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2021-02-23

• 45. Women´s Quality of Labour, Social Visibility and Quality of Life. Euro-American Report year 2020
  by MCG Blogs de Economía in Euro-American Association: World Development, 2021-02-23 11:29:00 UTC

  Here we present a short version of section 4 of the article by Guisan and Aguayo(2020) 4. Quality of Labour, female social visibility and quality of life. 4.1. Quality of labour and its impact on quality of life      Women workers lifes are sometimes more stressed than lifes of men workers, due to the problems to conceal family life and labour hours. The consequence is that women workers usually have fewer hours of leisury activities per week. In spite of that, the majority of women are happy to find a job, with quality of labour, not only because paid work provides some degree of income and i [...]

2021-02-22

• “Mom, Dad: I’m staying”. Initial labor market conditions, housing markets, and welfare
  by Christian Zimmermann in NEP-DGE blog, 2021-02-22 21:26:46 UTC

  By Rodrigo Martínez-Mazza http://d.repec.org/n?u=RePEc:ieb:wpaper:doc2020-14&r=dge Young individuals are currently living with their parents more than at any other point in time, while also spending more on housing. In this paper, I first show how labor market entry conditions affect housing tenure and affordability in the long term, by using the unemployment rate at the time of graduation as an exogenous shock to income. I perform this analysis across Europe for the last 25 years. Results indicate that a 1 pp increase in the unemployment rate at the time of graduation leads, one year after, [...]

2021-02-21

• 歪められた最低賃金の議論
  by himaginary in himaginaryの日記, 2021-02-21 02:43:58 UTC

  タイラー・コーエンが要旨を 紹介し 、ノアピニオン氏が批判的に 取り上げている （ 邦訳 ）David Neumark（UC アーバイン ）とPeter Shirley（ウ エス ト バージニア州 議会）の 論文 「Myth or Measurement: What Does the New Minimum Wage Research Say about Minimum Wages and Job Loss in the United States?」を、ケイトー研究所のRyan Bourneが表題の記事（原題は「The Distorted Minimum Wage Debate」）で クルーグマン 叩きに 援用している 。 It sometimes feels as if advocates and opponents of minimum wage hikes are talking in different universes. In large part, that stems from completely opposite interpretations of the balance of the academic literature on the subject. Research on the minimum wage in the U [...]

2021-02-19

• Why Labour should talk about productivity
  by chris in Stumbling and Mumbling, 2021-02-19 14:31:06 UTC

  If you buy a goldfish, you shouldn’t be disappointed that it doesn’t catch mice. It is therefore pointless to criticize Starmer’s speech yesterday for being insufficiently critical of capitalism. There is however one curious but important omission from his speech – one which is odd for a technocratic social democrat. I’m referring to the lack of any discussion of, or remedy for, our productivity problem. Just before the pandemic, real wages were actually lower than they were in 2007. The average worker has gone 13 years without a pay rise. This is not because capitalists have taken a bigger s [...]

2021-02-17

• It's not the 90s any more
  by chris in Stumbling and Mumbling, 2021-02-17 14:01:11 UTC

  Sir Keir Starmer wants to party like it’s 1999. That seems to be his motive for seeking the advice of Peter Mandelson. There is, however, a big problem with this. It’s not the 1990s any more. There have been huge socio-economic changes since then, which require very different policy responses. One of these is that the economy is now stagnating. In the 20 years to May 1997 labour productivity grew by an average of 2.3 per cent. In the 12 years before the pandemic, however, it grew by only 0.2 per cent per year. Back in the 90s, therefore, it was reasonable to believe that the economy would grow [...]

• Would Americans Have More Babies if the Government Paid Them?
  by ? in NYT > Politics, 2021-02-17 10:00:21 UTC

  One policy goal of a child allowance is to reverse declines in fertility, but some experts say improving families’ well-being is more important. [...]

2021-02-15

• A Buffer-Stock Model for the Government: Balancing Stability and Sustainability
  by Christian Zimmermann in NEP-DGE blog, 2021-02-15 19:09:58 UTC

  By Jean-Marc Fournier http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/159&r=dge A fiscal reaction function to debt and the cycle is built on a buffer-stock model for the government. This model inspired by the buffer-stock model of the consumer (Deaton 1991; Carroll 1997) includes a debt limit instead of the Intertemporal Budget Constraint (IBC). The IBC is weak (Bohn, 2007), a debt limit is more realistic as it reflects the risk of losing market access. This risk increases the welfare cost of fiscal stimulus at high debt. As a result, the higher the debt, the less governments should smooth the cy [...]

• Otra mirada al salario mínimo
  by ? in Nada es Gratis, 2021-02-15 14:00:01 UTC

  Hablar del salario mínimo es sinónimo de interés. Un ejemplo: ¿ven el Gráfico 1? Pues también lo vieron 300.000 personas en un día cuando lo colgué en Twitter. Mientras sufría con el partido Betis-Barcelona, Messi y yo compartíamos ingresos, aunque los mío [...]

• Is Inflation Coming?
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2021-02-15 12:42:50 UTC

   Money money money money, money… Don’t let, don’t let, don’t let money fool you For the Love of Money, The O’Jays , 1973 “[W]ith inflation running persistently below 2 percent, our policy will aim to achieve inflation outcomes that keep inflation expectations well anchored at our 2 percent longer-run goal.” Federal Reserve Vice-Chair Richard Clarida , January 8, 2021. Over the past quarter century, disagreements about monetary policy have been narrow. A broad consensus developed that central banks should be independent, with a primary focus on price stability. Furthermore, nearly everyone agre [...]

• Chris Sampson’s journal round-up for 15th February 2021
  by Chris Sampson in The Academic Health Economists' Blog, 2021-02-15 12:00:01 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. If you’d like to write one of our weekly journal round-ups, get in touch . Journal of Health Economics Volume 75 This month we have another dozen articles from JHE on a variety of topics. But no COVID! A few papers look at maternal and infant health. One study focused on the impact of maternity ward crowding in Denmark between 2000 and 2014. As you might expect, the delivered care changes accord [...]

