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Blog aggregator for economics research

2022-01-19

• How Ted Cruz Engineered a Supreme Court Case To Recoup a Half-Million Dollars
  by ? in Slate Blogs, 2022-01-19 20:36:37 UTC

  The Republican-appointed justices appear eager to carve a new loophole in campaign finance law. [...]

2022-01-18

• 47. World Development Reports 2021: The role of Education on economic development and quality of life
  by MCG Blogs de Economía in Euro-American Association: World Development, 2022-01-18 19:51:00 UTC

  � � � � World Development Reports published by the Euro-American Association of Economic Development Studies in year 2021. The reports, as well as other interesting publications are free downloadable at our Website and from Dialnet and Ideas-Repec. 1) Report published in the journal Applied Econometrics and International Development, Volume 21-2 of year 2021. World Development For 1995-2020: �Econometric Relationships Of Human Capital, Development, Quality Of Government And Life Satisfaction In 164 Countries, �Guisan, M.C ��� Abstract �We highlight the following table from that report: � � � � [...]

• Inequalities in the Distribution of National Institutes of Health Research Project Grant Funding
  by ? in NIH Extramural Nexus, 2022-01-18 17:02:15 UTC

  Introduction In its Fall 2020 edition the Journal of Economic Perspectives featured articles on income and wealth inequality. There is ample evidence that in the United States and in Europe inequality has increased over the last 40-50 years. While the fact [...]

2022-01-17

• 46. Informe 2021 de Cooperación al Desarrollo de África: producción, educación y calidad de vida,1995-2020. Revista RSES.
  by MCG Blogs de Economía in Asociación de Estudios Euro-Americanos: Desarrollo internacional de América, Europa y otras áreas, 2022-01-17 19:56:00 UTC

  Informe sobre África 2021:    Industry, Education, Development and Quality Of Life In 53 African Countries, 1995-2020,  Guisan, M.C., Exposito, P.   Abstract Publicado en Regional and Sectoral Economic Studies PÁGINA EN ELABORACIÓN: EN ENERO DE 2022 INCLUIREMOS ALGUNAS DE LAS PRINCIPALES CONCLUSIONES DEL INFORME DE COOPERACIÓN CON EL DESARROLLO DE ÁFRICA.   [...]

2022-01-14

• Riformare il sistema fiscale europeo: la gestione del debito
  by Massimo Taddei in La Voce, 2022-01-14 23:03:51 UTC

  Negli ultimi anni, si è sempre più diffusa l’idea che le regole del Patto di stabilità e crescita siano datate. Una proposta per modificarle basata su due pilastri: la revisione delle regole fiscali e la creazione di un’Agenzia europea del debito. In un precedente contributo , abbiamo illustrato la nostra recente proposta sulla modifica delle regole fiscali del patto di stabilità e crescita. In questo articolo, presentiamo la seconda parte di questa proposta: il piano di spostare una parte del debito pubblico dei paesi Ue sotto l’ombrello di una Agenzia europea del debito ( European De [...]

2022-01-12

• Does Inattentiveness Matter for DSGE Modelling? An Empirical Investigation
  by Christian Zimmermann in NEP-DGE blog, 2022-01-12 23:47:59 UTC

  By Jenyu Chou, Joshy Easaw and Patrick Minford http://d.repec.org/n?u=RePEc:cdf:wpaper:2021/35&r=dge The purpose of this paper is to investigate the empirical performance of the standard New Keynesian dynamic stochastic general equilibrium (DSGE) model in its usual form with full-information rational expectations and compare it with versions assuming inattentiveness- namely sticky information and imperfect information data revision. Using a Bayesian estimation approach on US quarterly data (both realtime and survey) from 1969 to 2015, we find that the model with sticky information fits best an [...]

2022-01-11

• Inflation Heresies
  by Dani Rodrik in Project Syndicate, 2022-01-11 09:35:32 UTC

  CAMBRIDGE – The specter of inflation is once again stalking the world, after a long period of dormancy during which policymakers were more likely to be preoccupied by price deflation. Now, old debates have resurfaced on how best to restore price stability. Should policymakers step on the monetary and fiscal brakes, by reducing spending and raising interest rates – the orthodox approach to fighting inflation? Should they instead move in the opposite direction by lowering interest rates, a route followed by Turkey’s central bank under the direction of President Recep Tayyip Erdoğan? Or should [...]

2022-01-07

• The ‘China Shock’ of Trade in the 2000s Reverberates in US Politics and Economics
  by ? in Naked Capitalism, 2022-01-07 14:55:32 UTC

  Belatedly learning from how trade losses to China damaged communities to determine how to shore them up. [...]

2022-01-04

• Financial Constraints, Sectoral Heterogeneity, and the Cyclicality of Investment
  by Christian Zimmermann in NEP-DGE blog, 2022-01-04 16:55:53 UTC

  By Cooper Howes http://d.repec.org/n?u=RePEc:fip:fedkrw:93095&r=dge While investment in most sectors declines in response to a contractionary monetary policy shock, investment in the manufacturing sector increases. Using manually digitized aggregate income and balance sheet data for the universe of U.S. manufacturing firms, I show this increase is driven by the types of firms that are least likely to be financially constrained. A two-sector New Keynesian model with financial frictions can match these facts; unconstrained firms are able to take advantage of the decline in the user cost of capit [...]

• How Do We Nudge "Behavioral" Decision Makers to Adapt to Emerging Climate Risks?
  by Matthew E. Kahn in Environmental and Urban Economics, 2022-01-04 14:57:00 UTC

  �An excellent new NBER Working Paper t itled "Mandated vs. Voluntary Adaptation to Natural Disasters: The Case of U.S Wildfires" has been published.� The authors have assembled a great data set to document that building codes cause upgrades of properties such that subsequent wildfires cause lower damage to property.� This is a highly optimistic adaptation paper and it puts Government at the center of achieving adaptation progress.� The authors argue that building codes are a binding constraint such that in the absence of this constraint that people would have chosen to build lower quality stru [...]

