report, the top 1,000 R&D spenders invested $680 billion in R&D that year, up 5% from the prior year. Historically, R&D has been viewed as the engine of national economic growth as well.
Despite the importance of innovation to companies, as well as to the broader economy, despite the 250% rise in the number of scientists and engineers engaged in R&D, and despite al [...]
- Alcune precisazioni a caldo su Radio Anch'io
by Alberto Bagnai in Goofynomics, 2017-03-21 11:03:00 UTC
(... qui il podcast ...) La prima precisazione è che questa precisazione viene data a caldo perché non ho alcuna intenzione di essere tiepido. La fine dei tiepidi è spiegata in Ap. 3, 16 e non sarà la mia . La seconda precisazione è che a me interessa mantenere rapporti cordiali con tutti e non vedo perché non dovrei mantenerne con Giorgio Zanchini, che è persona cortese e disposta all'ascolto, e mi ha invitato nella sua trasmissione. È interesse di tutti, ma soprattutto mio, mantenere rapporti cordiali proprio perché le cose andranno come dico io, e quindi io in particolare non ho alcun motiv [...]
- Education and economic development: Five reforms that have worked
by ? in World Bank Blogs, 2017-03-21 02:00:00 UTC
Education systems are simply not performing as needed; not as economies demand, and not as parents desire. Yet it’s important to celebrate and recognize the success of counties that have made significant advances. (Photo: Sofie Tesson / Taiman [...]
- Regulating Wall Street: The Financial CHOICE Act and Systemic Risk
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2017-03-20 12:00:36 UTC
“ The Financial CHOICE Act espouses some principles that we heartily endorse. Chief among them is that the more well-capitalized institutions are, the less of a threat they pose to financial stability. And we endorse removing many inefficient parts of Dodd-Frank. But at the end of the day, the CHOICE Act is fatally flawed by a failure to recognize systemic risk and to understand the dangers that it poses for the financial system—and thus for the healthy functioning of the U.S. economy. Because of this failure, the CHOICE Act represents a step backward in the establishment of a prudential regul [...]
- Heterogeneous Household Finances and the Effect of Fiscal Policy
by Christian Zimmermann in NEP-DGE blog, 2017-03-16 20:38:38 UTC
By Javier Andrés, José E. Boscá, Javier Ferri and Cristina Fuentes-Albero
This paper develops a model with heterogeneous households in terms of net worth and collaterizable assets. Using sample weights estimated from the PSID, we show that balance sheet heterogeneity is key to characterizing the aggregate effects of government spending along different dimensions. We find that: (i) the response of individual consumption to a government spending shock is negatively correlated with household’s net worth and also depends on her access to mortga [...]
- å®éèª å¸æ°ã®FTPLãéçç·©åç¡å¹ã®æ ¹æ ã«ãªããªãè«ã«ã¤ãã¦
by uncorrelated in ニュースの社会科学的な裏側, 2017-03-16 18:00:00 UTC
エコノミストの安達誠司氏が「 現代ビジネス 」で、(1) FTPL は1990年代後半にゼロ金利制約下のインフレ説明用に誕生した、(2)FTPLは量的緩和無効の根拠にならない、(3)理論的には政府支出の拡大と金融引き締めが無いと破綻しないと色々と勘違いしたかうがった話をしており、(4)FTPLを「机上の空論」としている人々の根拠についても把握できていないようなので指摘しておきたい。 1. 1980年代から高インフレの説明用に作られた FTPLが出てきた経緯についてだが、『1990年代の終盤から2000年代前半にかけて、当初は、主にアメリカのマクロ経済学者の間で「理論的な可能性」として議論されたもの』と言うのは、大きな誤解がある。 Sims (1993) の先行研究紹介を読むと、 Sargent and Wallace (1981) 、 Leeper (1991) などを挙げているわけで、年代が違うのは明らかだ。1980年代初頭に高金利でも抑制できない高インフレの原因が、経験的に財政政策と突き止められたところから始まっているとして良いであろう。当時は南米の高インフレなども問題になっていた。 2. 複数均衡はよく生じるし、排除すべきとも言えない 『FTPLは、標準的なマクロ経済モデル（「ニューケインジアンモデル」といわれる）の抱える問題点の1つの解決策として提示された』『その問題点と [...]
- ExIT: reflections of a mainstreamer
by Alberto Bagnai in Goofynomics, 2017-03-16 17:37:00 UTC
A few days ago I had a long talk with James Politi, the Rome correspondent of FT. He gave a fair account of our conversation here , a praiseworthy achievement considering the pressure under which he was working. Many aspects of our conversation were obviously omitted, but the main message remains. In my experience this is extremely unusual, especially with the Italian media. I shall not mention all the aspects omitted, but wish to add some nuances that were lost in translation (mostly my fault). The most important one concerns my statement about “having been saying this stuff for seven years [...]
