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- Are recessions predictable?
by ? in Stumbling and Mumbling, 2016-02-09 13:59:00 UTC
Amidst all the talk of a recession, this chart presents something of a puzzle. It shows that there’s a decent correlation (0.57) between annual changes in the All-share index and in UK industrial production*.
The puzzle is that this correlation [...]
- Go ask ‘Gladys’: Why gender matters in energy consumption policy and research
by Administrator in British Politics and Policy at LSE, 2016-02-09 12:00:45 UTC
Gender norms and relations should be a core concern for energy researchers and policy-makers because they mediate access to resources, adoption of values and practices, capacity to make choices, and opportunities for participation in all aspects of society (from markets to politics). Here, Sherilyn MacGregor outlines how gender norms and identities influence both energy consumption decisions and willingness to adopt pro-environmental practices.
In spring 2013, amid growing public discontent with energy companies, news broke that British retailer Marks and Spencer (M&S) was guilty of mis [...]
- The Magic Trick of Inflation Targeting
by Francesco Saraceno in Sparse Thoughts of a Gloomy European Economist, 2016-02-09 08:01:38 UTC
FT Alphaville ‘s Matthew Klein goes back to the issue of financial stability and monetary policy. A recent speech of Bank of Canada’s Timothy Lane is the occasion for Klein to reassess monetary policy before the crisis, when policy makers (in particular he refers to Ben Bernanke, but the Fed chair was in good company) dismissed fears of asset price bubbles, thus failing recognize, and to counter, the buildup of the crisis.
What I find interesting in Lane’s speech is the acknowledgement that monetary policy alone is vastly insufficient to attain the many interrelated objectives of today’s pol [...]
- Are football tickets under-priced?
by chris in Stumbling and Mumbling, 2016-02-08 12:59:49 UTC
Saturday’s protest by Liverpool fans at the proposed rise in ticket prices poses a question: why are football tickets so cheap?
What I mean is simple. Fans are addicts; many would pay much more to see their team. Demand is therefore price-inelastic. And despite playing indifferent football, Anfield – like most Premier League stadia – has been full this season. Both these facts suggest that Liverpool’s owners could increase profits by charging fans more. Econ 101, therefore, tells us that tickets are under-priced.
This is not just true for Liverpool. A survey (pdf) by Anthony Krautmann [...]
- The Scandal is What's Legal
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2016-02-08 12:26:31 UTC
If you haven’t seen The Big Short , you should. The acting is superb and the story enlightening: a few brilliant outcasts each discover just how big the holes are that eventually bury the U.S. financial system in the crisis of 2007-2009. If you’re like most people we know, you’ll walk away delighted by the movie and disturbed by the reality it captures. [Full disclosure: one of us joined a panel organized by the film’s economic consultant to view and discuss it with the director.] But we’re not film critics. The movie—along with some misleading criticism —prompts us to clarify wh [...]
- Multivariate Quantiles
by Francis Diebold in No Hesitations, 2016-02-06 19:16:00 UTC
This new paper got me thinking. How often one wishes for a natural notion of multivariate median, or more generally, multivariate quantiles. Had fun learning about centerpoints and Tukey depths .Multiple-Output Quantile Regression By: Marc Hallin ; Miroslav Šiman URL: http://d.repec.org/n?u=RePEc:eca:wpaper:2013/224753&r=ecm [...]
- Engels’ Pause: A Cause of Marx and Engels’ Hasty and False Generalisations about Capitalism
by LK in Social Democracy for the 21st Century: A Post Keynesian Perspective, 2016-02-06 11:02:00 UTC
The expression “Engels’ Pause” refers to the period of real wage stagnation or low real wage growth in Britain in the early 19th century from about 1800 to 1840, even when real per capita GDP was rising in an historically unprecedented manner. First, it is important to note that some economic historians have challenged the data on GDP and real wages in this period. For example, Gregory Clark (Clark 2001; 2005 and 2007) argues that GDP has been overestimated and real wage growth in the early 19th century underestimated, so real wages did in fact grow more than per capita output growth (Al [...]
- Un bilancio della Riforma Fornero. Ipotesi sugli effetti del Jobs Act di Renzi
by Lorenzo Battisti in Pensieri Economici, 2016-02-04 11:49:00 UTC
La Fornero che piange mentre annuncia le riforme Sono ormai passati quasi 5 anni dalla Riforma Fornero del mercato del lavoro. Quella riforma aveva come obiettivo quello di ridurre la disoccupazione in Italia e di ridurre il dualismo del mercato del lavoro (cioè la forte differenza di diritti tra contratti a tempo indeterminato e gli altri contratti). Una riforma che ha inciso così profondamente nel diritto del lavoro, ha ottenuto i risultati che si prefiggeva? E a partire da quei risultati, cosa possiamo dire del Jobs Act di Renzi? Un'analisi degli effetti della Riforma Fornero ci viene for [...]
