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Blog aggregator for economics research

2022-11-27

• Full-Information Estimation of Heterogeneous Agent Models Using Macro and Micro Data
  by Christian Zimmermann in NEP-DGE blog, 2022-11-27 16:00:33 UTC

  By Laura Liu and Mikkel Plagborg-Møller http://d.repec.org/n?u=RePEc:pri:econom:2022-21&r=dge We develop a generally applicable full-information inference method for heterogeneous agent models, combining aggregate time series data and repeated cross sections of micro data. To handle unobserved aggregate state variables that affect cross-sectional distributions, we compute a numerically unbiased estimate of the model-implied likelihood function. Employing the likelihood estimate in a Markov Chain Monte Carlo algorithm, we obtain fully efficient and valid Bayesian inference. Evaluation of the mi [...]

2022-11-25

• Quotation of the Day…
  by Don Boudreaux in Cafe Hayek, 2022-11-25 09:15:00 UTC

  (Don Boudreaux) Tweet … is from page 62 of Israel Kirzner’s March 1992 South African Journal of Economics paper, “ Subjectivism, Freedom and Economic Law ” as this paper is reprinted in Austrian Subjectivism and the Emergence of Entrepreneurship Theory , (Peter J. Boettke and Frédéric Sautet, eds., 2015), which is a volume in The Collected Works of Israel M. Kirzner : Physical realities and constraints have, of course, enormously important consequences for economic outcomes. But the subjectivist must insist that economic outcomes are not determined by any objective physical phenomena whate [...]

2022-11-24

• Optimal carbon pricing with fluctuating energy prices – emission targeting vs. price targeting
  by Christian Zimmermann in NEP-DGE blog, 2022-11-24 16:48:05 UTC

  By Alkis Blanz, Ulrich Eydam, Maik Heinemann and Matthias Kalkuhl http://d.repec.org/n?u=RePEc:pot:cepadp:51&r=dge Prices of primary energy commodities display marked fluctuations over time. Market-based climate policy instruments (e.g., emissions pricing) create incentives to reduce energy consumption by increasing the user cost of fossil energy. This raises the question of whether climate policy should respond to fluctuations in fossil energy prices? We study this question within an environmental dynamic stochastic general equilibrium (E-DSGE) model calibrated on the German economy. Our res [...]

• La transmission des hausses de taux de la BCE au marché monétaire
  by raphael.moncomble in Bloc-Notes Eco, 2022-11-24 15:42:45 UTC

  Publié le 25/11/2022 Par Benoît Nguyen et Miklos Vari Depuis le mois de juillet 2022, la BCE a relevé ses taux directeurs de 200 points de base au total, successivement 50 pb puis deux fois 75 pb, soit les hausses les plus fortes depuis sa création. Dans quelle mesure se sont-elles transmises au marché monétaire, première étape de la transmission de la politique monétaire ? Sur le marché non sécurisé (€STR), la transmission a été presque parfaite, mais sur le marché sécurisé (repo), elle est restée incomplète. billet_292_vf.pdf Graphique 1 : Variations des taux du marché monétaire en bla [...]

2022-11-23

• How well have ECB rate hikes been transmitted to the money market?
  by aurelie.dossantos in Eco Notepad, 2022-11-23 16:06:17 UTC

  Published on 11/25/2022 By Benoit Nguyen and Miklos Vari Since July, the ECB increased its key interest rates by 200 basis points in total (once by 50bps and twice by 75 bps). These are the largest single rate hikes of the ECB key interest rates. In this post, we examine to what extent these changes of policy rates passed through to the money market, the first step of monetary policy transmission. Transmission has been nearly complete in the unsecured market (e.g. on €STR) but subdued in the secured market (i.e. on repo transactions). billet_292_ve.pdf Graph 1: Changes for unsecured mone [...]

2022-11-21

• The macroeconomics of establishing a basic income grant in South Africa
  by Christian Zimmermann in NEP-DGE blog, 2022-11-21 16:27:17 UTC

  By Daan Steenkamp, Roy Havemann and Hylton Hollander http://d.repec.org/n?u=RePEc:pra:mprapa:114614&r=dge This paper quantifies the effect of fiscal transfers on the trade-off between social relief and debt accumulation, and discusses the economic growth and fiscal implications of different combinations of expanded social support and funding choices. Given South Africa’s already high level of public debt, the opportunity to fund a basic income grant through higher debt is limited. Using a general equilibrium model, the paper shows that extending the social relief of distress grant could be fis [...]

2022-11-18

• Useful Microeconomics
  by Francesc Trillas in Real Progress, 2022-11-18 16:31:00 UTC

   Microeconomics does not need to be a distant topic. My design of the Applied Microecnomics course  (taught jointly with Javier Asensio) at the Master in Applied Research in Economics and Business of my university combines theory and discussion of empirical papers in top journals. I paste the syllabus here. As we finish the current edition and we prepare the next one, I would most welcome suggestions of topics, references and discussion papers.  Objectives -Learn the basic skills to understand and be able to use the basic models and theories (old and new) in microeconomics, to better analyze b [...]

2022-11-16

• Can civic nationalism help reduce corruption? Insights from Solomon Islands
  by Grant Walton in Development Policy Blog, 2022-11-16 19:00:10 UTC

  In many parts of the world “nationalism” has earned itself a bad rap. Ethnic cleansing, war, genocide and other atrocities have been committed in its name. In recent years we’ve seen political leaders, like Donald Trump, whip up a toxic form of nationalist sentiment defined by race and a disdain for foreigners. On the other hand, nationalism can be a force for good; a devotion to one’s nation can encourage solidarity, pride and belonging. And for some practitioners, policymakers and academics, a certain type of nationalism – civic nationalism – has the potential to help address corruption in p [...]

• Some Links
  by Don Boudreaux in Cafe Hayek, 2022-11-16 16:00:57 UTC

  (Don Boudreaux) Tweet Phil Magness and Michael Makovi report on their important research showing that Karl Marx’s reputation was given a real boost by the ‘success’ of the Bolshevik revolution . A slice: In his classic book the Logic of Collective Action, Mancur Olson observed a peculiar feature about socialist political organizing. Marxist theory envisions itself as a manifestation of collective class interests, with the proletarian class being the most numerous. Yet as Olson noted, “the ‘Marxian’ revolutions that have taken place have been brought about by small conspiratorial elites tha [...]