- My New HBR Piece on Climate Skeptics and Induced Innovation
by Matthew Kahn in Environmental and Urban Economics, 2017-03-16 17:17:00 UTC
My new Harvard Business Review piece is based on th is recent NBER paper. Climate change will increase the risk of temperature extremes. Induced innovation could offset some of this threat. This paper explores the demand and supply for climate adaptation innovation in a market economy. Climate change induces this innovation because the rising temperatures increase demand for self protection products and for profit firms respond to these incentives. We then augment the model to introduce climate skeptics. Such skeptics reject the claim that the world is warming and thus do not increasingly dema [...]
- The More Climate Skeptics There Are, the Fewer Climate Entrepreneurs
by Matthew E. Kahn in HBR Blog Network, 2017-03-16 14:13:53 UTC
According to an October 2016 Pew poll , only about half of Americans believe that climate change is due to human activity. The U.S. remains home to a considerable number of “climate skeptics,” who clearly impact the politics around the issue, as they are unlikely to support costly actions such as carbon taxes intended to mitigate the challenge of climate change. Higher carbon taxes would have a direct effect on encouraging households and firms to consume less fossil fuels and would accelerate directed research in green technologies such as electric vehicles, solar panels, and other forms of r [...]
- Intertemporal CGE Analysis of Income Distribution in Turkey
by pmakdissi in NEP-ARA blog, 2017-03-15 15:04:39 UTC
By Aykut Mert Yakut and Ebru Voyvoda
The effects of welfare payments on the labor market outcomes of recipients and the size distribution of income are subject of academics for decades. In the related literature, various country cases show that welfare payments render labor force participation and / or lower hours of work of the recipients. For the Turkish case, there are few studies on the issue although there are controversies on the welfare regime. In the last fifteen years, although number and variety of the programs have been increased an [...]
- Would California be an Even Better Place to Live if Republicans had more Political Clout?
by Matthew Kahn in Environmental and Urban Economics, 2017-03-15 14:35:00 UTC
The LA Times has published a fascinating piece� pointing to California as an important state where Republicans wield little political clout. In such a "progressive paradise", is all well? �Or , to repeat this again; �when progressives are in charge does the wise governance of the TV show West Wing's President Bartlet emerge? So, there are two issues I want you to consider. �What public goods does a government seek to provide (and thus how would this product mix be affected if Republicans had some clout in California)? �Second, what is the input mix (i.e quantity of labor and capital used) to p [...]
- Deregulation Fantasies
by Mark Thoma in Economist's View, 2017-03-15 11:50:57 UTC
Deregulation fantasies : Several people on Twitter yesterday reminded us of Liam Fox’s vision of a deregulated labour market:
we must begin by deregulating the labour market. Political objections must be overridden. It is too difficult to hire and fire and too expensive to take on new employees.
This fits in with Tory fantasies of the post-Brexit UK being like Singapore .
It does, however run into a problem – that there’s no obvious benefit to deregulation . ... You might think this is counter-intuitive. Common sense says that if firms can easily fire people then workers’ [...]
- Deregulation fantasies
by chris in Stumbling and Mumbling, 2017-03-15 08:49:58 UTC
Several people on Twitter yesterday reminded us of Liam Fox’s vision of a deregulated labour market:
we must begin by deregulating the labour market. Political objections must be overridden. It is too difficult to hire and fire and too expensive to take on new employees.
This fits in with Tory fantasies of the post-Brexit UK being like Singapore .
It does, however run into a problem – that there’s no obvious benefit to deregulation .
My chart shows the point. It plots labour productivity in 2015 against a measure of employment protections in 2013-14: I’m taking a simple average of four OECD [...]
- La ciudad sÃ es para mÃ. Una mirada al pasado del emigrante interno en EspaÃ±a
by Francisco BeltrÃ¡n Tapia in Nada Es Gratis, 2017-03-15 06:24:32 UTC
Estación de Atocha, Madrid
Buena parte de la literatura sobre inmigración analiza el efecto de la misma en los mercados de trabajo que la reciben. Este blog ha dedicado varias entradas a estos temas ( aquí ). La cualificación de los inmigrantes es fundamental porque determina no sólo el capital humano que esas economías incorporan, sino también el tipo de trabajadores nativos que se verán afectados por la competición foránea. Así, estos trabajos suelen fijarse en los perfiles de los inmigrantes en relación a los de los trabajadores locales. Una pregunta relacionada tiene que ver con lo que ocu [...]
- The Real Exchange Rate and China's Savings
by Doug Campbell in Douglas L. Campbell, 2017-03-15 02:49:00 UTC
I attended the Forum for Research in Empirical International Trade (FREIT) in Yogyakarta, Indonesia this past week. Marc Muendler and I were debating the source of China's excess savings, over and above its high level of investment. China's high savings rate could have multiple causes ( e.g. , lack of a social safety net implies a need for precautionary savings, while countries that are growing fast, such as the Asian Tigers, have a clear tendency to save a lot), and various policies could be at play. However, in this post I merely want to lay out how an undervalued real exchange rate, which c [...]
