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2019-11-20

• Ownership and productivity
  by chris in Stumbling and Mumbling, 2019-11-20 14:12:03 UTC

  In last night’s leaders’ debate, the audience laughed when Jeremy Corbyn said that productivity gains could pay for a four-day week. This is an example of what I said recently – that we cannot have nice things because voters have resigned themselves to the inadequacy of British capitalism. And inadequate it is. The ONS estimates that UK productivity is one-fifth lower than that of the US, Germany or France and one-tenth lower than Italy’s. Closing some of this gap would allow for a cut in the working week with no loss of pay. In this context, Labour’s plans (pdf) to reform corporate governanc [...]

2019-11-19

• Measuring “OK Boomer”
  by Andrew Coleman in TVHE, 2019-11-19 19:00:47 UTC

  In a sense OK Boomer has as long history, as long as the lives of Baby Boomers themselves – at least if we relate such things to the overlapping generations models in economics. The literature on OK Boomer/intergenerational transfers The first “OK Boomer” paper was written by the Nobel prize winning economist Franco Modigliani and his co-author Richard Brumberg in 1954 . To analyse the process of saving and wealth transmission, they developed the overlapping generations model of an economy – simply a model in which people of different ages and incomes and wealth all live together, j [...]

• L’Italia che gioca d’azzardo
  by Elisa Benedetti, Raffaele Lagravinese, Sabrina Molinaro e Giuliano Resce in La Voce, 2019-11-19 10:53:11 UTC

  Nel 2018 in Italia si sono giocati quasi 107 miliardi di euro. Ma se i più ricchi restano sui giochi tradizionali, sono i più poveri a dedicarsi a scommesse e slot-machine. I risultati di uno studio sugli effetti distributivi del gioco d’azzardo. Il boom dell’azzardo Secondo gli ultimi dati dell’Agenza delle dogane e dei monopoli, nel 2018 in Italia si sono giocati 106,7 miliardi di euro ( Adm, 2019 ). Una cifra quasi assimilabile al fondo sanitario nazionale per il 2018 (che vale circa 113 miliardi) è stata investita nel gioco d’azzardo. Tra il 2000 e il 2018 si è passati da una raccolta di 1 [...]

2019-11-18

• Is Gentrification Good or Bad?
  by Jason Barr in Skynomics Blog, 2019-11-18 13:06:24 UTC

  Jason M. Barr         November 18, 2019 Across U.S. cities, perhaps nothing is more controversial than the issue of gentrification—the process of wealthier residents moving into lower-income, central city communities. Those who are against it claim it destroys cities and harms residents, while proponents say it helps neighborhoods grow and become livelier. So, which is it? Is gentrification good or bad? To answer this, we need to move beyond feelings and rhetoric and try to get a sense of what’s really going on. One of the best ways to do this is to employ rigorous social science methods with [...]

2019-11-17

• Why we can't have nice things
  by chris in Stumbling and Mumbling, 2019-11-17 13:32:23 UTC

  We can’t have nice things. That’s the message of Ed Davey’s speech yesterday, in which he called for a structural current budget surplus and denounced Labour’s spending plans as “fantasy economics”. Voters seem to agree. Although many individual Labour policies are popular, the majority think Labour’s plans are unaffordable, and very few trust Corbyn on the economy. From one perspective, all this is wrong. Over the last 25 years, two big things have changed. One is that real risk-free interest rates have slumped. This means government borrowing and investment is much more affordable than it u [...]

2019-11-15

• On the Heterogeneous Welfare Gains and Losses from Trade
  by Christian Zimmermann in NEP-DGE blog, 2019-11-15 02:09:41 UTC

  By Daniel Carroll and Sewon Hur http://d.repec.org/n?u=RePEc:fip:fedcwq:190602&r=dge How are the gains and losses from trade distributed across individuals within a country? First, we document that tradable goods and services constitute a larger fraction of expenditures for low-wealth and low-income households. Second, we build a trade model with nonhomothetic preferences—to generate the documented relationship between tradable expenditure shares, income, and wealth—and uninsurable earnings risk—to generate heterogeneity in income and wealth. Third, we use the calibrated model to quantify the [...]

2019-11-14

• Contraintes financières et productivité : une relation en U inversé
  by Emeline in Bloc-Notes Eco, 2019-11-14 14:25:37 UTC

  Publié le 15/11/2019 Par Philippe Aghion (LSE, Collège de France et CEPR), Antonin Bergeaud , Gilbert Cette , Rémy Lecat , Helene Maghin (KU Leuven). Note : ce billet a été d’abord publié en anglais sur vox.eu Quel est l’impact sur la productivité des contraintes de crédit ? Un durcissement de ces contraintes rend plus difficile le financement de l’innovation, avec à long terme des effets néfastes sur la productivité. Mais cela pousse également les entreprises en place les moins performantes à sortir du marché, facilitant l’arrivée d’entreprises plus performantes. La combinaison de ces deux e [...]

2019-11-11

• Monitoring the Monitors
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2019-11-11 12:47:22 UTC

  “Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” Louis Brandeis, Other People's Money and How the Bankers Use It , 1914. Disclosure is a fundamental pillar of our market-based financial system. When information is accurate and complete, asset prices can reflect both expected return and risk. Without effective disclosure, how could anyone make good savings and investment decisions? Having information is one thing; using it appropriately is something else entirely. To eva [...]

2019-11-08

• Resilience and selection
  by chris in Stumbling and Mumbling, 2019-11-08 13:38:55 UTC

  If truth is the first casualty of war, social science is the first casualty of election campaigns. So it was with Sajid Javid’s speech yesterday. He claimed that Labour will tax everybody more, “saddle the next generation with debt”, “ruin your finances” and would be “letting prices run wild in the shops.” All this is silly hyperbole. I say so not just because, as Simon says . Labour’s spending plans are more sustainable than the Tories because it will not inflict a damaging Brexit upon the economy. Instead, there are two other reasons why Javid is wrong. One is that developed economies are r [...]