2022-11-13

• Recent Behavioural Science and Policy Links November 13th
  by Liam Delaney in Economics, Psychology and Policy, 2022-11-13 20:01:00 UTC

  It is still very difficult to know fully what to do about posting on twitter. I have not deleted my account. I am not actively posting. I RT'd the happy announcement of one of our PhD students passing their viva on the basis that many people on my timeline know the student and would want to celebrate. My current mood with it is basically to see this as a transition phase before something new emerges.  I have continued to engage with mastodon ( link here ). It has been exciting to see various people and groups move there and I highly recommend trying it out but it is clearly still open as to wh [...]

• We accurately predicted the fall in the labor force participation rate since 2000 at a two-year horizon
  by Ivan Kitov in Economics as Classical Mechanics, 2022-11-13 15:24:00 UTC

  In 2008, we published a working paper titled " The driving force of labor force participation in developed countries"   in the ECINEQ (Society for the Study of Economic Inequality) Working Paper Series  also available at    Research Papers in Economics  (RePEc/IDEAS). In this paper we proposed a simple  model of the change in the labor force participation rate, dLFP/LFP, as a nonlinear function of the real GDP per capita, G:  N(t 2 ) = N(t 1 ){ 2[dG(t 1 -T)/G(t 1 -T) - A 2 /G(t 1 -T)] + 1}                                                (1 ) dLFP(t 1 )/LFP(t 1 ) = N(t 1 -T)/B + C                [...]

2022-11-02

• Recent behavioural science and policy links November 2nd
  by Liam Delaney in Economics, Psychology and Policy, 2022-11-02 13:22:00 UTC

  Like a lot of people, am thinking about how to proceed with social media. For now, am going to go back to basics and use the blog here to update on anything particularly interesting I see emerging in our areas.  1. Michael Muthukrishna points to a really useful new measure of cultural distance between regions.  2. From last year and open access, Nancy Cartwright's paper on rigour versus the need for evidential diversity is very thought-provoking. In general our literatures should engage more directly with her thinking in this regard.  3. New paper by Leo Lades and Federica Nova  Ethical Consid [...]

2022-11-01

• Poids de la dette et inflation : quelles leçons après l’épisode britannique ?
  by The Conversation in Contrepoints, 2022-11-01 04:10:35 UTC

  Par Éric Mengus et Guillaume Plantin.   Le 23 septembre au Royaume-Uni , l’annonce du mini-budget et les événements qui ont suivi jusqu’à l’annonce de la démission de la Première ministre Liz Truss , le 20 octobre, ont suscité un regain d’intérêt pour le risque de «  dominance budgétaire  », c’est-à-dire une situation dans laquelle la banque centrale abandonne son objectif de stabilité des prix pour aider le gouvernement à financer ses déficits. Mais dans quelle mesure cette séquence d’événements doit-elle nous pousser à repenser les relations entre les gouvernements, en charge de la politique [...]

2022-10-21

• ‘Sex Positivity,’ Porn May Be Keeping Young Men From Sex, Marriage
  by Marjorie Jackson in The Foundry, 2022-10-21 20:16:41 UTC

  “Young men aren’t having sex!” A  Twitter thread  that has been gaining traction resurfaced a 2019  Washington Post study , which found that young men are not having as much sex as they used to. Alexandra Hunt,  a former stripper  who  lost the 2022 Democratic congressional primary  in Philadelphia, wrote, “Nearly a third of men under 30 have not had sex. And a higher percent do not have as much sex as they’d like—not exactly surprising, but this kind of statistic is a sign of much deeper problems.” Hunt points to men’s declining mental health and low motivation to work as negative [...]

2022-10-17

• Spatial economic dynamics and transport project appraisal
  by Christian Zimmermann in NEP-DGE blog, 2022-10-17 20:33:57 UTC

  By James Lennox http://d.repec.org/n?u=RePEc:cop:wpaper:g-335&r=dge Transport infrastructure is costly to build and very long-lived. Major projects are expected to enhance accessibility, which over time, is likely to affect the distribution of population and employment. In a Dynamic Spatial Equilibrium (DSE) model, the timing and location of a project’s direct costs and benefits can be explicitly represented. Effects of both construction and operational phases are captured in a forward-looking spatial general equilibrium with costly adjustment. Not only are dynamic responses of direct interest [...]

2022-10-16

• The optimal quantity of CBDC in a bank-based economy
  by Christian Zimmermann in NEP-DGE blog, 2022-10-16 16:45:20 UTC

  By Lorenzo Burlon, Carlos Montes-Galdón, Manuel Muñoz and Frank Smets http://d.repec.org/n?u=RePEc:ecb:ecbwps:20222689&r=dge We provide evidence on the estimated effects of digital euro news on bank valuations and lending and find that they depend on deposit reliance and design features aimed at calibrating the quantity of CBDC. Then, we develop a quantitative DSGE model that replicates such evidence and incorporates key selected mechanisms through which CBDC issuance could affect bank intermediation and the economy. Under empirically-relevant assumptions (i.e., central bank collateral require [...]

2022-10-07

• Japan’s currency bursts its post-bubble economy
  by Gunther Schnabl in East Asia Forum, 2022-10-07 11:00:16 UTC

  Author: Gunther Schnabl, Leipzig University At more than 145 yen per dollar, the Japanese yen has slipped to a 24-year low. After the Bank of Japan (BoJ) signalled further depreciation would be tolerated, Finance Minister Shunichi Suzuki stated that ‘excessive, disorderly currency moves could negatively impact the economy and financial conditions’. The massive foreign exchange intervention that followed to strengthen yen could not reverse the depreciation pressure. That may signal that Japan’s post-bubble crisis management has reached its limits. The roots of the current policy dilemma go ba [...]

