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- Osborne's wage squeeze
by chris in Stumbling and Mumbling, 2015-11-26 14:34:58 UTC
In the 2009 Pre-Budget Report the Labour government proposed a rise in employers' National Insurance Contributions. David Cameron said the measure was a "jobs killer" and George Osborne attacked it as a "tax rise on jobs" that "will stamp out the green shoots and kill the recovery."
Yesterday, Mr Osborne announced his own tax rise on jobs by introducing an Apprenticeship Levy.
It is this, and not just the money the OBR has magically discovered behind the sofa, which is paying for his tax credits U-turn. It will raise the Treasury £2.7bn in 2017-18 - very close to the £2.9bn that the restora [...]
- On the desirability of capital controls
by Christian Zimmermann in NEP-DGE blog, 2015-11-24 16:37:46 UTC
By Fabrizio Perri and Jonathan Heathcote
In a standard two country international macro model we ask whether shutting down the market for international non-contingent borrowing and lending is ever desirable. The answer is yes. Imposing capital controls is unilaterally desirable when initial conditions are such that ruling out bond trade generates a sufficiently favorable change in the expected path for the terms of trade. Imposing capital controls can be welfare improving for both countries for calibrations in which changes in equilibrium terms [...]
- The UN’s Coming Paris Folly: Part 1
by rbezdek in MasterResource, 2015-11-24 07:00:32 UTC
“The UN’sÂ ‘Deep Decarbonization Pathways’ …Â will require a radical transformation of economic and energy systems by 2050, through massive declines in carbon intensity in all sectors. It is not about modest or incremental change [but] …Â major changes in every countryâs energy and production systems , over both the mid-term and long-term.”
Radical Islamist terrorists just maimed and murdered hundreds of people in Paris, dozens more in Mali, still more in other nations. They promise more atrocities in the United States and around the globe.
Meanwhile some 40,000 bureaucrats, politicians, sc [...]
- Les terroristes sont-ils des agents rationnels ?
by Thomas Renault in Contrepoints, 2015-11-24 06:00:23 UTC
Par Thomas Renault.
Phrenology credits Ryan Somma (CC BY 2.0)
AprÃ¨s l’atrocitÃ© des attentats du 13 novembre, tenter d’analyser de maniÃ¨re « Ã©conomique » le terrorisme peut sembler totalement dÃ©placÃ©… IlÂ est vrai que les Ã©conomistes ne sont pas de grands psychologues, et encore moins des experts militaires ! Mais un Ã©conomiste, en tant que « chercheur », sait tout de mÃªme faire deux choses assez utiles (enfin normalement)Â : modÃ©liser une situation et collecter des donnÃ©es pour tester diffÃ©rentes hypothÃ¨ses.Â Bien qu’ayant clairement de nombreuses limites, l’analyse Ã©conomique du [...]
- What caused the Great Recession ?
by Robert in Robert's Stochastic Thoughts, 2015-11-23 21:41:00 UTC
A short comment on a shorter comment on Krugman's short comment on "The Big Short" Comment FSP asked a question FSP Los Angeles 41 minutes ago My question is this: Would the Lesser Depression have occurred if we did not have the "financial superstructure" of sub-prime backed securities, and just had instead the bursting of a housing bubble, without the implosion of those financial products adding to the problem? Or, can the two not be separated? I think at least a rough attempt to separate the two factors (housing bubble and financial superstructure) can be managed. Dean Baker has definitely [...]
- Where is the growth?
by tambo0986 in NEP-HIS blog, 2015-11-23 17:21:08 UTC
Mismeasuring Long Run Growth: The Bias from Spliced National Accounts
by Leandro Prados de la Escosura (Carlos III)
Abstract: Comparisons of economic performance over space and time largely depend on howÂ statistical evidence from national accounts and historical estimates are spliced. To allowÂ for changes in relative prices, GDP benchmark years in national accounts are periodicallyÂ replaced with new and more recent ones. Thus, a homogeneous long-run GDP seriesÂ requires linking different temporal segments of national accounts. The choice of theÂ splicing procedure may result in substan [...]
- On Bayesian DSGE Modeling with Hard and Soft Restrictions
by Francis Diebold in No Hesitations, 2015-11-23 11:57:00 UTC
A theory is essentially a restriction on a reduced form. It can be imposed directly (hard restrictions) or used as as a prior mean in a more flexible Bayesian analysis (soft restrictions). The soft restriction approach -- "theory as a shrinkage direction" -- is appealing: coax parameter configurations toward a prior mean suggested by theory, but also respect the likelihood, and govern the mix according to prior precision. (1) Important macro-econometric DSGE work, dating at least to the classic Ingram and Whiteman (1994) , finds that using theory as a VAR shrinkage direction is helpful for for [...]
- Zimbabwe's new bond coins and the demonetization of the rand
by JP Koning in Moneyness, 2015-11-21 18:17:00 UTC
Issued a little less than a year ago, Zimbabwe's bond coin is one of the world's newest monetary units. The bond coin is designed to solve one of the most venerable problems in the pantheon of monetary conundrums; the big problem of small change —a nice turn of phrase coined by economists Tom Sargent and François Velde (excuse the pun). Some background first. When Zimbabweans spontaneously ceased to use worthless Zimbabwe dollars in 2009 they simultaneously adopted a ragtag collection of currencies including the South African rand and U.S. dollar. Unlike cash, coins are heavy—shipping the [...]
- How Should State Governments Prepare for Climate Change?
by Matthew Kahn in Environmental and Urban Economics, 2015-11-19 15:25:00 UTC
While the challenges vary on a state by state basis, here is o ne current report card grading states on their preparation for climate change. �Here I list a set of "free market" policies to facilitate adaptation. �For those who have read my 2010 Climatopolis book , this will be familiar. 1. �Sign up more households, farmers, industrial and agricultural customers for dynamic pricing of water and electricity. �By exposing consumers to dynamic pricing, this will encourage conservation and purchasing more resource efficient durables. The net effect will be that heat waves and drought cause less "s [...]