- Capital Accumulation and Dynamic Gains from Trade
by Christian Zimmermann in NEP-DGE blog, 2017-03-14 19:58:12 UTC
By B. Ravikumar, Ana Maria Satacreu and Michael Sposi
We compute welfare gains from trade in a dynamic, multicountry model with capital accumulation. We examine transition paths for 93 countries following a permanent, uniform, unanticipated trade liberalization. Both the relative price of investment and the investment rate respond to changes in trade frictions. Relative to a static model, the dynamic welfare gains in a model with balanced trade are three times as large. The gains including transition are 60 percent of those computed by com [...]
- Coping with the backfire effect
by chris in Stumbling and Mumbling, 2017-03-14 14:02:55 UTC
Jeremy Corbyn has been getting a lot of stick recently, much of it justified: he seems to be the Henry VI of our time – obsessed with his own piety to the neglect of day-to-day politics despite massive and obvious dangers. Nevertheless, he made a very good and important point yesterday (2’24” in) when he said that the economic debate should be about inequality.
The point here is that the left must shift the agenda onto inequality and capitalist stagnation and away from immigration and Brexit .
I say this because of Tim Harford’s essay in which he points out that facts just don’t matter in poli [...]
- Caltrain as Another Case of Spending "Other People's Money"
by Matthew Kahn in Environmental and Urban Economics, 2017-03-13 13:24:00 UTC
Caltrain is a painfully slow train that connects San Francisco to Stanford to San Jose. �This double decker train stops every mile and cruises at a speed of about 25 miles per hour. � �Here is �a photo of this bus �on rails. �This train could move faster if the rails are improved. �Who should pay for this project? The NY Times believes that the people of Iowa should pay. I believe that local land owners and Silicon Valley workers should pay for their own train. The NY Times has published an angry editorial ( and this earlier piece ) arguing that obstructionist Republicans are blocking a $650 m [...]
- Morale and public goods: some unsurprising research
by Nicholas Gruen in Club Troppo, 2017-03-12 11:27:55 UTC
Does the reliability of institutions affect public good contributions? Evidence from a laboratory experiment By: Jahnke, Björn ; Fochmann, Martin ; Wagener, Andreas
Reliable institutions – i.e., institutions that live up to the norms that agents expect them to keep – foment cooperative behavior. We experimentally confirm this hypothesis in a public goods game with a salient norm that cooperation was socially demanded and corruption ought not to occur. When nevertheless corruption attempts came up, groups that were told that “the system” had fended off the attempts made considerably higher con [...]
- Sectoral Effects of Monetary Policy: Evidence from Morocco
by pmakdissi in NEP-ARA blog, 2017-03-11 16:52:21 UTC
By Charaf Eddine Moussir (Mohammed V University Agdal, Rabat, Morocco)
The effects of monetary policy on economic performance have long attracted the attention of economists and policy makers. In recent years, there seems to be a growing consensus among economists that monetary policy has an impact on the real economy, at least in the short term. The literature shows that monetary policy can have negative effects on sectoral growth and consequently on overall growth and that; different sectors of the economy react differently to monetary poli [...]
- Diversification des exportations et transformation structurelle au Maroc: Quel rÃ´le pour les IDE1?
by pmakdissi in NEP-ARA blog, 2017-03-11 16:48:29 UTC
Par Safaa Tabit (Doctorante, Université Mohammed V Rabat-Agdal) et Charaf-Eddine Moussir (Doctorant, Université Mohammed V Rabat-Agdal)
Le débat sur le rôle de la diversification comme levier de développement économique a été marqué ses dernières années par un retour en force. Plusieurs raisons expliquent cette résurgence. La forte volatilité des prix de matières premières, associée aux crises des dernières années, a ralenti la croissance économique et a montré la forte vulnérabilité des économies nord africaines aux chocs et ce malgré leur f [...]
- My New Hamilton Project Paper on Urban Climate Resilience
by Matthew Kahn in Environmental and Urban Economics, 2017-03-11 01:57:00 UTC
Back in 2011, �David Levinson and I wrote a well regarded Hamilton Project Paper called " Fix it First". �In two weeks, I return to Brookings to present my new Hamilton Project Paper. 3:15 PM Roundtable Discussion: Investing in Resilient Infrastructure Author: Matthew Kahn Professor of Economics, University of Southern California Discussant: Steven H. Strongin� Head of Global Investment Research, Goldman Sachs Discussant: Alice Hill Research Fellow, Hoover Institution Discussant: Mindy S. Lubber � President and Founding Board Member, CERES Moderator: Diane Whitmore Schanzenbach Director, The H [...]