2021-12-31

• The impact of U.S. employer-sponsored insurance in the 20th century
  by Christian Zimmermann in NEP-DGE blog, 2021-12-31 18:46:13 UTC

  By Vegard Nygaard and Gajendran Raveendranathan http://d.repec.org/n?u=RePEc:mcm:deptwp:2021-11&r=dge The introduction of employer-sponsored insurance (ESI) in the 1940s led to the largest decline in the uninsurance rate in U.S. history. To study the fiscal and welfare implications of this insurance expansion, we endogenize the selection of workers into jobs with and without ESI in a general equilibrium life-cycle model where consumers face idiosyncratic health shocks. Our model rationalizes non-targeted empirical patterns related to ESI coverage between 1940 and 2010 and in recent cross-secti [...]

2021-12-30

• Annual Review 2021
  by noreply@blogger.com (David Stern) in Stochastic Trend, 2021-12-30 06:11:00 UTC

  I've been doing these annual reviews since 2011. They're mainly an exercise for me to see what I accomplished and what I didn't in the previous year.� This was the first year since I have been back living in Canberra in 2007 that I spent the entire year in the Canberra region. In fact, it is the first year since 1991 that I didn't fly on a plane. It's not that unusual for me not to leave my country for a year. I didn't travel outside of Australia in 2019. This year, with a two year old and random snap lockdowns happening in the first part of the year, we were not in the mood to travel anywhere [...]

2021-12-27

• On the relationship between unemployment and late credit card payments
  by ? in FRED blog, 2021-12-27 14:00:00 UTC

  The first shaded region on the FRED graph above indicates the 2008-09 Great Recession. In that recession, the seasonally adjusted unemployment rate (red line, right axis) nearly doubled from 5% in December 2007 to 9.5% in June 2009. At the same time, seasonally adjusted credit card delinquency rates (blue line, left axis) increased from 4.6% in the fourth quarter of 2007 to 6.8% in second quarter of 2009. In short, as workers became unemployed, some stopped making on-time credit card payments. Research by  Athreya, Sánchez, Tam, and Young (2015) shows how this relationship can emerge in a mod [...]

2021-12-24

• Unintended Effects From the Expansion of the Non-Contributory Health System in Peru
  by Christian Zimmermann in NEP-DGE blog, 2021-12-24 03:45:02 UTC

  By Jonas Nauerz and Jose Torres http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/106&r=dge Over the last two decades, the Peruvian government has made great efforts to improve access to health care by significantly augmenting the coverage of the non-contributory public health care system Seguro Integral de Salud (SIS). This expansion has a positive impact on welfare and public health indicators, as it limits the risk of catastrophic health-related costs for previously uninsured individuals and allows for the appropriate treatment of illnesses. However, it also entails some unintended consequences [...]

2021-12-21

• Around the halls: Built environment issues that could define 2022
  by Newsha Ajami, Alex Berke, Rushaine Goulbourne, Noah Kazis, Elizabeth Kneebone, Anika Singh Lemar, Blair Levin, Robert Puentes, Gian Claudia Sciara, Evan Siddall, Christopher Severen, Jan Whittington in The Avenue, 2021-12-21 17:27:32 UTC

  By Newsha Ajami, Alex Berke, Rushaine Goulbourne, Noah Kazis, Elizabeth Kneebone, Anika Singh Lemar, Blair Levin, Robert Puentes, Gian Claudia Sciara, Evan Siddall, Christopher Severen, Jan Whittington For the nation’s infrastructure and built environment, 2021 felt like a year of extremes. Extreme weather events such as Hurricane Ida, western wildfires, and recently, the Kentucky tornados made the effects of climate change harder to ignore. Housing prices and rents rose precipitously , driven by strong demand, pandemic-related supply constraints, and policy choices . The digital divide persis [...]

• Così le famiglie hanno risposto alla chiusura delle scuole*
  by Segugio 1 in La Voce, 2021-12-21 09:01:08 UTC

  La chiusura delle scuole durante la pandemia potrebbe avere conseguenze di lungo periodo sui divari di genere. Disoccupate o in smart working, sono state quasi sempre le donne a occuparsi dei figli in Dad. Anche l’aiuto dei nonni è stato rilevante. Sostegni nel periodo di Dad Durante la pandemia da Covid-19, la sospensione della didattica in presenza ha interessato tutte le aree del paese e tutti gli ordini di scuola, sebbene con diversa intensità . Gli effetti sugli apprendimenti degli studenti sono stati considerevoli, soprattutto nelle zone e nei cicli scolastici in cui la didatt [...]

• Estimating the Effect of Physical Infrastructure on Economic Growth
  by noreply@blogger.com (David Stern) in Stochastic Trend, 2021-12-21 00:00:00 UTC

  I have a new working paper coauthored with Govinda Timilsina of the World Bank and my PhD student Debasish Das . It is a panel data study of the effect of various forms of infrastructure on the level of GDP.  Compared to existing studies, we use more recent data, include new types of infrastructure such as mobile phones, and provide separate estimates for developing and developed countries. We find larger effects than most previous studies. We also find that infrastructure has a larger effect in more recent years (1992-2017) than in earlier years (1970-1991), and the effects of infrastructure [...]

2021-12-20

• No Regret Fiscal Reforms
  by Christian Zimmermann in NEP-DGE blog, 2021-12-20 17:29:10 UTC

  By Pierre-Édouard Collignon http://d.repec.org/n?u=RePEc:crs:wpaper:2021-20&r=dge How should fiscal policy react to shocks ex-post while preserving incentives to work and save ex-ante? The standard solution involves a commitment to a contingent policy, whereby the initial government sets all the policies for all future states of the world. Contingent policies are unrealistic. As an alternative, I introduce ”No Regret Fiscal Reforms”: the government has the discretion to change its fiscal policy provided households do not regret their past decisions. Hence flexibility is provided and incentives [...]

2021-12-19

• 360. Potential farmer responses to extreme prices for nitrogen fertiliser
  by David Pannell in Pannell Discussions, 2021-12-19 12:29:18 UTC

  For various reasons, the current price of nitrogen fertiliser is sky high. How should farmers respond? Crop farmers in Australia are currently ordering the inputs needed for sowing their crops in about April next year. They are particularly grappling with how much nitrogen (N) fertilizer to order, given that it currently costs two to three times as much as it cost them for the 2021 season. One obviously sensible option is to reduce the rates of N fertiliser that are applied to crops. Figure 1 shows how N fertiliser price affects the relationship between N rate and profit for a particular examp [...]