• Call to readers: let's talk about patent quality
  by noreply@blogger.com (Léon Dijkman) in The IPKat, 2019-11-08 11:35:00 UTC

  Last week, the Intellectual Property subcommittee to the U.S. Senate Committee on the Judiciary held a hearing to inquiry how the U.S. Congress can prevent the issuance of poor quality patents [video recording and testimony transcripts here ]. The hearing was part of a series to educate the subcommittee on the current state of U.S. patent law in light of the proposed STRONGER Patents Act of 2019 . Several interesting comments and suggestions for improvement were made during the hearing, which are briefly summarized below. The hearing is also a good opportunity to reflect on the quality of Euro [...]

2019-11-06

• Why your research project needs build automation
  by jdingel in Trade Diversion, 2019-11-06 19:45:25 UTC

  Software build tools automate compiling source code into executable binaries. (For example, if you’ve installed Linux packages, you’ve likely used Make.) Like software packages, research projects are large collections of code that are executed in sequence to produce output. Your research code has a first step (download raw data) and a last step (generate paper PDF). Its input-output structure is a directed graph ( dependency graph ). The simplest build approach for a Stata user is a “master” do file. If a project involves A through Z, this master file executes A, B, …, Y, and Z in order. But t [...]

• 38. Economía y Difusión Social (EDS): Asepelt y América
  by MCG Blogs de Economía in Asociación de Estudios Euro-Americanos: Desarrollo internacional de América, Europa y otras áreas, 2019-11-06 18:13:00 UTC

  Congreso celebrado en Cartagena de Indias (Colombia). Año 201 8. Además de los Anales Iberoamericanos de Economía Aplicada, l a asociación de Estudios de Economía Aplicada ASEPELT ha celebrado congresos anuales  en España y Portugal desde el año 1978 hasta el año 2019, cuyas comunicaciones están gratuitamente disponibles en la Web de la revista: https://www.asepelt.org/anales/anales-de-economia-aplicada.html Las comunicaciones abordan una variedad de temas, con interés investigador, docente y de difusión social. En general se refieren a la economía española pero hay también algunas comunicacio [...]

• Imagine Riding the Ceteris Pari-bus into the Sunset ... in Argentina
  by Anna Gelpern in Credit Slips, 2019-11-06 01:36:18 UTC

  Imagine sovereign debt without Argentina -- no Paris Club , no pari passu , no CACs, no SDRM ... even sovereign immunity might look totally different. History teaches that whatever happens in Argentina's imminent bond restructuring ( revisiting, reprofiling, rejiggering, revamping --the difference is overblown) is likely to have consequences beyond the long-suffering Republic. The fact that Argentina has an actual government with authority over the economy and some capacity to execute a restructuring (unlike, say, Venezuela) justifies wading into the small print of its bond disclosure--as Mark [...]

2019-11-05

• The Cyclical Behavior of the Beveridge Curve in the Housing Market
  by Christian Zimmermann in NEP-DGE blog, 2019-11-05 21:08:01 UTC

  By Miroslav Gabrovski and Victor Ortego-Marti http://d.repec.org/n?u=RePEc:ucr:wpaper:201911&r=dge This paper develops a business cycle model of the housing market with search frictions and entry of both buyers and sellers. The housing market exhibits a well-established cyclical component, which features three stylized facts: prices move in the same direction as sales and the number of houses for sale, but opposite to the time it takes to sell a house. These stylized facts imply that in the data housing vacancies and the number of buyers are positively correlated, i.e. that the Beveridge Curve [...]

• "Plan B" for a Global Climate Mitigation Treaty
  by Matthew E. Kahn in Environmental and Urban Economics, 2019-11-05 06:58:00 UTC

  As the U.S enters an election year, it should not surprise people that President Trump's team will not be l eading the low carbon coalition.   Read this quote released by his team; Secretary of State Mike Pompeo  announced the notification on Twitter  and issued a statement saying the accord would impose intolerable burdens on the American economy. “The U.S. approach incorporates the reality of the global energy mix and uses all energy sources and technologies cleanly and efficiently, including fossils fuels, nuclear energy, and renewable energy,” Mr. Pompeo said. I do not agree that this acco [...]

2019-11-04

• Job quality, FDI and institutions in Sub-Saharan Africa
  by Sotiris Blanas, Adnan Seric and Christian Viegelahn in Development Policy Blog, 2019-11-04 19:00:23 UTC

  Although Africa still lags other developing regions in terms of FDI inflows, its capacity to attract FDI has increased remarkably in recent decades. UNCTAD data show that annual FDI flows into Africa increased from US$2.8 billion to US$41.7 billion between 1990 and 2017, resulting in an increase in the FDI stock from 10.9% to 38.8% of GDP over the same period. Sub-Saharan Africa has also been among the regions with the fastest growth in working-age population worldwide. According to projections of the United Nations Population Division, this trend is expected to continue over the next decades, [...]

• Rita Faria’s journal round-up for 4th November 2019
  by Rita Faria in The Academic Health Economists' Blog, 2019-11-04 12:00:18 UTC

  Every Monday our authors provide a round-up of some of the most recently published peer reviewed articles from the field. We don’t cover everything, or even what’s most important – just a few papers that have interested the author. Visit our Resources page for links to more journals or follow the HealthEconBot . If you’d like to write one of our weekly journal round-ups, get in touch . The marginal benefits of healthcare spending in the Netherlands: estimating cost-effectiveness thresholds using a translog production function . Health Economics [ PubMed ] Published 30th August 2019 The [...]

2019-10-31

• Public Sector Pay Inequality Dynamics in Baltimore, Boston, and New York City
  by Matthew E. Kahn in Environmental and Urban Economics, 2019-10-31 12:26:00 UTC

  At Johns Hopkins, I serve as the Director of the 21st Century Cities Initiative .  This week, we just released a new report titled; "  Public Sector Pay Inequality Dynamics in Baltimore, Boston, and New York City".      Using administrative micro data from Baltimore, Boston and New York City for the last 8 years, we document widening earnings inequality among each of these three city's public employees. The top 1% (especially in Boston) of public employees are earning more over time.  This effect is more pronounced among those who work in the Fire Department and Police Department.  Overtime pa [...]

