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2018-09-19

• 2012 deflation explained
  by Bruno Duarte in EUnomics, 2018-09-19 21:04:50 UTC

  Robert Hall’s  seminal work  on firms’ marginal cost and price strategies shook the foundations of market competition. Hall found firms fix prices above marginal costs when output increases.  Firms seek to  maximise profits , forecasting profit as a consequence of its pricing decision. Demand is assumed with constant elasticity such that a lower price shall increase revenues regardless of volume.  This profit forecast mechanism helps understand what happened to consumer prices in the recession, plotted below (US in blue, EU in red) The behaviour of price indexes between 2012 and 2015 (an expan [...]

• ‘Running for the exit’: How cross-border bank lending fell
  by bankunderground in Bank Underground, 2018-09-19 08:00:52 UTC

  Neeltje van Horen Cross-border bank lending fell dramatically in the aftermath of Lehman Brothers’ failure as funding constraints forced banks to reduce their foreign exposures . While this decline was partly driven by lower demand for international bank credit, it was substantially aggravated by a retrenchment of international banks from cross-border lending. But banks did not cut their cross-border lending in a uniform manner. Instead, they reallocated their foreign portfolios towards countries that were geographically close, in which they had more experience, in which they had close connec [...]

2018-09-18

• EU-13 should spend more
  by Bruno Duarte in EUnomics, 2018-09-18 20:25:53 UTC

  Still on the  nominal spending limit rule  advanced by French and German economic advisers. Were small open economies exposed to foreign markets subject to an exogenous shock, the adjustment to nominal spending required by either rule (and particularly by the rule drafted by German advisers) would most likely be achieved by reducing discretionary spending and revenue. The European Commission acknowledges the link ( plotted below ) while  research  concludes public spending is primarily discretionary. If Member-States are encouraged to reduce discretionary spending to meet institutional obliga [...]

2018-09-17

• Perceptions of the neutral interest rate
  by Bruno Duarte in EUnomics, 2018-09-17 17:42:36 UTC

  Amongst the rules and indicators available to Central Banks for informing the Central Bank interest rate is the Taylor Rule. Conceived as a  descriptor rather than a prescriber , the Taylor Rule considers the inflation rate and applies a coefficient to both the deviation from steady-rate growth of GDP and the inflation target to compute a prescribed rate. The Fed  actually uses other versions of interest rate -setting rules along with the Taylor Rule.  Some of these rules  assume the long-term neutral Fed funds rate at 2% (the interest rate seen as consistent with 2% inflation in full employme [...]

• Research: Simple Prompts Can Get Women to Negotiate More Like Men, and Vice Versa
  by Leigh Thompson in HBR Blog Network, 2018-09-17 12:05:30 UTC

  Mitch Blunt/Getty Images Do we lie to get what we want out of negotiations? That depends, according to forthcoming research I conducted with   Jason Pierce  of the University of North Carolina, Greensborough. We found that the likelihood of engaging in unethical behavior during negotiation is related strongly to gender: men are more likely to act deceptively than women are. The difference in bargaining behavior is linked to negotiators’ sense of competitiveness and empathy. In negotiations, men tend to embrace a competitive mode that motivates unethical behavior to get ahead, whereas women o [...]

• Illuminating GDP
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2018-09-17 11:25:28 UTC

  "GDP figures are 'man-made' and therefore unreliable," reported remarks of Li Keqiang (then Communist Party secretary of the northeastern Chinese province of Liaoning), March 12, 2007. Satellites are great. It is hard to imagine living without them. GPS navigation is just the tip of the iceberg. Taking advantage of the immense amounts of information collected over decades, scientists have been using satellite imagery to study a broad array of questions, ranging from agricultural land use to the impact of climate change to the geographic constraints on cities (see here for a recent survey). One [...]

2018-09-15

• Occasional Weekend Links
  by Jesse Anttila-Hughes in Fight Entropy, 2018-09-15 17:43:00 UTC

  1) Neanderthals at sea 2)  As if the Industrial Revolution had never happened. 3)  “We’re going to be like the Saudi Arabia of freshwater.” 4) A history of RCTs in the social sciences 5) Piketty on Russia 6) "Miscodings of rare events are likely to be asymmetric" 7)   Early humans may have resembled stressed, sweaty chimpanzees 8)  Disproportionate Sterilization of Latinos Under California’s Eugenic Sterilization Program, 1920–1945 9)  Nearly half of aboriginal Australians carry HLTV-1 10) Markets in abstract everything:  "I very much hope you will apply for a grant at Emergent Ventures.  Most [...]

2018-09-13

• French and German Experts’ could hamper EU-13 catch-up 
  by Bruno Duarte in EUnomics, 2018-09-13 18:33:08 UTC

  In recent opinions, French and German economic advisers suggest replacing the current deficit and debt limits enshrined in the TFEU by a limit to nominal public expenditure.  The limit would solve long-standing structural disequilibria in the Union:  preventing high public debt in some Member-States thus precluding the need for debt mutualisation. By indexing the spending limit to potential growth, the EU would ensure the Euro’s stability. The limit would be consider with the currently instated long-term limit to public debt and medium-term limit to the structural deficit. The expenditure lim [...]

2018-09-12

• Skyscrapers and Cities: A Q&A Interview with Edward Glaeser (Part II)
  by Jason Barr in Building the skyline, 2018-09-12 12:11:41 UTC

  by Jason M. Barr     September 12, 2018 [Author’s Note: This is Part II of a two-part Q&A Interview with Professor Edward Glaeser. Part I can be read here .]   Edward Glaeser is the Fred and Eleanor Glimp Professor of Economics in the Department of Economics at Harvard University. He one of the world’s leading experts on the economics of cities. He is the author of  Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier . On Tall Buildings and Urban Livability JB: There is a running debate about whether tall buildings are beneficial for cities [...]