- Foreign exchange intervention
by ? in FRED blog, 2015-11-19 14:00:36 UTC
Foreign exchange intervention is the buying and selling of foreign currencies by central banks and finance ministries to influence the value of their own currencies. It has become rare for developed countries to intervene in foreign exchange markets. The last U.S. intervention in the foreign exchange market was in March 2011, as part of the G3 intervention with Japan and the European Central Bank ( Neely, 2011 ).
In the bad old days, it was very difficult for researchers to obtain data on foreign exchange intervention, which central banks and finance ministries often treated as confidential. [...]
- I'm at that point in my career where I'm ready to do something absolutely crazy
by John Whitehead in Environmental Economics, 2015-11-19 11:06:26 UTC
And, as always,�Matt Kahn makes a timely suggestion:
In the past, I've done s ome writing on social capital and civic engagement. � I just put the theory to the test by volunteering to serve on USC Econ's PHD Admissions Committee. � � �USC Economics is world renown for its excellence in econometrics. � With Antonio Bento, Dana Goldman, me and Arie Kapteyn now all at USC (and many other research active Price School faculty) , �a talented student can take his/her knowledge of econometrics and apply it to the economics of aging, health, the environment and cities. �There are many exciting possib [...]
- The Commodity Roller Coaster
by Carmen Reinhart in Project Syndicate, 2015-11-19 10:52:25 UTC
CAMBRIDGE – The global commodity super-cycle is hardly a new phenomenon. Though the details vary, primary commodity exporters tend to act out the same story, and economic outcomes tend to follow recognizable patterns. But the element of predictability in the path of the commodity-price cycle, like that in the course of a roller coaster, does not make its twists and turns any easier to stomach.
Since the late eighteenth century, there have been seven or eight booms in non-oil commodity prices, relative to the price of manufactured goods. (The exact number depends on how peaks and troughs are [...]
- Regulatory arbitrage in action: evidence from cross-border lending and macroprudential policy
by bankunderground in Bank Underground, 2015-11-19 07:30:56 UTC
Dennis Reinhardt and Rhiannon Sowerbutts.
We find evidence that certain types of macroprudential regulation are avoided by borrowing from abroad. Borrowing by the non-bank sector from abroad increases after an increase in capital requirement, but not after an increase in lending standards. This is likely to be because of the way that the two regulations are applied and is supportive of strong frameworks for reciprocating capital regulation.
Following the global financial crisis macroprudential policies have become part of many central banks’ toolkits. These instruments are being used actively [...]
- Apply to USC Econ's PHD Program
by Matthew Kahn in Environmental and Urban Economics, 2015-11-18 21:01:00 UTC
In the past, I've done s ome writing on social capital and civic engagement. � I just put the theory to the test by volunteering to serve on USC Econ's PHD Admissions Committee. � � �USC Economics is world renown for its excellence in econometrics. � With Antonio Bento, Dana Goldman, me and Arie Kapteyn now all at USC (and many other research active Price School faculty) , �a talented student can take his/her knowledge of econometrics and apply it to the economics of aging, health, the environment and cities. �There are many exciting possibilities and permutations here. �I strongly encourage s [...]
- Unions in a Frictional Labor Market
by Christian Zimmermann in NEP-DGE blog, 2015-11-18 14:55:34 UTC
By Leena Rudanko and Per Krusell
We analyze a labor market with search and matching frictions where wage setting is controlled by a monopoly union. Frictions render existing matches a form of firm-specific capital which is subject to a hold-up problem in a unionized labor market. We study how this hold-up problem manifests itself in a dynamic infinite horizon model, with fully rational agents. We find that wage solidarity, seemingly an important norm governing union operations, leaves the unionized labor market vulnerable to potentially substa [...]
- Keynes' error
by chris in Stumbling and Mumbling, 2015-11-18 14:08:42 UTC
Why was Keynes wrong? In his 1930 essay (pdf) , Economic possibilities for our grandchildren he predicted that:
the standard of life in progressive countries one hundred years hence will be between four and eight times as high as it is to-day.
This looks like being spot-on: real UK GDP per head is now 5.2 times what it was in 1930.
However, Keynes made another forecast that has been wrong - that the average working week would fall to around 15 hours. In fact, it is more than twice that. What's more, it is now falling much more slowly than it did in Keynes' time: in the last 20 years it has [...]
- GDP as a Faulty Measure of Economic Development: The Weapons Industry
by email@example.com (David Zetland) in Aguanomics, 2015-11-17 13:01:00 UTC
Laurens S. writes* Gross Domestic Product (GDP) is the most widely used measure of economic activity in the market ( Stiglitz et al. 2009 ). GDP makes no distinction between well-being enhancing activities in the economy and well-being degrading activities. Both are considered equal and more economic activity means in either case a higher GDP. Governments and other organisations often present GDP as a measure of well-being. They assume thereby that more goods in general equates more welfare. This blog post will try to argue why equating GDP with welfare is a dangerous equation, as it enables o [...]
- Neoliberalism: A Cultural Social Construction
by stefanotijerina in NEP-HIS blog, 2015-11-17 09:45:16 UTC
Crisis Without End: Neoliberalism in a Globalized Environment
by Richard N. Rambarran (University of Hyderabad)
Abstract: Since the 1970âs, both politically and theoretically, neoliberalism as an ideology has been on a persistent rise to the point where, in the twenty first century, it has garnered hegemonic dominance. Despite several recurring crises in countries since the ascendance of neoliberalism, we yet remain reluctant to point out the political economy philosophy as a root cause of the crises. Instead, many of the academics within Economics prefer to offer bouts of highly technical r [...]
- 287 – Farmers like trees
by David Pannell in Pannell Discussions, 2015-11-16 15:00:23 UTC
In most parts of the world, the original establishment of farms required removal of the existing vegetation, creating a different, much less natural, environment. There can be a tendency for some people to view farmers as people who don’t value the environment, but rather seek to destroy it for economic gain. In fact, many farmers have a strong affinity for nature. They have to make a living from their land, but that doesn’t mean they are indifferent to the environment around them.
In a recent study in the Australian state of Victoria (Polyakov et al. 2015), we found that farmers and other rur [...]