2022-10-06

• East Asia’s precautionary financing fix
  by Randall Henning in East Asia Forum, 2022-10-06 11:00:11 UTC

  Author: C. Randall Henning, American University Southeast Asian economies, like emerging markets and developing countries globally, are anticipating a rocky financial transition out of the COVID-19 pandemic. The rapid tightening of monetary policy in the United States and the economic fallout from Russia’s invasion of Ukraine are causing a global recession and threatening further capital outflows from emerging markets and developing countries. ASEAN+3 (China, Japan and South Korea) countries can help protect Southeast Asian economies and advance regional institutions by tapping their precauti [...]

2022-10-03

• 49. Actividades de la Asociacion Euro-Americana con América Latina: Años 2011-2022
  by MCG Blogs de Economía in Asociación de Estudios Euro-Americanos: Desarrollo internacional de América, Europa y otras áreas, 2022-10-03 12:12:00 UTC

            En la Entrada 19 de este Blog (del año 2011), hemos incluido varias actividades de colaboración de nuestra Asociación de Estudios Euro-Americanos de Desarrollo Económico con América Latina en el período 2011-2022. Ahora, en el año 2022, incluimos otras actividades desarrolladas en 2011-2022.             19. Actividades de la Asociación Euro-Americana con América Latina: Años 2001-2010 ,  25-3-11 (2644)            ACTIVIDADES DE COLABORACIÓN INTERNACIONAL EN 2011-2022                      Participación de la Profesora María-Carmen Guisán (Presidenta de la Asociación de Estudios Euro-A [...]

2022-09-30

• Mental health in the UK is about to get worse, and inequality will have a lot to do with it
  by ? in Whats New, 2022-09-30 14:49:36 UTC

  Credit: Hyejin Kang/Shutterstock The British government’s recent mini-budget has been widely criticized. The effect on stock markets, pensions and the value of the pound has hardly been out of the news. As a clini [...]

2022-09-23

• Chartbook #154 Who is going to vote for Italy’s right-wing coalition?
  by Adam Tooze in Adam Tooze, 2022-09-23 20:48:00 UTC

  Many of us had hoped that it would not come to this. In Sunday’s elections in Italy, triggered by the premature fall of Mario Draghi’s government, the right-wing coalition of Berlusconi’s Forza Italia, Matteo Salvini’s Lega and Giorgia Meloni’s Fratelli D’Italia, seem set to score a decisive victory. The center-left party PD is not polling badly. It will likely come in second in terms of share of the vote. But without an effective coalition, it is doomed to defeat. Leading in the polls by a decisive margin are the Fratelli d’Italia, who emerged as champions of the hard-right from the fa [...]

• The US economy is on a long-term descent
  by Ivan Kitov in Economics as Classical Mechanics, 2022-09-23 12:55:00 UTC

  The US economy was and is successful, as many people think. Such a view on the economy prevails because the long-term evolution is not discussed by the economic and financial authorities and mainstream experts. Here, I would like to present the US economic performance with the long-term trends in key economic parameters since 1960.� These parameters are the growth rate of the civilian noninstitutional population, CNP, the rate of real GDP growth, the rate of real GDP per capita growth,� the labor force growth rate, and the labor force participation rate. The population-related parameters are k [...]

• The End of Privilege: A Reexamination of the Net Foreign Asset Position of the United States
  by Christian Zimmermann in NEP-DGE blog, 2022-09-23 03:10:41 UTC

  By Andrew Atkeson, Jonathan Heathcote and Fabrizio Perri http://d.repec.org/n?u=RePEc:fip:fedmsr:94111&r=dge The US net foreign asset position has deteriorated sharply since 2007 and is currently negative 65 percent of US GDP. This deterioration primarily reflects changes in the relative values of large gross international equity positions, as opposed to net new borrowing. In particular, a sharp increase in equity prices that has been US-specific has inflated the value of US foreign liabilities. We develop an international macro finance model to interpret these trends, and we argue that the r [...]

2022-09-20

• No title
  by maximorossi in NEP-LTV blog, 2022-09-20 20:27:25 UTC

  Measuring Preferences for Competition By: Lina Lozano ; Ernesto Reuben (Division of Social Science) Abstract:Recent research has found that competitive behavior measured in experiments strongly predicts individual differences in educational and labor market outcomes. However, there is no consensus on the underlying factors behind competitive behavior in these experiments. Are participants who compete more capable, more confident, and more tolerant of risk, or are they competing because they enjoy competition per se? In this study, we present an experiment designed to measure individuals†[...]

• No title
  by maximorossi in NEP-LTV blog, 2022-09-20 20:20:13 UTC

  Does the Minimum Wage Affect Wage Inequality? A Study for the Six Largest Latin American Economies By: Carlo Lombardo (CEDLAS-IIE-FCE-UNLP & CONICET); Lucía Ramirez-Veira (CEDLAS-IIE-FCE-UNLP & CONICET); Leonardo Gasparini (CEDLAS-IIE-FCE-UNLP & CONICET) Abstract: Minimum wage (MW) policies are widespread in the developing world and yet their effects are still unclear. In this paper we explore the effect of national MW policies in Latin America†s six largest economies by exploiting the heterogeneity in the bite of the national minimum wage across local labor markets and over time. We [...]

2022-09-18

• Factor Network Autoregressions
  by Francis Diebold in No Hesitations, 2022-09-18 22:10:00 UTC

  �Check this out, by Barigozzi, Cavaliere, and Moramarco: http://d.repec.org/n?u=RePEc:arx:papers:2208.02925&r= Very cool methods for dynamic "multilayer networks".� In a standard N-dim net there's one NxN adjacency matrix.� But richer nets may have many kinds of connections, each governed by its own adjacency matrix.� (What a great insight -- so natural and obvious once you hear it.� A nice "ah-ha moment"!)� So perhaps there are K operative NxN adjacency matrices.� Then there is actually a grand 3-dim adjacency matrix (NxNxK) operative -- a cubic rather than a square matrix.� Parsimonious mode [...]

• Finally, we have evidence that hell is other people on social media | Torsten Bell
  by ? in Science news, comment and analysis | theguardian.com, 2022-09-18 08:30:08 UTC

  Seeing how much fun your peers are having is bad for your mental health, a study of students suggestsScrolling Twitter or refreshing Facebook definitely feels like it’s bad for you, as our attention spans rot and meaning is drained from our lives. Despite [...]