- Reforming the Social Security Earnings Cap: The Role of Endogenous Human Capital
by Christian Zimmermann in NEP-DGE blog, 2017-03-10 01:24:14 UTC
By Adam Blandin
Old age Social Security benefits in the US are funded by a 10.6% payroll tax up to a cap, currently set at $118,500. Despite calls from policy circles to eliminate the cap on taxable earnings, there has been little work examining the likely outcomes of such a policy change. I use a life-cycle human capital model with heterogeneous individuals to investigate the aggregate and distributional steady state impacts of several policy changes to the earnings cap. I find: (1) Eliminating the earnings cap generates large reductions in a [...]
- Navigating Americaâs Economic-Policy Shocks
by Shang-Jin Wei in Project Syndicate, 2017-03-09 15:50:06 UTC
NEW YORK – With a series of tax and trade moves being considered in the United States this year, emerging-market economies are likely to face devaluation pressure and volatility.
Three sources of US-fueled economic uncertainty, in particular, will rattle emerging markets in 2017.
The first is a border adjustment tax that would give tax breaks to US exporters, but impose a levy – or, equivalently, disallow deductions – on imports to the US. Both President Donald Trump and the Republican-controlled US Congress have said they favor the scheme, which has a fair chance of being enacted. Such a ta [...]
- How capitalist power works
by chris in Stumbling and Mumbling, 2017-03-09 13:52:35 UTC
The two main news stories this morning both gave us an insight into how capitalist power works.
The first item is the increase in NICs despite repeated Tory promises not to do so. It would be nice to think this will lead to a backlash against the Tories. But it might not. People don’t like to admit even to themselves that they were stupid enough to let themselves be conned. One trick to protect their egos is to adopt naïve cynicism towards politicians in general: “they’re all the same, aren’t they?”. As the Economist put it:
It is tempting to think that, when policies sold on dodgy prospectus [...]
- "The impact of private debt on economic growth"
by The Arthurian in The New Arthurian Economics, 2017-03-09 09:00:00 UTC
A Google search for how does the cost of private debt affect the economy? turned up The impact of private debt on economic growth , a 37-page PDF by Martti Randveer, Lenno Uusküla, and Liina Kulu of Eesti Pank, the Bank of Estonia. It is available for download at the Bank's working paper page and at IDEAS .
So far I only read the abstract. But I find two interesting things.
1. The first two sentences:
Both theoretical and empirical evidence show that recessions are steeper in countries with high levels of private debt and/or credit booms. But do these negative effects carry over to the per [...]
- Limits of supply-side reform
by chris in Stumbling and Mumbling, 2017-03-06 14:07:12 UTC
Philip Hammond says he plans to use Wednesday’s Budget to get us “match fit” for Brexit. This reminds me of an old error of Chancellors and political commentators – their habit of under-estimating just how damned difficult it is to increase long-run growth.
In fact, John Landon-Lane and Peter Robertson have shown (pdf) that the data are consistent with the possibility that national government policies have no discernible impact upon long-run growth at all. This is because most developed economies grow at much the same rate as each other, give or take a standard error and pathological exception [...]
- The Fed's Price Stability Achievement
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2017-03-06 13:41:01 UTC
“ We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued. […] The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.” Open Letter to Ben Bernanke , The Wall Street Journal , November 15, 2010. Over the past decade, critics of all stripes have assailed Federal Reserve monetary policy. At one end of the spectrum, some argued that the Fed’s expansionary balance sheet policy risked currency debasement and high inflation [...]
- Local Coal Demand Induced by Political Influence
by Matthew Kahn in Environmental and Urban Economics, 2017-03-05 22:04:00 UTC
Jonathan Eyer and I have released a new NBER paper studying power plant demand for local coal. �Consider a map of the USA featuring circles for every power plant in the U.S and triangles for every coal mine in the U.S. �Each of these power plants might trade with each coal mine. �Using GIS, we calculate the physical distance between each of these potential trading partners. �A standard gravity model predicts that there will be more trade between pairs that are closer to each other. �Controlling for this distance, we then ask the following question; �"If the power plant and mine are located in [...]
- Who buys social responsibility
by Nicholas Gruen in Club Troppo, 2017-03-05 12:03:40 UTC
Is Socially Responsible Production a Normal Good? , Jana Friedrichsen
This paper uses a controlled laboratory experiment to investigate the effect of wealth on individual social responsibility (ISR), defined as choosing a more socially responsible product if a cheaper alternative is available. We find that rich consumers are significantly less likely to engage in ISR than poor consumers. This suggests that socially responsible production conditions may not be normal product attributes.
Reminding me of the line Oscar Wilde puts into the mouth of Algernon (I think it is) in the opening of The Im [...]