- Desigualdad espacial en las ciudades
by David Cuberes in Nada Es Gratis, 2016-02-03 06:07:24 UTC
Desde un punto de vista de políticas económicas, parece claro que, de cara a formular programas redistributivos que disminuyan la creciente desigualdad que muchos países están experimentando en los últimos años (o décadas), es fundamental tratar de entender la estructura básica de localización por riqueza en nuestras ciudades. La falta de datos desagregados a nivel de ciudad es, probablemente, la mayor barrera que ha habido hasta hace poco. Sin embargo, con la ayuda de bases de datos microeconómicas mucho más elaboradas y programas que permiten situar a las familias o individuos en [...]
- Costs of the living wage
by chris in Stumbling and Mumbling, 2016-02-02 13:22:11 UTC
The living wage could put some people out of work even if it has only small effects upon aggregate employment.
I say so because of a new paper by Jan Kabatek which studies the effect of the Dutch minimum wage, which increases with age for workers up to the age of 23. Mr Kabatek shows that workers are more likely to lose their jobs around the time of their birthdays*. This is consistent with employers getting rid of workers as they become more expensive, and replacing them with cheaper younger ones.
This might have implications for the living wage. It will apply only to over-25s. Mr Kabatek’s [...]
- Falling Interest Rates and Government Investment
by Stephen G. Cecchetti in Huffington Post Business, 2016-02-01 12:52:47 UTC
Note to editors: This post is coauthored with authorized HuffPo blogger Kermit Schoenholtz . Switzerland is an amazing place, not least the skiing, the chocolate, and the punctual trains. The latter is part of the country's exquisitely maintained infrastructure: there are no potholes, and no deferred maintenance of train tracks, tunnels, airports, or public buildings. Few countries go so far, but many can take a lesson: it pays to maintain infrastructure at least so that it doesn't fail. We bring this up now because financial markets are telling us that it's a very good time to build and rep [...]
- Interview with Narayana Kocherlakota
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2016-02-01 12:08:24 UTC
Narayana Kocherlakota, Lionel W. McKenzie Professor of Economics, University of Rochester; former President, Federal Reserve Bank of Minneapolis. Has the experience of the crisis changed your view of the central bank policy toolkit? Former President Kocherlakota: Yes. I’m going to focus on the U.S. experience—with which I am most familiar—aside from one comment later that relates to Europe. I would divide the U.S. response to the crisis into two pieces. One is the liquidity interventions that the Federal Reserve undertook, largely under the rubric of Section 13(3) of the Federal Reserve [...]
- Shrinking VAR's Toward Theory: Supplanting the Minnesota Prior?
by Francis Diebold in No Hesitations, 2016-01-31 17:50:00 UTC
A recent post, On Bayesian DSGE Modeling with Hard and Soft Restrictions , ended with: "A related issue is whether 'theory priors' will supplant others, like the 'Minnesota prior'. I'll save that for a later post." This is that later post. Its title refers to Ingram and Whiteman's 1994 classic , entitled "Supplanting the 'Minnesota' Prior: Forecasting Macroeconomic Time Series Using Real Business Cycle Model Priors." So, shrinking VAR's using DSGE theory priors improves VAR forecasts. Sounds like a victory for economics, with the headline "Using Economic Theory Improves Economic Forecasts!" We [...]
- Scuola, classi di livello: promosse o bocciate?
by Lavoce.info in Il Fatto Quotidiano, 2016-01-30 09:50:32 UTC
Per poter verificare meriti e demeriti dei vari sistemi di organizzazione didattica, classi di livello comprese, gli studenti dovrebbero essere assegnati in modo casuale all’uno o all’altro. Ma ciò significherebbe ignorare legittime preferenze individuali. Progetti pilota per superare le difficoltà.
di Giorgio Brunello e Maria De Paola* (Fonte: lavoce.info )
Percorsi scolastici diversi: come e quando
Una circolare ministeriale dell’11 dicembre 2015 in cui si invitavano i presidi a utilizzare schemi didattici flessibili e a considerare la possibilità di organizzare il lavoro per “gr [...]