2021-02-13

• Choosing charlatans
  by chris in Stumbling and Mumbling, 2021-02-13 12:55:24 UTC

  People choose to listen to charlatans even when it is against their interest to do so. That’s the message of some recent experiments . Aristotelis Boukouras and colleagues got subjects to take a multiple choice exam during which they could choose to take help from one of two computerized advisors. One of these was an expert, who gave the answers that a panel of economists would. The other gave the answers that had been most popular with other people who had taken the test. They found that most people chose to take advice from the latter – even after they had been told that it was only giving t [...]

2021-02-12

• Two papers on monetary theory where the Friedman Rule is not optimal
  by Christian Zimmermann in NEP-DGE blog, 2021-02-12 19:23:26 UTC

  Nominal Contracts and the Payment System By Hakime Tomura http://d.repec.org/n?u=RePEc:wap:wpaper:1923&r=dge This paper introduces into an overlapping generations model the courts inability to distinguish different qualities of goods of the same kind. Given the recognizability of fiat money for the court, this friction leads to the use of nominal debt contracts as well as the use of fiat money as a means of payment in the goods market. This result holds without dynamic inefficiency or lack of double coincidence of wants. Instead, money is necessary because it is essential for credit. However, [...]

• Why income inequality is the key predictor of COVID-19 death rates, according to 3 Kellogg School professors
  by insider@insider.com (Katie Gilbert) in Business Insider, 2021-02-12 14:00:00 UTC

  Researchers found a staggering difference in death rates between low- and high-income people. Blake Nissen/The Boston Globe/Getty Images Kellogg School professors conducted research on why COVID death rates are higher in certain countries and US states.  Considering factors like population age, share of doctors, and climate conditions didn't reveal a correlation.  Instead, they found that higher death rates tended to occur in places with higher pre-COVID income inequality. Visit the Business section of Insider for more stories . As the coronavirus pandemic rages on, the wide chasm between [...]

2021-02-11

• You’re sad, I’m sad, we’re all sad. Is there a way out?
  by Eve Andrews in Grist Business and Technology, 2021-02-11 11:33:35 UTC

  Q. Dear Umbra, How can I get others out of a funk if I am deep in one too? –Sorry, Also Down A. Dear SAD, The pressure you are putting on yourself to be a joy-dispensing pandemic Tinkerbell is deeply ingrained in our culture: American social graces are all about projecting a “friendly and upbeat” vibe — even though that feels so definitively disingenuous at this moment that it’s hard to keep up. And you’re definitely onto something. Humans take cues from each other: It’s basically how society functions. We are wired to change our behavior, mannerisms, way of dress, and even beliefs based on w [...]

2021-02-10

• Choices, capabilities, and unanswered questions
  by Chris Sampson in The Academic Health Economists' Blog, 2021-02-10 07:00:04 UTC

  Sometimes research gets left in a drawer. The virtual equivalent can happen to blog posts. In clearing out some old drafts, I found a blog post on capabilities that it seems I wrote in May 2014. I don’t remember what was going on in my life back then. But it was before I had embraced the Oxford comma (I have added one to the title). It seems that this blog post is not entirely useless or, at least, it will be no more useless if released into the wild. So, here it is, an unintended time capsule. Why I didn’t finish it, I don’t remember. Perhaps I thought it would be superseded by my writing [...]

2021-02-08

• Rita Faria’s journal round-up for 8th February 2021
  by Rita Faria in The Academic Health Economists' Blog, 2021-02-08 12:00:01 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. If you’d like to write one of our weekly journal round-ups, get in touch . Medical Decision Making Volume 41, Issue 1 There are quite a few interesting studies in this month’s issue of Medical Decision Making . There is a study showing that offering COVID-19 testing in US post offices reduces travel distance and improves accessibility to testing; a study reporting a simulation model for obesity in [...]

• Hazara Representation in Popular Culture
  by Anya Magotra in India at LSE, 2021-02-08 07:47:37 UTC

  This post explores the representation of the Hazara community in popular culture, using the examples of a novel The Kite Runner , a TV talent show Sitara-e Afghan ( Afghan Star) , and a documentary Laila at the Bridge . Rabia Khan discusses the gradual change in perceptions about Hazara identity, especially in terms of community consciousness and individual agency, and highlights the manner in which contemporary depictions of the Hazaras reflect more intricate forms of engagement with the historical, political and social realities of the community. In July 2020, Netflix released Stateless , a [...]

2021-02-07

• That Mystical Monetary Theory
  by Tyler Durden in Zero Hedge, 2021-02-07 22:50:00 UTC

  That Mystical Monetary Theory Authored by Joakim Book via The American Institute for Economic Research, MMT, or Modern Monetary Theory, is on everyone’s lips – and it seems that everyone is keen on this long-obscure idea of how our public finances really work.  In an article in the latest issue of  Economic Affairs , I try to condense the argument into four propositions that form the core of MMTers’ understanding of the world. I do this by reviewing  Stephanie Kelton’s book  from June of last year, Kelton being the most vocal and well-known persona in the field. I show that th [...]

2021-02-05

• Reply to Academic Agent on Austrian Economics and Price Rigidity
  by LK in Social Democracy for the 21st Century: A Post Keynesian Perspective, 2021-02-05 09:27:00 UTC

  Academic Agent lost a bet to me on Twitter and was forced to respond to my post here on Austrian economics and the reality of relative price rigidity. He has now produced two videos in this debate. Here is Academic Agent’s first video response to my post: Before he uploaded the video, I predicted that his video would contain the following: (1) he would misrepresent the actual theories of Austrian economics; (2) he would attack straw-man misrepresentations of my post; (3) he would focus on minor arguments and weak evidence and largely ignore major arguments and strong evidence. These predictio [...]