- Poverty and Productivity
by Nicholas Gruen in Club Troppo, 2017-03-05 10:14:56 UTC
This is a pretty weak study, but even so, it’s certainly pretty plausible that poverty depresses productivity. And the effect could be quite substantial. Which would explain why business is pretty strongly campaigning to minimise poverty in our society as part of its overall push to promote productivity enhancing reform …
Exposure to poverty and productivity
By: Dalton, Patricio (Tilburg University, School of Economics and Management) ; Gonzalez Jimenez, Victor (Tilburg University, School of Economics and Management) ; Noussair, Charles (Tilburg University, School of Economics a [...]
- Where Does Economic Growth in MENA Countries Come From?
by pmakdissi in NEP-ARA blog, 2017-03-05 00:58:44 UTC
By Dr. Mohamed Sami Ben Ali (Associate Professor of Economics, Qatar University)
Economic growth can be defined briefly as an increase in the level of output that an economy can produce. The literature on economic growth examines whether the sources of economic growth stem mostly from technological progress, physical capital accumulation, or human capital accumulation. Besides, it is a fundamental debate about a simple question: Why does rapid growth occur in some countries when some others cannot achieve such a performance? Th [...]
- Yes, slavery matters
by chris in Stumbling and Mumbling, 2017-03-04 13:07:38 UTC
David Olusoga says we British should be more aware of our role in the slave trade. I agree.
For one thing, slavery is not just (just!) a crime against humanity that many would like to forget. Its effects are still with us. Avidit Acharya, Matthew Blackwell and Maya Sen show (pdf) that:
Whites who currently live in Southern counties that had high shares of slaves in 1860 are more likely to identify as a Republican, oppose affirmative action, and express racial resentment and colder feelings toward blacks.
Glenn Loury has written :
The communal experience of the slaves and their descendants [ [...]
- Some Economics of Public Sector Pay
by Matthew Kahn in Environmental and Urban Economics, 2017-03-04 10:53:00 UTC
In my new NBER paper , �I study how the pay of federal and city workers varies as a function of geography. �In this blog post, I would like to sketch the results and explain why this work is mildly interesting. � First, permit me to tell the backstory. �Over 25 years ago, I was a student of Sherwin Rosen's at the University of Chicago. �Rosen's students were taught a healthy dose of compensating differentials theory. �This theory dates back to Adam Smith and to state it succinctly, the theory posits that you pay for quality. �Higher quality shoes cost more than mediocre shoes, nicer neighborho [...]
- 6 Raisons de rejeter le Front National qui nâont rien Ã voir avec le racisme
by Bill Wirtz in Contrepoints, 2017-03-04 04:30:24 UTC
Par Bill Wirtz.
Sur la route des élections présidentielles françaises, la campagne de Marine Le Pen est étrangement similaire à celle de Donald Trump : confrontation avec les médias, nativisme et accusations de xénophobie. Pour éviter de donner le beau rôle au candidat de l’extrême-droite en lui accolant des étiquettes, voici six raisons de fond pour rejeter Marine Le Pen qui ne sont pas «à cause du racisme».
1. Liberté d’expression
Les membres du parti politique de Le Pen, le Front national, parlent beaucoup de la liberté d’expression, mais seulement lorsque celle-ci sert leurs intérêts. Par [...]
- Neoliberalism Was Supposed to Make Us Richer: Three Reasons Why It Didnât
by ? in Naked Capitalism, 2017-03-02 09:55:00 UTC
How neoliberalism contributed to the productivity slowdown [...]
- A self-fulfilling expectations led recession?
by Mainly Macro in Mainly Macro, 2017-03-02 09:40:00 UTC
The only two lectures on Oxford’s core undergraduate macro course that I still teach, and which I have just taught, are the last two on fiscal policy. I use the privilege of the last lecture to end on a reflective note. I acknowledge that macro rightly got a lot of stick by largely ignoring the role of finance, but I also point out that the poor recovery has involved a vindication of the core macro model: austerity is a bad idea at the ZLB, QE was not inflationary and interest rates on government debt did not rise but fell. So far so familiar. But I end by showing them my this chart. And I say [...]
- Ferraris and Resource Stocks
by email@example.com (Jisung Park) in Sense and Sustainability, 2017-03-01 13:00:43 UTC
Probably the most famous economic indicator is Gross Domestic Product (GDP). GDP per capita gives us a measure of how much was produced in an economy per person. Most, if not all, governments use GDP per capita growth as a measure of their economic performance and a large branch in economic research focuses on understanding why some countries have such high GDP per capita while others do not.
GDP is calculated as the sum of household consumption, investment (saving), government expenditures and net exports (net exports are total exports minus imports). GDP therefore is supposed to provide a su [...]