- A Primer on Central Bank Independence
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2015-11-16 12:24:31 UTC
"These are my principles. If you don't like them... well, I have others." (Groucho Marx) Central bank independence is controversial. It requires the delegation of powerful authority to a group of unelected officials. In a democracy, this anomaly naturally raises questions of legitimacy. It also raises fears of the concentration of power in the hands of a select few. An independent central bank is a device to overcome the problem of time consistency: the concern that policymakers will renege in the future on a policy promise made today. Keeping inflation low and stable requires a credible polic [...]
- Wrapping up ARC DP12 Project
by firstname.lastname@example.org (David Stern) in Stochastic Trend, 2015-11-15 11:15:00 UTC
I just submitted the final report for this funded project which has been running since 2012 to the research office. We achieved most of the project goals despite receiving much less funding than requested. I also had to take on the role of research director for the Crawford School for 2 years of the project, which took up quite a lot of my time. On the other hand, one of the main papers is still not quite complete and another is in the revise and resubmit stage. We haven't yet put out working papers for either of those papers either. So, the reduced funding and added admin work did slow things [...]
- Descifrando el Plan Económico de Scioli
by Andrés Neumeyer in Foco Económico, 2015-11-14 03:02:00 UTC
El candidato presidencial Scioli ha prometido en la campaÃ±a no hacer un ajuste fiscal , no devaluar, aumentar las reservas, mantener el cepo y liberarlo gradualmente. Â¿Es posible llevar a cabo tal plan? Â¿CuÃ¡l serÃa la tasa de inflaciÃ³n?
En esta nota voy a interpretar las propuestas econÃ³micas de Scioli utilizando un modelo monetario simple en el que incorporo las restricciones impuestas por el cepo cambiario.
Un modelo monetario de una economÃa con tipo de cambio dual
El modelo de Â una economÃa con tipo de cambio dual que voy a usar fue desarrollado en los aÃ±os 80 (ver referencias a [...]
- Optimal Unemployment Insurance and Cyclical Fluctuations
by Christian Zimmermann in NEP-DGE blog, 2015-11-13 14:31:54 UTC
By Rui Li and Noah Williams
The authors study the design of optimal unemployment insurance in an environment with moral hazard and cyclical fluctuations. The optimal unemployment insurance contract balances the insurance motive to provide consumption for the unemployed with the provision of incentives to search for a job. This balance is affected by aggregate conditions, as recessions are characterized by reductions in job finding rates. We show how benefits should vary with aggregate conditions in an optimal contract. In a special case of th [...]
- “Austeriani” e “appellisti”: le due favole sull’austerità
by Alberto Bagnai in Goofynomics, 2015-11-12 13:52:00 UTC
(... la traduzione in italiano del mio intervento sul magazine That sinking feeling . Enjoy responsibly ...) Secondo il Wikizionario, si intende per austerità un “atteggiamento e comportamento personale rigido e, a volte, intransigente nel contenere i desideri, le esigenze, le abitudini e il contegno”. La prima domanda che dovremmo porci quando parliamo di austerità è perché mai per descrivere uno strumento di politica economica (sostanzialmente, politiche di tagli alla spesa pubblica) si utilizzi una parola che trasmette un giudizio di valore positivo. L’austerità, in linea di pri [...]
- Business rates and the Scottish economy
by Brian Ashcroft in Scottish Economy Watch, 2015-11-12 13:51:58 UTC
Magnus Gardham writes in the Herald on Tuesday 10 November that
'Some of Britain's biggest retailers have warned stores could be forced to shed jobs in Scotland unless business rates are overhauled. Boots, Marks & Spencer and John Lewis are among 40 firms and business organisations that have called for a fundamental reform of non-domestic rates . They say business rates, which raise £2.8billion, place an "unsustainable burden" on them. In an open letter to The Herald, they describe rates as "a tax on jobs and growth" that "acts as a drag on the Scottish economy".
Gardham al [...]
- Our watershed… opportunity
by Johan Fourie in Johan Fourie's Blog, 2015-11-12 07:44:13 UTC
SlingShot: Could this device make water infrastructure redundant?
South Africans are gearing up for a tough summer. While loadshedding (the frequent power shortages that plagued the country since 2008) has eased, a new issue came to the fore this week: watershedding. In areas of GermistonÂ and the East Rand, water shortages have been reported and watershedding between 10am and 3pm is on the cards. While the heatwave and drought across the country are the immediate cause of the shortages, there are far deeper structural problems that is likely to make watershedding a common feature of daily lif [...]
- A Better Way to Calculate the ROI of Your Marketing Investment
by Werner Reinartz in HBR Blog Network, 2015-11-10 17:00:50 UTC
Traditionally, marketers calculate the ROI of a marketing investment by measuring how much sales increased in its aftermath. This is a blunt metric: maybe the consumer had a different interaction with the brand that influenced them. Or maybe they had an intrinsic preference for the brand and would have made a purchase anyway.
Today the situation has changed. Marketers have access to data that allows them to track individuals’ various interactions with a brand before their purchase, and better understand what role each interaction — and individual preferences — played in the eventual sale.
- Disciplining the Human Capital Model: Learning By Doing, Ben-Porath, and Policy Analysis
by Christian Zimmermann in NEP-DGE blog, 2015-11-10 16:40:56 UTC
By Adam Blandin
The human capital literature is largely split between two models of human capital investment: Learning By Doing (LBD) and Ben-Porath (BP). Given the importance of human capital investment for a host of policy issues, I ask whether observable macroeconomic moments are informative about the relative importance of LBD investment versus BP investment. A life-cycle human capital model is constructed which nests both LBD and BP as extreme special cases. I find: (1) Both the BP and LBD versions of the model are consistent with the agg [...]
- Diseguaglianza: si tramanda di padre in figlio
by Lavoce.info in Il Fatto Quotidiano, 2015-11-10 14:18:30 UTC
In molti paesi a una forte diseguaglianza si accompagna l’ereditarietà nelle posizioni economiche e sociali. Perché le famiglie con reddito più alto investono di più nel capitale umano dei figli. E perché hanno connessioni sociali che permettono l’accesso a occupazioni e retribuzioni migliori.
di Maria De Paola ( lavoce.info )
La curva del grande Gatsby
Nel libro La grande fuga. Salute, ricchezza e le origini della disuguaglianza , il neo-premio Nobel Angus Deaton spiega che nonostante oggi la vita sia “meno dura di quanto sia forse mai stata nel corso della storia”, il mondo è [...]