• Method of the month: Distributional cost effectiveness analysis
  by miqedup in The Academic Health Economists' Blog, 2018-09-12 06:00:57 UTC

  Once a month we discuss a particular research method that may be of interest to people working in health economics. We’ll consider widely used key methodologies, as well as more novel approaches. Our reviews are not designed to be comprehensive but provide an introduction to the method, its underlying principles, some applied examples, and where to find out more. If you’d like to write a post for this series, get in touch . This month’s method is distributional cost effectiveness analysis . Principles Variation in population health outcomes, particularly when socially patterned by characterist [...]

2018-09-11

• Trump’s tirade du jour
  by Bruno Duarte in EUnomics, 2018-09-11 19:43:38 UTC

  President Trump  compared growth in GDP and unemployment  to much displeasure and negative criticism of macroeconomists and pundits. Specifically, the President described the current economic moment positively as the unemployment rate percentage was nominally lower than the percentage rate of GDP growth. How could unemployment and GDP be linked? For instance,  Rudd and Whelan  argue the labour wages portion of GDP is not a good measure of either output gap or inflation, contradicting  Woodford’s  estimation of the new Philips curve – that assumes ULC and unemployment are related. Conversely,  [...]

• How the Triple Tax Exemption on Puerto Rico’s Bonds Financed Its Territorial Status—and Helped Spark Its Debt Crisis
  by Evaluz Cotto-Quijano in Pro-Market, 2018-09-11 16:45:18 UTC

  How did Puerto Rico manage to incur a monumental debt of $72 billion without raising red flags among the sophisticated investors who continuously bought its bonds? Here associate professor of business E valuz Cotto – Quijano points to the role of a tax exemption designed by the US Congress over 100 years ago to finance Puerto Rico ’s territorial government by inflating its bond debt instead of appropriating federal funds .     On June 30, 2016, a day before the government of Puerto Rico missed a bond payment, the US Congress and President Obama passed the Puerto Rico Oversight, Management, a [...]

• Collection Development: Reference Resources Roundup (A Curated Collection of Recently Published or Updated Data-Rich Reports Available on the Web)
  by ? in LJ INFOdocket, 2018-09-11 14:22:48 UTC

  NOTE: THIS ROUNUP IS NO LONGER UPDATED. PLEASE VISIT THE CURRENT UPDATE FOR EVEN MORE REPORTS AND RESOURCES (September 11, 2018) — This selection of curated, full text documents. and other reference material is updated daily with new entries. Please [...]

2018-09-10

• Harvard Prof: Merit-Based Admissions "Reproduce Inequality"
  by Tyler Durden in Zero Hedge, 2018-09-10 23:05:22 UTC

  Submitted by Toni Airaksinen of Campus Reform A Harvard University professor claims in a new academic study that merit-based admission processes at elite universities “reproduce inequality.” Harvard education professor Natasha Warikoo draws on interviews with 98 white, native-born students at Harvard, Brown University, and the University of Oxford in “ What Meritocracy Means to its Winners: Admissions, Race, and Inequality ,” published in the journal Social Sciences . During interviews Warikoo conducted between 2009 and 2011, these students were asked to sound-off on whether they felt the [...]

• What Should the Fed Own?
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2018-09-10 13:05:33 UTC

  “[T]he Fed might accommodate a sudden spike in [demand for safe assets] by selling some of its T-bill holdings and using the proceeds to buy longer-term Treasuries.” Greenwood, Hanson and Stein, The Journal of Finance , August 2015.  “[T]he Committee would be prepared to use its full range of tools, including altering the size and composition of the balance sheet, if future economic conditions were to warrant a more accommodative monetary policy than can be achieved solely by reducing the federal funds rate.” Federal Open Market Committee, “ Addendum to the Policy Normalization Principles and [...]

• Sam Watson’s journal round-up for 10th September 2018
  by Sam Watson in The Academic Health Economists' Blog, 2018-09-10 11:00:59 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 . Probabilistic sensitivity analysis in cost-effectiveness models: determining model convergence in cohort models . PharmacoEconomics [ PubMed ] Published 27th July 2018 Probabilistic sensitivity analysis (PSA) is [...]

2018-09-06

• Drivers of the investment cycle
  by Bruno Duarte in EUnomics, 2018-09-06 22:04:53 UTC

  In the follow-up to  yesterday’s post  on wages and investment, it is interesting to assess what stimulates and impedes firm investment. Research finds  leverage  is determinant to firms’ investment decisions when subject to cyclical constraints such as those imposed to European firms between 2011-2016. In other words,  market interest rates exogenous to the firm  affect firms’ investment decisions conditional on firm indebtness.  Less explored is the role of policy makers in signalling macroeconomic conditions where firms operate. Whereas  uncertainty , in  prices or demand , are typically fo [...]

• Short-termism: what's the problem?
  by chris in Stumbling and Mumbling, 2018-09-06 12:51:11 UTC

  There’s a widespread consensus that corporate short-termism is a problem. Many have welcomed Donald Trump’s call to end quarterly reporting in the hope that it might lengthen planning horizons; yesterday’s report from the IPPR cited short-termism as one reason for the UK’s lack of investment and innovation; and Richard Murphy has decried the “transient enterprise.” I disagree with all this. I side instead with Sam Dumitriu and Larry Summers : short-termism is not a problem. Four facts make me say so:  - If stock market investors were short-termist, they’d under-price growth stocks and over-pri [...]

2018-09-05

• Manufacturing wages are historically high
  by Bruno Duarte in EUnomics, 2018-09-05 12:29:53 UTC

  New research  concludes Union membership increases wage premia of workers, particularly those less skilled The less skilled the workers were, the greater the wage premium associated with their union membership. Whilst tempting, it may also be considered this premia represents a rent extracted by Unionised workers. As labour productivity declined from the beginning of this century, profits increased despite the widening gap between earnings and productivity. A plausible explanation is the  increase in firm financialisation . Regardless of the cause, the increase in capital intensity has not coi [...]