- Quotation of the Dayâ¦
by Don Boudreaux in Cafe Hayek, 2017-02-28 13:09:27 UTC
Tweet … is from page 218 of the 2015 Fourth Edition of Douglas A. Irwin’s important volume, Free Trade Under Fire ; Doug is here discussing Japan’s Ministry of International Trade and Industry (“ MITI “) (footnote deleted; link added):
But the actual evidence of MITI’s contributions to Japan’s [economic] success is weak. The two industries that achieved the most notable success on world markets – automobiles and consumer electronics – did not benefit from extensive government support, unlike some other heavy industries such as chemicals and steel. MITI also had notable fa [...]
- A Quick Economic Analysis of the EPA's Budget
by Matthew Kahn in Environmental and Urban Economics, 2017-02-27 15:15:00 UTC
Based on the data posted here , �the EPA has had an annual nominal budget of roughly $8 billion dollars for each year from 1999 to 2016. Inflation adjusted, this does not look like Leviathan in action. �In fact, the EPA's staffing has shrunk from its peak of 18,000 in 1999 to 15,000 recently. � Here is the main 2016 budget document for the EPA. � Based on the pie chart presented on page 29, 52% of the agency's budget is spent on clean water infrastructure. �While this is a vague category, it provides some insights into what we will lose if President Trump sharply reduces the agency's budget. � [...]
- Inconvenient Facts
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2017-02-27 13:17:13 UTC
“Don’t believe these phony numbers when you hear 4.9 and 5 percent unemployment. The number’s probably 28, 29 as high as 35. In fact, I even heard recently 42 percent.” Candidate Donald Trump, February 9, 2016. When governments don’t like the numbers their statisticians report, they have two options. They can modify their policies with the aim of changing the trajectory of the economy. Or, they can push to change the data to conform to what they would like to see. In countries with trustworthy leaders, those who understand the value of objective facts, we see the former. In places where leader [...]
- Bibliography on Post Keynesian Economics (Updated)
by LK in Social Democracy for the 21st Century: A Post Keynesian Perspective, 2017-02-26 13:30:00 UTC
The updated bibliography below provides a list of the most important books and articles on various topics within Post Keynesian economics. It is divided into the following sections (and there are now links to each section): (1) Introductory Studies (2) Advanced Overviews and Specialised Studies (3) History of Post Keynesian Economics (4) Methodology (5) Uncertainty (6) Endogenous Money (7) Fiscal Policy (8) Inflation (9) Price Theory (10) Trade Theory (11) Against Wicksellian Loanable Funds Theory (12) Kaldor’s Growth Laws and Verdoorn’s Law (13) Thirlwall’s Law (14) Cambridge Capital Controve [...]
- Neoliberalism & productivity
by chris in Stumbling and Mumbling, 2017-02-26 13:08:29 UTC
Chris Edwards says the privatizations started by Thatcher “transformed the British economy” and boosted productivity. This raises an under-appreciated paradox.
The thing is that privatization isn’t the only thing to have happened since the 1980s which should have raised productivity, according to (what I’ll loosely call) neoliberal ideology. Trades unions have weakened, which should have reduced “restrictive practices”. Managers have become better paid, which should have attracted more skilful ones, and better incentivized them to increase productivity. And the workforce has more human capital [...]
- The polarised republic
by Diane Coyle in The Enlightened Economist, 2017-02-25 12:19:07 UTC
Cass Sunstein’s #Republic: Divided Democracy in the Age of Social Media is very timely, as we all, horrified, watch the American republic splinter ever more irreparably since the election last November. The book links the literature on filter bubbles and social media dynamics with the actual political impact in the US context, and the constitutional implications.
It cites the growing empirical literature on political polarisation as a result of the spread and increasing use of social media, especially Facebook. (Of course, conventional media have contributed to the polarisation as well – there [...]
- Agribusiness trade as a pillar of development: Measurement and patterns
by Fabian Mendez Ramos in Let's Talk Development, 2017-02-23 15:35:00 UTC
Agribusiness is en vogue , fostered by a new understanding of the agricultural sector as a major contributor to overall growth and poverty reduction and through its linkages with the manufacturing and services sector .
In order to efficiently link farmers and consumers across countries and regions, quantifying and analyzing agribusiness trade flows is key. But how can we measure international agribusiness trade flows in a systematic way to identify important patterns?
- An Economy of Meaning â or Bust
by ? in Naked Capitalism, 2017-02-23 09:05:00 UTC
Can one really create "an economy of meaning"? [...]
- Basil Halperinâs critique of NGDP targeting
by ssumner in The Money Illusion, 2017-02-22 23:59:10 UTC
Lots of people have tried to find flaws in NGDP targeting, but most of these posts are written by people who have not done their homework. Basil Halperin is an exception. Back in January 2015 he wrote a very long and thoughtful critique of NGDP targeting. A commenter recently reminded me that I had planned to address his arguments. Here’s Basil:
Remember that nominal GDP growth (in the limit) is equal to inflation plus real GDP growth. Consider a hypothetical economy where market monetarism has triumphed, and the Fed maintains a target path for NGDP growing annually at 5% (perhaps even wi [...]