- Di padre in figlio: così si tramanda la diseguaglianza
by Maria De Paola in La Voce, 2015-11-10 08:19:44 UTC
In molti paesi a una forte diseguaglianza si accompagna lâereditarietÃ nelle posizioni economiche e sociali. PerchÃ© le famiglie con reddito piÃ¹ alto investono di piÃ¹ nel capitale umano dei figli. E perchÃ© hanno connessioni sociali che permettono lâaccesso a occupazioni e retribuzioni migliori.
La curva del grande Gatsby
Nel libro La grande fuga. Salute, ricchezza e le origini della disuguaglianza , il neo-premio Nobel Angus Deaton spiega che nonostante oggi la vita sia âmeno dura di quanto sia forse mai stata nel corso della storiaâ, il mondo Ã¨ sempre attraversato da âdiseguag [...]
- Green Power Creates Free Electricity in Texas: Will this Increase Night Industrial Economic Activity?
by Matthew Kahn in Environmental and Urban Economics, 2015-11-09 15:30:00 UTC
The NY Times r eports that Texas households are being offered free electricity after 9pm because wind power generators are generating a surplus that cannot be stored and the physics of the local grid (which is not connected to the national grid) are such that the power must just flow and be consumed locally. � Suppose that Texas could commit to low industrial night electricity prices. �This would create a large economic incentive for energy intensive industries to locate in this Right to Work State. For a list of such industries, read my 2013 paper with Erin Mansur. � � � If such industries su [...]
- 286 – Marine reserves and tourism benefits
by David Pannell in Pannell Discussions, 2015-11-09 15:00:35 UTC
Last year I made my first visit to Coral Bay, part of the Ningaloo Reef in the north-west of Western Australia. It was stunning to snorkel on the reef and see the richness of marine life there. One reason itâs so amazing is that the area is protected from all forms of fishing.
Coral Bay and nearby Exmouth are economically dependent on tourism. Without the systems in place to protect the reef, there would still be tourism, but surely not as much. This is one of the arguments in favour of establishing and enforcing marine protected areas, in addition to the benefits for fishers that I discusse [...]
- Lies we've told our children
by chris in Stumbling and Mumbling, 2015-11-09 13:58:30 UTC
The possibility of a strike by junior doctors has more profound political significance than generally realized.
What I mean is that we should regard Jeremy Hunt's proposal to change their working conditions as part of a general trend - resulting from both market and state action - for "good" jobs to decline in quality. This happened long ago to journalists , but we're seeing it among criminal lawyers where cuts to legal aid are depressing already-modest pay and among academics who face increasingly stressful demands to act as money-grubbers and coppers as well as intellectuals. And even the be [...]
- Learning from Japan: It's Hard to End a Deflation
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2015-11-09 13:27:57 UTC
In 1974, when the Fed faced rising inflation, the U.S. government sought to “Whip Inflation Now” by encouraging people to wear “WIN” buttons. Today, the problem is reversed. Several central banks are having trouble creating inflation. Unfortunately, we doubt that “SIN” buttons – “Support Inflation Now” – will be any more effective than the earlier variety, which served mainly as fodder for late-night comedy. As has been the case for some time, Japan is blazing the trail into the monetary and fiscal unknown. Today’s Bank of Japan’s (BoJ) leadership is far more determined [...]
- Case-Deaton and the human capital debate
by Noah Smith in Noahpinion, 2015-11-09 12:41:00 UTC
Everyone is talking about the Case-Deaton paper that shows an increase in mortality among American white people. Most people have noted that the increase is concentrated among less-educated whites. Here is the relevant excerpt from the paper: The three numbered rows of Table 1 show that the turnaround in mortality for white non-Hispanics was driven primarily by increasing death rates for those with a high school degree or less. All-cause mortality for this group increased by 134 per 100,000 between 1999 and 2013. Those with college education less than a BA saw little change in all-cause mortal [...]
- The “question” or the “answer”? Market reaction to UK stress tests
by bankunderground in Bank Underground, 2015-11-09 07:30:59 UTC
Matthieu Chavaz, Jeremy Chiu and Evarist Stoja.
How might banks fare in stressful macroeconomic conditions? Are they strong enough to withstand the stress and survive or will they fall like dominoes? Stress tests offer insights into such questions.
Regulators are not only making a growing usage of such tests, they are also increasingly inclined to communicate openly about them. This is a remarkable evolution. Throughout history, regulators have typically followed some form of Hippocratic Oath and refrained from disclosing their detailed diagnostics of individual banksâ health. Regulators are [...]
- Two November Days at the University of Chicago
by Matthew Kahn in Environmental and Urban Economics, 2015-11-08 19:56:00 UTC
On November 5th and 6th, I was back at the University of Chicago. �I was there to participate in a Media Economics conference organized by Matt Gentzkow and Jessie Shapiro. � �Luigi Zingales and the conference participants provided really useful criticism of our paper. �I learned that we still have a fair bit of work to do that will improve our paper. �An old draft of our "Death and the Media" paper is available here. While people point out that UChicago has lost some of its superstars, let me sketch out what two days are like at my old home. I flew in late and arrived at the Hyde Park Hilton [...]
- "Panics and Bubbles" reading list
by Noah Smith in Noahpinion, 2015-11-08 06:14:00 UTC
Tony Yates offers his reading list on "Panics and Bubbles". The list has some good stuff on it. Diamond-Dybvig , Geanakoplos , and Cogley and Sargent especially stand out. There's also some good stuff on how "expectation shocks" can cause economic fluctuations - for example, Angeletos and Werning , Farmer , etc. There is also some random, incongruous stuff. (Money search? What does money search have to do with panics and bubbles??) But mostly good stuff to read. However, there's also a lot that I think Tony left out. His list skews heavily toward macro and money-based models, usually with rati [...]