2022-09-17

• Twitter peut-il prédire l’évolution des marchés financiers ?
  by Thomas Renault in Contrepoints, 2022-09-17 02:40:12 UTC

  Par Thomas Renault   En 2015, un article publié par Les Échos intitulé « Comment Twitter est devenu la boule de cristal des marchés financiers » a fait un bon petit buzz sur les réseaux sociaux. Réalisant ma thèse de doctorat sur ce sujet depuis maintenant près de trois ans, j’ai tendance à être assez psychorigide à propos de cette thématique, surtout que les mêmes mythes et les mêmes erreurs reviennent très souvent dans les articles de presse traitant de Twitter en tant qu’outil de First-Story Detection (détection d’événement) et d’analyse du sentiment des investisseurs. Voici les quelques er [...]

2022-09-15

• Women in the sports industry : Did Title IX make a difference?
  by ? in FRED blog, 2022-09-15 13:00:00 UTC

  This summer marked the 50th anniversary of the passage of the Education Amendments of 1972, which protect people from discrimination based on sex in education programs or activities that receive federal financial assistance. The well-known Title IX in this legislation made equal access to athletic programs mandatory, which resulted in more women playing sports while enrolled in school. But does a more-even playing field in high school and college athletics result  in comparable employment in the sports industry? The FRED graph above shows the number of men and women working as athletes, coach [...]

2022-09-12

• Credit and Saving Constraints in General Equilibrium: A Quantitative Exploration
  by Christian Zimmermann in NEP-DGE blog, 2022-09-12 16:49:18 UTC

  By Catalina Granda-Carvajal, Franz Hamann and Cesar Tamayo http://d.repec.org/n?u=RePEc:rie:riecdt:92&r=dge In this paper we build an incomplete-markets model with heterogeneous households and firms to study the aggregate effects of saving constraints and credit constraints in general equilibrium. We calibrate the model using survey data from Colombia, a developing country in which informal saving and credit frictions are pervasive. Our quantitative results suggest that reducing savings costs increases selection into formal saving, but the effect on aggregate outcomes and welfare is dwarfed by [...]

2022-09-03

• Memories of Ted Anderson
  by Francis Diebold in No Hesitations, 2022-09-03 21:35:00 UTC

  Ted is among the very greatest statisticians/econometricians of the 20th-century.� I feel very close to him, as my former Penn colleague, Larry Klein, worked closely with him at Cowles in the 1940s, and another former colleague, Bobby Mariano, was his student at Stanford before coming to Penn around 1970.� I recall a Penn seminar he gave late in his career, on unit moving-average roots.� He started painfully slowly, defining, for example, things like "time series" and "covariance stationarity".� Some eyes were rolling.� Ten minutes later, he was far beyond the frontier.� No eyes were rolling.� [...]

• Equal-weight HAR combination
  by Francis Diebold in No Hesitations, 2022-09-03 16:52:00 UTC

  This just blows me away.  So full of great insight.  Equal-weight combinations rule, in yet another context!  See also my papers with Minchul Shin that clearly lead to equal weights for point and density forecasts, respectively: Diebold, F.X. and Shin, M. (2019) , " Machine Learning for Regularized Survey Forecast Combination: Partially-Egalitarian Lasso and its Derivatives ,"  International Journal of Forecasting , 35, 1679-1691.   Diebold, F.X., Shin, M. and Zhang, B. (2022) , “On the Aggregation of Probability Assessments: Regularized Mixtures of Predictive Densities for Eurozone Inflation [...]

• Long memory and weak ID
  by Francis Diebold in No Hesitations, 2022-09-03 16:42:00 UTC

  I've thus far never been a big fan of the weak ID literature.  Always seemed to me that if you wind up with weak ID, it's time to think harder about the underlying economics rather than fancier econometrics.  But this opened my eyes and changed my mind.  Totally cool.     Weak Identification of Long Memory with Implications for Inference By: Jia Li  (Singapore Management University);  Peter C. B. Phillips  (Cowles Foundation, Yale University, University of Auckland, Singapore Management University, University of Southampton);  Shuping Shi  (Macquarie University);  Jun Yu  (Singapore Management [...]

2022-09-01

• Is the economy growing? Depends on how you measure it : GDP vs. GDI
  by ? in FRED blog, 2022-09-01 13:00:00 UTC

  One of the most watched U.S. economic indicators is the growth of real gross domestic product (GDP). A similar but lesser-known economic indicator has also been in the news lately—real gross domestic income (GDI). According to the Bureau of Economic Analysis , both real GDP and real GDI measure the real output of the U.S. economy. Real GDP measures the value of goods, while real GDI measures the income of employees and corporations. In theory, the growth rates of real GDP and real GDI should be equal. Lately, this hasn’t been the case. The FRED graph above displays the compounded annual rate [...]

• Federal student loan forgiveness: Research to help journalists
  by Denise-Marie Ordway in Journalist's Resource, 2022-09-01 12:23:00 UTC

  Facebook Twitter LinkedIn Reddit Email As adults with federal student loans await new details about the widespread loan forgiveness program President Joe Biden announced Aug. 24, many journalists will be trying to answer questions such as: How much will the program cost? Who will benefit most? What could be the unintended consequences? To help, we’ve gathered and summarized a sampling of academic research and government reports that provide insights on Biden’s historic program, which offers adults earning less than $125,000 a year a one-time opportunity to erase up to $10,000 in f [...]

2022-08-30

• In praise of Enough is Enough
  by ? in Stumbling and Mumbling, 2022-08-30 12:47:08 UTC

  One of the few silver linings to the cost of living crisis has been the re-emergence of trades union power and the start of the Enough is Enough campaign. These could potentially be the start of a new and better politics.As Enough is Enoughsay:We can’t rel [...]