2019-10-30

• Cross-Sectional and Aggregate Labor Supply
  by Christian Zimmermann in NEP-DGE blog, 2019-10-30 14:29:53 UTC

  By Yongsung Chang, Sun-Bin Kim, Kyooho Kwon and Richard Rogerson http://d.repec.org/n?u=RePEc:dpr:wpaper:1063&r=dge Standard heterogeneous agent macro models that highlight idiosyncratic productivity shocks do not generate the near zero cross-sectional correlation between hours and wages found in the data. We ask whether matching this moment matters for business cycle properties of these models. To do this we explore two extensions of the model in Chang et al. (2019) that can match this empirical cross-section correlation. One of these departs from the assumption of balanced growth preference [...]

2019-10-29

• Prohibición de las fumigaciones de glifosato y principio de precaución: ¡Una relación compleja!
  by David Bardey in Foco Económico, 2019-10-29 20:51:20 UTC

  Por David Bardey [1] En una entrada previa (ver acá ), abordé varios aspectos relativos a la decisión de retomar o no las fumigaciones de glifosato para disminuir los cultivos de coca en Colombia. En esta entrada, retomaré y me concentraré en uno de los aspectos mencionados: la aplicación del principio de precaución en esta situación. Más precisamente, intentaré responder a las siguientes preguntas: ¿Cuándo se debe hablar del principio de precaución? ¿Es pertinente aplicar el principio de precaución al caso de las fumigaciones a los cultivos de coca? En caso de una respuesta afirmativa a la p [...]

• On constraints in politics
  by chris in Stumbling and Mumbling, 2019-10-29 15:55:06 UTC

  When I tell people that I work from home, they ask me how I have the discipline to do so. The answer is that I don’t. I just have a habit: I start work every weekday after breakfast without fail, so I can often get a few hours done before I’ve started thinking. If I were to wake up every morning and ask “what do I feel like doing today?” I’d never do any work. I use a similar rule in my investments. Mostly, I make a direct debit into a tracker fund each month and an Isa contribution every November. If I had to do otherwise, I’d not save enough or make all sorts of silly stock picks. And I do t [...]

2019-10-28

• Household Labor Search, Spousal Insurance, and Health Care Reform
  by Christian Zimmermann in NEP-DGE blog, 2019-10-28 20:06:12 UTC

  By Hanming Fand and Andrew Shepherd http://d.repec.org/n?u=RePEc:pen:papers:19-019&r=dge Health insurance in the United States for the working age population has traditionally been provided in the form of employer-sponsored health insurance (ESHI). If employers offered ESHI to their employees, they also typically extended coverage to their spouse and dependents. Provisions in the Affordable Care Act (ACA) significantly alter the incentive for firms to offer insurance to the spouses of employees. We evaluate the long-run impact of the ACA on firms’ insurance offerings and on household outcomes [...]

• What’s an “iceberg commuting cost”?
  by jdingel in Trade Diversion, 2019-10-28 18:14:15 UTC

  In the recent quantitative spatial economics literature, the phrase “iceberg commuting cost” appears somewhat often. The phrase primarily appears in papers coauthored by Stephen Redding (ARSW 2015, RR 2017, MRR 2018, HRS 2018), but it’s also been adopted by other authors ( Fratto 2018 , Gaigne et al 2018 , Matt Turner’s lecture notes ). However, none of these papers explicitly explains the meaning of the phrase. Why are we calling these commuting costs “iceberg”? The phrase was imported from international economics, where the concept of “iceberg transport costs” is widely used. That idea is al [...]

• ¿Hombres o mujeres? Descubre quiénes dan mejores propinas en Uber
  by ? in El Diario NYEl Diario NY, 2019-10-28 17:04:54 UTC

  Los investigadores analizaron 40 millones de viajes para dar con la respuesta [...]

• Monetary Policy Operations Redux
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2019-10-28 12:57:07 UTC

   “[T]he Committee reaffirms its intention to implement monetary policy in a regime in which an ample supply of reserves ensures that control over the federal funds rate and other short-term rates is exercised primarily through the setting of the Federal Reserve’s administered rates, and in which active management of the supply of reserves is not required. ” FOMC Statement Regarding Monetary Policy Implementation , October 11, 2019. “This is not QE. In no sense is this QE.” Federal Reserve Chair Jerome Powell, cited in The Wall Street Journal , October 9, 2019. On September 17, the overnight [...]

• Chris Sampson’s journal round-up for 28th October 2019
  by Chris Sampson in The Academic Health Economists' Blog, 2019-10-28 12:00:05 UTC

  Every Monday our authors provide a round-up of some of the most recently published peer reviewed articles from the field. We don’t cover everything, or even what’s most important – just a few papers that have interested the author. Visit our Resources page for links to more journals or follow the HealthEconBot . If you’d like to write one of our weekly journal round-ups, get in touch . Spatial competition and quality: evidence from the English family doctor market . Journal of Health Economics [ RePEc ] Published 17th October 2019 Researchers will never stop asking questions about the r [...]

2019-10-25

• Inside Money, Investment, and Unconventional Monetary Policy
  by Christian Zimmermann in NEP-DGE blog, 2019-10-25 22:10:28 UTC

  By Likas Altermatt http://d.repec.org/n?u=RePEc:red:sed019:470&r=dge I develop a new monetarist model to analyze why an economy can fall into a liquidity trap, and what the effects of unconventional monetary policy measures such as helicopter money and negative interest rates are under these circumstances. I find that liquidity traps can be caused by a decrease in the bonds-to-money ratio, by a decrease in productivity of capital, or by an increase in demand for consumption. The model shows that, while conventional monetary policy cannot control inflation in a liquidity trap, unconventional mo [...]

• Loss-Offset Provisions in the Corporate Tax Code and Misallocation of Capital
  by Christian Zimmermann in NEP-DGE blog, 2019-10-25 21:55:30 UTC

  By Baris Kaymak and Immo Schott http://d.repec.org/n?u=RePEc:red:sed019:1177&r=dge The corporate tax code allows corporations to write off operating losses against past or future tax obligations, resulting in effective tax rates that are firm-specific and dependent on the history of the firm’s performance. Since losses are partly an indication of a drop in productivity, which is generally persistent over time, firms with higher expected productivity face, on average, higher marginal taxes on their investment. In this paper, we analyze the distortionary effects of loss-offset provisions on inve [...]