- Scarred by history
by ? in Stumbling and Mumbling, 2016-01-27 13:32:00 UTC
Sarah O Connor, echoing a point recently made by Minouche Shafik, fears that millennials have been frightened by the crisis into being too timid to push for better wages. I sympathize..
One of my favourite theories about the long post-war boom is that wage [...]
- This could be the first recession caused by falling oil prices
by email@example.com (James Hamilton) in Business Insider, 2016-01-26 19:31:00 UTC
Reuters/Mariana Bazo The global economy is slipping into recession. The evidence is showing up in all the usual ways: slowing output growth, slumping purchasing-manager indexes, widening credit spreads, declining corporate earnings, falling inflation expectations, receding capital investment and rising inventories. But this is a most unusual recession– the first one ever caused by falling oil prices.
A drop in oil prices means less money in the hands of oil producers but more money in the hands of oil consumers. Currently the U.S. is importing about 5.1 million barrels a day more than we’re ex [...]
- Financing Constraints, Radical versus Incremental Innovation, and Aggregate Productivity
by Christian Zimmermann in NEP-DGE blog, 2016-01-26 14:58:18 UTC
By Andrea Caggese
I provide new empirical evidence on a negative relation between financial frictions and productivity growth over firms’ life cycle. I show that a model of firm dynamics with incremental innovation cannot explain such evidence. However also including radical innovation, which is very risky but potentially very productive, allows for joint replication of several stylized facts about the dynamics of young and old firms and of the differences in productivity growth in industries with different degrees of financing frictions. The [...]
- On Mariel
by George Borjas in LaborEcon, 2016-01-25 20:48:19 UTC
A couple of readers of early drafts of We Wanted Workers Â made some comments last spring that planted an idea in my head: perhaps it was time to revisit Mariel and see what we could learn from that supply shockÂ with the hindsight of 25-years worth of additional research.
I resisted the idea for a while, as I thought it would be a complete waste of my time. But it kept nagging me. So one Sunday morning I wakeÂ up, goÂ downstairs to my office, and start looking at the March Current Population Surveys (CPS) for the 1980s. Within an hour, my monitor was flashing a graph like this one:
And I rem [...]
- Can Margin Requirements Improve Financial Resilience?
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2016-01-25 17:55:46 UTC
Eight years after the financial crisis began, the regulatory reforms it spawned continue apace. Over the past year, regulators introduced total loss absorbing capacity ( TLAC ) and the liquidity coverage ratio ( LCR ) to make banks more resilient. And, with an eye toward strengthening market function, authorities continue to push for central clearing of derivatives ( CCPs ). Overlapping with these goals—and extending to nonbanks—is the recent move to establish standards for margin requirements in securities transactions: that is, the maximum amount that someone can borrow when using a give [...]
- 25/1/16: Nordic Model: Not Too Heavy Handed on Corporate Profits
by Constantin Gurdgiev in True Economics, 2016-01-25 16:16:00 UTC
Much of the tax debate nowadays has been around tax base erosion and corporate taxes. But the old issue of what to tax: capital or profits is still unresolved. One interesting myth, associated with this debate, is that Nordic countries run a more ‘balanced’ tax system that relies on corporate profit taxes and avoids the problem of so-called harmful tax competition commonly attributed to Anglo-Saxon models where, again allegedly, corporations are treated softly with low tax rates and more benign tax regimes. Well, a myth is a myth. And a recent paper, titled “ Taxing Mobile Capital and Pr [...]
- Krugman on Gordon: Both Need to Re-Read Dixit and Stiglitz
by Matthew Kahn in Environmental and Urban Economics, 2016-01-25 15:53:00 UTC
Paul Krugman has written an excellent book review of Robert Gordon's new pessimistic book� �about the future of economic growth. �Ed Glaeser also wrote an excellent review for the WSJ last week. Krugman provides a great life sketch as he compares progress in daily quality of life from 1870 to 1940 versus from 1940 to today. The key missing piece in both Krugman, Glaeser and Gordon is any discussion of variety. �Modern capitalism is constantly accelerating product differentiation. �Since none of these scholars study industrial organization (I realize that Krugman won the Nobel Prize in part for [...]
- Borjas 'On Mariel'
by Mark Thoma in Economist's View, 2016-01-25 14:11:51 UTC
George Borjas is blogging again:
Hello World (again) : About 10 years ago, I had a blog that ran for about a year or so. It quickly began to consume�too much of my time, and I realized�that I could not be a heavy blogger and a full-time researcher at the same time. So I stopped blogging after a while.