- Le plan C, ou « Splendeurs et misères de la gauche européenne »
by Alberto Bagnai in Goofynomics, 2015-11-07 17:07:00 UTC
Au colloque�: «�Personne ne croit dans une Europe fédérale�!�» Je me trouve à Rouen, la ville où tant de choses européenne se sont passées (comme dans toute ville qui se trouve en Europe, d’ailleurs), à partir d’un certain procès , pour en venir à un certain colloque , qui est l’occasion de ma visite. Deux événements relativement lointains, mais qui ont en commun une forte présence de juristes, et des débats fort intéressants. On m’y avait appelé pour décrire le processus de régionalisation en Italie, ce que j’ai fait comme j’ai pu, avec l’aide des collègues [...]
- Blairism vs the left
by chris in Stumbling and Mumbling, 2015-11-07 14:02:00 UTC
The difference between Blairites and the left isn't merely one of policy prescriptions. It's also about the diagnosis of capitalism. John Rentoul's response to my post yesterday alerts me to this fact.
Here's what I mean. To a large extent, New Labour's thinking was founded in large part upon a belief in the dynamism of capitalism. It thought that capitalism would increase investment and productivity if only governments could provide (pdf) the right policy framework, such as the macroeconomic stability required to give firms the confidence to invest. It thought capitalism could create good job [...]
- Bibliografía Sobre el Sistema de Pensiones en México y Ahorro para el Retiro
by Alejandro Villagomez in Tintero Económico Diario, 2015-11-07 00:19:00 UTC
Les comparto algunas referencias bibliográficas sobre mi investigación sobre el Sistema de Pensiones en México y el Ahorro para el Retiro 1. Una radiografía completa y reciente sobre los sistemas de pensiones en México (todos los pilares) 2. El Ahorro para el Retiro. Una reflexión para México , El Trimestre 2014 3. �Pensión Universal Proporcional : Una Propuesta para México � El Trimestre �2014 4.� Más Allá de las Pensiones Contributivas: el Caso de México � �Banco Mundial 5. Contribución de la reforma de pensiones al crecimiento económico : el caso de México �(versión Document [...]
- Worms at work: Long-run impacts of a child health investment
by maximorossi in NEP-LTV blog, 2015-11-06 17:07:01 UTC
By: Sarah Baird (George Washington University) ; Joan Hamory Hicks (University of California, Berkeley) ; Michael Kremer (Harvard University) ; Edward Miguel (University of California, Berkeley)
This study estimates long-run impacts of a child health investment, exploiting community-wide experimental variation in school-based deworming. The program increased education among women and labor supply among men, with accompanying shifts in labor market specialization. Ten years after deworming treatment, women who were eligible as girls are 25% more likely to have attended secondary school, halving [...]
- Poor Little Rich Kids? – The Determinants of the Intergenerational Transmission of Wealth
by maximorossi in NEP-LTV blog, 2015-11-06 17:05:45 UTC
By: Sandra E. Black ; Paul J. Devereux ; Petter Lundborg ; Kaveh Majlesi
Wealth is highly correlated between parents and their children; however, little is known about the extent to which these relationships are genetic or determined by environmental factors. We use administrative data on the net wealth of a large sample of Swedish adoptees merged with similar information for their biological and adoptive parents. Comparing the relationship between the wealth of adopted and biological parents and that of the adopted child, we find that, even prior to any inheritance, there is a substantial rol [...]
- EARNINGS AND CONSUMPTION DYNAMICS: A NONLINEAR PANEL DATA FRAMEWORK
by maximorossi in NEP-LTV blog, 2015-11-06 17:04:34 UTC
By: Manuel Arellano (CEMFI, Centro de Estudios Monetarios y Financieros) ; Richard Blundell (University College London) ; Stéphane Bonhomme (University of Chicago)
We develop a new quantile-based panel data framework to study the nature of income persistence and the transmission of income shocks to consumption. Log-earnings are the sum of a general Markovian persistent component and a transitory innovation. The persistence of past shocks to earnings is allowed to vary according to the size and sign of the current shock. Consumption is modeled as an age-dependent nonlinear function of assets a [...]
- Urban networks: Spreading the flow of goods, people and ideas
by maximorossi in NEP-LTV blog, 2015-11-06 17:03:36 UTC
By: Edward L. Glaeser ; Giacomo A. M. Ponzetto ; Yimei Zou
Should China build mega-cities or a network of linked middle-sized metropolises? Can Europe’s mid-sized cities compete with global agglomeration by forging stronger inter-urban links? This paper examines these questions within a model of recombinant growth and endogenous local amenities. Three primary factors determine the trade-off between networks and big cities: local returns to scale in innovation, the elasticity of housing supply, and the importance of local amenities. Even if there are global increasing returns, the returns to lo [...]
- Decomposing the wage losses of displaced workers: the role of the reallocation of workers into firms and job titles
by maximorossi in NEP-LTV blog, 2015-11-06 17:02:42 UTC
By: Pedro Portugal ; Pedro S. Raposo ; Anabela Carneiro
Using an unusually rich matched employer-employee-job title data set for Portugal, this paper evaluates the sources of wage losses of workers displaced due to firm closure based on the comparison of workers’ wages differentials before and after displacement. Potential wage losses of displaced workers can be related to firm, job title, and match heterogeneity in the pre- and post-displacement jobs. In this vein, we estimate a threeway high-dimensional fixed effects regression model that enables us to decompose the sources of the wage los [...]
- Wage Dispersion, Job Creation and Development: Evidence from Sub-Saharan Africa
by Christian Zimmermann in NEP-DGE blog, 2015-11-06 15:41:03 UTC
By Juan Pablo Rud and Ija Trapeznikova
Labor markets in least developed countries are characterised by small wage sectors and low productivity and wages. Using household level data for many countries in Sub-Saharan Africa, we document that they also show a greater level of wage dispersion. This is in stark contrast with the positive correlation between income mean and income inequality for the same countries. We propose a labor search and matching framework with entry costs and firm heterogeneity that delivers endogenously the negative correla [...]
- ¿Por qué hay tantas armas en Estados Unidos?
by ? in Nada es Gratis, 2015-11-06 06:30:00 UTC
Despu�s del reciente tiroteo en un instituto de Oreg�n que acab� con la vida de diez personas y dej� heridas a otras siete, ha resurgido una vez m�s� en Estados Unidos el debate sobre si deber&i [...]