• Nearly two-thirds of Uber riders never tip, study finds
  by ? in ScienceBlog.com, 2019-10-25 14:00:01 UTC

  The ridesharing company Uber added tipping more than two years ago, but how often do people actually use the feature? Less than a fifth of ... Read more [...]

2019-10-24

• ¡Pasajeros al Tren!
  by Gerard Llobet in Nada Es Gratis, 2019-10-24 05:30:44 UTC

  La fecha es el 14 de diciembre de 2020. Este es el día en que el mercado del transporte pasajeros en ferrocarril debería quedar liberalizado, de acuerdo con el Cuarto Paquete Ferroviario aprobado por la Unión Europea. Por este motivo, en el mes de julio la CNMC publicó un extenso informe en el que analizaba los retos a los que se enfrenta España si quiere que esta liberalización tenga éxito. En esta entrada voy a centrarme, utilizando el análisis de ese informe, en algunos de las principales dificultades de este proceso y discutir cómo determinan la manera en que se puede abordar esta liberali [...]

2019-10-23

• Central Bank Digital Currency and Banking
  by Christian Zimmermann in NEP-DGE blog, 2019-10-23 20:40:03 UTC

  By Jonathan Chiu, Janet Hua Jiang, Seyed Mohammadreza Davoodalhosseini and Yu Zhu http://d.repec.org/n?u=RePEc:red:sed019:862&r=dge This paper builds a model with imperfect competition in the banking sector. In the model, banks issue deposits and make loans, and deposits can be used as payment instruments by households. We use the model to assess the general equilibrium effects of introducing central bank digital currency (CBDC). We identify a new channel through which CBDC can improve the efficiency of bank intermediation and increase lending and aggregate output even if its usage is low, i.e [...]

• A Theory of Housing Demand Shocks
  by Christian Zimmermann in NEP-DGE blog, 2019-10-23 19:41:14 UTC

  By Zheng Liu, Pengfei Wang and Tao Zha http://d.repec.org/n?u=RePEc:red:sed019:78&r=dge Housing demand shocks are an important source of housing price fluctuations and, through the collateral channel, they drive macroeconomic fluctuations as well. However, these reduced-form shocks in the standard macro models fail to generate the observed large fluctuations in the housing price-to-rent ratio. We build a tractable heterogeneous-agent model that provides a microeconomic foundation for housing demand shocks. Households with high marginal utility of housing face binding credit constraints, giving [...]

• Time-consistent decisions and rational expectation equilibrium existence in DSGE models
  by Christian Zimmermann in NEP-DGE blog, 2019-10-23 19:10:02 UTC

  By Minseong Kim http://d.repec.org/n?u=RePEc:arx:papers:1909.10915&r=dge We demonstrate that if all agents in an economy make time-consistent decisions and policies, then there exists no rational expectation equilibrium in a dynamic stochastic general equilibrium (DSGE) model, unless under very restrictive and special circumstances. Some time-consistent interest rate rules, such as Taylor rule, worsen the equilibrium non-existence issue in general circumstances. Monetary policy needs to be lagged in order to avoid equilibrium non-existence due to agents making time-consistent decisions. We als [...]

• The Technology of Tall (Part III): Getting to the Core
  by Jason Barr in Skynomics Blog, 2019-10-23 12:27:08 UTC

  Jason M. Barr                October 23, 2019 Note this is Part III of an on-going series on the evolution of skyscraper technology. Part I is here and Part II is here . The Too-Tall Debate A common assumption about many of the world’s tallest buildings is that, from an economic point of view, they are too tall. Their heights, it is argued, don’t produce an income that justifies their expense. They are monuments, not moneymakers . This was a common refrain in the early 20 th century when planners and reformers were attempting to limit building heights in large cities across the U.S. The Found [...]

2019-10-19

• Can We Save the American Dream? A Dynamic General Equilibrium Analysis of the Effects of School Financing on Local Opportunities
  by Christian Zimmermann in NEP-DGE blog, 2019-10-19 23:10:06 UTC

  Fabian Eckert and Tatjana Kleineberg http://d.repec.org/n?u=RePEc:red:sed019:1197&r=dge Neighborhoods in the US differ substantially in the educational and economic opportunities that they offer to children who grow up in them. We develop and estimate a structural spatial equilibrium model of residential and education choice to study the effects of school financing policies on education outcomes, intergenerational mobility, and welfare at the local and aggregate level. Our model generates persistent effects of children’s neighborhoods on adult outcomes through local labor market access and loc [...]

• Optimal Fiscal Policy without Commitment: Beyond Lucas-Stokey
  by Christian Zimmermann in NEP-DGE blog, 2019-10-19 22:48:17 UTC

  By Davide Debortoli, Pierre Yared and Ricardo Nunes http://d.repec.org/n?u=RePEc:red:sed019:926&r=dge According to the Lucas-Stokey result, a government can structure its debt maturity to guarantee commitment to optimal fiscal policy by future governments. In this paper, we overturn this conclusion, showing that it does not generally hold in the same model and under the same definition of time-consistency as in Lucas-Stokey. Our argument rests on the existence of an overlooked commitment problem that cannot be remedied with debt maturity: a government in the future will not tax on the downward [...]

• Risks of low for longer
  by thebusinesscycleblog in The business cycle blog, 2019-10-19 20:54:33 UTC

  My three most relevant pieces: AER with Ben Bernanke and John Roberts Brookings Papers with John Roberts The efficacy of QE [...]

• Bad Jobs and Low Inflation
  by Christian Zimmermann in NEP-DGE blog, 2019-10-19 20:21:04 UTC

  Renato Faccini and Leonardo Melosi http://d.repec.org/n?u=RePEc:red:sed019:970&r=dge Since 2014 the U.S. economy has been characterized by (i) a tight labor market with a record-low unemployment rate and very high job finding rates, (ii) disappointing labor productivity growth, and (iii) low inflation. We propose a model with the job ladder that can reconcile these three facts. In the model inflation picks up only when most jobs are concentrated at the high rung of the ladder: as firms compete for efficiently allocated employed workers, outside offers are declined and matched, triggering an in [...]