Immigration is back big time. I’ve been dragged into a public debate over some work I did last summer. And I have a book coming out in the fall that hopes to clarify many of the issues in the immigration debate.
So I’m going to try�blogging one more time. I’ve�learned my lesson; I don’t [...]
- Complexity, & BBC bias
by chris in Stumbling and Mumbling, 2016-01-25 14:07:40 UTC
We heard yesterday a neat example of BBC’s ideology. On Broadcasting House, Paddy O’Connell asked people about the “personality of the market”:
It’s an angry toddler, a fickle teenager, an ex-lover you can’t shake off, your master, your slave…an attention-seeking drama queen ( 21'03" in )
The horrible mixedness of this metaphor should draw attention to a big problem. The stock market is NOT like a person. Share price moves are the product of complex emergent processes which cannot simply be reduced to individual behaviour. Sometimes, stupid investors can generate a rational mar [...]
- How healthy is the labor market, really?
by ? in FRED blog, 2016-01-25 14:00:22 UTC
Economists, policy wonks, and the public often look at the unemployment rate to quickly assess the U.S. economy. Although the unemployment rate provides some understanding of the cyclical state of the labor market, it doesn’t account for those who have dropped out of the labor force. The labor force participation rate captures that information. Both rates (shown in the top graph) have declined since the end of the Great Recession, which may imply that thereâs unmeasured slack in the labor market.
Andreas Hornstein and Marianna Kudlyak from the Federal Reserve Bank of Richmond and Fabian Lan [...]
- Potential supply, the output gap and inflation
by bankunderground in Bank Underground, 2016-01-25 07:30:48 UTC
Potential supply matters!Â If an economy is producing less output than it could, then there are resources that are being wasted.Â And when these resources are human â that is unemployment â this carries an additional social cost.Â But why, specifically, should it matter for an inflation-targeting central bank?Â Presumably, because it is a good indicator of inflationary pressure!Â The trouble is that there are good reasons to think that this is not actually the case.Â And economic theory suggests there is a much better measure of inflationary pressure we can use.
A c [...]
- Can lower oil prices cause a recession?
by James_Hamilton in Econbrowser, 2016-01-24 21:47:17 UTC
Donald Luskin writes in the Wall Street Journal:
The global economy is slipping into recession. The evidence is showing up in all the usual ways: slowing output growth, slumping purchasing-manager indexes, widening credit spreads, declining corporate earnings, falling inflation expectations, receding capital investment and rising inventories. But this is a most unusual recession– the first one ever caused by falling oil prices.
A drop in oil prices means less money in the hands of oil producers but more money in the hands of oil consumers. Currently the U.S. is importing about 5.1 million [...]
- Armed Conflict Database
by kdmtz in Devecondata, 2016-01-23 21:59:00 UTC
The data is freely available here along with the codebook etc. For each conflict coded in the dataset, the list of scholarly references is now available here .Miguel et al. (2004) popularize the use of this dataset for measuring civil wars among economists. See this paper for why this dataset may be better than the COW data .Most recently used by Besley and Persson (2011) .A spin-off data is the Conflict Site Dataset , which provides the centroid and the radius of the zone of each conflict recorded in the�Armed Conflict Database. A grid-cell (0.5 x 0.5 arc-degree) version is available as part [...]
- A Ph.D. Microeconomics Research Dissertation Topic Suggestion: LDC Resilience to Storm Risk
by Matthew Kahn in Environmental and Urban Economics, 2016-01-23 15:49:00 UTC
I have visited the Philippines once. � This is a highly populated developing nation featuring "bad geography" in the sense that it gets hit with many natural disasters. �Its proximity to China is both an economic advantage and perhaps a regional power disadvantage. �I would like to see a development economics student study the following issues sketched in this article. � 1. �Given that the Philippines suffers from typhoons and other nasty storms, what investment choices are private investors and government making to reduce risk exposure? �Are private and public investments complements or subst [...]
- Banki upadają dlatego, że nie wiedzą, iż ryzykują
by k.Ned in Obserwator Finansowy, 2016-01-23 02:00:25 UTC
Persaud omawia swoją nową książkę poświęconą temu zagadnieniu, zatytułowaną Reinventing Financial Regulation: A Blueprint for Overcoming Systemic Risks (Propozycja nowych zasad uregulowania branży finansowej: plan uporania się z ryzykiem systemowym). Oto co pisze:
O tym, jak ważne jest opracowanie odpowiednich regulacji branży usług finansowych, świadczy to, że prawie dziesięć lat od początku kryzysu wywołanego w USA przez kredyty hipoteczne udzielane klientom o słabej zdolności kredytowej kraje najboleśniej odczuwające konsekwencje późniejszego kryzysu kredytowego n [...]