2021-12-18

• The Murder-Suicide of the Rentier: Population Aging and the Risk Premium
  by Christian Zimmermann in NEP-DGE blog, 2021-12-18 17:50:02 UTC

  By Joseph Kopecky and Alan Taylor http://d.repec.org/n?u=RePEc:tcd:tcduee:tep1220&r=dge Population aging has been linked to global declines in real interest rates. A similar trend is seen for equity risk premia, which are on the rise. An existing literature can explain part of the declining trend in safe rates using demographics, but has no mechanism to speak to trends in relative returns on different assets. We calibrate a heterogeneous agent life-cycle model with equity markets and aggregate risk, and we show that aging demographics can simultaneously account for both the majority of a downw [...]

2021-12-08

• Clear, consistent and inclusive ECB communication
  by nadine in Eco Notepad, 2021-12-08 15:09:30 UTC

  Published on 12/09/2021 By Katrin Assenmacher, Gabriel Glöckler, Sarah Holton, Klodiana Istrefi, Adrian Penalver To ensure public understanding and trust, the ECB has to explain better what it does to all the people it serves. With these goals in mind, the Governing Council modernised its communication in July 2021, to have a stronger influence on interest rates and inflation expectations. The ECB will also listen more to citizens’ economic concerns. billet_244_ve.pdf Chart 1: High support for the euro; the recovery of trust in ECB is slow Source: Eurobarometer.  Notes: Net trust [...]

• Flight-free: What Swedish views on travel might tell us about the future
  by ? in Forum:Blog, 2021-12-08 14:53:56 UTC

  In Sweden, 80% of national flight emissions are caused by leisure and holiday travel, but new research shows a shift in the views on holidays by plane. [...]

• Vers une communication claire, cohérente et inclusive pour la BCE
  by aurelie.dossantos in Bloc-Notes Eco, 2021-12-08 14:40:26 UTC

  Publié le 09/12/2021 Par Katrin Assenmacher , Gabriel Glöckler , Sarah Holton , Klodiana Istrefi , Adrian Penalver Pour garantir la compréhension et la confiance du grand public, la BCE doit mieux expliquer ses activités. Dans cette optique, en juillet 2021, le Conseil des gouverneurs a modernisé sa communication afin d’avoir une plus forte influence sur les anticipations de taux d’intérêt et d’inflation. La BCE va également être davantage à l’écoute des préoccupations économiques des citoyens. billet_244_vf.pdf Graphique 1 : Soutien élevé en faveur de l’euro et redressement lent de la c [...]

2021-12-07

• A Consolidated-by-Nationality Approach to Irish Foreign Exposure
  by The Irish Economy in The Irish Economy, 2021-12-07 13:45:38 UTC

  Andre Sanchez Pacheco (Trinity College Dublin) How exposed is Ireland to foreign shocks? Relying on residence-based measures of foreign holdings to answer this question can be challenging. These statistics are obscured by the vast presence of Special Purpose Entities (SPEs) in the country. In residence-based statistics, foreign assets and liabilities are sorted according to the residence of the immediate counterparts. Consequently, the cross-border positions held by these Irish-resident financial intermediaries appear in Ireland’s external balance sheet. However, these entities frequently [...]

2021-12-06

• 357. BCA criticisms 2: “too much uncertainty”
  by David Pannell in Pannell Discussions, 2021-12-06 15:00:25 UTC

  Number 2 in my series on criticisms of Benefit: Cost Analysis (BCA) addresses the concern that it is not feasible to do a BCA on projects for which we lack good information. Sometimes people are concerned that we are just too uncertain about the details for it to be sensible to do a BCA. (There is a video version of the post below, if you prefer.) It’s true that there often is a high level of uncertainty about the numbers that would be needed to complete a BCA. For example, we might have weak evidence about how effective the project would be at generating the intended benefits, or we might not [...]

• Igersheim on Rawls and economics
  by Mark D. White in Economics and Ethics, 2021-12-06 13:00:00 UTC

  By Mark D. White A new working paper from Herrade Igersheim (BETA, University of Strasbourg, CNRS, University of Lorraine) titled " Rawls and the Economists: The (Im)possible Dialogue " offers a unique perspective on the relationship between the great philosopher and the field that would adopt his thinking. From the abstract: Although falling within the scope of political and moral philosophy, it is well known that A Theory of Justice has also had a great impact on economists. As such, Rawls put great emphasis on his desire to combine economics and philosophy, and particularly t [...]

• Anche l’istruzione protegge dal Covid-19
  by Saodiatou in La Voce, 2021-12-06 10:37:42 UTC

  Nella prima ondata, il coronavirus è stato meno letale nei comuni dove il livello di istruzione è più alto. Forse in quelle zone le persone si sono protette meglio perché in grado di valutare l’attendibilità delle informazioni in circolazione. Le differenze nella diffusione del Covid-19 Il Covid-19 ha colpito i comuni italiani in modo diverso. Le maggiori differenze si osservano tra Nord e Centro-Sud (figura 1). Tuttavia, anche confrontando municipi all’interno della stessa macroarea, si vedono importanti differenze nella gravità della pandemia. Che cosa spiega queste differenze? [...]

2021-12-04

• Some Covid Links
  by Don Boudreaux in Cafe Hayek, 2021-12-04 12:32:56 UTC

  (Don Boudreaux) Tweet UnHerd ‘s Freddie Sayers talks to a former prisoner of Australia’s Covid-internment camp . Here’s the abstract of a new paper by Daron Acemoglu, Victor Chernozhukov, Iván Werning, and Michael D. Whinston – a paper which lends a good deal of support (without mentioning it) to the spirit of the great Great Barrington Declaration) : (HT Ian Fillmore) We study targeted lockdowns in a multigroup SIR model where infection, hospitalization, and fatality rates vary between groups—in particular between the “young,” the “middle-aged,” and the “old.” Our model enables a tractabl [...]