- Grit beats talent
by chris in Stumbling and Mumbling, 2015-11-05 14:03:36 UTC
The later Nobel laureate James Buchanan used to advise his graduate students: "keep your ass in the chair". Woody Allen claimed that "80% of success is showing up." And Gary Player used to say: "The harder you work, the luckier you get." Some recent experiments show they are right.
Leonie Gerhards and Christina Gravert got subjects to solve anagrams, paying them for each one they got right. Subjects could pay to skip a hard anagram or to switch to easier less well-paid ones. They found that subjects that did not skip or switch earned much more than those who did - even controlling for ability, [...]
- The Baptist Question Redux: Emancipation & Cotton Productivity
by pseudoerasmus in Pseudoerasmus, 2015-11-05 13:46:39 UTC
Edward Baptist, the author ofÂ The Half Has Never Been Told , has been claiming since the publication of his book that a putativeÂ post-Emancipation drop in overall agriculturalÂ productivity in the American South is proof that it was torture, not new cottonÂ cultivars and frontier soils, which had beenÂ largely responsible for the US cotton boom of 1800-60. But there are severeÂ limitations toÂ what the cliometricÂ literature on slavery can reveal about post-Emancipation productivity specifically in cotton-picking.
The nature of the “Baptist Question”
InÂ The Half Has Never Been Told Â th [...]
- Turns out Daylight Saving Time really does suck
by Ask Umbra® in Grist Business and Technology, 2015-11-05 11:00:01 UTC
Q. Dear Umbra,
Having just suffered through the circadian disruption of another Daylight Saving time shift, I turn to you for clarity:Â What is the justification for this outrage?Â Specifically, is there any real impact in terms of energy consumption in the context of our 24-7, mostly urban society?
A. Dearest Dale,
If I may make a suggestion before we start: Please brew yourself a nice, strong cup of coffee and seat yourself next to a sunny window. There, isnât that better? The combination of caffeine and hormone-stimulating sunlight should help you adjust to the bia [...]
- Assegurada a continuidade do projeto editorial da MEGA2
by Hugo da Gama Cerqueira in Meu gabinete de curiosidades, 2015-11-04 17:16:00 UTC
A boa notícia do dia é que, graças ao apoio financeiro da Deutsche Akademie der Wissenschaften , o desenvolvimento do projeto de edição das obras completas de Marx e Engels, a Marx-Engels Gesamtausgabe (MEGA), está assegurado pelos próximos 16 anos!� O anúncio foi feito pela Berlin-Brandenburgische Akademie der Wissenschaften (BBAW) e pode ser conferido aqui .A edição da MEGA é feita em cooperação internacional por um conjunto de instituições que, além da BBAW, incluem o� Instituto Internacional de História Social Amsterdam (IISH), o Arquivo Russo de História Social e Polít [...]
- Calm and Sensible Climate Adaptation Discussion in the NY Times
by Matthew Kahn in Environmental and Urban Economics, 2015-11-04 14:49:00 UTC
The front page of the NY Times reports that China's coal consumption is 17% higher than had previously been reported. �On the Opinion Piece page, NYU's Steve Koonin has a nice piece talking about the need to adapt to climate change. Here is a calm and sensible direct quote; "Adaptation can be effective. Humans today live in climates ranging from the tropics to the Arctic and have adapted through many climate changes, including the Little Ice Age about 400 years ago. Adaptation is also indifferent to whether the climate change is natural or human-induced; it can be proportional, depending upon [...]
- 285 – The collapse of North Atlantic Cod
by David Pannell in Pannell Discussions, 2015-11-02 15:00:27 UTC
Humanity has a terrible track record when it comes to managing fisheries. There are many examples where over-fishing has led to the collapse of a fish population. One of the most spectacular collapses was the cod fishery in the north-west Atlantic.
Prior to the 1950s, cod had been fished off Canada for hundreds of years without any major decline in fish stocks.Â From the 1950s, fishing technologies improved and people got greedy.
âThe decline began with the arrival of large factory stern trawlers in the late 1950s and the exploitation rate increased dramatically as these vessels were able to [...]
- Intellect in politics
by chris in Stumbling and Mumbling, 2015-11-02 13:59:55 UTC
How important is intelligence and education to politicians?
I ask because of Martin Amis's jibe that Corbyn is "under-educated" and "slow-minded" and Tristram Hunt's claim that it is the responsibility of the brightest 1% to "take leadership going forward." Both men seem to presume - without adducing evidence - that intellectual ability is desirable in politicians.
I'm not at all sure of this, for four reasons.
- Ability and knowledge can lead to overconfidence . For example, a study of German mutual fund investors found (pdf) that "sophisticated investors do not earn higher risk-adjusted retu [...]
- Is International Diversification Dead?
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2015-11-02 13:37:46 UTC
At least since Harry Markowitz’s work in the 1950s, diversification has been viewed as the key to an efficient portfolio that minimizes risk for a given expected rate of return. When James Tobin received his Nobel Prize in 1981 – in part for his work on the subject – he summarized portfolio selection theory in the classic fashion: “don’t put all your eggs in one basket.” Over the years, academicians and market professionals extended this fundamental principle to the global asset universe, highlighting the benefits of going beyond simply holding a broad group of domestic instruments [...]
- Manuscritos de Marx e Engels estão disponíveis para consulta
by Hugo da Gama Cerqueira in Meu gabinete de curiosidades, 2015-11-02 12:46:00 UTC
O Instituto Internacional de História Social (IIHS), de Amsterdã, anunciou recentemente a digitalização e disponibilização on line de todos os textos originais da coleção Marx e Engels. Eles agora podem ser consultados pela internet, através do catálogo das coleções do IIHS , e baixados gratuitamente em formato PDF. O Arquivo Marx/Engels reúne textos e manuscritos desses dois autores, que foram preservados pelo IIHS desde 1938: "Entre os papéis de Marx, há documentos pessoais e sua correspondência com Engels, Bruno Bauer, Nikolai Danielson, Moses Hess (...) e muitos outros. A c [...]