• A fistful of dollars: transmission of global funding shocks to emerging markets
  by BankUnderground in Bank Underground, 2021-02-05 09:00:00 UTC

  Aakriti Mathur and Shekhar Hari Kumar Emerging markets (EMs) have become more exposed to the global financial cycle in recent years. Positive liquidity shocks – that is, a loosening of global funding market conditions – have led to exchange rate appreciations, reductions in long-term bond yields, stock market booms, and increased gross capital flows to EMs ( Bhattarai et al (2018) ). Negative liquidity shocks on the other hand constitute a tightening of financial conditions, reducing lending and real investment ( Bruno and Shin (2015) and Avdjiev et al (2018) ). In a recent pape [...]

2021-02-02

• The Welfare and Distributional Effects of Fiscal Volatility: A Quantitative Evaluation
  by Christian Zimmermann in NEP-DGE blog, 2021-02-02 05:00:29 UTC

  By Rüdiger Bachmann, Jinhui Bai, Minjoon Lee and Fudong Zhang http://d.repec.org/n?u=RePEc:ris:wsuwpa:2020_002&r=dge This study explores the welfare and distributional effects of fiscal volatility using a neoclassical stochastic growth model with incomplete markets. In our model, households face uninsurable idiosyncratic risks in their labor income and discount factor processes, and we allow aggregate uncertainty to arise from both productivity and government purchases shocks. We calibrate our model to key features of the U.S. economy, before eliminating government purchases shocks. We then ev [...]

2021-02-01

• This Decade’s Growth Champions
  by Kaushik Basu in Project Syndicate, 2021-02-01 15:38:41 UTC

  ITHACA – With 2021 still young, and hope in the air thanks to new COVID-19 vaccines and a new occupant of the White House, we can finally stop covering our eyes in horror and peer furtively into the future. As the decade unfolds, which countries are likely to be the biggest economic success stories? My bet is on South Korea, Vietnam, and Mexico, three countries at markedly different stages of development. South Korea is an advanced economy, while Vietnam is what the World Bank calls a lower middle-income economy, like India or Bangladesh. Mexico, an upper middle-income country like Colombia, B [...]

• GameStop: Some Preliminary Lessons
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2021-02-01 13:22:59 UTC

  “The risk-reward of being a short seller is not worth it; it’s not worth it for me or my family.” Andrew Left, founder of Citron Research, The Wall Street Journal , January 29, 2021. Volatility in the stock market is not new. We remember the October 1987 crash, the dot.com bust in the early 1990s, and the collapse following the Lehman bankruptcy in September 2008. If you invest to gain the long-run benefits of equity ownership, you need some way to shield yourself from the inevitable day-to-day carnage. But, even if one takes such a broad perspective, recent experience with GameStop is extrao [...]

• Machine Learning for Realized Volatility Forecasting
  by Francis Diebold in No Hesitations, 2021-02-01 12:16:00 UTC

  Check out this interesting paper.� Lots to think about. Kim Christensen & Mathias Siggaard & Bezirgen Veliyev , 2021. " A machine learning approach to volatility forecasting ,"� CREATES Research Papers �2021-03, Department of Economics and Business Economics, Aarhus University. https://ideas.repec.org/p/aah/create/2021-03.html The paper shows that various ML methods outperform HAR for daily forecasting of realized asset-return volatility.� Of course there's nothing particularly interesting about HAR.� What's interesting is long memory, the overwhelmingly dominant feature of asset return realiz [...]

• Chris Sampson’s journal round-up for 1st February 2021
  by Chris Sampson in The Academic Health Economists' Blog, 2021-02-01 12:00:03 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. If you’d like to write one of our weekly journal round-ups, get in touch . Applied Health Economics and Health Policy Volume 19, Issue 1 AHEHP is the journal for me. Almost every issue includes a good mix of topics and methods from the broad church of health economics, and I like variety. This issue is no different. It opens with a commentary on medically assisted dying , which I previously discuss [...]

• The Recession Exposes the US’ Failures on Worker Retraining
  by ? in Feed: All Latest, 2021-02-01 11:00:00 UTC

  Unemployment is high, and many pre-pandemic jobs will not return. But the US spends a smaller share of its economy on training than most developed nations. [...]

2021-01-29

• The death of economic policy
  by chris in Stumbling and Mumbling, 2021-01-29 13:51:47 UTC

  One of the great and under-appreciated changes of recent years has been the disappearance of serious economic debate from Westminster politics. For decades the big political divide was about economics: the causes and cures for the UK’s relative economic decline; the precise mix of state and private sector; what to do about industrial relations; monetarism vs Keynesianism; how to achieve macroeconomic stability; how to redefine social democracy in the 90s; and austerity after 2010. Today, though, mainline politics is largely innocent of economics. The Tories, Stian Westlake has said , “seem to [...]

2021-01-27

• The Silent Pandemic of Antibiotic Resistance
  by Patricia Geli in Project Syndicate, 2021-01-27 16:21:03 UTC

  WASHINGTON, DC/UPPSALA – When the World Health Organization launched last year’s World Antimicrobial Awareness Week, it expanded the campaign’s focus from antibiotics to all antimicrobials – including antiviral, antifungal, and antiprotozoal drugs. The WHO said that framing the response to antibiotic resistance (ABR) within the broader antimicrobial resistance (AMR) agenda, including HIV and malaria, would “facilitate programmatic synergy and efficiency, and catalyze country-level action to combat drug-resistant infections.” But although there are many commonalities between ABR and AMR, there [...]

2021-01-26

• The macroprudential toolkit: effectiveness and interactions
  by Christian Zimmermann in NEP-DGE blog, 2021-01-26 18:45:13 UTC

  By Stephen Millard, Margarita Rubio and Alexandra Varadi http://d.repec.org/n?u=RePEc:boe:boeewp:0902&r=dge We use a DSGE model with financial frictions, leverage limits on banks, loan to value (LTV) limits and debt‑service ratio (DSR) limits on mortgage borrowing to examine: i) the effects of different macroprudential policies on key macro aggregates; ii) their interaction with each other and with monetary policy; and iii) their effects on the volatility of key macroeconomic variables and on welfare. We find that capital requirements can nullify the effects of financial frictions and reduce t [...]