• Comprendre les coûts de l’inflation monétaire
  by Marius-Joseph Marchetti in Contrepoints, 2021-12-04 03:50:27 UTC

  Par Marius-Joseph Marchetti. À une époque où l’inflation repointe dangereusement le bout de son nez, du moins plus qu’à l’accoutumée, il me semble opportun de nous intéresser aux coûts que peut faire subir l’inflation monétaire à travers la recension de deux articles. Je passe outre la distinction de savoir si l’inflation que nous connaissons est une inflation monétaire ( monetary-driven ), ou une inflation par les coûts, causés par les différentes restrictions des États ( costs-driven ). Il va sans dire que la réponse est probablement à mi-chemin entre ces deux options. Mais revenons au sujet [...]

2021-12-03

• Welfare Costs of Exchange Rate Fluctuations: Evidence from the 1972 Okinawa Reversion
  by Christian Zimmermann in NEP-DGE blog, 2021-12-03 15:21:14 UTC

  By Kazuko Kano and Takashi Kano http://d.repec.org/n?u=RePEc:tky:fseres:2021cf1179&r=dge The main tenet of the New Keynesian (NK) paradigm is that price dispersion caused by nominal price stickiness is the primary source of allocative inefficiency. This study empirically evaluates the welfare implications of NK models by observing how internal and external price dispersion responds to two types of large aggregate shocks: high inflation and sharp currency depreciation. For this purpose, we consider the history of US military deployment on a small southern island in Japan called Okinawa followin [...]

2021-11-29

• Bank branch density and economic development
  by ? in FRED blog, 2021-11-29 14:00:00 UTC

  An important component in the development of an economy is for the population to be “banked”—that is, to have a bank account to save money and participate in the payment system. One indicator of the amount of banked people in a location (e.g., a state or country) used to be the number of bank branches in that location. The FRED graph above shows this statistic for a non-random set of countries: Mongolia, the United States, and Nigeria. If this statistic is in some way representative of economic development, why is the number of bank branches in Mongolia so much higher than in the United State [...]

2021-11-27

• Democracy or Optimal Policy: Income Tax Decisions without Commitment
  by Christian Zimmermann in NEP-DGE blog, 2021-11-27 19:40:53 UTC

  By Youngsoo Jang http://d.repec.org/n?u=RePEc:pra:mprapa:110466&r=dge How do differences in the government’s political and commitment structure affect the aggregate economy, inequality, and welfare? I analyze this question, using a calibrated Aiyagari’s (1994) economy with wealth effects of labor supply wherein a flat tax rate and transfers are endogenously determined according to its political and commitment structure. I compare four economies: a baseline economy, an economy with the optimal tax with commitment in all steady states, an economy with the optimal tax without commitment, and a p [...]

2021-11-22

• Green technology policies versus carbon pricing. An intergenerational perspective
  by Christian Zimmermann in NEP-DGE blog, 2021-11-22 19:22:32 UTC

  By Sebastian Rausch and Hidemichi Yonezawa http://d.repec.org/n?u=RePEc:ssb:dispap:965&r=dge Technology policy is the most widespread form of climate policy and is often preferred over seemingly efficient carbon pricing. We propose a new explanation for this observation: gains that predominantly accrue to households with large capital assets and that influence majority decisions in favor of technology policy. We study climate policy choices in an overlapping generations model with heterogeneous energy technologies and distortionary income taxation. Compared to carbon pricing, green technology [...]

• Cancellation of rail projects in Northern England shows why fiscal rules with investment caps and debt targets just create short-termism
  by ? in Mainly Macro, 2021-11-22 11:29:20 UTC

    As Stephen Bush outlined here , and I foreshadowed here , the reason why the new high speed Northern Powerhouse Rail line has been cut, HS2 will no longer go to Leeds, and the less newsworthy cuts to Tfl infrastructure projects, is the government’s 3% cap on public investment, and its determination that government debt will be falling once the pandemic is over. [1] The excuse of long delivery periods for the cancelled projects does not wash when the government’s current scaled back plans also have the same long implementation period. Is there some reason why public investment should be held [...]

2021-11-19

• An Economy of Neural Networks: Learning from Heterogeneous Experiences
  by Christian Zimmermann in NEP-DGE blog, 2021-11-19 22:29:23 UTC

  By Artem Kuriksha http://d.repec.org/n?u=RePEc:arx:papers:2110.11582&r=dge This paper proposes a new way to model behavioral agents in dynamic macro-financial environments. Agents are described as neural networks and learn policies from idiosyncratic past experiences. I investigate the feedback between irrationality and past outcomes in an economy with heterogeneous shocks similar to Aiyagari (1994). In the model, the rational expectations assumption is seriously violated because learning of a decision rule for savings is unstable. Agents who fall into learning traps save either excessively or [...]

2021-11-17

• Firm Heterogeneity, Market Power and Macroeconomic Fragility
  by Christian Zimmermann in NEP-DGE blog, 2021-11-17 15:38:11 UTC

  By Alessandro Ferrari and Francisco Queirós http://d.repec.org/n?u=RePEc:sef:csefwp:627&r=dge We investigate how firm heterogeneity and market power affect macroeconomic fragility, defined as the probability of long-lasting recessions. We propose a theory in which the positive interaction between firm entry, competition and factor supply can give rise to multiple steady-states. We show that when firm heterogeneity is large, even small temporary shocks can trigger firm exit and make the economy spiral in a competition-driven poverty trap. Calibrating our model to incorporate the well-documente [...]

2021-11-15

• Why does risk matter more in recessions than in expansions?
  by Christian Zimmermann in NEP-DGE blog, 2021-11-15 16:41:15 UTC

  By Martin Andreasen, Giovanni Caggiano, Efrem Castelnuovo and Giovanni Pellegrino http://d.repec.org/n?u=RePEc:bof:bofrdp:2021_013&r=dge This paper uses a nonlinear vector autoregression and a non-recursive identification strategy to show that an equal-sized uncertainty shock generates a larger contraction in real activity when growth is low (as in recessions) than when growth is high (as in expansions). An estimated New Keynesian model with recursive preferences and approximated to third order around its risky steady state replicates these state-dependent responses. The key mechanism behind t [...]