2022-08-26

• Monetary policy in the open economy with digital currencies
  by Christian Zimmermann in NEP-DGE blog, 2022-08-26 23:05:04 UTC

  By Pietro Cova, Alessandro Notarpietro, Patrizio Pagano and Massimiliano Pisani http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1366_22&r=dge We assess the transmission of a monetary policy shock in a two-country New Keynesian model featuring a global private stablecoin and a central bank digital currency (CBDC). In the model, cash and digital currencies are imperfect substitutes that differ as to the liquidity services they provide. We find that in a digital-currency economy, where the stablecoin is a significant means of payment, the domestic and international macroeconomic effects of a monetary [...]

2022-08-24

• The Complexity Principle (!)
  by Francis Diebold in No Hesitations, 2022-08-24 22:25:00 UTC

  Continuing the previous post, I'm sorry if I seem to be gushing over the recent Kelly et al. program (indeed I am), but it just blows me away.� The famous "parsimony" and "KISS (keep it sophisticatedly simple)" principles turned on their heads!� George Box and Arnold Zellner must be rolling in their graves... � The Virtue of Complexity Everywhere Bryan T. Kelly �(Yale SOM; AQR Capital Management, LLC; National Bureau of Economic Research (NBER));� Semyon Malamud �(Ecole Polytechnique Federale de Lausanne; Centre for Economic Policy Research (CEPR); Swiss Finance Institute);� Kangying Zhou �(Ya [...]

2022-08-19

• Complexity in Prediction
  by Francis Diebold in No Hesitations, 2022-08-19 13:54:00 UTC

  Really glad to see that Kelly et al. are keeping at it, moving well into the "double dip" zone and adding regularization.   The Virtue of Complexity in Return Prediction  (2022) B ryan T. Kelly ;  Semyon Malamud ;  Kangying Zhou The extant literature predicts market returns with “simple” models that use only a few parameters. Contrary to conventional wisdom, we theoretically prove that simple models severely understate return predictability compared to “complex” models in which the number of parameters exceeds the number of observations. We empirically document the virtue of complexity in US e [...]

2022-08-12

• Japan’s low inflation conundrum
  by Gunther Schnabl in East Asia Forum, 2022-08-12 12:00:39 UTC

  Author: Gunther Schnabl, Leipzig University Inflation rates have risen far above the targets of many central banks around the world, reaching 9.1 per cent in the United States and 8.6 per cent in the euro area in June 2022. Yet Japan has bucked this phenomenon by maintaining surprisingly low inflation rates, sitting at 2.4 per cent in June 2022. For many years, Japan’s inflation rate has been well below other industrialised countries even though the Bank of Japan’s balance sheet has grown much faster than the balance sheets of most other central banks. Inflation is generally caused by centra [...]

• How India Can Sustain Rapid Economic Growth
  by Barry Eichengreen in Project Syndicate, 2022-08-12 10:45:03 UTC

  NEW DELHI – One country stands out from the gloomy overall tone of the International Monetary Fund’s recent update  of its World Economic Outlook . Against the backdrop of tepid 3.2% global growth in 2022, the IMF expects India’s GDP to expand by 7.4%. This is the fastest growth of any large economy except Saudi Arabia, which is the incidental beneficiary of upward pressure on global oil prices from Russian President Vladimir Putin’s war against Ukraine. India may be buying Russian crude at a discount, but, as the world’s third largest oil importer, it is still burdened by high oil prices. O [...]

2022-08-09

• 48. La investigación económica en América Latina, Estados Unidos y España en 2001-2022: publicaciones destacadas y representación femenina
  by MCG Blogs de Economía in Asociación de Estudios Euro-Americanos: Desarrollo internacional de América, Europa y otras áreas, 2022-08-09 17:30:00 UTC

    En el Documento nº 125 de la Serie Economic Development del Equipo de Econometría de la Universidad de Santiago de Compostela, se ha publicado el siguiente estudio, disponible de forma gratuita en Ideas.Repec:  Guisán, M.C. (2021).   La Investigacion De Economía En España, América Latina Y Estados Unidos: Representación Femenina Y Publicaciones Destacadas. Documento nº 125 de la Serie Economic Development Próximamente resumiremos algunos de los datos más destacados de dicho estudio y también la lista de autores más destacados en Julio de 2022 en la base Ideas.Repec. [...]

2022-08-08

• Are we in a recession (yet)? : Consulting Chauvet and Piger’s smoothed probabilities
  by ? in FRED blog, 2022-08-08 13:00:00 UTC

  It’s natural to want to know where you stand in the economy and get ahead of any big changes. It’s no surprise, then, that we’re hearing plenty of talk about whether the U.S. economy is in a recession. As usual, we begin our inquiry with FRED data! The graph above displays, month after month, the estimated probabilities that the U.S. economy is in recession. These estimates are calculated from a set of economic statistics discussed in this article . The FRED graph also conveniently displays shaded bars when actual recessions occurred, as determined by the NBER business cycle dating committee. [...]

2022-08-01

• Travel chaos, flight fees, and labor shortages could get even worse in October when airlines can start buying their own stocks again, according to the president of the flight attendants' union
  by insider@insider.com (Juliana Kaplan) in Business Insider, 2022-08-01 16:06:46 UTC

  Flight delays and cancellations will likely continue throughout the summer, analysts told Insider. James D. Morgan/Getty Images Travel chaos has abounded this summer, as passengers deal with delays, cancellations, and lost luggage. Sara Nelson, international president of the Association of Flight Attendants, warns that could get even worse. In the fall, airlines can start buying their own stocks again — potentially leading to higher fees and fewer staff. If you've even thought about boarding a plane this summer, you've probably heard the tales of travel chaos. Passengers are getting hit with d [...]

• Does purchasing power parity (PPP) hold in the long run? : A look at the franc/dollar exchange rate on the Swiss national holiday
  by ? in FRED blog, 2022-08-01 13:00:00 UTC

  Part of the “My favorite FRED graph” guest post series. “Under the skin of any international economist lies a deep-seated belief in some variant of the PPP theory of the exchange rate.” — Dornbusch and Krugman (1976) Most models in international macroeconomics assume purchasing power parity (PPP) holds in the long run. But what is PPP and what is the long run? A good starting point is the law of one price (LOP), which states that the same good in different competitive markets must sell for the same price, when transportation costs and barriers between those markets are not important. Intuitiv [...]