2021-01-25

• Chris Sampson’s journal round-up for 25th January 2021
  by Chris Sampson in The Academic Health Economists' Blog, 2021-01-25 12:01:17 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. If you’d like to write one of our weekly journal round-ups, get in touch . Economics & Human Biology Volume 40 I know we keep saying that health economists haven’t been much of a presence in COVID-related policy discussions, but these round-ups are testament to the fact that there is no shortage of economics research on the topic. The latest issue of E&HB is no exception. One article focuses on men [...]

2021-01-24

• Endogenous policy
  by ? in Stumbling and Mumbling, 2021-01-24 13:09:48 UTC

  In a justlycriticisedpiece in the FT, Morgan Stanley’s Ruchir Sharmasays:My team also found a statistically significant link between periods of rising government debt and slow GDP growth. These studies cannot show causation, but the consistent link between [...]

2021-01-21

• Thesis Thursday: Stefan Lipman
  by Chris Sampson in The Academic Health Economists' Blog, 2021-01-21 07:00:04 UTC

  On the third Thursday of every month, we speak to a recent graduate about their thesis and their studies. This month’s guest is Dr Stefan Lipman who has a PhD from Erasmus University Rotterdam . If you would like to suggest a candidate for an upcoming Thesis Thursday, get in touch . Title Decisions about health: behavioral experiments in health with applications to understand and improve health state valuation Supervisors Werner Brouwer , Arthur Attema Repository link https://repub.eur.nl/pub/130911/ Why did you choose to use behavioural experiments in your research? The use of behav [...]

2021-01-20

• Clouds in Your Coffee? Skyscrapers and their Symbolic Heights
  by Jason Barr in Skynomics Blog, 2021-01-20 13:17:39 UTC

  Jason M. Barr          January 20, 2021 You’re So Vain? On January 4, 2010, the Burj Khalifa officially opened its doors. At 828 meters (2,717 feet) it became the world’s tallest building by a long shot. It overtook the previously tallest building, the Taipei 101, by 302 meters (991 feet). The only rub: Much of Burj is empty space—the top third is a 243-meter (797-foot) spire—where no human will likely ever work or live. The difference between the actual or architectural height (excluding TV and radio antennae) and the highest occupied floor is what the Council on Tall Buildings and Urban Habi [...]

• Zombie Arguments Against Fiscal Stimulus
  by Francesco Saraceno in Sparse Thoughts of a Gloomy European Economist, 2021-01-20 11:58:43 UTC

  Busy days. I just want to drop a quick note on a piece just published on the Financial Times that is puzzling on many levels. Ruchir Sharma pleads against Joe Biden’s stimulus on the ground that it risks “exacerbating inequality and low productivity growth”. The bulk of the argument is in this paragraph: Mr Biden captured this elite view perfectly when he said, in announcing his spending plan: “With interest rates at historic lows, we cannot afford inaction.” This view overlooks the corrosive effects that ever higher deficits and debt have already had on the global economy. These effects, [...]

2021-01-19

• Labor Market Informality and the Business Cycle
  by Christian Zimmermann in NEP-DGE blog, 2021-01-19 00:28:11 UTC

  By Frédéric Lambert, Andrea Pescatori and Frederik Toscani http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/256&r=dge Labor market informality is a pervasive feature of most developing economies. Motivated by the empirical regularity that the labor informality rate falls with GDP per capita, both at business cycle frequency and in a cross-section of countries, and that the Okun’s coefficient falls with the level of labor informality, we build a small open-economy dynamic stochastic general equilibrium model with two sectors, formal and informal, which can replicate these key stylized facts. The mo [...]

2021-01-18

• Open-end Funds vs. ETFs: Lessons from the COVID Stress Test
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2021-01-18 12:19:08 UTC

  “These funds are built on a lie, which is that you can have daily liquidity for assets that fundamentally aren’t liquid. And that leads to an expectation of individuals that it’s not that different from having money in a bank.” Mark Carney, then-Governor of the Bank of England, Speaking to the House of Commons Treasury Committee , June 26, 2019. COVID-19 posed the most severe stress test for financial markets and institutions since the Great Financial Crisis (GFC) of 2007-09. By some measures, the COVID shock’s peak impact was larger than that of the GFC—both the VIX rose higher and intermedia [...]

• Chris Sampson’s journal round-up for 18th January 2021
  by Chris Sampson in The Academic Health Economists' Blog, 2021-01-18 12:00:03 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. If you’d like to write one of our weekly journal round-ups, get in touch . Journal of Public Economics Volume 193 As far as I can tell, this issue is not a ‘special’ on COVID-19, but it looks a lot like one. Of the 17 articles that are included, eight focus on issues relating to COVID-19. One article addresses a point previously discussed on this blog; the relative importance of lockdown and fea [...]

• How Britain paid for war: bond holders in the Great War 1914-32
  by BankUnderground in Bank Underground, 2021-01-18 09:00:00 UTC

  Norma Cohen This post contributes to our occasional series of guest posts by external researchers who have used the Bank of England’s archives for their work on subjects outside traditional central banking topics . In August 1914, Britain was the world’s wealthiest country. Yet there was no guarantee that government would be able to harness that wealth for World War I. Effectively, Britain was forced into a ‘Battle for Capital’ simultaneous with its military efforts — with the efficacy of the latter dependent on the success of the former. Over 80% of the £7,280 million Britain b [...]

2021-01-16

• Some Rust Belt Urban Economics
  by Matthew E. Kahn in Environmental and Urban Economics, 2021-01-16 13:36:00 UTC

  �In this blog post, I want to market my new co-authored book "Unlocking the Potential of Post Industrial Cities" .� I will do this by talking about past research on the Economics of the Rust Belt.� �Here is chapter one of my book and here is a r ecent video where I talk about the book. The most prominent "Rust Belt" economics paper is the 2005 Glaeser and Gyourko paper on U rban Decline and Durable Housing. � �On a slightly deep level, this paper is about gross flows and sunk capital.� In the 1950s, cities such as Detroit and Pittsburgh were doing quite well as their main manufacturing industr [...]