2021-11-14

• The decline of economics
  by chris in Stumbling and Mumbling, 2021-11-14 12:31:39 UTC

  Edward Luce writes : Bill Clinton’s 1992 campaign watch phrase was “it’s the economy, stupid”. Today it would be “it’s the culture, idiot”. He’s right, but this poses the question: why did this change? The question of, course, applies to the UK as well as the US. One fact deepens the puzzle. It’s that trend growth in GDP per capita has halved since the 90s*. This should have made economic issues more important, because it’s much less obvious now that the economy can thrive without policy intervention. Back in the 90s, politicians might reasonably have thought “the economy will take care of i [...]

2021-11-12

• Ethics of Behavioural Science Policy: Nudge FORGOOD
  by Liam Delaney in Economics, Psychology and Policy, 2021-11-12 01:00:00 UTC

  This is one of a series of "living posts" that will updated periodically. See more examples on the right-hand side-bar of the blog.  The post below has been developed since 2015 to keep tabs on various discussions about ethical aspects of behavioural science and policy. I will continue to update this post through the next three years. The paper linked here (abstract below), co-authored with Leonhard Lades and published in Behavioural Public Policy, is an attempt to summarise what has become a very large literature on ethics into a framework that is useful for project development and training. [...]

2021-11-10

• 87. Informe de España y Europa 2021: salarios, productividad, calidad del sector público y satisfacción ciudadana
  by MCG Blogs de Economía in Economía y desarrollo de España y Galicia, 2021-11-10 14:05:00 UTC

    Desarrollo y calidad del Sector Público en España y Europa, 2021. INFORME DE ESPAÑA Y EUROPA 2021 La revista de investigación económica RSES, dedicada a los estudios económicos regionales y sectoriales de Europa, América y otras áreas, ha publicado en el Volumen 21-1 del año 2021 un interesante artículo, de la Profesora María-Carmen Guisán , Catedrática de universidad en el área de Economía Aplicada, que ha sido directora de 3 revistas de investigación económica incluidas en la prestigiosa base SCOPUS, y una de las autoras más destacadas por número de lectores en la base internacional Ideas- [...]

2021-11-09

• Will the Biden Administration's Trillion Dollar Investment in Infrastructure Unlock the Potential of Post-Industrial Cities?
  by Matthew E. Kahn in Environmental and Urban Economics, 2021-11-09 21:31:00 UTC

    The Biden Administration is about to enact a new infrastructure law that will spend more than $1 trillion dollars on rebuilding America's infrastructure. Cities such as Baltimore, Cleveland, Detroit and St. Louis need new investment to boost the local economy, reduce local poverty, and increase the quality of life of children in these cities. My co-authored 2021 book; " Unlocking the Potential   of Post-Industrial Cities" explores the synergistic investments that are needed to help the many poor people who live in poor cities to achieve their own "American Dream". Unlike other urban books, o [...]

2021-11-08

• The Case for Chinese Foreign Aid
  by Nancy Qian in Project Syndicate, 2021-11-08 15:56:03 UTC

  CHICAGO – Since 2000, China has spent $843 billion on bilateral aid. That is around $39.5 billion per year, similar to the amount provided by the United States, the world’s largest donor of foreign aid. Although the two countries’ definitions of foreign aid differ, no one disputes the fact that China – which in the past two decades has financed 13,427 bilateral aid projects in 165 countries – is the biggest new player in this domain. Moreover, recent research is challenging outside observers’ often negative view of the country’s overseas development schemes. Critics accuse China of using ai [...]

• Working less
  by chris in Stumbling and Mumbling, 2021-11-08 13:52:00 UTC

  Many people believe we need to work less if we are to avoid catastrophic climate change. We must “dramatically reduce economic activity” says George Monbiot. “We should cut working hours to save the planet” agrees Simon Kuper. In truth, though, there are other reasons to work less, as Martin Hagglund argued in his brilliant This Life . Our most fundamental possession, he says, is time, and we can only be truly free if we can choose what to do with this scarce asset. For many of us, though, having to work long hours or for many years deprives us of this freedom. Which runs into the objection th [...]

2021-11-05

• La globalización deja perdedores, sí, pero muchos más ganadores: el Elefante de Milanovic tiene problemas metodológicos
  by Ancora Imparando in Elblogsalmon, 2021-11-05 12:42:39 UTC

  Toca hablar de desigualdad . Proclamado por muchos como el gráfico más importante de los últimos años, el Elefante de Milanovic no deja indiferente a nadie en el mundillo. Hoy, intentaremos rellenar sus lagunas más comunes. Vemos renta relativa en X (si, de cada 100, cobro más que 61 y menos que 37, seré el percentil 62) y su crecimiento en Y. De ahí el mote de "elefante": poco crecimiento en la cola, torso alto, caída en la curva de la trompa y repunte de megaricos. Spoiler: la globalización no afecta a todos por igual . La lectura habitual afirma que pobres y ricos se han b [...]

2021-11-04

• Impôts sur les multinationales : l’Irlande évite le coup de massue fiscale
  by Philippe Lacoude in Contrepoints, 2021-11-04 04:15:23 UTC

  Par Philippe Lacoude. Selon Bruno Le Maire, le G7 était, en mai dernier « à un millimètre d’un accord historique » sur une réforme de la fiscalité internationale. Cinq mois plus tard, sous l’énorme pression des pays les plus dépensiers, l’ Irlande aurait enfin capitulé et accepterait de relever son impôt sur les sociétés pour rejoindre l’accord mondial rêvé par les étatistes de tous les partis. Depuis quatre ans, je me bats pour mettre en œuvre une taxation internationale d’au moins 15% pour les entreprises multinationales. Ce soir, nous y sommes ! L’ensemble des pays du G20 empruntent la voi [...]

2021-10-29

• Lessons from the Marshall Plan for the European Recovery Plan
  by remi.alleman in Eco Notepad, 2021-10-29 14:27:57 UTC

  Published on 10/29/2021 By Jean-Baptiste Gossé , Aymeric Schneider and Roger Vicquéry The EU post-Covid recovery plan is the largest European-wide fiscal stimulus in 70 years. This post revisits the experience of the Marshall Plan by highlighting the role of structural effects, conditionality design, the need to prepare the plan exit, the influence of fundamentals and the importance of the plan’s success as a vector of European integration. billet_236_ve.pdf Chart 1: Marshall Plan and European plan by type of aid and size of investments financed (% of GDP of recipient countries) So [...]