- Workplace surveillance
by chris in Stumbling and Mumbling, 2016-01-21 14:18:13 UTC
Last week I took my car in for a service, and the following day I was emailed the video of the job being done – something I found so spooky I’ve not watched it. This seems to corroborate Sarah O’Connor’s claim that workplace surveillance is on the rise.
This, I suspect has been going on for years. For “middle class” workers (or erstwhile middle class ones) it has taken the form of the assertion of management power - such as the REF in universities – and to a demise of office pranks and liquid lunches. For other workers, technical change such as CCTV and containerization has reduc [...]
- Measuring and comparing local economies: Memphis vs. Nashville
by ? in FRED blog, 2016-01-21 14:00:23 UTC
When we want to assess the national economy, we typically look at the growth rate of gross domestic product (GDP), as it accounts for all goods and services produced in the economy. Similar data are also available for local economies in a measure called gross metropolitan product (GMP).
Unfortunately, local GMP data are calculated only once per year and released with a nine-month lag. For more timely information, we use factor analysis to estimate the common trend (or factor) underlying the movement in 12 variables of regional economic activity. This common factor is used to produce an index [...]
- The New Economics of Coastal City Adaptation to Climate Change
by Matthew Kahn in Environmental and Urban Economics, 2016-01-20 21:56:00 UTC
There is an interesting debate stirring in academic economics focused on urban adaptation to climate change.. �In one corner, I sit as the reigning optimist. �Read my new post p ublished today in the Harvard Business Review blog.� � Read my 2010 book Climatopolis. � � In the other corner sit some top economists. There is my friend Klaus Desmet and his co-authors who have written th is coastal flooding paper and there is my friend Guy Michaels and his co-authors who have written this e mpirical paper. �Let the debate continue. A longer version of my vision for how we wi ll adapt is published he [...]
- Time-Varying Dynamic Factor Loadings
by Francis Diebold in No Hesitations, 2016-01-20 17:32:00 UTC
Check out Mikkelsen et al. (2015) .� I've always wanted to try high-dimensional dynamic factor models (DFM's) with time-varying loadings as an approach to network connectedness measurement (e.g., increasing connectedness would correspond to increasing factor loadings...). �The problem for me was how to do time-varying parameter DFM's in (ultra) high dimensions. �Enter Mikkelsen et al. �I also like that it's MLE -- I'm still an MLE fan, per Doz, Giannone and Reichlin . �It might be cool and appropriate to endow the time-varying factor loadings with factor structure themselves , which might be a [...]
- Sind Fed und EZB zwei Paar Schuhe?
by Acemaxx-Analytics in Acemaxx-Analytics, 2016-01-20 12:39:00 UTC
Die Spatzen pfeifen es von den Dächern, dass die EZB es von Anfang an versäumt hat, Impulse zu geben, wenn es notwendig war. Die Finanzkrise von 2008 ist zwar in den USA via subprime -Sektor ausgebrochen. Aber die Eurozone war stark betroffen. Während die USA einen pro-aktiven Ansatz an den Tag legten, hat sich die Eurozone zurückgehalten, Stimulus bereitzustellen. Vor diesem Hintergrund ist es nicht verwunderlich, dass Europa heute in eine Niedrig-Inflation-Falle rutscht, wie eine aktuelle Analyse via voxeu nahelegt. Die Verfasser der Forschungsarbeit erinnern daran, dass die Fed sofort d [...]
- Long-run Estimates of Interfuel and Interfactor Elasticities
by firstname.lastname@example.org (David Stern) in Stochastic Trend, 2016-01-20 10:11:00 UTC
A new working paper coauthored with Chunbo Ma on estimating long-run elasticities. This is one of the major parts of our ARC DP12 project , the "Present" part of the title: "Energy Transitions: Past, Present, and Future". We just resubmitted the paper to a journal and I thought that was a good time to post a working paper with the benefit of some referee comments. Both my meta-analysis of interfuel elasticities of substitution and Koetse et al .'s meta-analysis of the capital-energy elasticities of substitution show that elasticity estimates are dependent on the type of data – time series, [...]