2021-01-13

• Rare disasters, the natural interest rate and monetary policy
  by Christian Zimmermann in NEP-DGE blog, 2021-01-13 18:04:03 UTC

  By Alessandro Cantelmo http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1309_20&r=dge This paper evaluates the impact of rare disasters on the natural interest rate and macroeconomic conditions by simulating a nonlinear New-Keynesian model. The model is calibrated using data on natural disasters in OECD countries. From an ex-ante perspective, disaster risk behaves as a negative demand shock and lowers the natural rate and inflation, even if disasters hit only the supply side of the economy. These effects become larger and nonlinear if extreme natural disasters become more frequent, a scenario compat [...]

• On forecasting
  by chris in Stumbling and Mumbling, 2021-01-13 16:30:53 UTC

  What’s the point of forecasting? This is the question posed for me by Michael Story’s account of superforecasters’ predictions for the course of the pandemic. Take this: Our central estimate that the death toll will peak at 1,278 with an 80% confidence interval of 892 to 5,750. So what? It’s not all clear how this affects the debate about how tight the lockdown should be. That depends upon how the virus is transmitted; the trade-off between mental and physical health; how far the economic effects of the lockdown can be mitigated; and so on. Yes, that claim that the daily death toll could be [...]

• An Infrastructure Inoculation for America’s Recovery
  by Barry Eichengreen in Project Syndicate, 2021-01-13 13:40:59 UTC

  BERKELEY – With the Democrats’ stunning sweep of Georgia’s two Senate run-off elections handing them control of both houses of Congress as of January 20, the idea of $2,000 stimulus checks for every household is sure to be back on the agenda in the United States. But although targeted relief for the unemployed should unquestionably be a priority, it is not clear that $2,000 checks for all would in fact help to sustain the US economic recovery. One post-pandemic scenario is a vigorous demand-driven recovery as people gorge on restaurant meals and other pleasures they’ve missed for the past year [...]

2021-01-12

• Brexit and hate crime: why was the rise more pronounced in areas that voted Remain?
  by LSE BPP in British Politics and Policy at LSE, 2021-01-12 08:00:23 UTC

  The sharp increase in hate crime that was recorded in the aftermath of the Brexit vote was more pronounced in pro-Remain areas, write  Facundo Albornoz , Jake Bradley , and Silvia Sonderegger . They write that this was because the referendum was a source of new information about society’s overall preferences over immigration, enabling those holding anti-immigrant sentiments but living in areas which are generally supportive of diversity to externalise their views.  In the aftermath of the Brexit referendum, the police reported a significant surge in racially motivated hate crime which immediat [...]

2021-01-11

• Chris Sampson’s journal round-up for 11th January 2021
  by Chris Sampson in The Academic Health Economists' Blog, 2021-01-11 12:00:06 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. If you’d like to write one of our weekly journal round-ups, get in touch . Health Economics Review Volume 10, December 2020 This week’s round-up is a BMC bonanza! HER published four articles in December, demonstrating a variety of topics, methods, and grammatical misdemeanors. A report from a systematic review identifies some issues in the context of discrete choice experiments with primary heal [...]

2021-01-09

• Veblen and Conspicuous Consumption Revisited: The Beneficial Role of "Invisible" Masks During a Pandemic
  by Matthew E. Kahn in Environmental and Urban Economics, 2021-01-09 17:32:00 UTC

  Suppose that masks are invisible,� would more people wear them?� Would more supporters of President Trump wear them?� How much of the opposition to playing it safe and putting on a mask is due to the economics of identity?� � To repeat my question, if you could put on a mask but everyone else wouldn't know that you were wearing one, would this increase your probability of putting it on? Let's review the economics of risk taking. Case #1:� Decision makers who do not have social preferences. In the 1970s, my friend Glenn Blomquist wrote a nice paper on the economics of putting on a seatbelt.� In [...]

2021-01-07

• How Important Is Health Inequality for Lifetime Earnings Inequality?
  by Christian Zimmermann in NEP-DGE blog, 2021-01-07 18:34:35 UTC

  By Roozbeh Hosseini, Karen A. Kopecky and Kai Zhao http://d.repec.org/n?u=RePEc:uct:uconnp:2020-20&r=dge Using a dynamic panel approach, we provide empirical evidence that negative health shocks reduce earnings. The effect is primarily driven by the participation margin and is concentrated in less educated and poor health individuals. We build a dynamic, general equilibrium, lifecycle model that is consistent with these findings. In the model, individuals, whose health is risky and heterogeneous, choose to either work, or not work and apply for social security disability insurance (SSDI). Health [...]

2021-01-06

• The link between unemployment and real economic growth in the UK. Brits are able to retain data quality and integrity
  by Ivan Kitov in Economics as Classical Mechanics, 2021-01-06 13:33:00 UTC

    In 2011, we published a paper modeling the link between the annual change in employment rate and the change rate in the real GDP per capita. This paper also included modeling of a similar link for unemployment.  In 2011, we used data from various sources – the OECD, BEA, BLS, and the Total Economy Database of the Conference Board. Because of the data availability, the period under consideration varied between countries and the longest time series started between 1950 and 1960. For many developed economies, however, the start year was 1970. Since the studied period was limited to 2010, we pro [...]

• Further school closures and weakening economic conditions equate to bleak prospects for the young
  by LSE BPP in British Politics and Policy at LSE, 2021-01-06 08:00:16 UTC

  The further closures of schools that have been announced, while necessary to contain the spread of COVID-19, are likely to exacerbate educational inequalities. Learning losses could have long-term consequences for the life chances of children from disadvantaged backgrounds, explain  Andrew Eyles and  Lee Elliot Major . Closing schools is one of the most difficult decisions that governments have had to make in their efforts to halt the spread of COVID-19. This is a trade-off between the costs to health and education. While ministers have been forced into further closures as coronavirus cases p [...]