• Les leçons du plan Marshall pour le plan de relance européen
  by nadine in Bloc-Notes Eco, 2021-10-29 14:06:03 UTC

  Publié le 29/10/2021 Par Jean-Baptiste Gossé , Aymeric Schneider et Roger Vicquéry Le plan européen post-Covid est la plus vaste initiative budgétaire sur le continent depuis 70 ans. Ce billet tire les leçons du plan Marshall en soulignant le rôle majeur des effets structurels induits par une conditionnalité adaptée au contexte, la nécessité de préparer la sortie du plan, l’influence des fondamentaux et l’importance du succès du plan comme vecteur d’intégration en Europe. billet_236_vf.pdf Graphique 1 : Plan Marshall et plan européen par type d'aide et taille des investissements financés [...]

2021-10-28

• My favorite FRED graph: Gasoline prices and consumer expenditures : A guest post from Carlos Asarta, University of Delaware
  by ? in FRED blog, 2021-10-28 13:00:00 UTC

  The FRED graph above shows gasoline prices and real personal consumption expenditures on motor vehicle fuels, lubricants, and fluids between 2006 and 2015. I use this graph when illustrating how changes in prices influence the quantity demanded of a good or service. The inverse relationship between these two variables is a foundational concept in introductory economics courses. This relationship is also used in econ courses to calculate the price elasticity of demand. But instead of using made-up figures or imaginary scenarios to illustrate the price elasticity of demand, I direct my students [...]

2021-10-24

• Incorporating Local Public Health Dynamics into The Rosen/Roback Spatial Equilibrium Model
  by Matthew E. Kahn in Environmental and Urban Economics, 2021-10-24 12:11:00 UTC

   Imagine if there is an infectious disease that spreads within cities but not across cities.   Throughout the COVID crisis, the city specific infection rate has varied across cities at each point in time.  In a city facing a rising infection rate, people can adapt by either engaging in costly self protection (self isolating) or through public health interventions --- such as vaccinating the local population.  In this case, public health substitutes for private health protection investments.  To be safe, one can either isolate and not be vaccinated or continue with life as usual and be vaccinat [...]

2021-10-21

• The Economist’s Guide to Parenting: 10 Years Later (Ep. 479)
  by Stephen J. Dubner in Freakonomics, 2021-10-21 03:00:42 UTC

  In one of the earliest Freakonomics Radio episodes (No. 39!), we asked a bunch of economists with young kids how they approached child-rearing. Now the kids are old enough to talk — and they have a lot to say. We hear about nature vs. nurture, capitalism vs. Marxism, and why you sometimes don’t tell your friends that your father is an economist. Listen and follow our podcast on Apple Podcasts , Spotify , Stitcher , or wherever you get your podcasts. Below is a transcript of the episode, edited for readability. For more information on the people and ideas in the episode, see the links at the bo [...]

• The Environmental Kuznets Curve: 2021 Edition
  by noreply@blogger.com (David Stern) in Stochastic Trend, 2021-10-21 02:50:00 UTC

  The second encyclopedia chapter. First one is here . Introduction  The environmental Kuznets curve (EKC) is a hypothesized relationship between various indicators of environmental degradation and countries’ gross domestic product (GDP) per capita. In the early stages of a country’s economic development, environmental impacts and pollution increase, but beyond some level of GDP per capita (which will vary for different environmental impacts) economic growth leads to environmental improvement. This implies that environmental impacts or emissions per capita are an inverted U-shaped function of GD [...]

• Energy and Development
  by noreply@blogger.com (David Stern) in Stochastic Trend, 2021-10-21 02:29:00 UTC

  The first of two book chapters for Elgar encyclopedias I recently wrote. What is the Role of Energy in Economic Activity? The economic system must operate within the constraints determined by the laws of physics and human knowledge of technology. Production, including household production, requires energy to carry out work to convert materials into desired products and to transport raw materials, goods, and people. The second law of thermodynamics implies that energy cannot be recycled and that there are limits to how much energy efficiency can be improved. Therefore, energy is an essential fa [...]

2021-10-19

• Rethinking the Welfare State
  by Christian Zimmermann in NEP-DGE blog, 2021-10-19 17:05:09 UTC

  By Nezih Guner, Remzi Kaygusuz and Gustavo Ventura http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2021_2107&r=dge The U.S. spends non trivially on non-medical transfers for its working-age population in a wide range of programs that support low and middle-income households. How valuable are these programs for U.S. households? Are there simpler, welfare-improving ways to transfer resources that are supported by a majority? What are the macroeconomic effects of such alternatives? We answer these questions in an equilibrium, life-cycle model with single and married households who face idiosyncratic pr [...]

• People love the billionaire, but hate the billionaires’ club
  by ? in ScienceBlog.com, 2021-10-19 13:34:39 UTC

  Americans may respect and admire how individual billionaires – think Oprah Winfrey or Bill Gates – made their fortunes, even as they rage against the “top 1%” as a group, new research finds. In eight related studies, people tended to have fewer problems wi [...]

• People love the billionaire, but hate the billionaires’ club
  by ? in Science Blog, 2021-10-19 13:34:39 UTC

  Americans may respect and admire how individual billionaires – think Oprah Winfrey or Bill Gates – made their fortunes, even as they rage against the “top 1%” as a group, new research finds. In eight related studies, people tended to have fewer problems wi [...]

2021-10-18

• Productivity in late capitalism
  by ? in Stumbling and Mumbling, 2021-10-18 13:27:02 UTC

  In the debate about how to increase productivity, everybody seems to be making an assumption that I find questionable - that feasible policy changes can make a significant difference.We need some historical context here. My chart shows that big, sustained [...]

2021-10-14

• The house price puzzle
  by chris in Stumbling and Mumbling, 2021-10-14 13:49:07 UTC

  Everybody knows that the housing market has become financialized, as Josh Ryan-Collins among others has documented . But what kind of financial asset is housing? The answer is far from straightforward. In one sense, house prices are like share prices. Both are claims upon future incomes – profits in the case of equities and wages in the case of houses (it’s fair to assume rents are a stable fraction of wages). Both tend to fall in recessions. And both have over the years delivered a risk premium – though how great depends upon which time period you use, how you account for liquidity risk and s [...]