2022-07-29

• Transmission of Flood Damage to the Real Economy and Financial Intermediation: Simulation Analysis using a DSGE Model
  by Christian Zimmermann in NEP-DGE blog, 2022-07-29 13:32:36 UTC

  By Ryuichiro Hashimoto and Nao Sudo http://d.repec.org/n?u=RePEc:boj:bojwps:wp22e05&r=dge This paper quantitatively assesses the indirect effect of floods on the real economy and financial intermediation in Japan by estimating a dynamic stochastic general equilibrium (DSGE) model that incorporates a mechanism through which floods cause the capital stock and the public infrastructure to depreciate exogenously, using the data on flood damage recorded in the Flood Statistics released by the Japanese government. The result of the analysis is twofold. First, flood shocks dampen GDP from the supply [...]

2022-07-27

• Should the Federal Govt "split" its cloud computing contracts?
  by noreply@blogger.com (Luke Froeb) in Managerial Econ, 2022-07-27 17:08:00 UTC

  WSJ Reports :   Amazon  dominates the cloud-infrastructure industry  with a 39% share of the 2021 global market ahead of Microsoft at No. 2 with a 21% share, according to research firm  Gartner  Inc. ...   Microsoft has grown frustrated about its lack of progress selling its Azure cloud services to the U.S. federal government with its rival’s Amazon Web Services continuing to win most of those contracts, said some of the people familiar with its efforts.  ...     Microsoft  Corp.   is rallying other big name  cloud-computing providers  such as  Alphabet  Inc.’s   Google and  Oracle  Corp.  to [...]

2022-07-26

• No title
  by maximorossi in NEP-LTV blog, 2022-07-26 19:33:05 UTC

  The role of unobservable characteristics in friendship network formation. By: Pablo Brañas-Garza (Universidad de Loyola Andalucia); Lorenzo Ductor (Department of Economic Theory and Economic History, University of Granada.); Jaromir Kovarik (‡Universidad del País Vasco UPV/EHU and University of West Bohemia) Abstract: Inbreeding homophily is a prevalent feature of human social networks with important individual and group-level social, economic, and health consequences. The literature has proposed an overwhelming number of dimensions along which human relationships might sort, without pr [...]

2022-07-25

• The big idea: should we be using data to make life’s big decisions?
  by ? in Science news, comment and analysis | theguardian.com, 2022-07-25 11:30:34 UTC

  Faced with tough choices, people usually fall back on gut instinct or seek the advice of friends. Now, there’s an alternativeWhom should you marry? Where should you live? How should you spend your time? For centuries, people have relied on their gut instin [...]

• The futility of economic policy debate
  by ? in Stumbling and Mumbling, 2022-07-25 09:08:58 UTC

  Sam Bowmanwriteson the divide between boosters and doomsters - those who believe we can boost economic growth and those who don't. He misses, however, an important point.This is that economic policy is not made by Sam, nor by Giles Wilkes, Stian Westlake, [...]

2022-07-24

• Sunday assorted links
  by ? in Marginal Revolution, 2022-07-24 17:33:30 UTC

  1. Timothy Snyder’s argument that Russia is losing. 2. “We provide novel evidence that poor individuals born in countries with high consumption of meat are more likely to show soccer prowess.” 3. Are young people becoming more miserable r [...]

2022-07-14

• Fertility and migration
  by Christian Zimmermann in NEP-DGE blog, 2022-07-14 19:24:09 UTC

  By Arianna Garofalo http://d.repec.org/n?u=RePEc:ewp:wpaper:421web&r=dge Over the past three decades, the drop in fertility rates has been accompanied by high rates of migration in several developing countries. We argue that migration affects fertility negatively in the countries of origin. To analyze the effect of migration we build a fertility choice model, based on De La Croix (2014), with endogenous migration decisions. In this framework, when a member of the household migrates abroad, income increases due to remittances but at the same time, individuals left at home face a much higher opp [...]

• OECD data show less employment for older French folks : Assessing joie de vivre on Bastille Day
  by ? in FRED blog, 2022-07-14 13:00:00 UTC

  Part of the “My favorite FRED graph” guest post series. It’s July 14th, Bastille Day! So the FRED Blog focuses on France, where the retirement age was a central issue in their recent elections. France’s legal retirement age is 62, conditional on time worked. President Emmanuel Macron, who was re-elected in April, prefers raising it to 65. Jean-Luc Mélenchon campaigned on lowering it to 60 as part of the leftist coalition policy proposal. That political debate didn’t include a great deal of data, so we provide some here, including international comparisons. The FRED graph above uses OECD data [...]

2022-07-09

• Global Cultures and Global Variations in Obesity
  by ? in ConscienHealth, 2022-07-09 10:00:52 UTC

  Obesity prevalence is rising all over the world. But in different cultures and different countries, tremendous variations in obesity are striking. Countries of eastern Asia tend to have very low obesity prevalence. Japan, for example, has an obesity rate o [...]

2022-07-05

• 3 examples of post-publication review (ecology, the underground economy, and “lockdowns”)
  by Andrew in Statistical Modeling, Causal Inference, and Social Science, 2022-07-05 13:34:22 UTC

  1. Manuel Lerdau writes: This might interest you as an example of a public post-publication review that will, I hope, make a difference. As a bonus, one of the key issues with the original paper is a statistical problem. We have this issue frequently in Ecology (the field, not, in particular, the journal), an over-emphasis on mean values and a corresponding underappreciation of the importance of variability. 2. Asher Meir writes: This should warm your heart: Uncovering errors on measuring the underground economy: Manuel A. Gómez and Adrián Ríos-Blanco uncover problems in the Journal of Mac [...]

2022-07-03

• Measuring financial inclusion: how much do households participate in the formal financial system?
  by x in Ajay Shah's blog, 2022-07-03 05:02:00 UTC

  by Geetika Palta, Mithila A. Sarah and Susan Thomas . Measuring the impact of financial inclusion Households use financial instruments and financial markets to achieve their lifetime objectives. These include being able to smooth consumption over time, being able to withstand shocks, and pursue entrepreneurial opportunities to gain income mobility. Financial inclusion refers to such access to finance for a larger subset of the population (e.g. Rao, 2018 ). Financial policy makers have pursued financial inclusion for many decades. In recent years, the rise of ESG investors has bolstered p [...]