2019-10-18

• REED: EiR* – More on Heterogeneity in Two-Way Fixed Effects Models
  by replicationnetwork in The Replication Network, 2019-10-18 11:37:42 UTC

  [* EiR = Econometrics in Replications, a feature of TRN that highlights useful econometrics procedures for re-analysing existing research. The material for this blog is primarily drawn from the recent working paper “Difference-in-differences with variation in treatment timing” by Andrew Goodman-Bacon, available from his webpage at Vanderbilt University] In a recent blog at TRN, I discussed research by Clément de Chaisemartin and Xavier D’Haultfoeuille (C&H) that pointed out how heterogeneity in treatment effects causes two-way fixed effects (2WFE) estimation to produce biased estimates of Aver [...]

2019-10-17

• Bosses face more discrimination if they are women – from employees of any gender
  by ? in DJG Blogger, 2019-10-17 11:41:53 UTC

  Women in upper management are discriminated against by all employees, not just men. fizkes/Shutterstock.com Imagine that your boss Ethan calls you into his office. He expresses disappointment in your recent performance and lack of commitment. How would [...]

• Thesis Thursday: Luke Wilson
  by Chris Sampson in The Academic Health Economists' Blog, 2019-10-17 06:00:57 UTC

  On the third Thursday of every month, we speak to a recent graduate about their thesis and their studies. This month’s guest is Dr Luke Wilson who has a PhD from Lancaster University . If you would like to suggest a candidate for an upcoming Thesis Thursday, get in touch. Title Essays on the economics of alcohol and risky behaviours Supervisors Colin P. Green , Bruce Hollingsworth , Céu Caixeiro Mateus Repository link https://doi.org/10.17635/lancaster/thesis/636 What inspired your research and how did ‘attractiveness’ enter the picture? Without trying to sound like I have a problem, [...]

2019-10-16

• Climate change is a top issue for Canadians. What should voters look for?
  by ? in Dal News, 2019-10-16 14:00:00 UTC

  Polls show that climate change is one of the top-three issues for Canadians heading to the ballot box, writes Dal prof Larry Hughes. [...]

• Why we are wrong
  by chris in Stumbling and Mumbling, 2019-10-16 13:37:49 UTC

  Eric Lonergan asked a good question yesterday: "why does it take so long for economic beliefs which are repeatedly falsified to change?" I can think of several reasons. A failure to appreciate that the institutional background has changed. Take, for example, big bonuses paid to bankers and CEOs. The idea that we need these to incentivize people is (mostly*) wrong. Instead, they crowd out other motives (pdf) such as professional ethics and can encourage excessive risk-taking. In truth, though, investment bankers’ bonuses did not begin as an incentive at all. BITD when stockbrokers were owne [...]

2019-10-15

• Legalized Political Corruption Is So Much Bigger Than Trump: A Journey in 7 Charts
  by ? in Common Dreams - Breaking News & Views for the Progressive Community, 2019-10-15 04:10:49 UTC

  Kenneth PeresAttendees hold signs as they listen to speakers during a rally calling for an end to corporate money in politics and to mark the fifth anniversary of the Supreme Court's Citizens United decision at Lafayette Square near the White House on Jan. [...]

2019-10-14

• 37. Informe de desarrollo de América Latina, 2019: Renta, pobreza, medio ambiente y calidad de vida
  by MCG Blogs de Economía in Asociación de Estudios Euro-Americanos: Desarrollo internacional de América, Europa y otras áreas, 2019-10-14 19:13:00 UTC

  Informe de Desarrollo Mundial 2019: América Contenido: 1. Producción por habitante. 2 Pobreza. 3. Crecimiento sostenible y medio ambiente. 4. Otros indicadores de calidad de vida. Recientemente la Profesora María-Carmen Guisán ha publicado un interesante informe de la Asociación de Estudios Euro-Americanos de Desarrollo Económico sobre América. Destacamos aquí algunos de los datos y conclusiones más importantes, y remitimos al lector interesado en más información al artículo publicado por esta autora cuya referencia se indica al final de esta Entrada nº 37 de este Blog. 1. Producción manufactu [...]

• The Federal Home Loan Banks: Two Lessons in Regulatory Arbitrage
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2019-10-14 12:01:05 UTC

  There is an important U.S. government-sponsored banking system that most people know nothing about. Created by an act of Congress in 1932, the Federal Home Loan Banks (FHLBs) issue bonds that investors perceive as having government backing, and then use the proceeds to make loans to their members: namely, 6,800 commercial banks, credit unions, insurance companies and savings associations. As the name suggests, the mission of the (currently 11) regional, cooperatively owned FHLBs is “ to support mortgage lending and related community investment .” But, since the system was founded, its role as [...]

2019-10-12

• Interval Prediction
  by Francis Diebold in No Hesitations, 2019-10-12 19:16:00 UTC

  Last time I blogged on Serena's amazing presentation from Per's Chicago meeting, https://fxdiebold.blogspot.com/2019/10/large-dimensional-factor-analysis-with.html But I was equally blown away by Rina's amazing "Predictive inference with the jackknife+". Rina Foygel Barber∗ , Emmanuel J. Canes† , Aaditya Ramdas‡ , Ryan J. Tibshirani‡§ https://arxiv.org/pdf/1905.02928.pdf .  Correctly calibrated confidence intervals despite arbitrary model misspecification! But of course I'm left with lots of questions.  They have nice correct-coverage theorems. What about length?  We want shortest-length corre [...]

2019-10-10

• Health Risk, Insurance and Optimal Progressive Income Taxation
  by Christian Zimmermann in NEP-DGE blog, 2019-10-10 19:15:25 UTC

  By Juergen Jung and Chung Tran http://d.repec.org/n?u=RePEc:red:sed019:620&r=dge We study the optimal progressivity of personal income taxes in an environment where individuals are exposed to idiosyncratic shocks to health and labor productivity over the lifecycle. Our analysis is based on a large-scale overlapping generations general equilibrium model that is calibrated to the US economy. Our results indicate that the presence of health risk and health insurance has a strong effect on the amount of redistribution and social in- surance provided by progressive income taxes. In an environment w [...]