• The Decline in Capital-Skill Complementarity
  by Christian Zimmermann in NEP-DGE blog, 2021-10-14 04:34:05 UTC

  By Gonzalo Castex, Stanley Cho and Evgenia Dechter http://d.repec.org/n?u=RePEc:swe:wpaper:2021-06&r=dge We revisit the capital-skill complementarity hypothesis and examine whether and under what conditions this mechanism can explain the developments in wage inequality and labor share in the 1963-2016 period. Krusell, Ohanian, Rios-Rull, and Violante (2000) show that a model with capital-skill complementarity mechanism matches the data well and can account for the changes in wage inequality in the 1963-1992 period. We show that applying the model to the 1963-2016 period delivers a good fit for [...]

2021-10-12

• How Large is the Economy-Wide Rebound Effect in Middle Income Countries? Evidence from Iran
  by noreply@blogger.com (David Stern) in Stochastic Trend, 2021-10-12 01:19:00 UTC

  � We have a new working paper in our rebound effect series. Previous papers reviewed the literature on the economy-wide rebound effect, estimated the economy-wide rebound effect for the United States, and estimated it for some European countries (as well as the United States). The new paper is about Iran. This is a middle income country with a resource intensive and quite regulated economy. Is it a lot different to the developed economies we have already looked at? The rebound effect is large in Iran too. A major difference between Iran and the developed economies is that energy intensity has [...]

2021-10-11

• Downward Interest Rate Rigidity
  by Christian Zimmermann in NEP-DGE blog, 2021-10-11 17:06:39 UTC

  By Grégory Levieuge and Jean-Guillaume Sahuc http://d.repec.org/n?u=RePEc:bfr:banfra:828&r=dge Empirical evidence suggests that bank lending rates are downward rigid: banks tend to adjust their rates more slowly and less completely to short-term market rates decreases than to increases. We investigate the macroeconomic consequences of this downward interest rate rigidity by introducing asymmetric bank lending rate adjustment costs in a macrofinance dynamic stochastic general equilibrium model. Calibrating the model to the euro area economy, we find that the difference in the initial response o [...]

• Afghan women have a long history of taking leadership and fighting for their rights
  by ? in Christians, Conflict and Change – Religion News Service, 2021-10-11 15:35:50 UTC

  (The Conversation) — Two Afghan women scholars write about how Afghan women’s groups have been fighting for human rights, both now and historically. The post Afghan women have a long history of taking leadership and fighting for their rights appeared first [...]

2021-10-08

• The Neoclassical Model and the Welfare Costs of Selection
  by Christian Zimmermann in NEP-DGE blog, 2021-10-08 15:07:30 UTC

  By Fabrice Collard and Omar Licandro http://d.repec.org/n?u=RePEc:tse:wpaper:125924&r=dge This paper embeds firm dynamics into the Neoclassical model and provides a simple framework to solve for the transitional dynamics of economies moving towards more selection. As in the Neoclassical model, markets are perfectly competitive, there is only one good and two production factors (capital and labor). At equilibrium, aggregate technology is Neoclassical, but the average quality of capital and the depreciation rate are both endogenous and positively related to selection. At steady state, output per [...]

• L’innovation n’est pas liée à l’éducation mais à l’intelligence
  by Mises Institute in Contrepoints, 2021-10-08 02:30:26 UTC

  Par Lipton Matthews. Un article du Mises Institute. Les cercles politiques se lamentent de voir s’éloigner les vagues d’innovation. L’éminent économiste Robert Gordon affirme que l’époque des innovations transformatrices est révolue. Comme Peter Thiel , il est déçu par la nature incrémentale des inventions modernes. La thèse du déclin repose sur l’hypothèse que les innovations révolutionnaires comme la machine à vapeur, l’électricité et le téléphone deviennent excessivement rares. Il a été assez facile de trouver des preuves de cette observation, mais nous sommes moins habiles pour comprendre [...]

2021-10-05

• Optimizing the life cycle path of pension premium payments and the pension ambition in the Netherlands
  by Christian Zimmermann in NEP-DGE blog, 2021-10-05 13:49:27 UTC

  By Harry ter Rele, Carolijn de Kok, Nicoleta Ciurila and Peter Zwaneveld http://d.repec.org/n?u=RePEc:cpb:discus:421&r=dge Pension premium rates and pension benefits are independent of age or family situation in the second pillar of the Dutch pension system. In a life cycle model calibrated on Dutch data we investigate the optimal arrangement of pension premiums and benefits taking into consideration two factors: the fact that incomes generally rise with age and the presence of children in the early years of the household. Our analysis points out that due to these factors lifetime welfare can [...]

• Transizione ecologica è cercare un equilibrio fra sviluppo e ambiente
  by Segugio 1 in La Voce, 2021-10-05 09:43:13 UTC

  Il cambiamento climatico e l’impatto antropico sull’ambiente costringono a ripensare modelli di consumo e di produzione. Se il primo passo è misurare la relazione tra i fenomeni, occorre poi dare significato al concetto di transizione ecologica. La relazione tra sviluppo e tutela dell’ambiente Nel corso del tempo, il rapporto fra esseri umani e natura ha vissuto innumerevoli mutamenti, un continuo oscillare tra armonia e conflitto, senso di appartenenza e contrapposizione, scelta di assecondarne i ritmi e invece spinta a modificarne l’aspetto, fino a piegare l’ambiente circostante a [...]

2021-09-28

• The minimum wage dilemma
  by chris in Stumbling and Mumbling, 2021-09-28 13:29:01 UTC

  Should the national living wage rise to £15 an hour? For me, it’s a dilemma because there are two competing and powerful perspectives. The economic perspective is sceptical. Econ 101 says a higher price means lower demand, so a higher minimum will lead to job losses or – just as importantly but often overlooked – cuts in hours. Granted, Econ 101 might be wrong. Where employers have monopsony power, a higher minimum wage can lead to employment actually increasing . Which leads us to the thorny question of empirical evidence. Here, we have a problem. It’s possible that previous rises in the mini [...]