2021-01-04

• Fix Money Funds Now
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2021-01-04 12:12:06 UTC

  “ Free of capital constraints, official reserve requirements, and deposit insurance charges, these MMMFs are truly hidden in the shadows of banking markets. […] While generally conservatively managed, the funds are demonstrably vulnerable in troubled times to disturbing runs .” Former Federal Reserve Chair Paul Volcker, William Taylor Memorial Lecture , September 23, 2011. On September 19, 2008, at the height of the financial crisis, the U.S. Treasury announced that it would guarantee the liabilities of money market mutual funds (MMMFs). And, the Federal Reserve created an emergency facility ( [...]

• Chris Sampson’s journal round-up for 4th January 2021
  by Chris Sampson in The Academic Health Economists' Blog, 2021-01-04 12:00:05 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. If you’d like to write one of our weekly journal round-ups, get in touch . Health Economics Volume 30, Issue 1 The latest issue of Health Economics includes several articles on the topic of multi-sectoral evaluation. One study seeks to marry QALY-based analyses with consumption value, for an overall measure of wellbeing effects in economic evaluation . The researchers call it OQoL: overall quality [...]

2020-12-30

• The Economics of Personal Responsibility and Human Development
  by Matthew E. Kahn in Environmental and Urban Economics, 2020-12-30 14:10:00 UTC

   Congratulations to Nick Kristof of the New York Times.  I am really impressed with this discussion between him and Carol in Berkeley.   My mother's name is Carol and she has been to Berkeley and I'm wondering if my mom wrote the following response; Here is the NY Times Source and my remarks appear below.   By all means, let’s talk about “personal responsibility”’  — Nicholas Kristof Carol in Berkeley, Calif., on “ Who Killed the Knapp Family? ” (Jan. 9): So long as poverty is seen as an individual or cultural failing (e.g. the culture of poverty which was linked to race, even though the evide [...]

2020-12-29

• Modern professional sport is an ultimate expression of gender and race segregation
  by Ivan Kitov in Economics as Classical Mechanics, 2020-12-29 16:35:00 UTC

  I had a post o n the Winter Olympic s as an example of hostile racial segregation. The winners of the Olympics have the same fame and honor as the winners of the (summer) Olympic Games. They almost all belong to one race and this predominance cannot be resolved - no natural snow and ice for the majority of UN countries. This segregation is based on historical prejudice.� It is even more outrageous because modern sport is professional and the absence of equal conditions is the worst expression of all kinds of inequality, including economic.� Another example of professional segregation is the ge [...]

• Will President Biden's Low Carbon Policy Efforts be Slowed Down by the Gruenspecht Effect and Slow Economic Growth?
  by Matthew E. Kahn in Environmental and Urban Economics, 2020-12-29 13:24:00 UTC

  �In recent decades, U.S Clean Air Regulations have focused on reducing the emissions of new cars, new factories and new power plants.� Old cars, old factories and old power plants have often been "grandfathered" and haven't faced regulations.� Given the durability of capital, this differential regulation creates long lags between "cause" and "effect". In this case, the cause is the new regulations and the effect is environmental progress. The Gruenspecht effect refers to an economist who in his Yale PHD thesis argued that the Clean Air Act can unintentionally make air pollution worse in the sh [...]

2020-12-28

• Chris Sampson’s journal round-up for 28th December 2020
  by Chris Sampson in The Academic Health Economists' Blog, 2020-12-28 12:00:00 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. If you’d like to write one of our weekly journal round-ups, get in touch . Applied Health Economics and Health Policy Volume 18, Issue 6 This month we have a themed issue of AHEHP on health financing in sub-Saharan Africa, with all of the articles open access. The challenges are summarised in the opening editorial , and many of the papers focus on informing methods for future research. A couple [...]

2020-12-27

• We have validated our model allowing for an accurate prediction of GDP growth using unemployment estimates
  by Ivan Kitov in Economics as Classical Mechanics, 2020-12-27 19:33:00 UTC

    According to the gap version of Okun’s law, there exists a negative relation between the output gap, ( Y p -Y)/Y p , where Y p is potential output at full employment and Y is actual output, and the deviation of the actual unemployment rate, u , from its natural rate, u n . The overall GDP or output includes the change in population as an extensive component which is not necessary dependent on other macroeconomic variables. Econometrically, it is mandatory to use macroeconomic variables of the same origin and dimension. Therefore, we use real GDP per capita, G, and rewrite Okun’s law in the f [...]

2020-12-24

• In the Year 2030, How Will Applied Microeconomists Study the Consequences of the 2020 COVID Shock?
  by Matthew E. Kahn in Environmental and Urban Economics, 2020-12-24 15:02:00 UTC

  An active research field in climate economics uses natural disasters as "natural experiments" to learn about the economic effects of such shocks.� Amine Ouazad and I study how major hurricanes impact bank lending and securitization pa tterns in this study .� �Gary Lin, Rhiannon Jerch and I study local public finance dynamics in the aftermath of disaste rs in this study. � � In both papers, our estimation strategy relies on the fact that we have a "treatment group" and a "control group".� �Intuitively, there are places that are roughly similar that have and have not been recently hit with a sho [...]

2020-12-23

• Can We All Turn Japanese?
  by Tyler Durden in Zero Hedge, 2020-12-23 22:40:00 UTC

  Can We All Turn Japanese? Submitted by Tuomas Malinen of GnS Economics Now that the first serious mutation of the Coronavirus has apparently emerged, many are wondering how well the global economy will cope.  “Not well” is what we consider the rather obvious answer. However, some hope the world economy will now manage to avoid general collapse by massive government intrusion mirroring the Japanese experience, “Japanification”, even though this will result in nothing more than permanent economic stagnation and the massive growth of sovereign debt.  While a questionable—if not tr [...]