- Letture suggerite da Keynes blog – 2 novembre 2015
by keynesblog in Keynes Blog, 2015-11-02 12:33:45 UTC
Inauguriamo con questo post una rubrica che, a scadenza non prefissata, suggerirÃ ai nostri lettori alcuni articoli e working papers di economia, principalmente di matrice eterodossa, ma non solo, anche divulgativi. In particolare segnaleremo lavori inerenti:
teorie economiche eterodosseÂ (principalmente la teoria Post Keynesiana);
critica, intera ed esterna, alle teorie eterodosse; Â
“dissidenti” nell’ambito dell’economia mainstream (New Keynesian Ã la Stiglitz);
articoli che, pur utilizzando modelliÂ mainstream, giungono a conclusioni simili a quelle delle teorie economiche critiche.
- Cooperative smarts
by Eric Crampton in Offsetting Behaviour, 2015-11-02 08:21:00 UTC
Intelligence can affect income through more than a few channels. Smarter people have better health-related behaviours, so what looks like an income gradient in health might in large part be an intelligence gradient . Smarter people are more likely to go to and complete university degrees, so what looks like a return to education might in large part be a return to intelligence .And smarter people are better at playing cooperate in prisoners' dilemma games. I'd had this hanging in my to-read file from a Marginal Revolution assorted-links post for a while and had missed the original paper when it [...]
- What’s the natural rate of interest?
by Tyler Cowen in Marginal Revolution, 2015-11-01 05:17:55 UTC
Peter Olson and David Wessel write :
The natural rate of interest, also called the long-run equilibrium interest rate or neutral real rate, is the rate that would keep the economy operating at full employment and stable inflation.
You’ll find comparable statements from Paul Krugman, and here is the underlying Laubach and Williams paper , and more recently and ungated here (pdf).Â Here are a variety of Brookings presentations .
Personally, I get nervous when I read about natural rates of interest, although I accept the core conclusion that currently low interest rates are not mainly the result [...]
by himaginary in himaginaryの日記, 2015-11-01 00:00:00 UTC
大不況入り後に米国の自然利子率が急低下した、というSF連銀の 論文 をクルーグマンが 取り上げ 、FRBが利上げを急ぐべきでない証左として訴えた。一方、Carola Binderが同論文について以下のような技術的な指摘を 行っている （H/T Economist’s View ）。
The authors' estimates come from a methodology they developed in 2001 (published 2003). The earlier paper noted the imprecision of estimates of the natural rate. The solid line in the figure below presents their estimates of the natural real interest rate, whil [...]
- Did the Natural Rate Fall***?
by email@example.com (Carola) in Quantitative Ease, 2015-10-30 20:56:00 UTC
Paul Krugman describes the natural rate of interest as "a standard economic concept dating back a century; it’s the rate of interest at which the economy is neither depressed and deflating nor overheated and inflating. And it’s therefore the rate monetary policy is supposed to achieve." The reason he brings it up-- aside from obvious interest in what the Fed should do about interest rates-- is because a recent� paper �by Thomas Laubach of Federal Reserve and San Francisco Fed President John Williams �has just provided updated estimates of the natural rate for the U.S. Laubach and Williams [...]
- Greg Ip on Moral Hazard and Coastal Defense Against Rising Natural Disaster Risk
by Matthew Kahn in Environmental and Urban Economics, 2015-10-30 18:10:00 UTC
Read Greg Ip's WSJ piece t alking about his new book. �He appears to believe in a "lulling hypothesis" that ignorant urbanites will continue to live in increasingly risky cities below rising sea level (think Miami and NYC) because they have been lulled by big government mega projects into feeling safe. �This argument suggests that public investment in protection crowds out private self protection. Kousky et. al. discuss this point in their 2005 paper and Leah Boustan and Paul Rhode and I discuss this point in this paper.� � I like his emphasis on spatial moral hazard but I believe that he is o [...]
- On the distributive effects of inflation
by Christian Zimmermann in NEP-DGE blog, 2015-10-29 00:31:32 UTC
By Charles Gottlieb
This paper undertakes a quantitative investigation of the effects of anticipated inflation on the distribution of household wealth and welfare. Consumer Finance Data on household financial wealth suggests that about a third of the US population holds all its financial assets in transaction accounts. The remaining two-third of the US population holds most of their financial assets outside transaction accounts. To account for this evidence, I introduce a portfolio choice in a standard incomplete markets model with heterogeneou [...]
- Guest Post: Inequality Undermines Democracy
by Tyler Durden in Zero Hedge, 2015-10-28 23:05:00 UTC
Authored by Sean McElwee, originallyu posted at AlJazeera.com, In recent years, several academic researchers have argued that rising inequality erodes democracy. But the lack of international data has made it difficult to show whether inequality in fact exacerbates the apparent lack of political responsiveness to popular sentiment. Even scholars concerned about economic inequality, such as sociologist Lane Kenworthy , often hesitate to argue that economic inequality might bleed into the political sphere. New cross-national research, however, suggests that higher inequality does indeed limit p [...]
- Three Years After Hurricane Sandy: How is the NYC Metro Area Adapting?
by Matthew Kahn in Environmental and Urban Economics, 2015-10-28 15:09:00 UTC
The NY Times Room for Debate section ha s an excellent, calm (and sane) discussion of the small ball actions households, firms and local governments are taking that together will help NYC to adapt so that the "next Sandy" causes much less damage to the area. � I see a group of self interested spatially tied actors not being naive and "crossing their fingers" and hoping that another Sandy doesn't occur. Instead, they are investing under uncertainty and a silver lining of Sandy is that they have learned some hard lessons. To quote The Who "We won't be fooled again." This has been my "Climatopoli [...]
- Ethnographic Atlas
by Masa in Devecondata, 2015-10-28 14:10:00 UTC
Compiled by George Peter Murdock (see his obituary in American Anthropologist , 88(3), pp. 682-6, for who he is) and published in 29 successive instalments in the journal ETHNOLOGY between 1962-1980. The data for 862 societies, at the time before their encounter with Europeans, was published in Ethnology , volume 6, number 2 (April 1967), and then in a hardcover from the University of Pittsburgh Press .Since then, more societies were added and some of the 1967 data were revised (s ee here �for detail). The final version, compiled by Patrick Gray in World Cultures, vol. 10, issue 1 (1998), is a [...]