2022-06-28

• No title
  by maximorossi in NEP-LTV blog, 2022-06-28 21:07:05 UTC

  https://ideas.repec.org/p/feb/artefa/00755.html [...]

2022-06-27

• Optimal bank capital requirements: What do the macroeconomic models say?
  by Christian Zimmermann in NEP-DGE blog, 2022-06-27 21:17:20 UTC

  By Adam Gulan, Esa Jokivuolle and Fabio Verona http://d.repec.org/n?u=RePEc:zbw:bofecr:22022&r=dge The optimal level of banks’ capital requirements has been a key research topic since at least the introduction of the Basel rules in the late 1980s. In this paper, we review the literature, focusing on recent findings from quantitative structural macroeconomic models. While dynamic stochastic general equilibrium models capture second-round (general equilibrium) effects such as the feedback effects from macroeconomic outcomes back to financial intermediation and the dynamic evolution of the econom [...]

2022-06-23

• Oil and gas prices move together like rockets and feathers
  by ? in FRED blog, 2022-06-23 13:00:00 UTC

  In recent months, U.S. gasoline prices have risen significantly—because of both increased demand and increased production costs. Notably, but not surprisingly, oil prices have also increased. And although oil is a key input in the production of retail gasoline, oil and gas prices don’t always move in tandem. When oil prices shoot upward, gas prices rise with them. And when oil prices fall, gasoline prices also fall; but they can fall at a slower rate. Economists refer to this market dynamic as “asymmetric pass-through.” A more colorful description of the phenomenon is “rockets and feathers.” [...]

2022-06-22

• The Poisson distribution: From basic probability theory to regression models
  by Achim Zeileis in R-bloggers, 2022-06-22 22:00:00 UTC

  [This article was first published on Achim Zeileis , and kindly contributed to R-bloggers ]. (You can report issue about the content on this page here ) Want to share your content on R-bloggers? click here if you have a blog, or here if you don't. Brief introduction to the Poisson distribution for modeling count data using the distributions3 package. The distribution is illustrated using the number of goals scored at the 2018 FIFA World Cup, suitable for self-study or as a classroom exercise. The Poisson distribution The classic basic probability distribution e [...]

• The future of work 2 – working long and hard
  by michael roberts in Michael Roberts Blog, 2022-06-22 14:34:52 UTC

  In the first post of my Future of Work series , I looked at the impact of working from home and remote work which has mushroomed since the COVID pandemic. In this second part, I want to consider the impact of work on people’s lives and health and how that will pan out over the next few decades. Marx once said “The less you eat, drink and buy books; the less you go to the theatre, the dance hall, the public house; the less you think, love, theorize, sing, paint, fence, etc., the more you save—the greater becomes your treasure which neither moths nor rust will devour—your capital. The less y [...]

2022-06-21

• Financer le nucléaire sans argent public et sans démanteler EDF : une solution existe !
  by François Henimann in Contrepoints, 2022-06-21 02:50:13 UTC

  Nous avons montré dans un précédent article que la stratégie énergétique 2050 annoncée par le président de la République relance insuffisamment le nucléaire, et que décarboner de façon compétitive et résiliente l’économie française à l’horizon 2050 nécessite de disposer à cette échéance d’une puissance installée nucléaire de l’ordre de 85 GW (60 à 65 % du mix électrique). EDF est en grande difficulté financière, à cause de la sous-évaluation du prix de vente de l’ARENH (Accès Régulé à l’Électricité Nucléaire Historique), fixé à 42 euros/MWh en 2012, et surtout non réévalué depuis, malgré les c [...]

2022-06-13

• Putin’s War and the German Economic Model
  by Dalia Marin in Project Syndicate, 2022-06-13 12:55:42 UTC

  MUNICH – Will Germany’s economic model survive Russian President Vladimir Putin’s war on Ukraine? As I noted in a recent talk at Harvard University, answering that question requires revisiting recent economic history. Germany’s economy was transformed after the fall of communism in 1989. Liberalization of trade with the country’s eastern neighbors had three profound effects at home . First, it led to decentralized wage bargaining. Second, it had a flattening effect on hierarchical management in German firms. And third, it extended German production networks into Central and Eastern Europe. [...]

2022-06-02

• Educational inequality
  by maximorossi in NEP-LTV blog, 2022-06-02 20:14:05 UTC

  Educational Inequality By: Blanden, Jo (University of Surrey); Doepke, Matthias (Northwestern University); Stuhler, Jan (Universidad Carlos III de Madrid) Abstract: This chapter provides new evidence on educational inequality and reviews the literature on the causes and consequences of unequal education. We document large achievement gaps between children from different socio-economic backgrounds, show how patterns of educational inequality vary across countries, time, and generations, and establish a link between educational inequality and social mobility. We interpret this evidence fr [...]

• Wellbeing
  by maximorossi in NEP-LTV blog, 2022-06-02 20:03:59 UTC

  By: Richard Layard Abstract: As societies become richer, they do not become happier. This paradox has led to a growing interest in the science of wellbeing, and how policymakers can evaluate policies in terms of what will improve wellbeing. Economists investigate what is important for wellbeing and the influence of wellbeing on working life, education and health. Keywords: Climate Change, Education, Employment, Health, Inequality, Unemployment, Wellbeing, Wages, Happiness, Public Policy URL: http://d.repec.org/n?u=RePEc:cep:cepins:08&r= [...]

• Confidence Intervals for Recursive Journal Impact Factors
  by noreply@blogger.com (David Stern) in Stochastic Trend, 2022-06-02 06:39:00 UTC

  I have a new working paper coauthored with Johannes König and Richard Tol . It's a follow up to my 2013 paper in the Journal of Economic Literature , where I computed standard errors for simple journal impact factors for all economics journals and tried to evaluate whether the differences between journals were significant.* In the new paper, we develop standard errors and confidence intervals for recursive journal impact factors, which take into account that some citations are more prestigious than others, as well as for the associated ranks of journals. We again apply these methods to the all [...]