- Missing markets
by chris in Stumbling and Mumbling, 2017-02-22 14:33:44 UTC
Why is there such a long lag between good economic ideas and their implementation? I’m prompted to ask by the death of the great Kenneth Arrow .
He showed (pdf) that, under certain conditions, it was possible for competitive markets to achieve an optimal allocation of risk. One of these conditions is that there exist securities which pay out in all possible states of the world, so that we have in effect complete insurance markets. But, he concluded:
Many of the economic institutions which would be needed to carry out the competitive allocation in the case of uncertainty are in fact lacking.
- The Greatest Living Economist Has Passed Away: Notes on Kenneth Arrow Part I
by afinetheorem in A Fine Theorem, 2017-02-22 06:09:43 UTC
It is amazing how quickly the titans of the middle of the century have passed. Paul Samuelson and his mathematization, Ronald Coase and his connection of law to economics, Gary Becker and his incorporation of choice into the full sphere of human behavior, John Nash and his formalization of strategic interaction, Milton Friedman and his defense of the market in the precarious post-war period, Robert Fogel and his cliometric revolution: the remaining titan was Kenneth Arrow, the only living economist who could have won a second Nobel Prize without a whit of complaint from the gallery. These fi [...]
- An Economy of Meaning â or Bust
by ? in Common Dreams - Breaking News & Views for the Progressive Community, 2017-02-21 21:37:00 UTC
John BoikIt’s not often that a scientist gets to use the words love, creativity, and wisdom in a paper, especially when writing about economics. Perhaps that’s because economics, the dismal science, is obsessed with dismal systems – make [...]
- Why mandate young borrowers to contribute to their retirement accounts?
by Christian Zimmermann in NEP-DGE blog, 2017-02-21 21:27:57 UTC
By Troebn M. Andersen and Joydeep Bhattacharya
Many countries, in an effort to address the problem that too many retirees have too little saved up, impose mandatory contributions into retirement accounts, that too, in an age-independent manner. This is puzzling because such funded pension schemes effectively mandate the young, who wish to borrow, to save for retirement. Further, if agents are present-biased, they disagree with the intent of such schemes and attempt to undo them by reducing their own saving or even borrowing again [...]
- Would Jim Morrison Recognize the New Venice Beach? Internet Billionaires Replace Bongs and Muscle
by Matthew Kahn in Environmental and Urban Economics, 2017-02-21 18:26:00 UTC
I live seven miles from Venice Beach. �While there are still many eccentric people walking along the beach paths, the area is gentrifying as leading Internet Startups take root. � The New York Times has writte n a great piece about Snap and its upcoming IPO that will mint many new super-rich people. As an environmental and urban economist, permit me to pose a riddle for you. �Why have these "hot startups" located near the beach? �Is there anything inherently productive about being in the sunshine in 75 degree warmth in winter with blue skies and clean air and close to the beach? � No! �Milton [...]
- How do we eliminate wealth inequality and financial fragility?
by chechurris in NEP-HIS blog, 2017-02-21 08:41:59 UTC
The market turn: From social democracy to market liberalism
By Avner Offer, All Souls College, University of Oxford ( firstname.lastname@example.org )
Abstract: Social democracy and market liberalism offered different solutions to the same problem: how to provide for life-cycle dependency. Social democracy makes lateral transfers from producers to dependents by means of progressive taxation. Market liberalism uses financial markets to transfer financial entitlement over time. Social democracy came up against the limits of public expenditure in the 1970s. The ‘market turn’ from social democracy [...]
- PrÃ¤sident Trumps "Wirtschaftsexperten"
by Ekkehart Schlicht in Funktionale Staatsfinanzen, 2017-02-21 08:10:00 UTC
Peter Navarro und Wilbur Ross waren die federführenden wirtschaftspolitischen Berater in Donald Trumps Wahlkampf und haben zusammen das wirtschaftspolitische Programm von Präsidentschaftskandidat Trump geschrieben. Peter Navarro, Wirtschaftsprofessor an der Business School in Irvine, Kalifornien, ist der „Direktor für Handel und Industriepolitik“ und Leiter eines neuen von Präsident Trump geschaffenen „Nationalen Handelsrats“ der USA. Wilbur Ross ist Billionär und Privatinvestor (genannt " Bankrottkönig "). Dass letzterer, als Praktiker, nicht besonders viel Ahnung von theoretischen Grundlagen [...]
- On the Political Nature of Monetary Policy
by Francesco Saraceno in Sparse Thoughts of a Gloomy European Economist, 2017-02-20 18:10:54 UTC
I was intrigued by Munchau’s editorial on central bank independence, that appeared on today’s FT . Munchau argues that central banks’ choices are increasingly political in nature, especially if their mandate is broad, as is the case for example of the Fed. His argument is that a broad mandate implies tradeoffs, and as such it does not go well with central bank independence.