• Skyscrapers and Cities: A Q&A Interview with Edward Glaeser (Part I)
  by Jason Barr in Building the skyline, 2018-09-05 12:06:05 UTC

  by Jason M. Barr     September 5, 2018 [Author’s Note: This is Part I of a two-part Q&A interview with Professor Edward Glaeser.]   Edward Glaeser is the Fred and Eleanor Glimp Professor of Economics in the Department of Economics at Harvard University. He one of the world’s leading experts on the economics of cities. He is the author of  Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier . On Skyscraper Research in Economics JB: While there are a handful of research papers in economics on investigating the causes and consequences of skys [...]

2018-09-04

• Context matters, but are the economists listening?
  by noreply@blogger.com (Gulzar Natarajan) in Urbanomics, 2018-09-04 21:22:00 UTC

  In a famous 2007 paper, Robert Jensen, heralded the case for the use of mobile phones in advancing development outcomes. He used microlevel survey data on the adoption of mobile phones by fishermen in Kerala over 1997-2001 to show that , the adoption of mobile phones by fishermen and wholesalers was associated with a dramatic reduction in price dispersion, the complete elimination of waste, and near-perfect adherence to the Law of One Price. Both consumer and producer welfare increased. Mobile phones could bridge all kinds of information asymmetry and so on, the story got constructed. Since th [...]

• Quotation of the Day…
  by Don Boudreaux in Cafe Hayek, 2018-09-04 11:19:00 UTC

  (Don Boudreaux) Tweet … is from page 153 of Stephen Meardon’s 2005 paper “ How TRIPs Got Legs: Copyright, Trade Policy, and the Role of Government in Nineteenth-Century American Economic Thought ,” as this paper is reprinted The Role of Government in the History of Economic Thought (Steven G. Medema and Peter Boettke, eds., 2005) (citation omitted): To [William Cullen] Bryant, the unfairness of protection and the likelihood that it would “bring ruin” to a populace were reasons enough to renounce the policy. But one could say more. It was unfair and ruinous because it was contrary to the le [...]

2018-09-03

• Democracy depends on financial markets too
  by Bruno Duarte in EUnomics, 2018-09-03 18:02:28 UTC

  Amongst the most sensitive innovations brought to economics by Marx was the definition of value as that captured by prices of exchanged goods and services. As  Mariana Mazzucato  details and previously explained  in this blog , defining value by a good or product fungibility has an immense impact on how we perceive value and its distribution. The reallocation of capital by financial intermediaries (banks or asset managers) relies on Adam Smith’s invisible hand ( Marx’s writing trails Smith’s ). The profound influence of Marx’s concept of value by fungibility (and only this concept) is better s [...]

• Financial Crisis: The Endgame
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2018-09-03 12:25:40 UTC

   “The only way we could have saved Lehman would have been by breaking the law.” Ben S. Bernanke, Testimony to the Financial Crisis Inquiry Commission, September 2, 2010 (cited by Reuters ). “Lehman actually did have ample collateral for a loan that would have averted its sudden bankruptcy.” Laurence Ball, The Fed and Lehman Brothers , 2018, page xii. Ten years ago this month, the run on Lehman Brothers kicked off the third and final phase of the Great Financial Crisis (GFC) of 2007-2009. In two earlier posts ( here and here ), we describe the prior phases of the crisis. The first began on Augu [...]

• James Altunkaya’s journal round-up for 3rd September 2018
  by jamesaltunkaya in The Academic Health Economists' Blog, 2018-09-03 11:00:24 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 . Sensitivity analysis for not-at-random missing data in trial-based cost-effectiveness analysis: a tutorial . PharmacoEconomics [ PubMed ] [ RePEc ] Published 20th April 2018 Last month, we highlighted a Bayesian [...]

2018-08-28

• More on capping direct payments
  by Alan Matthews in CAP Reform.eu, 2018-08-28 11:07:02 UTC

  I want to revert to the topic of the capping of direct payments under the CAP, which I last discussed here and here . It is not the most important issue in the Commission’s legislative proposals for the CAP after 2020. But the issue of the fairness of direct payments was raised as an issue in the CAP Communication, and the proposed capping has been defended as a significant step in the better targeting of these payments. There is thus some interest in asking how effective it is likely to be. The current situation The current situation reflecting the distribution of payments in claim year 2015 [...]

• Safeguarding Indonesia’s development from increasing disaster risks
  by ? in World Bank Blogs, 2018-08-28 08:53:00 UTC

  � New settlements in Sleman district post-eruption of Mt. Merapi. Imagine that you live near one of 127 active volcanoes in Indonesia, threatened by the next eruption that could endanger your family. Imagine that your house stands in one of th [...]

2018-08-27

• Mutual Funds, "Common Ownership" and Ownership Concentration
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2018-08-27 12:24:37 UTC

  Guest post by Richard Berner , Executive-in-Residence (Center for Global Economy and Business) and Adjunct Professor, NYU Stern School of Business America faces two interrelated long-term challenges: rising longevity and inadequate retirement saving. The combination of declining private, defined-benefit pension plans and concerns about the viability of federal entitlements has intensified these challenges. While the economic recovery has raised confidence about retirement resources at the margin (see here ), workers and retirees remain concerned about how they will meet future basic expenses, [...]

• Chris Sampson’s journal round-up for 27th August 2018
  by Chris Sampson in The Academic Health Economists' Blog, 2018-08-27 11:00:25 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 . Ethically acceptable compensation for living donations of organs, tissues, and cells: an unexploited potential? Applied Health Economics and Health Policy [ PubMed ] Published 25th August 2018 Around the world, [...]

• The IMF as a transmission mechanism for academic knowledge
  by Mainly Macro in Mainly Macro, 2018-08-27 08:30:00 UTC

  In my recent post on the ‘biggest policy mistake of the last decade’, I emphasised the irrelevance of the academic consensus on austerity if politicians did not want to listen. It was, inevitably, a picture painted with a broad brush. I did not discuss, for example, an element that should form part of the transmission mechanism for academic knowledge but didn’t, and that is European central banks. As I have discussed here , these central banks are full of economists applying state of the art macroeconomic knowledge, so they should be a source for the current academic consensus. But these centr [...]