• Rational Inattention and Oversensitivity of Retirement to the State Pension Age
  by Christian Zimmermann in NEP-DGE blog, 2019-10-10 19:02:20 UTC

  By Jamie Hentall MacCuish http://d.repec.org/n?u=RePEc:red:sed019:336&r=dge This paper presents evidence that incorporating costly thought, modelled with rational inattention, solves two well-established puzzles in the retirement literature. The first puzzle is that, given incentives, the extent of bunching of labour market exits at legislated state pension ages (SPA) seems incompatible with rational expectations (e.g. Cribb, Emmerson, and Tetlow, 2016). Adding to the evidence for this puzzle, this paper includes an empirical analysis focusing on whether liquidity constraints can account for t [...]

• Heterogeneous Price Rigidities and Monetary Policy
  by Christian Zimmermann in NEP-DGE blog, 2019-10-10 18:42:51 UTC

  By Christopher Clayton, Andreas Schaab and Xavier Jaravel http://d.repec.org/n?u=RePEc:red:sed019:1480&r=dge This paper investigates the implications of heterogeneous price rigidities across sectors for the distributional and aggregate effects of monetary policy. First, we identify and characterize analytically a new set of earnings and expenditure channels of monetary policy that emerge in the presence of sectoral heterogeneity. Second, we establish empirically that (i) prices are more rigid in sectors selling to college-educated households, (ii) prices are more rigid in sectors employing col [...]

• Germany Versus the ECB
  by Hans-Helmut Kotz in Project Syndicate, 2019-10-10 13:45:54 UTC

  CAMBRIDGE – Over the past couple of months, the German debate over fiscal and monetary policy has taken an interesting turn. Old, deeply ingrained economic dogmas , including that the public sector must strive to generate a fiscal surplus regardless of macroeconomic conditions, are being reappraised , at least by some . The economic situation is changing rapidly for the worse. The German economy – long the engine of eurozone growth – is undeniably sputtering . Powerful underlying currents are contributing to the slowdown. As a result, there is a high probability of a typical German recession ( [...]

2019-10-09

• Should Creditors Pay the Price for Dubious Bonds?
  by Mitu Gulati in Project Syndicate, 2019-10-09 11:01:28 UTC

  DURHAM/GENEVA/CHAPEL HILL – In late October, Venezuela is likely to default on a $913 million payment on a key bond. Because the country has already defaulted on most of its debt, one might be tempted to regard another missed payment as no big deal. But this bond, issued by the national oil company Petróleos de Venezuela, S.A. (PDVSA), and referred to as PDVSA 2020, is backed by juicy collateral: a controlling stake in Venezuela’s economic crown jewel, United States-based refiner CITGO. Ordinarily, unpaid bondholders could tell the bond trustee to seize the collateral. But, given its dubious p [...]

2019-10-07

• Journal Round-up at the Academic Health Economists’ Blog
  by Jason Shafrin in Healthcare Economist, 2019-10-07 22:13:05 UTC

  Over at the Academic Health Economists’ (AHE) blog, I host this week’s journal round-up . The papers I cover include: Combined impact of future trends on healthcare utilisation of older people: a Delphi study . Health Policy [ PubMed ] [ RePEc ]  Published October 2019 The fold-in, fold-out design for DCE choice tasks: application to burden of disease . Medical Decision Making [ PubMed ]  Published 29th May 2019 The health and cost burden of antibiotic resistant and susceptible Escherichia coli bacteraemia in the English hospital setting: a national retrospective cohort study . PLoS O [...]

• 328 – Weitzman discounting
  by David Pannell in Pannell Discussions, 2019-10-07 15:08:25 UTC

  Martin Weitzman (1942-2019) was an environmental economist who thought laterally. He made important contributions to the field in at least three areas. Here I’ll explain one of his clever insights: that uncertainty about the discount rate has an impact on the effect of discounting. At a function in his honour in 2018, Weitzman said “I’m drawn to things that are conceptually unclear, where it’s not clear how you want to make your way through this maze,” and described how he “took a decisive step in that direction a few decades ago…getting into the forefront rather than…following everything that [...]

• Jason Shafrin’s journal round-up for 7th October 2019
  by Jason Shafrin in The Academic Health Economists' Blog, 2019-10-07 11:00:35 UTC

  Every Monday our authors provide a round-up of some of the most recently published peer reviewed articles from the field. We don’t cover everything, or even what’s most important – just a few papers that have interested the author. Visit our Resources page for links to more journals or follow the HealthEconBot . If you’d like to write one of our weekly journal round-ups, get in touch . Combined impact of future trends on healthcare utilisation of older people: a Delphi study . Health Policy [ PubMed ] [ RePEc ] Published October 2019 Governments need to plan for the future. This is part [...]

2019-10-06

• An October Update on the 21st Century Cities Initiative at Johns Hopkins
  by Matthew E. Kahn in Environmental and Urban Economics, 2019-10-06 14:16:00 UTC

  The last few weeks have been exciting.� �On Wednesday October 2nd, I gave the Rice Lecture at NYU's Wagner School.�� � I spoke about the urban economics of climate change adaptation.� On Friday, October 4th I spoke at the Federal Reserve of Boston Conference o n the Geographic Divide in the United States.� � I spoke about quality of life inequality in the U.S.� I soon go to Washington DC and Philly to discuss my recent urban economics work.�� Over the last few weeks, I have released two high quality co-authored NBER papers with both related to urban economics issues.� Joe Tracy and I released [...]

2019-10-03

• Durables and Lemons: Private Information and the Market for Cars
  by Christian Zimmermann in NEP-DGE blog, 2019-10-03 23:13:54 UTC

  By Richard Blundell, Ran Gu, Soren Leth-Petersen, Hamish Low and Costas Meghir http://d.repec.org/n?u=RePEc:cwl:cwldpp:2197&r=dge We specify an equilibrium model of car ownership with private information where individuals sell and purchase new and second-hand cars over their life-cycle. Private information induces a transaction cost and distorts the market reducing the value of a car as a savings instrument. We estimate the model using data on car ownership in Denmark, linked to register data. The lemons penalty is estimated to be 18% of the price in the first year of ownership, declining wit [...]