2022-06-01

• Axel Leijunhufvud, Wide-Ranging Economist
  by Lance Taylor in INET Blog, 2022-06-01 18:31:00 UTC

  An obituary for Axel Leijunhufvud (Sept 6, 1933 - May 5, 2022) Axel Leijunhufvud’s sad passing on May 5 th has rightly stimulated a round of tributes to a thinker of uncommon breadth. But there is perhaps reason to doubt how widely appreciated the diversity of his thinking really was. Leijunhufvud changed the colors of his economic reasoning in response to many strands of 20th-century discussion, repainting each one. He had an ample palette and his color mixes were always interesting – an artist of macroeconomics indeed. Never lacking confidence a [...]

2022-05-31

• A new federal program goes local to accelerate regional innovation
  by Mark Muro in The Avenue, 2022-05-31 18:43:12 UTC

  By Mark Muro One of the most compelling developments of the Biden presidency has been the emergence of significant programs and policies targeted at helping places (and their residents) thrive, rather than people more generally. Proposed across numerous realms , “place-based” programs such as the Economic Development Administration’s Build Back Better Regional Challenge are encouraging bottom-up problem-solving in more and more places, even though the Senate blockage of the Build Back Better Act stymied multiple proposals last winter. Now comes another impressive embrace of place-based policy— [...]

2022-05-23

• Monetary Policy in Disaster-Prone Developing Countries
  by Christian Zimmermann in NEP-DGE blog, 2022-05-23 21:19:06 UTC

  By Chris Papageorgiou, Giovanni Melina, Alessandro Cantelmo and Nikos Fatouros http://d.repec.org/n?u=RePEc:imf:imfwpa:2022/067&r=dge This paper analyzes monetary policy regimes in emerging and developing economies where climate-related natural disasters are major macroeconomic shocks. A narrative analysis of IMF reports published around the occurrence of natural disasters documents their impact on important macroeconomic variables and monetary policy responses. While countries with at least some degree of monetary policy independence typically react by tightening the monetary policy stance, i [...]

• The Persistence of Childhood Poverty in the US
  by ? in Counter Punch, 2022-05-23 08:37:09 UTC

  In the United States, children are more likely to experience poverty than people over 18. In 2020, about 1 in 6 kids, 16% of all children, were living in families with incomes below the official poverty line – an income threshold the government set that ye [...]

2022-05-21

• Stealing a living
  by chris in Stumbling and Mumbling, 2022-05-21 09:57:05 UTC

  Now I am retired, I can safely make a confession: for years, I was stealing a living. I say so because the general financial advice any retail investor needs is actually very simple :  - Minimize taxes and charges. Avoid expensive fund manager fees. Don’t trade very much . Make full use of Isa and Sipp allowances.  - Make the power of compounding work for you, not against you. Start investing as early as you can. And remember that fund managers’ fees compound horribly over time; an extra half percentage point in annual fees can easily add up to over £2000 for every £10,000 invested over twenty [...]

2022-05-17

• Dynamic spatial general equilibrium
  by Christian Zimmermann in NEP-DGE blog, 2022-05-17 02:55:29 UTC

  By Benny Kleinman, Ernest Liu and Stephen Redding http://d.repec.org/n?u=RePEc:ehl:lserod:113917&r=dge We develop a dynamic spatial general equilibrium model with forward-looking investment and migration decisions. We characterize analytically the transition path of the spatial distribution of economic activity in response to shocks. We apply our framework to the re-allocation of US economic activity from the Rust Belt to the Sun Belt from 1965-2015. We find slow convergence to steady-state, with US states closer to steady-state at the end of our sample period than at its beginning. We find su [...]

2022-05-10

• Liquidity constraints and fiscal multipliers
  by Christian Zimmermann in NEP-DGE blog, 2022-05-10 04:28:58 UTC

  By Diogo Sá http://d.repec.org/n?u=RePEc:pra:mprapa:112132&r=dge Although recent studies identified the percentage of constrained agents as the crucial force driving many fiscal policy mechanisms, the values attained were purely the result of model calibrations. We make use of household-level data to estimate the fraction of hand-to-mouth households for several European countries. We calibrate an overlapping generations model with heterogeneous agents to match the net liquid wealth distribution and study the impact of credit constraints on the effectiveness of fiscal consolidation policies. Ou [...]

2022-05-09

• House prices: who wins, who loses
  by chris in Stumbling and Mumbling, 2022-05-09 12:55:19 UTC

  I grow my own kale and never buy any from the shops. If the price of kale rises, do I therefore win or lose? The answer is: neither. On the one hand, I could profit if I were to sell the kale I grow. But on the other, the cost of eating my own kale – the money I would make if I were to sell it – has also risen. Net, I’m neither better or worse off. Some of you might not care very much about the kale-growers of Rutland. What’s true of kale, though, is true of something many of you do care about – house prices. Just as I am self-sufficient in kale, so I’m self-sufficient in housing. As an owner- [...]

2022-05-08

• Jordan Smith: Alito Was Wrong
  by ? in Diane Ravitch's blog, 2022-05-08 13:00:00 UTC

  The Intercept contains an article that is worth your time about the leaked Alito decision that overturns Roe v. Wade. Jordan Smith writes: AS A MATTER of fact, Supreme Court Justice Samuel Alito is wrong. In a leaked draft of the court’s majorit [...]

2022-04-28

• Dollar Invoicing, Global Value Chains, and the Business Cycle Dynamics of International Trade
  by Christian Zimmermann in NEP-DGE blog, 2022-04-28 18:59:01 UTC

  By Nikhil Patel and David Cook http://d.repec.org/n?u=RePEc:imf:imfwpa:2022/028&r=dge Recent literature has highlighted that international trade is mostly priced in a few key vehicle currencies and is increasingly dominated by intermediate goods and global value chains (GVCs). Taking these features into account, this paper reexamines the relationship between monetary policy, exchange rates and international trade flows. Using a dynamic stochastic general equilibrium (DSGE) framework, it finds key differences between the response of final goods and GVC trade to both domestic and foreign shocks [...]

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