2018-08-26

• Bonus Quotation of the Day…
  by Don Boudreaux in Cafe Hayek, 2018-08-26 00:17:47 UTC

  (Don Boudreaux) Tweet … is from page 589 of Douglas Irwin’s marvelous 2017 volume, Clashing Over Commerce (citation omitted; link added): [J. Michael] Finger argued that “antidumping is ordinary protection, albeit with a good public relations program” because it was based on the allegation of “unfair” foreign competition. DBx : Pictured here is the late J. Michael Finger. [...]

2018-08-23

• Saint Jane versus the Nimby
  by Jason Barr in Building the skyline, 2018-08-23 12:26:28 UTC

  Jason M. Barr     August 23, 2018 [Author’s note: This is the second of at least two blog posts about Jane Jacobs and her book, The Death and Life Great American Cities . The first one can be read here .]   The Visions of Saint Jane In 1961, Jane Jacob published her seminal book, The Death and Life of Great American Cities . In it, she decries large-scale interventions by the government, and promotes small-scale ideas to create diverse and vibrant neighborhoods. She believed in the power of the people to naturally bring order to the bustling city. Since then, Jacobs has become the Patron Saint [...]

2018-08-22

• Are asset price data informative about news shocks? A DSGE perspective
  by Christian Zimmermann in NEP-DGE blog, 2018-08-22 19:26:17 UTC

  By Nikolay Iskrev http://d.repec.org/n?u=RePEc:ptu:wpaper:w201802&r=dge Standard economic intuition suggests that asset prices are more sensitive to news than other economic aggregates. This has led many researchers to conclude that asset price data would be very useful for the estimation of business cycle models containing news shocks. This paper shows how to formally evaluate the information content of observed variables with respect to unobserved shocks in structural macroeconomic models. The proposed methodology is applied to two different real business cycle models with news shocks. The c [...]

• Rebuilding commercial society
  by chris in Stumbling and Mumbling, 2018-08-22 13:02:57 UTC

  We need Adam Smith more than ever. That’s the thesis of Jesse Norman’s new book, Adam Smith: What He Though And Why It Matters. To establish this, Norman first rescues Smith from the caricatures. He was not a free-market headbanger; he did not believe Britain was over-governed, had no doctrine of the “invisible hand” and “did not think free markets always served human well-being.” Nor was he a shill for the rich. He deplored the tendency to “admire, and almost to worship the rich”, favoured progressive taxes and thought (as did Marx) that some of the functions of the state worked “for the defe [...]

2018-08-20

• Koloniinstitutioner og moderne demokrati
  by Christian Bjørnskov in Punditokraterne, 2018-08-20 18:45:11 UTC

  Vi har tidligere skrevet om Bjørnskov-Rode databasen, og hvad den potentielt kan bruges til (læs f.eks. her, her og her ). Til både PEDD-konferencen i Münster og Public Choice Society i Charleston i år præsenterede jeg nye papirer, hvor vi bruger dele af databasen (Pedd-papiret kan nu læses her ). Det har paradoksalt nok taget længere tid at skrive et papir, der dokumenterer databasen og demonstrerer en af de væsentlige features. Martin Rode og jeg er nu endelig klar med det, og det er tilgængeligt under titlen ”Regimes and Regime Change: A New Dataset”, og kan hentes enten på min hjemmeside e [...]

• Sources of Finance: Internal versus External
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2018-08-20 12:13:28 UTC

  In the aftermath of the Great Financial Crisis, debt has taken center stage. When borrowing is either high or growing quickly, people see it as a danger sign. When individuals, firms or governments are heavily indebted, they have less flexibility in responding to unfortunate events. And, when borrowers default, lenders suffer as well. We should, therefore, anticipate that high debt can be a drag on growth . So, it ought not be surprising that borrowing can be difficult. In good times, households usually can obtain financing to purchase a house or car. But these loans are secured with collatera [...]

• Sam Watson’s journal round-up for Monday 20th August 2018
  by Sam Watson in The Academic Health Economists' Blog, 2018-08-20 12:00:54 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 . A Randomized Trial of Epinephrine in Out-of-Hospital Cardiac Arrest . New England Journal of Medicine. Published July 2018. Adrenaline (epinephrine) is often administered to patients in cardiac arrest in order t [...]

• 316 – Resources for agri-environmental schemes
  by David Pannell in Pannell Discussions, 2018-08-20 04:00:57 UTC

  I’ve been asked to present a talk in Ireland in two weeks, on the topic “The Design of Effective Agri-Environment Schemes”. In putting the talk together, it struck me that I (with help from colleagues) have developed quite a few resources in this space, so I’ve collected them on a new web site to make them easily accessible. Agri-environmental schemes (or programs or policies) aim to reduce the adverse impacts of agriculture on the environment. There are many such schemes around the world, but often they are not very efficient or effective. We could often do a lot better if we did a smarter jo [...]

2018-08-18

• Euro Area unemployment insurance at the time of zero nominal interest rates
  by Christian Zimmermann in NEP-DGE blog, 2018-08-18 00:56:45 UTC

  By Guillaume Claveres and Jan Stráský http://d.repec.org/n?u=RePEc:oec:ecoaaa:1498-en&r=dge The discussion about a fiscal stabilisation capacity as a way of providing more fiscal integration in the euro area has strengthened in the aftermath of the European sovereign debt crisis. Among the instruments that can be used for temporary macroeconomic stabilisation in the presence of both asymmetric and area-wide shocks, a euro area unemployment insurance scheme has attracted increased attention. We build a two-region DSGE model with supply, demand and labour market frictions and introduce in it an [...]