2019-09-30

• 327 – Heterogeneity of farmers
  by David Pannell in Pannell Discussions, 2019-09-30 15:18:22 UTC

  Farmers are highly heterogeneous. Even farmers growing the same crops in the same region are highly variable. This is often not well recognised by policy makers, researchers or extension agents. The variation between farmers occurs on many dimensions. A random sample of farmers will have quite different soils, rainfall, machinery, access to water for irrigation, wealth, access to credit, farm area, social networks, intelligence, education, skills, family size, non-family labour, history of farm management choices, preferences for various outcomes, and so on, and so on. There is variation among [...]

2019-09-29

• The Brexit Vote, Productivity Growth and Macroeconomic Adjustments in the United Kingdom
  by Christian Zimmermann in NEP-DGE blog, 2019-09-29 01:05:34 UTC

  By Ben Broadbent, Federico Di Pace, Thomas Drechsel, Richard Harrison and Silvana Tenreyro http://d.repec.org/n?u=RePEc:cfm:wpaper:1916&r=dge” The UK economy has experienced significant macroeconomic adjustments following the 2016 referendum on its withdrawal from the European Union. This paper develops and estimates a small open economy model with tradable and non-tradable sectors to characterise these adjustments. We demonstrate that many of the effects of the referendum result can be conceptualised as news about a future slowdown in productivity growth in the tradable sector. Simulations s [...]

2019-09-26

• Malthus se baña en el Pacífico: el misterioso caso de la Isla de Pascua
  by David Cuberes in Nada Es Gratis, 2019-09-26 05:00:25 UTC

  Que los conquistadores jugaron un papel fundamental en el desplome de las poblaciones indígenas de las Américas no es noticia y no debería sorprender a nadie a estas alturas del partido. Sin embargo, la historia nos brinda un episodio en el que la población indígena prácticamente desapareció sin que anduviera cerca ningún colonizador con ansias de grandeza. Se trata de la Isla de Pascua, situada en el Pacifico, lejísimos (a unos 3.500 kilómetros) del país más cercano, Chile. Los estudios arqueológicos de los que disponemos revelan que a esta diminuta isla del tamaño de una cuarta parte de Meno [...]

2019-09-25

• Dynamic Programming with State-Dependent Discounting
  by Christian Zimmermann in NEP-DGE blog, 2019-09-25 22:14:42 UTC

  By John Stachurski and Junnan Zhang http://d.repec.org/n?u=RePEc:arx:papers:1908.08800&r=dge This paper extends the core results of discrete time infinite horizon dynamic programming theory to the case of state-dependent discounting. The traditional constant-discount condition requires that the discount factor of the controller is strictly less than one. Here we replace the constant factor with a discount factor process and require, in essence, that the process is strictly less than one on average in the long run. We prove that, under this condition, the standard optimality results can be reco [...]

• Six methods of unconventional monetary policy
  by Giulia Bellocchio in TVHE, 2019-09-25 20:00:13 UTC

  In a recent response to questions , The Reserve Bank of Australia has listed six options of unconventional monetary policy that is considered in an event of extreme policy implementation. Westpac economists have also talked about potential unconventional monetary policy tools applicable to the NZ case here  – this is worth a read, but is a different list! In this post I would like to outline the RBA’s options and hopefully make them easy to understand. As discussed in my post on uncertainty, investment, and monetary policy we are thinking about “unconventional” actions when the neut [...]

2019-09-24

• The Technology of Tall (Part II): The Need for Speed
  by Jason Barr in Skynomics Blog, 2019-09-24 12:04:54 UTC

  Jason M. Barr    September 24, 2019 Note this is Part II of an on-going series on the evolution of skyscraper technology. Part I can be read here . The Chicken or the Egg? What came first: building height or elevator speed? The history of skyscrapers brings us to a kind of chicken-and-egg conundrum. Does the drive to build tall come first and then fast elevators come next? Or do rapid elevators show what’s possible and then developers exploit them to go taller? While I don’t think there’s any way to answer this question, we can look at the history of the elevator to get a sense how this co-dep [...]

2019-09-23

• 326 – 60-second videos about our research
  by David Pannell in Pannell Discussions, 2019-09-23 15:50:02 UTC

  My School at the University of Western Australia is having a competition amongst staff and students to produce a 60-second video that says something interesting and engaging about our research. I’ve put in two entries. The first one, about farmer adaptation to climate change, is the fun one. The second one, about water pollution, is more traditional, but I hope it’s still interesting. I’m also included in a third really creative entry that was put together by Maksym Polyakov. Wish us luck. The winner will be announced in December. Further reading Thamo, T., Addai, D., Kragt, M.E., Kingwell, [...]

• The Costs of Inefficient Regulation: The Volcker Rule
  by Kim Schoenholtz in Money, Banking and Financial Markets, 2019-09-23 12:54:49 UTC

  “Regulatory capital and liquidity requirements for market making are a more cost effective method of treating the associated systemic risk. […] Market making risks, and other risks taken by a bank, are unsafe whenever they are large relative to the capital and liquidity of the bank.” Darrell Duffie, “ Market Making Under the Proposed Volcker Rule ,” 2012. By creating a new regime to limit threats to the U.S. financial system—including heightened scrutiny for systemic intermediaries and a new resolution framework—the Dodd-Frank Act (DFA, passed in July 2010) has made the U.S. financial system [...]

2019-09-22

• Exchange Rate Pass-Through: A Competitive Search Approach
  by Christian Zimmermann in NEP-DGE blog, 2019-09-22 22:01:28 UTC

  By Beverly Lapham and Ayman Mnasri http://d.repec.org/n?u=RePEc:qed:wpaper:1418&r=dge We develop an open economy monetary model with heterogeneous households which is characterized by incomplete pass-through of exchange rate movements to import prices. Partial pass-through arises in our environment due to the presence of competitive search in international goods’ markets. Under competitive search, agents choose a sub-market in which to exchange goods, where different sub-markets are characterized by different price and trading probability combinations. Preference and policy shocks which induce [...]