• The Microeconomics of the Rise of Green Buildings and Climate Change Adaptation: A California Example
  by Matthew E. Kahn in Environmental and Urban Economics, 2020-12-23 16:05:00 UTC

  �In this blog post, I'd like to introduce a "mashup " where I combine ideas about green buildings, the rise of Work from Home, climate change adaptation, and non-linear pricing of electricity to make some predictions about the rise of the green economy. People who know my work, know that I've published several papers on green buildings.�� To make my main point, I need to establish several other points; Point #1;� In California, there is a sharp geographic temperature gradient such that areas closer to the water (Santa Monica, Berkeley) are much cooler than more inland places (say 30 or 40 mile [...]

• Using the Supply and Demand Model to Understand China's Recent Electricity and Coal Shortage
  by Matthew E. Kahn in Environmental and Urban Economics, 2020-12-23 14:07:00 UTC

  �The New York Times has p ublished an excellent piece about an emerging coal shortage in China.� Let's use the supply and demand framework to study this issue.� Aggregate demand for coal in China is rising because it is winter and much of the nation's winter heating is supplied by burning coal.� The manufacturing sector is making a comeback and this sector uses plenty of electricity.� At the same time that aggregate demand is rising, aggregate supply has declined because the national Chinese government is in the midst of a feud with Australia. A ustralia is a leading exporter of coal to China. [...]

• Why Doesn’t New York Construct the World’s Tallest Building Anymore?
  by Jason Barr in Skynomics Blog, 2020-12-23 13:17:41 UTC

  Jason M. Barr       December 23, 2020 The Space Race At the end of the Roaring Twenties , New York City witnessed a three-way race for the world’s tallest building. First was the Bank of Manhattan Building, at 40 Wall Street, which topped out at 927 feet (283 meters, 70 stories) in November 1929 and officially opened in May 1930. Next came the Chrysler Building (1,046 feet 319 meters, 77 stories), whose final height was riveted into place concurrently with the Bank of Manhattan but was not formally revealed until its rival was finished. Finally was the granddaddy of them all, the Empire State [...]

• New EU members have no chance to catch up the most developed countries
  by Ivan Kitov in Economics as Classical Mechanics, 2020-12-23 12:45:00 UTC

    In 2005, we published a paper quantitatively describing the transition of the former socialist countries to a new state similar to capitalism .  In 2009 , we extended our model and predicted the evolution of real GDP per capita in 27 countries, including two virtual countries: the U.S.S.R and Czechoslovakia. Briefly, despite different social, cultural, ethnical, racial, demographical, religious, and technological histories our model demonstrates general success in the overall prediction between the start point (1989 to 1991) and the year of 2006(7). In all cases, the most accurate prediction [...]

2020-12-22

• Real GDP is likely not correct as the inflation estimates are weird
  by Ivan Kitov in Economics as Classical Mechanics, 2020-12-22 13:21:00 UTC

    We revisited several times our original post published in 2011 on biased metrology of macroeconomic measurements. New data are needed to validate the original hypothesis or to reject it. It is important to retain in mind that economics as science often fails and gives counterproductive results due to inaccurate or biased measurements of the most basic macroeconomics variables – price inflation, labor force, unemployment, nominal GDP. In one of our previous post s, we focused on the estimates of real GDP in the USA before and after 1979 and here we extend the US case by several other cases. A [...]

2020-12-21

• Consumer Credit With Over-Optimistic Borrowers
  by Christian Zimmermann in NEP-DGE blog, 2020-12-21 19:08:44 UTC

  By Florian Exler, Igor Livshits, James MacGee and Michèle Tertilt http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_245&r=dge (paper is the first on the list once you click on this link) There is active debate over whether borrowers’ cognitive biases create a need for regulation to limit the misuse of credit. To tackle this question, we incorporate overoptimistic borrowers into an incomplete markets model with consumer bankruptcy. Lenders price loans, forming beliefs—type scores—about borrowers’ types. Since over-optimistic borrowers face worse income risk but incorrectly believe they are [...]

• On the potential non-equivalent exchange between developed countries
  by Ivan Kitov in Economics as Classical Mechanics, 2020-12-21 18:16:00 UTC

    I am in the middle of modeling the relationship between the labor force, unemployment, and price inflation.   Twelve years ago we reported several statistical models revealing a linear lagged relationship between these three parameters in developed (e.g., USA , UK , Japan , Germany , France , Austria ) countries. It is time to revisit them and validate these models with new data published since 2010. There are several problems we have to overcome before the published data can be used in statistical estimates. The most important problem is the change in definitions of all three parameters. Fo [...]

• Our prediction from 2008 on the evolution of unemployment rate in Italy at an 11-year horizon is still valid
  by Ivan Kitov in Economics as Classical Mechanics, 2020-12-21 15:35:00 UTC

  In this blog, we regularly revisit our prediction of the rate of unemployment in Italy, which had been made in our 2008 paper. (The previous revision was in 2017 .) Five years after this publication, we found that the accuracy of prediction was excellent. We decided that our model works well. Since the model has a natural 11-year horizon, we were able to check our original (2008!) prediction for 2013 and 2016 and now for 2019 using new estimates of the unemployment rate in Italy (here we use the OECD database ).  According to the OECD, the unemployment rate in 2019 was 9.95%. For 2017, the rat [...]

• Big Tech, Fintech, and the Future of Credit
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2020-12-21 15:06:54 UTC

  “ Microfinance is a positive development; it has clearly helped substantial numbers of poor people escape poverty…  However, microfinance is not a substitute for institution building... ” then-Federal Reserve Board Governor Frederic S. Mishkin, April 26, 2007 . Lenders want to know that borrowers will pay them back. That means assessing creditworthiness before making a loan and then monitoring borrowers to ensure timely payment in full. Lenders have three principal tools for raising the likelihood of that firms will repay. First, they look for borrowers with a sufficiently large personal stake [...]

• Chris Sampson’s journal round-up for 21st December 2020
  by Chris Sampson in The Academic Health Economists' Blog, 2020-12-21 12:00:05 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. If you’d like to write one of our weekly journal round-ups, get in touch . PharmacoEconomics – Open Volume 4, Issue 4 Last week, we published a post pondering the role of health economists in the COVID-19 pandemic response. One way in which our methods and mentality can surely be useful is in prioritising COVID-19 vaccination . And so leads the latest issue of PharmacoEconomics – Open , with a comm [...]