2018-08-16

• A ciascun debito la sua ristrutturazione
  by Silvia Marchesi e Tania Masi in La Voce, 2018-08-16 08:20:06 UTC

  Il nuovo piano concordato tra i governi dell’Eurozona prevede l’allungamento delle scadenze del debito greco ed esclude per ora riduzioni del suo valore nominale. Ma ogni rinegoziazione di debito sovrano ha caratteristiche specifiche, di cui tener conto. Il nuovo accordo con la Grecia Il 22 giugno, i governi europei hanno rinegoziato un accordo che prevede l’allungamento delle scadenze del debito greco e la concessione di nuove risorse finanziarie, ma esclude la riduzione del valore nominale del debito a scadenza. Christine Lagarde, direttore operativo del Fondo monetario internazionale, ha a [...]

2018-08-15

• Interest rate vs fiscal policy stabilisation
  by Mainly Macro in Mainly Macro, 2018-08-15 08:47:00 UTC

  One divide between mainstream and many heterodox economists is on whether monetary or fiscal policy should be used for macroeconomic stabilisation (controlling demand to influence inflation and output). What makes a good instrument in this context? As I have argued before , a key difference between the mainstream and MMT involves different answers to this question. I think the following issues are critical. How quickly do changes in the instrument (e.g. increases in interest rates) influence demand? How quickly can the instrument be changed? Are there limits to how far it can be changed? [...]

2018-08-14

• Protectionism for Liberals
  by Robert Skidelsky in Project Syndicate, 2018-08-14 10:20:17 UTC

  LONDON – Liberal revulsion at US President Donald Trump’s mendacious and uncouth politics has spilled over into a rigid defense of market-led globalization. To the liberal, free trade in goods and services and free movement of capital and labor are integrally linked to liberal politics. Trump’s “America First” protectionism is inseparable from his diseased politics. But this is a dangerous misconception. In fact, nothing is more likely to destroy liberal politics than inflexible hostility to trade protection. The upsurge of “ illiberal democracy ” in the West is, after all, the direct result o [...]

2018-08-09

• Cosa sappiamo del moltiplicatore keynesiano
  by keynesblog in Keynes Blog, 2018-08-09 14:35:26 UTC

  Riportiamo due ottimi articoli recenti di Francesco Saraceno sul dibattito relativo ai moltiplicatori fiscali. Il primo, tratto da LuissOpen, analizza la letteratura recente relativa all’entità dei moltiplicatori fiscali. Il secondo, tratta dal sito della Rivista “Il Mulino” è una critica ad un recente articolo di Cottarelli e Galli pubblicato dal Corriere della Sera. Che cosa ci dice il dibattito tra economisti sull’impatto di un piano di investimenti pubblici da LuissOpen   Una prima riflessione di Francesco Saraceno, autore di “La scienza inutile” (LUISS University Press 2018), sul piano [...]

• MMT is just plain old bad economics – Part 1
  by bill in Bill Mitchell - billy blog, 2018-08-09 08:48:15 UTC

  On August 6, 2018, British tax expert Richard Murphy who is becoming increasingly sympathetic to the principles of Modern Monetary Theory (MMT) published a blog post , which recorded an exchange with one James Meadway, who is the economics advisor to the Shadow Chancellor John McDonnell in Britain. The exchange took place on the social media page of a Labour Party insider who has long advocated a Land Tax, which McDonnell is on the public record as saying will “raise the funds we need” to help local government. He called it a “radical solution” ( Source ). An aside, but not an irrelevant one. [...]

• Labour’s fiscal rule is progressive
  by Mainly Macro in Mainly Macro, 2018-08-09 08:43:00 UTC

  I have seen a lot of things said about Labour’s fiscal credibility rule in the last few days which are simply wrong. I think the heart of the problem is that many heterodox economists do not believe in what I call the conventional or consensus assignment outwith the lower bound for interest rates. That conventional or consensus assignment [1] is that interest rates should be used to stabilise the economy rather than fiscal policy. The whole idea of independent central banks setting interest rates is predicated on this assignment. The assignment will not work when interest rates hit a lower bou [...]

2018-08-08

• Jane Jacobs: Libertarian?
  by Jason Barr in Building the skyline, 2018-08-08 12:43:24 UTC

  Jason M. Barr       August 9, 2018 [Author’s note: This is the first of at least two blog posts on Jane Jacobs and her book, The Death and Life of Great American Cities , published in 1961.]   With the resurgence of large cities like New York, San Francisco, Boston, and Chicago, it’s hard to imagine that not too long ago America’s cities were falling apart at the seams. In 1961, Jane Jacobs published her book, The Death and Life of Great American Cities , as an attempt to diagnose the problems and offer solutions. Today, Jacobs is revered among urbanists. She was a visionary—able to see—what o [...]

2018-08-07

• Ownership in question
  by chris in Stumbling and Mumbling, 2018-08-07 12:39:06 UTC

  What is the right form of ownership of a company? This is the question raised by Stan Kroenke’s proposal to buy all the remaining shares in Arsenal – a move described by the Arsenal Supporters Trust as “dreadful”. Viewed through the lens of some conventional economics, the AST’s objections seem misplaced because there are big pitfalls with dispersed ownership which can be solved by concentrating ownership into fewer hands. One of these is a lack of incentives. If a firm has many shareholders, it accounts for only a small fraction of the wealth of each owner. No owner therefore has a strong inc [...]

• Jak chronić pracowników bez wprowadzania ceł
  by Katarzyna Mokrzycka in Obserwator Finansowy, 2018-08-07 01:00:06 UTC

  To dobra wiadomość, że większość Amerykanów sprzeciwia się prezydentowi w tej kluczowej kwestii. Zagadką jest, dlaczego nawet 39 proc. badanych popiera taką politykę. Od czasu Wielkiego Kryzysu i II wojny światowej, a także Układu ogólnego w sprawie taryf celnych i handlu z 1947 r. Stany Zjednoczone – zarówno rząd, jak i obywatele – popierały wolny handel. Adam Smith , w książce z 1776 r. zatytułowanej „Bogactwo narodów” , przedstawił elokwentną i przekonującą argumentację za wolnym handlem, zamiast handlu zniekształconego przez cła. Dzięki wolnemu handlowi gospodarka kwitnie, ponieważ towary [...]