2021-09-27

• What Starmer misses: the C-word
  by ? in Stumbling and Mumbling, 2021-09-27 13:03:54 UTC

  One word is notably absent in Sir Keir Starmer’s recentessay– capitalism.Our most successful politicians have had something to say about this – whether it be Thatcher’s belief that capitalism needed low inflation and weak unions if it were to thrive, or Bl [...]

• Housing Gotham: The 21st Century So Far (Part I)
  by Jason Barr in Skynomics Blog, 2021-09-27 12:02:57 UTC

  Jason M. Barr ( @JasonBarrRU ) and Sean Franklin        September 27, 2021 The 1970s was New York’s darkest decade. The government nearly went bankrupt. A recession that began in 1969 triggered the loss of hundreds of thousands of manufacturing jobs. Between 1970 and 1980, Gotham’s population shrank by more than 800,000 people , while arsonists burned down entire neighborhoods. In those years, only a true visionary could have foreseen the city’s rebound. Yet starting in the early 1990s, New York began a dramatic resurgence. New service-based industries grew in place of the old factory jobs. Cr [...]

2021-09-23

• Monetary Policy over the Lifecycle
  by Christian Zimmermann in NEP-DGE blog, 2021-09-23 19:32:42 UTC

  By Anton Braun and Daisuke Ikeda http://d.repec.org/n?u=RePEc:ime:imedps:21-e-09&r=dge A tighter monetary policy is generally associated with higher real interest rates on deposits and loans, weaker performance of equities and real estate, and slower growth in employment and wages. How does a household’s exposure to monetary policy vary with its age? The size and composition of both household income and asset portfolios exhibit large variation over the lifecycle in Japanese data. We formulate an overlapping generations model that reproduces these observations and use it to analyze how househol [...]

2021-09-20

• Some Microeconomics of Extreme Heat Exposure in the United States
  by Matthew E. Kahn in Environmental and Urban Economics, 2021-09-20 23:12:00 UTC

  �The Biden Administration has made an announcement that it seeks to protect outdoor workers from extreme heat exposure.� �What does the theory of compensating differentials in real estate markets and labor markets teach us about exposure to high temperatures. I maintain two assumptions. Assumption #1:� The apartment rental market is perfectly competitive and an area's heat risk is common knowledge. If heat risk rises in a location, all market bidders are aware of this. Assumption #2:� The labor market for outdoor jobs is perfectly competitive and the job conditions (including heat exposure on [...]

2021-09-19

• Capitalism and the state
  by ? in Stumbling and Mumbling, 2021-09-19 11:27:34 UTC

  Greg Smith and Dehenna Davisonwrite:For many in left behind parts of the country, the reality is that the private sector is stifled by a bloated public sector that is almost Soviet-sized in some areas of the North.This seems to me to be a case of confusing [...]

2021-09-17

• Equidad de género en el trabajo: qué funciona y qué no
  by Hugo Ñopo, Sofia Hidalgo y Jerson Veliz in Foco Económico, 2021-09-17 21:26:34 UTC

  Son varios los indicadores relevantes del mercado de trabajo que acostumbramos a monitorear: participación laboral, desempleo, formalidad, ocupaciones, horas trabajadas, salarios y varios otros. Hay uno que de alguna manera sintetiza los anteriores, agregando todo ellos: la masa salarial. Una mirada a la composición de género de tal masa salarial da cuenta de un estancamiento en equidad de género: en el Perú las mujeres generan un tercio de la masa salarial del país, los otros dos tercios, los hombres. La serie que se construye a partir de la Encuesta Nacional de Hogares permite reportar que e [...]

2021-09-16

• The Neoclassical Model and the Welfare Costs of Selection
  by Christian Zimmermann in NEP-DGE blog, 2021-09-16 17:22:47 UTC

  By Fabrice Collard and Omar Licandro http://d.repec.org/n?u=RePEc:ces:ceswps:_9249&r=dge This paper embeds firm dynamics into the Neoclassical model and provides a simple framework to solve for the transitional dynamics of economies moving towards more selection. As in the Neoclassical model, markets are perfectly competitive, there is only one good and two production factors (capital and labor). At equilibrium, aggregate technology is Neoclassical, but the average quality of capital and the depreciation rate are both endogenous and positively related to selection. At steady state, output per [...]

• A Win for Devin Nunes in Lawsuit Over Journalist Ryan Lizza's Tweet
  by Elizabeth Nolan Brown in Hit & Run blog, 2021-09-16 13:41:02 UTC

  Tweeting article after Nunes called it defamatory could count as "actual malice," court says. In a disturbing ruling for fans of free speech, a federal court has partially sided with Rep. Devin Nunes (R–Calif.) in his lawsuit against journalist Ryan Lizza. Nunes has accused Lizza and Hearst Magazine Media, which publishes  Esquire , of defamation and conspiracy. Back in 2018, Esquire published an article by Lizza headlined "Devin Nunes's Family Farm Is Hiding a Politically Explosive Secret." The article suggested that Nunes [...]

2021-09-14

• No country is an island: International cooperation and climate change
  by Christian Zimmermann in NEP-DGE blog, 2021-09-14 15:00:18 UTC

  By Ferrari Massimo and Pagliari Maria Sole http://d.repec.org/n?u=RePEc:bfr:banfra:815&r=dge In this paper we explore the cross-country implications of climate-related mitigation policies. Specifically, we set up a two-country, two-sector (brown vs green) DSGE model with negative production externalities stemming from carbon-dioxide emissions. We estimate the model using US and euro area data and we characterize welfare-enhancing equilibria under alternative containment policies. Three main policy implications emerge: i) fiscal policy should focus on reducing emissions by levying taxes on pol [...]

2021-09-10

• Entrepreneurial Economies
  by Randall G. Holcombe in The Beacon, 2021-09-10 23:33:35 UTC

  Academic institutions increasingly are recognizing the importance of entrepreneurship to the performance of an economy, and in response, many (including my own institution, Florida State University) have established entrepreneurship programs to give students some skills that can help them succeed as entrepreneurs. I’m supportive of these efforts, but the degree to which individuals in an economy are entrepreneurial is affected more by an economy’s institutions than by characteristics of individual entrepreneurs. Some economies are more entrepreneurial than others. Entrepreneurial economies hav [...]

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