I must say I am unconvinced to say the least, on at least two levels.
First, I do not see how a strict mandate would make central bank choices less political in nature. It makes them more opaque, but by no means less poli [...]
- Altern ist (nicht) lustig
by Monika BÃ¼tler in BATZ.ch, 2017-02-20 13:01:44 UTC
Der Beitrag erscheint unter dem selben Titel im HSG Focus 01/2017.
Das Knie knirscht, der Rücken schmerzt, die Falten werden tiefer. Mein Jüngster meinte vor einiger Zeit, dass ich von hinten eigentlich jung aussähe – von vorne hingegen…. Altern ist nicht lustig. Dennoch: Fast alle möchten alt werden, ein immer grösserer Teil der Bevölkerung schafft es auch. Noch vor 20 Jahren kannte man zwar bereits die wachsenden Finanzierungslücken der Alterssicherung, man wusste allerdings herzlich wenig darüber, wie es den älteren Menschen geht. Materiell, gesundheitlich, sozial, und vor all [...]
- Liquidity Transformation and Open-end Funds
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2017-02-20 12:14:26 UTC
“A key structural vulnerability from asset management activities is the potential mismatch in open-ended funds between the liquidity of fund investments and daily redemption of fund units.” Financial Stability Board , January 2017 In the aftermath of Britain’s July 2016 vote to exit the European Union, six U.K. open-end property funds with nearly £15 billion in assets suspended redemptions. These funds had routinely engaged in an extreme version of liquidity transformation : offering investors the ability to convert their shares into cash daily on demand, while holding highly illiquid commerci [...]
- Can we attract good political leaders? Hint â yes
by Nicholas Gruen in Club Troppo, 2017-02-20 09:01:40 UTC
Can a democracy attract competent leaders, while attaining broad representation? Economic models suggest that free-riding incentives and lower opportunity costs give the less competent a comparative advantage at entering political life. Moreover, if elites have more human capital, selecting on competence may lead to uneven representation. This paper examines patterns of political selection among the universe of municipal politicians and national legislators in Sweden, using extraordinarily rich data on competence traits and social background for the entire population. We document four new fact [...]
- How Do Environmental Economists Know that the Social Cost of Carbon is $42 a Ton?
by Matthew Kahn in Environmental and Urban Economics, 2017-02-19 17:43:00 UTC
The National Academy of Sciences has released a brand new report that you can download here that has a definitive feel on stating the academic environmental economics' community consensus on the social cost of carbon. In this blog post, I will clearly state that I do not believe this number nor do I believe that such a number can be estimated. It is a moving target that changes every day and it may be actually declining over time. My recent NBER Paper offers one induced innovation theory for why this can happen. Here is the citation; Suggested citation: National Academies of Sciences, Eng [...]
- Il debito (che ti) pubblico
by Alberto Bagnai in Goofynomics, 2017-02-18 17:36:00 UTC
Poc'anzi, su Twitter, commentando gli ultimi exploit della piccola vedetta lombarda, rosa d'invidia per il successo di questo blog, e perché tutte le interlocuzioni politiche che ha con tanta alacrità cercato si sono rivelate fallimentari, mi sono reso conto di non avervi mai raccontato uno dei più gustosi fra i tanti aneddoti che sei anni di dibattito mi hanno consegnato. Un fardello a volte un po' pesante, che condivido con voi, senza fare nomi (perché io sono il piccolo scrivano fiorentino, non la piccola vedetta lombarda), dato che ritengo essenziale farvi capire qual è il modus operandi d [...]
- Replacing Wenger
by chris in Stumbling and Mumbling, 2017-02-17 14:13:39 UTC
Should Arsene Wenger go? If so who should replace him? In considering these questions we must remember three important economic principles.
One is that in hiring someone what matters is putting round pegs into round holes. Productivity often results not from the intrinsic quality of a worker, but from the match between his skills and the job. What matters is getting the right man for the job, not necessarily the best.
Boris Groysberg has shown this (pdf) . He looked at 20 former managers of General Electric – a company with a reputation for producing good bosses – who moved to senior positions [...]
- Condivisone del rischio, confronto tra Europa e Stati Uniti
by Valentina Milano e Pietro Reichlin in La Voce, 2017-02-17 09:16:20 UTC
Il maggiore grado di condivisione del rischio che si ha negli Stati Uniti rispetto all’Eurozona è dovuto principalmente a mercati finanziari più integrati. In Europa è più importante il contributo delle istituzioni pubbliche, soprattutto dopo la creazione dei meccanismi di aiuto sovra-nazionali.
Una federazione condivide il rischio
Una misura del successo delle federazioni o delle unioni monetarie è il grado di condivisione del rischio ( risk sharing ), cioè la capacità di assorbire gli shock specifici, o non comuni, al Pil dei paesi membri. Un grado di condivisione elevato implica che una cad [...]