2018-08-06

• Is there a skills gap in the South? : Mapping education and unemployment across the U.S.
  by ? in FRED blog, 2018-08-06 13:00:08 UTC

  View on GeoFRED ® Much research has been published on the labor market transition from low-skill and routine jobs to high-skill and non-routine jobs at both a national and a local level. But is this job polarization occurring to the same degree across the country? A recent report co-sponsored by the St. Louis Fed looks at the issue of workforce development in light of this changing economy, especially in southern regions of the U.S. that typically rely more on a low-skilled and low-wage labor force. These GeoFRED maps show that the southern states typically have lower levels of educational att [...]

• Trump v. Fed
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2018-08-06 11:39:43 UTC

  “ Well, it's staying at zero because she's [former Fed Chair Janet Yellen] obviously political and doing what Obama wants her to do. […] I used to hope the Fed was independent. And the Fed is obviously not independent. It’s obviously not even close to being independent." Candidate Donald Trump, CNBC , September 12, 2016. “I put a very good man in the Fed. I don’t necessarily agree with it because he’s raising interest rates [...] I don't like all this work that we are putting in to the economy and then I see rates going up…. President Donald Trump, CNBC , July 19, 2018. “China, the European Un [...]

• Simon McNamara’s journal round-up for 6th August 2018
  by sjmcnamara1 in The Academic Health Economists' Blog, 2018-08-06 11:00:29 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 . Euthanasia, religiosity and the valuation of health states: results from an Irish EQ5D5L valuation study and their implications for anchor values . Health and Quality of Life Outcomes [ PubMed ] Published 31st [...]

2018-08-03

• The Aggregate Consequences of Tax Evasion
  by Christian Zimmermann in NEP-DGE blog, 2018-08-03 16:23:38 UTC

  By Alessandro Di Nola, Georgi Kocharkov, Almuth Scholl and Anna-Mariia Tkhir http://d.repec.org/n?u=RePEc:knz:dpteco:1806&r=dge There is a sizable overall tax gap in the U.S., albeit tax non-compliance differs sharply across income types. While only small percentages of wages and salaries are underreported, the estimated misreporting rate of self-employment business income is substantial. This paper studies how tax evasion in the self-employment sector affects aggregate outcomes and welfare. We develop a dynamic general equilibrium model with incomplete markets in which heterogeneous agents [...]

2018-08-02

• 2 julio 2018: el día en el que se destruyeron 504.630 afiliados y se crearon 519.126
  by J. Ignacio Conde-Ruiz in Nada Es Gratis, 2018-08-02 11:15:14 UTC

  de J. Ignacio Conde-Ruiz, Manu García, Luis Puch y Jesús Ruiz. ( Nota de los editores : A pesar de la "parada biológica", colaboradores y editores de NeG siguen atentos a la realidad. Y, a veces, ocurren cosas extraordinarias que, aunque bien conocidas, requieren ser puestas de relieve. Hoy se han publicado los datos de afiliación a la Seguridad Social del mes de julio pasado. Y nuestros colaboradores expertos en los efectos calendario de la dinámica laboral han encontrado un registro histórico. Un hecho extraordinario merece una entrada extraordinaria). Se acaban de publicar los datos de afil [...]

2018-08-01

• On the optimal design of a Financial Stability Fund
  by Christian Zimmermann in NEP-DGE blog, 2018-08-01 15:58:27 UTC

  By Arpad Abraham, Eva Carceles-Poveda, Yan Liu and Ramon Marimon http://d.repec.org/n?u=RePEc:nys:sunysb:18-06&r=dge A Financial Stability Fund set by a union of sovereign countries can improve countries’ ability to share risks, borrow and lend, with respect to the standard instrument used to smooth fluctuations: sovereign debt financing. Efficiency gains arise from the ability of the fund to offer long-term contingent financial contracts, subject to limited enforcement (LE) and moral hazard (MH) constraints. In contrast, standard sovereign debt contracts are uncontingent and subject to untime [...]

2018-07-31

• Nonlinear household earnings dynamics, self-insurance, and welfare
  by Christian Zimmermann in NEP-DGE blog, 2018-07-31 13:51:19 UTC

  By Mariacristina De Nardi, Giulio Fella and Gonzalo Paz-Pardo http://d.repec.org/n?u=RePEc:cfm:wpaper:1817&r=dge Earnings dynamics are much richer than typically assumed in macro models with heterogeneous agents. This holds for individual-pre-tax and household-post-tax earnings and across administrative (Social Security Administration) and survey (Panel Study of Income Dynamics) data. We study the implications of two processes for household, post-tax earnings in a standard life-cycle model: a canonical earnings process (that includes a persistent and a transitory shock) and a rich earnings dyn [...]

• The Venality of Evil
  by Ricardo Hausmann in Project Syndicate, 2018-07-31 11:04:39 UTC

  CAMBRIDGE – On July 23, Alejandro Werner, the Director of the International Monetary Fund’s Western Hemisphere Department, announced that the Fund was expecting inflation in Venezuela to reach 1,000,000% by year’s end. In April, the IMF announced that Venezuela’s GDP was expected to be 45% below its 2013 level by the same time. These are mindboggling numbers. How and why could such a thing happen? Science is better at answering “how” questions than “why” questions. Gravity explains how celestial bodies attract each other at a distance, but it does not tell us why. That is a question for metaph [...]