- Financial transactions taxes: FTT?
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2015-10-26 12:22:04 UTC
If you put “FTT” into a search engine, the top results are for “Failure to Thrive.”� Proponents of a financial transactions tax should find this disturbing. We find it amusing, but apt. The idea of taxing the purchase and sale of certain securities has been around for a long time. The British first imposed a stamp duty on secondary market purchases of equity in 1694 – a tax that remains in force today. In 1936, Keynes proposed the imposition of a wider tax with an eye toward reducing volatility. In 1972, following the collapse of the Bretton Woods fixed-exchange-rate system, Nobelist [...]
- Marx's relevance today
by chris in Stumbling and Mumbling, 2015-10-25 13:02:50 UTC
Simon Kuper, whom I like a lot, says : "Marx. like Freud, has finally died." This is right in one sense. Big teleological theories of history have been discredited; the only people who believe them now are silly centrists and bosses who believe the future is foreseeable and who prate about "modernization" as if it were an uncontestable idea.
However, as you'd expect, I think Marx is still very relevant today. Take four examples:
1. Why have governments encouraged financialization rather than financial democracy? Why were they keener to bail out banks than steel firms? Why did central banks con [...]
- Ny evidens om ulandsbistand
by Christian Bjørnskov in Punditokraterne, 2015-10-24 09:53:04 UTC
Som punditokraternes læsere ved, er der en lang litteratur om ulandsbistandens effektivitet. Det overordnede billede – som kendes fra Chris Doucouliagos og Martin Paldams arbejde i metaanalyse – er at den gennemsnitlige effekt er nul. Det er efterhånden ret ukontroversielt blandt nationaløkonomer, men som Lars Christensen oplevede forleden i Radio 24 7, bliver man ofte udsat for ekstremt ubehagelige reaktioner, hvis man vover at lufte kritik af den nuværende ulandsbistand. Lars var dog på grund, der bliver stadig sikrere.
Punditokraternes ven og kollega Axel Dreher (Uni Heidelberg) ha [...]
- Não houve "Reversal of Fortune" no nível subnacional
by Leonardo Monasterio in Blog do Leonardo Monasterio, 2015-10-23 20:25:00 UTC
Foi o que encontraram Maloney e Caicedo em artigo recém aceito no Economic Journal. Os lugares do Novo Mundo que eram "ricos" continuaram assim. "The Persistence of (Subnational) Fortune� Using newly collected subnational data, this paper establishes the within country persistence of economic activity in the New World over the last half millennium, a period including the trauma of European colonization, the decimation of native populations, and the imposition of potentially growth inhibiting institutions. High pre-colonial density areas tend to be denser today due to locational fundamentals a [...]
- Progressive Social Goals and Economic Growth
by dvollrath in The Growth Economics Blog, 2015-10-23 15:36:33 UTC
Someone pointed me towards this Washington Post essay by Michael Strain, of the AEI, on “ Why we need growth more than we need democratic socialism “. It’s something of a rebuttal to Bernie Sanders’ positive statements regarding the social democratic systems that are in place in Denmark, Sweden, and several other countries. Strain takes issue with this, suggesting that we cannot purse the progressive social goals that are part of this social democratic system because we would sacrifice economic growth, and that would be bad. The TL;DR version of my post is that Strain is wrong. Wrong about the [...]
- Macro-Finance Separation by Force of Habit
by Christian Zimmermann in NEP-DGE blog, 2015-10-23 14:26:08 UTC
By J. David Lopez-Salido, Francisco Vazquez-Grande, and Pierlauro Lopez
We incorporate risk premia variation arising from Campbell-Cochrane habit formation in a standard DSGE framework. We show how the simultaneous presence of consumption and labor habits can produce a separation between quantity and risk premia dynamics, and hence unite nonlinear habits and a production economy without compromising the ability of the model to fit macroeconomic variables. We can then use economic theory rather than a reduced-form approach to restrict several ca [...]
- The Economics of Red State vs. Blue State Carbon Politics
by Matthew Kahn in Environmental and Urban Economics, 2015-10-23 13:40:00 UTC
Successful �"low carbon" people in San Francisco such Thomas Steyer face a fundamental challenge. �Much of the U.S relies on fossil fuels to create their jobs, to generate low electricity prices and to allow for cheap transportation services. These individuals are aware of this point and they are voting their pocket book and thus opposing carbon pricing. � The NY Times discusses the fact that 25 states will oppose President Obama's new carbon policies. Permit me to point you to my low carbon politics research. 1. � My JPAM 2000 paper documents that suburbanites drive more and consume more elec [...]
- Divario Nord-Sud, perché il Mezzogiorno è meno efficiente
by Lavoce.info in Il Fatto Quotidiano, 2015-10-23 06:55:47 UTC
Davvero i lavoratori del Sud sono meno produttivi di quelli del Centro-Nord? Ed Ã¨ possibile prescindere dal contesto in cui operano le aziende e dalle condizioni economiche del Mezzogiorno? Dagli errori del passato insegnamenti per cambiare le politiche e utilizzare meglio fondi statali ed europei.
diÂ Salvatore Perri Â (Fonte: lavoce.info )
Un contesto che non favorisce la produttivitÃ
In un recente articolo, il Gruppo Tortuga afferma che il valore aggiunto per lavoratore nel Sud-Isole, utilizzato come misura della produttivitÃ , Ã¨ di dieci punti inferiore a quello che si misura nel Cent [...]
- 22/10/15: Gig Economy and Human Capital: Evidence from Entrepreneurship and Self-Employment
by Constantin Gurdgiev in True Economics, 2015-10-22 16:53:00 UTC
In a couple of weeks, I will be speaking about the role of human capital in the emergence of the new economy at the CXC Corporate event “ Globalization & The Future of Work Summit ” in Dublin. Without preempting what I am going to say, here are some key points of interest. Human capital-centric growth is overlapping, but distinct from the so-called “Gig Economy”, primarily because of the different definition of what constitutes two respective workforces. Take, for example, the U.S. data. Based on research by the American Action Forum by Rinehart and Gitis (2015) we can define three typ [...]