2019-09-20

• L’università che non facilita la carriera delle mamme
  by Giovanni Abbiati e Alessandra Minello in La Voce, 2019-09-20 09:15:00 UTC

  La maternità è il momento più critico nella carriera delle donne e l’accademia non fa eccezione. Abbattere il “muro della maternità” è un obiettivo prioritario nella lotta per le pari opportunità. Le università potrebbero dare il buon esempio con quattro azioni. Le quote non bastano In ambito accademico ha fatto recentemente molto discutere la decisione della Eindhoven University of Technology di istituire “quote” indirizzate esclusivamente a candidate donne nel reclutamento di personale di ricerca a tempo indeterminato. Colmare il gap di genere e riparare precedenti discriminazioni sono i mot [...]

• Are QALYs #ableist?
  by Don Husereau in The Academic Health Economists' Blog, 2019-09-20 06:00:13 UTC

  As many of us who have had to review submitted journal articles, thesis defenses, grant applications, white papers, and even published literature know, providing feedback on something that is poorly conceived is much harder than providing feedback on something well done. This is going to be hard. Who is ValueOurHealth? The video above comes from the website of “ValueOurHealth.org” ; I would tell you more about them, but there is no “About Us” menu item on the website. However, the website indicates that they are a group of patient organizations concerned about: “The use of f [...]

2019-09-19

• Thesis Thursday: Andrea Gabrio
  by Chris Sampson in The Academic Health Economists' Blog, 2019-09-19 06:00:59 UTC

  On the third Thursday of every month, we speak to a recent graduate about their thesis and their studies. This month’s guest is Dr Andrea Gabrio who has a PhD from University College London . If you would like to suggest a candidate for an upcoming Thesis Thursday, get in touch. Title Full Bayesian methods to handle missing data in health economic evaluation Supervisors Gianluca Baio , Alexina Mason , Rachael Hunter Repository link http://discovery.ucl.ac.uk/10072087 What kind of assumptions about missing data are made in trial-based economic evaluations? In any analysis, assumptions [...]

2019-09-18

• Leuropa e Lapace: la parola alla scienza
  by Alberto Bagnai in Goofynomics, 2019-09-18 15:58:00 UTC

  (... mentre a Pontida i fascioleghisti si dedicavano al loro sport preferito, il linciaggio dei martiri della democrazia, dei non violenti , due fascioleghisti, caratterizzati, com'è noto, da un l ivello di istruzione insufficiente , si intrattenevano, scambiando fonemi gutturali accompagnati da un rude linguaggio gestuale, su un tema speculativo, e quindi per ciò stesso fuori dalla loro portata: è scientificamente fondato affermare che Leuropa ci abbia dato Lapace, così come si sente affermare comunemente nei dibattiti? Il riassunto di quella conversazione è nell'email che vi riporto, che uno [...]

• 3 or 7, truth or trust
  by K in Eight to Late, 2019-09-18 10:28:51 UTC

  “It is clear that ethics cannot be articulated.” – Ludwig Wittgenstein Over the last few years I’ve been teaching and refining a series of lecture-workshops on Decision Making Under Uncertainty . Audiences include data scientists and mid-level managers working in corporates and public service agencies. The course is based on the distinction between uncertainties in which the variables are known and can be quantified versus those in which the variables are not known upfront and/or are hard to quantify. Before going any further, it is worth explaining the distinction via a couple of examples: An [...]

2019-09-17

• El ciclo, el boom y el parón inmobiliario
  by Antonia Díaz in Nada Es Gratis, 2019-09-17 05:07:21 UTC

  de Antonia Díaz y Luis Puch Hasta la llegada de la crisis económica de 2008-2013 , uno de los consensos básicos entre los estudiosos del ciclo económico era que las fluctuaciones del PIB de la economía española presentaban una amplitud menor que las de otras economías desarrolladas. Esto se debía a que la balanza comercial era fuertemente contracíclica: los españoles, en conjunto, nos endeudamos en el exterior en épocas de vacas gordas y ahorramos en épocas de vacas flacas. Este comportamiento de la balanza comercial puede parecer contraintuitivo (deberíamos ahorrar en época de vacas gordas pa [...]

2019-09-16

• 325 – Ranking projects based on cost-effectiveness
  by David Pannell in Pannell Discussions, 2019-09-16 15:45:42 UTC

  Where organisations are unable or unwilling to quantify project benefits in monetary or monetary-equivalent terms, a common approach is to rank potential projects on the basis of cost-effectiveness. Just like ranking projects based on Benefit: Cost Ratio (BCR), this approach works in some cases but not others. To rank projects based on cost-effectiveness, you choose the metric you will use to measure project benefits, estimate that metric for each project, estimate the cost of each project, and divide the benefit metric by the cost. You end up with a cost-effectiveness number for each potentia [...]

• Should Students Borrow?
  by Kim Schoenholtz in Money, Banking and Financial Markets, 2019-09-16 12:30:13 UTC

  “ [Secretary of Education Betsy] DeVos issued the final repeal of an Obama-era rule aimed at holding low-quality education programs accountable by forcing them to prove their graduates were able to repay their student debt .” CNBC, July 1, 2019. As summer ends, 17 million students head to college. Nearly 40 percent are borrowing to do it. Over the past 15 years, the number of people with student loans nearly doubled and now stands at roughly 45 million―that’s about one in four adult Americans. Furthermore, the amount of debt has virtually tripled to just over $1.5 trillion, so the average loan [...]

• The Art of Winning a Peace Agreement: The Case of the FARC
  by ? in Political Violence at a Glance, 2019-09-16 12:00:53 UTC

  Guest post by Sally Sharif and Dayron Yegrail. Sunrise over mountains in Colombia. Photo via Magalie L’Abbé. Colombia’s peace agreement with the Revolutionary Armed Forces of Colombia—People’s Army (FARC-EP) was widely hailed as a diplomatic triumph. [...]

• David Mott’s journal round-up for 16th September 2019
  by David Mott in The Academic Health Economists' Blog, 2019-09-16 11:00:00 UTC

  Every Monday our authors provide a round-up of some of the most recently published peer reviewed articles from the field. We don’t cover everything, or even what’s most important – just a few papers that have interested the author. Visit our Resources page for links to more journals or follow the HealthEconBot . If you’d like to write one of our weekly journal round-ups, get in touch . Opening the ‘black box’: an overview of methods to investigate the decision‑making process in choice‑based surveys . The Patient [ PubMed ] Published 5th September 2019 Choice-based surveys using methods [...]

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