2018-07-30

• Housing Taxation and Financial Intermediation
  by Christian Zimmermann in NEP-DGE blog, 2018-07-30 15:56:45 UTC

  BY Hamed Ghiaie and Jean-François Rouillard http://d.repec.org/n?u=RePEc:shr:wpaper:18-01&r=dge Through the lens of a multi-agent dynamic general equilibrium model, we examine the effects of four permanent changes in housing taxes and deductions on macroeconomic aggregates and welfare. Our main result is that the presence of borrowing-constrained bankers dampen the negative consequences of housing taxation on output. The long-run tax multipliers found range from -1.02 to -0.6. The reduction in the deduction of mortgage interest payments delivers the lowest multiplier. We also implement reven [...]

• GDP: One size no longer fits all
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2018-07-30 12:33:44 UTC

  Following Friday’s announcement that real gross domestic product (GDP) grew by 4.1 percent (at a seasonally adjusted annual rate) in the most recent quarter, the business news was filled with stories about how big the number was. Even the most casual reader of financial and economic news knows that the speed of economic growth matters. Businesses―manufacturers, service providers, and retailers, among others―need to know so that they can decide how much to invest in new production facilities, how many people to employ, and what to stock on their shelves. Fiscal policymakers need to know so that [...]

• How radio can help empower women in Niger
  by ? in Forum:Blog, 2018-07-30 10:14:56 UTC

  Niger's prominent radio culture is giving women a platform to speak out against gender inequality. [...]

2018-07-29

• Some General Interest Reading in Climate Change Economics
  by Matthew Kahn in Environmental and Urban Economics, 2018-07-29 14:55:00 UTC

  Here are some suggested readings for those who want to learn about climate change economics. I name 3 books and one free article of mine. Here is Nordhaus' book on greenhouse gas mitigation� https://www.amazon.com/dp/B00G2C1374/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1 Here is my 2010 book on climate change adaptation https://www.amazon.com/gp/product/0465063837/ref=dbs_a_def_rwt_bibl_vppi_i4 Here is Wagner and Weitzman's book on climate change and risk. https://www.amazon.com/dp/B0175F6I8U/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1 Here is a free paper of mine that offers some key intuit [...]

2018-07-26

• Method of the month: Shared parameter models
  by Sam Watson in The Academic Health Economists' Blog, 2018-07-26 06:00:40 UTC

  Once a month we discuss a particular research method that may be of interest to people working in health economics. We’ll consider widely used key methodologies, as well as more novel approaches. Our reviews are not designed to be comprehensive but provide an introduction to the method, its underlying principles, some applied examples, and where to find out more. If you’d like to write a post for this series, get in touch . This month’s method is shared parameter models . Principles Missing data and data errors are an inevitability rather than a possibility. If these data were missing as a res [...]

2018-07-25

• The “Parabox”: Glass Skyscrapers and the City
  by Jason Barr in Building the skyline, 2018-07-25 12:52:44 UTC

  Jason M. Barr      July 25, 2018 From my eighth-floor office in Newark, New Jersey, I have a view of the Manhattan skyline. On a clear day, I can see One World Trade Center and the Empire State Building. I can also see much of downtown Newark, which, in many respects, is a typical central business district in a mid-size city. A few years ago, Prudential Insurance Company began building a new office building a few blocks from the Rutgers-Newark campus. Prudential has been a vital business to Newark since its founding in 1875. It remained in the city long after other companies fled in the 1960s [...]

2018-07-24

• Migration and Business Cycle Dynamics
  by Christian Zimmermann in NEP-DGE blog, 2018-07-24 12:54:28 UTC

  By Christie Smith and Christoph Thoenissen http://d.repec.org/n?u=RePEc:shf:wpaper:2018006&r=dge Shocks to net migration matter for the business cycles. Using an estimated dynamic stochastic general equilibrium (DSGE) model of a small open economy and a structural vector autoregression, we find that migration shocks account for a considerable proportion of the variability of per capita GDP. Migration shocks matter for the capital investment and consumption components of per capita GDP, but they are not the most important driver. Migration shocks are also important for residential investment [...]

• “Eliminating Uncertainty in Market Access: The Impact of New Bridges in Rural Nicaragua,” W. Brooks & K. Donovan (2018)
  by afinetheorem in A Fine Theorem, 2018-07-24 07:46:30 UTC

  It’s NBER Summer Institute season, when every bar and restaurant in East Cambridge, from Helmand to Lord Hobo, is filled with our tribe. The air hums with discussions of Lagrangians and HANKs and robust estimators. And the number of great papers presented, discussed, or otherwise floating around inspires. The paper we’re discussing today, by Wyatt Brooks at Notre Dame and Kevin Donovan at Yale SOM, uses a great combination of dynamic general equilibrium theory and a totally insane quasi-randomized experiment to help answer an old question: how beneficial is it for villages to be connected t [...]

2018-07-23

• Bank Capital and Stress Tests: The Foundation of a Thriving Economy
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2018-07-23 11:26:07 UTC

  We submitted this statement to the Subcommittee on Financial Institutions and Consumer Credit of the Committee on Financial Services of the U.S. House of Representatives for its hearing on July 17, 2018. We appreciate the opportunity to submit the following statement on the occasion of the hearing entitled “Examining Capital Regimes for Financial Institutions.” We welcome the Subcommittee’s further examination of the existing regulatory approach for prudentially regulated financial institutions. We are academic experts in financial regulation with extensive knowledge of the financial industry. [...]

2018-07-20

• Capitalism as a fetter
  by chris in Stumbling and Mumbling, 2018-07-20 12:30:34 UTC

  I was a little disappointed to see Tony Yates’ reaction to Aaron Bastani: Can we ditch 6th form debates and have someone arguing for evidenced based improvements to our policy portfolio please? My disappointment is the failure to see that there is, if you like, a third way between utopian communism on the one hand and technocratic tweaks on the other. It begins from the idea that ten years of stagnant productivity might mean we are now at the phase of capitalism that Marx foresaw : At a certain stage of development, the material productive forces of society come into conflict with the exist [...]