2020-12-19

• Annual Review 2020
  by noreply@blogger.com (David Stern) in Stochastic Trend, 2020-12-19 07:18:00 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. In the first half of the year we had the bushfires, the hailstorm, and then the pandemic and the "shutdown". On 5 January we woke up to orange light and visibility of only a couple of hundred metres at best where I live. It felt like being on the surface of Titan (but much warmer :)). My brother visited from Israel later in the month when conditions were a little better. The day he arrived was the hailstorm . Shortly after that the Orroral Valley [...]

2020-12-16

• Does the injunction gap violate implementers' fair trial rights under the ECHR?
  by Léon Dijkman in The IPKat, 2020-12-16 09:28:00 UTC

  In jurisdictions with bifurcated patent systems, infringement claims and invalidity attacks are heard in separate proceedings, before different courts. Bifurcation is often defended on the grounds that the validity of the patent can be assessed by judges with technical expertise. Germany, Hungary and Austria each have bifurcated patent systems. A compromise position was adopted in Article 33(3) of the Agreement on a Unified Patent Court , whereby the division hearing an infringement claim may either refer invalidity claims to the central division or hear both claims with the assistance of a te [...]

2020-12-14

• On the Purchasing Power of Money in an Exchange Economy
  by Christian Zimmermann in NEP-DGE blog, 2020-12-14 21:42:38 UTC

  By Juliusz Radwanski http://d.repec.org/n?u=RePEc:pra:mprapa:104244&r=dge A model is constructed in which completely unbacked fiat money, issued by generic supplier implementing realistically specified monetary policy designed to obey certain sufficient conditions, is endogenously accepted by rational individuals at uniquely determined price level. The model generalizes Lucas (1978) to an economy with frictions and specialization in production, without imposing the cash-in-advance constraint. The uniqueness of equilibrium is the consequence of complete characterization of both the environment, [...]

2020-12-13

• Growth rate of the GDP per capita revisited. 3. The results from 2007, 2009, and 2012 revisited. The model
  by Ivan Kitov in Economics as Classical Mechanics, 2020-12-13 11:01:00 UTC

    GDP per capita data revisited We start with a revision of the period after 1950. Originally, we estimated the evolution of annual increment before 2003 . Then data for the period between 2004 and 2007 were added the prediction of the model was estimated. In 2012 , 4 new readings were added for all involved countries. In 2006, we made a model-based assumption (see Appendix in this post for the model description) that all large deviations from the linear trend in the annual GDP per capita should fade away in the near future. In this post, we claim that this assumption was an extremely successf [...]

2020-12-12

• Growth rate of the GDP per capita revisited. 1. Comparison of the TED 2013 and Maddison Project Database 2020
  by Ivan Kitov in Economics as Classical Mechanics, 2020-12-12 11:35:00 UTC

  The history of physics has many examples when the measured values of fundamental physical constants were corrected according to new measurements using more sensitive instruments and methods. A good example is a change in the gravitational constant. In economics, the changing time series is commonplace. Moreover, most of the economic time series are accompanied by disclaimers that the measurements in adjacent years are incompatible due to change in measurement methodology and/definition of parameters. This is true even for such a simple process as population counting, and the population estimat [...]

2020-12-11

• The Debt Dogs that Didn’t Bark
  by Barry Eichengreen in Project Syndicate, 2020-12-11 16:56:37 UTC

  BERKELEY– Last March, when COVID-19 infected the world economy, many observers feared that emerging markets and developing countries would suffer the most, financially and otherwise. Economically, they relied on commodity exports, remittances, and tourism, all of which fell through the floor with the pandemic. There was every reason to expect a tsunami of financial crises and debt defaults. The tsunami never arrived. Just six countries – Argentina, Ecuador, Belize, Lebanon, Suriname, and Zambia – have defaulted on their sovereign debt, and only the first two have restructured their debts. But [...]

• Optimal quantitative easing in a monetary union
  by Christian Zimmermann in NEP-DGE blog, 2020-12-11 15:39:06 UTC

  By Serdar Kabaca, Renske Maas, Kostas Mavromatis and Romanos Priftis http://d.repec.org/n?u=RePEc:dnb:dnbwpp:697&r=dge This paper explores the optimal allocation of government bond purchases within a monetary union, using a two-region DSGE model, where regions are asymmetric with respect to economic size and portfolio characteristics: the extent of substitutability between assets of different maturity and origin, asset home bias, and steady-state levels of government debt. An optimal quantitative easing (QE) policy under commitment does not only reflect different region sizes, but is also a fu [...]

2020-12-10

• 'Great Demographic Reversal' & Shifting Wealth
  by ReibReisen in ShiftingWealth, 2020-12-10 16:03:00 UTC

    China's rise since the 1980s has brought an era of low inflation and real interest rates; it also stimulated emerging economies. This combination has resulted in high prices for equities, real estate and commodities. The impact on personal income distribution has been positive globally, but negative within most countries. In a highly acclaimed book, Charles Goodhart and Manoj Pradhan announce the end of the golden age [1] . Changes in demography will reverse decades of trends: declining growth in wages and inflation, falling interest rates, and greater inequality between countries, while ine [...]

• Debating ‘State Capitalism’ in Turkey: Beyond False Dichotomies
  by mehmetermanerol in Development Economics, 2020-12-10 09:32:00 UTC

  Following the 2016 failed coup attempt, and in the context of increasing mistrust towards the West, Turkey’s president Erdogan reflected his discontent with the EU and argued that Turkey should instead join the Shanghai Five , namely the Shanghai Cooperation Organisation (SCO) led primarily by China and Russia. Soon after, despite being a NATO member, Turkey signed a deal with Russia to buy the S-400 air defence missile system. Taken together with Turkey’s other ‘adventures’ in its region, these developments were perceived as manifestations of a changing political economy of Turkey, and w [...]

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