2018-07-19

• Thesis Thursday: Thomas Hoe
  by Chris Sampson in The Academic Health Economists' Blog, 2018-07-19 06:00:52 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 Thomas Hoe 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 Essays on the economics of health care provision Supervisors Richard Blundell , Orazio Attanasio Repository link http://discovery.ucl.ac.uk/10048627/ What data do you use in your analyses and what are your main analytical methods? I use data from the English National Health Service (NHS). One of the great features [...]

2018-07-18

• Nuances about Using the Supply and Demand Model in Urban Economics
  by Matthew Kahn in Environmental and Urban Economics, 2018-07-18 16:10:00 UTC

  The economist's model of supply and demand is pretty straightforward but in this brief post I would like to highlight a few twists that urban economics offers.� These twists make urban economics a really interesting (and challenging) field.� �Economists are a type of detective. We observe market prices and quantities and how they change over time.� Like a detective, we want to know why prices and quantities have changed. We have two "prime suspects" called supply and demand. In housing economics, the price is monthly rent and the quantity is the number of units of housing.� Building on the inf [...]

• On justifying policies
  by chris in Stumbling and Mumbling, 2018-07-18 13:24:12 UTC

  Much as I like Ash Sarker, I’m not happy with this recent thread of hers: Lots of people have asked what I mean when I say I’m a communist. What I mean is that in the next 15 years, 1 in 5 jobs in the UK will be automated (1 in 3 in the North, and 40% in Hayes & Harlington). What does that mean for workers? it means that *either* 1 in 5 people are excluded from the means of survival, are consigned to the scrapheap and increasingly authoritarian and violent means are employed by the state to manage surplus populations. Or... we find a means to distribute the abundance generated by fixed capita [...]

2018-07-17

• How to Protect Workers Without Trade Tariffs
  by Robert J. Shiller in Project Syndicate, 2018-07-17 15:24:22 UTC

  NEW HAVEN – According to a Washington Post/Schar School poll of Americans published on July 11, only 39% of respondents approved of US President Donald Trump’s imposition of tariffs on foreign countries, while 56% were opposed. But, while it’s good news that a majority of Americans oppose their president on this key issue, Trump is plunging ahead, apparently thinking the public will like the tariffs better when they are in place. It is a puzzle why even 39% support these policies. Ever since the Great Depression and World War II, and the 1947 General Agreement on Tariffs and Trade, the United [...]

2018-07-16

• Why Women Volunteer for Tasks That Don’t Lead to Promotions
  by Linda Babcock in HBR Blog Network, 2018-07-16 13:21:13 UTC

  Helen King/Getty Images Here’s a work scenario many of us know too well: You are in a meeting and your manager brings up a project that needs to be assigned. It’s not particularly challenging work, but it’s time-consuming, unlikely to drive revenue, and probably won’t be recognized or included in your performance evaluation. As your manager describes the project and asks for a volunteer, you and your colleagues become silent and uneasy, everyone hoping that someone else will raise their hand. The wait becomes increasingly uncomfortable. Then, finally, someone speaks up: “Okay, I’ll do it.” [...]

• Cyber Instability
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2018-07-16 12:36:25 UTC

  “[W ]e should see the global payment system for what it really is: an essential global public good whose integrity is increasingly being challenged by malicious cyberattacks and fraud attempts....” Benoît Cœuré, Member of the Executive Board of the ECB, Speech , 26 June 2018 “I rob banks because that’s where the money is.” Attributed to Willie Sutton . When terrorists attacked the World Trade Center on September 11, 2001, they also attacked the U.S. financial system. In addition to destroying critical financial infrastructure, the collapse of the twin towers closed the New York Stock Exchange [...]

• Harold Hastings’s journal round-up for 16th July 2018
  by hmhastings in The Academic Health Economists' Blog, 2018-07-16 11:00:51 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 . Legal origins and female HIV . American Economic Review [ RePEc ] Published 13th June 2018 I made this somewhat unusual choice because the author Siwan Anderson draws an important connection between the economic [...]

2018-07-13

• How having unemployed parents affects children’s future well-being
  by Milena Nikolova, Boris Nikolaev in Up Front, 2018-07-13 21:35:38 UTC

  By Milena Nikolova, Boris Nikolaev For many people, job loss can be a catastrophe with far-reaching negative psychological and economic consequences. Unemployment leads to lower earnings, worse physical and mental health, and lasting unhappiness for those directly affected. The negative psychological consequences of unemployment can even spill over to spouses and children . In a novel research paper , forthcoming in the Journal of Economic Behavior and Organization , we also show that parental unemployment during childhood can have long-term consequences for adult children’s psychological well [...]

2018-07-10

• The Manhattan Skyline during the Roaring Twenties
  by Jason Barr in Building the skyline, 2018-07-10 12:27:50 UTC

  Jason M. Barr        July 10, 2018 Author’s note: The paperback of Building the Skyline: The Birth and Growth of Manhattan’s Skyscrapers was recently released. This blog post has been adapted from Chapter 9 of the book. The Roaring Twenties remains a mythical time in American culture—an age of danger, of heroes, of unrestraint. Charles Lindbergh flew solo across the Atlantic Ocean. Clandestine speakeasies served bathtub gin to flappers, swinging to the new jazz music. Babe Ruth became the Sultan of Swat. And supertall skyscrapers sprouted upwards like Jack’s beanstalk. Though the skyscraper wa [...]

2018-07-09

• Is college still worth it? : Re-examining the college premium
  by ? in FRED blog, 2018-07-09 13:00:40 UTC

  A recent symposium held by the Center for Household Financial Stability at the St. Louis Fed looks at the question of whether the college premium is still increasing and positive, using new data from the Fed’s  Survey of Consumer Finances . On an absolute level, college graduates earn more than high school graduates, as shown in the graph above. This is consistent with the understanding that the benefits of a college education are greater than the costs. If we look at the college premium, we can see that it has always been positive, indicating that there is a positive benefit of graduating w [...]

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