- Trading Haute-Fréquence : à la recherche de la vitesse de la lumière
by Thomas Renault in Contrepoints, 2016-01-19 06:55:38 UTC
Par Thomas Renault.
Bourse – NYSE Euronext – the trading floor at euronext – Credits Perpetual Tourist (CC BY-NC-SA 2.0)
En juin 2010, la sociÃ©tÃ© amÃ©ricaine Spread Network a inaugurÃ© un nouveau cÃ¢ble de fibre optique reliant Chicago au New Jersey (sur une distance de 1330 kilomÃ¨tres), pour un coÃ»t total d’environ 300 millions de dollars. L’objectif : relier les serveurs de la bourse de Chicago Ã ceux du NASDAQ (dans le New Jersey, Ã quelques kilomÃ¨tres de Wall Street) en moins de 13 millisecondes aller-retour, pour permettre aux traders haute-frÃ©quence de profiter de potentielles an [...]
- More Uber Economics: How its Rise Will Accelerate the Development of High MPG Vehicles
by Matthew Kahn in Environmental and Urban Economics, 2016-01-18 23:00:00 UTC
Today on a walk to the local coffee shop, I sketched my recent Uber post to my wife and she pointed out that I only told half of the story. �To recap, �Uber's drivers drive more miles than individual households do. �Uber drivers are profit maximizers (not utility maximizers). Both of these facts incentivize Uber drivers to drive higher MPG vehicles than typical drivers. �Ignoring rebound effects, this greening of technique will decouple greenhouse gas emissions from private driving. �All hail Uber! �(pun intended). Now, I ignored induced innovation here. �Never forget Acemoglu and Linn (2004). [...]
- Economics Rules by Dani Rodrik
by Mainly Macro in Mainly Macro, 2016-01-17 10:22:00 UTC
I didn’t want to talk about this book before I had finished it: I somehow think Noah’s contrary approach has its shortcomings! The first and most important thing to say is this is a great book. Not because it gave me some huge new insight or knowledge, although I did learn quite a bit about other parts of economics, but because it had a way of putting things which was illuminating and eminently sensible. Illuminating is I think the right word: seeing my own subject in a new light, which is something that has not happened to me for a long time. There was nothing I could think of where I dis [...]
- Old blaggers & secular stagnation
by chris in Stumbling and Mumbling, 2016-01-15 13:36:02 UTC
There’s a link between the Hatton Garden blag and one of the big issues of our time – secular stagnation.
The blaggers were all old men. Having learned the trade of robbing in the 70s, they stuck with it even though technical change has made their trade more difficult :
a decade or two ago, there was not the ANPR [automatic number plate recognition] or CCTV coverage there is now, and they would have had a better chance of getting away with it.
Most of us, though, are like the Hatton Garden gang. We’re one-trick ponies. Footballers and soldiers struggle to adapt when their careers are o [...]
- Neo-Fisherism and Finite Horizons
by Stephen Williamson in Stephen Williamson: New Monetarist Economics, 2016-01-14 23:25:00 UTC
I'm pleased to see that Narayana Kocherlakota seems interested in Neo-Fisherism. The crux of what he wants to say is in this note. What's that about? Narayana starts with a more-or-less standard New Keynesian (NK) reduced-form setup. There's an equation pricing a nominal bond (the "IS curve" in NK-speak) and a Phillips curve, simplified here to include only the output gap, and omitting the usual inflation expectations term. The key difference, though, is that Narayana is going to work with this framework assuming a finite horizon. It's of course well-known that a finite horizon presents proble [...]
- Software for Research
by Anton Tarasenko in Economics and Development, 2016-01-14 19:06:24 UTC
The tools mentioned here help manageÂ reproducible research and handle new types of data. Why should you go after new data? New data provides new insights. For example, the recent Clark Medal winners Â used unconventional data in their major works. This data came large and unstructured, soÂ Excel, Word, and email wouldn’t do the job.
I write for economists, but other social scientists can also find these recommendations useful.Â These tools have a steep learning curve and pay off over time. Some improve small-data analysis as well, but most gains come from newÂ sourcesÂ and real-time analysis. [...]
- How India is using public-private partnerships to expand healthcare
by ? in Forum:Blog, 2016-01-14 14:43:00 UTC
PPPs are all about balance: maintaining equilibrium between public and private, risk and reward, cost and impact. Understanding this balance is especially important in regions with extreme poverty, where access to infrastructure can mean life or death. I w [...]
- Why everybody knows CEOs are overpaid, but nothing happens
by ? in Business Insider, 2016-01-14 12:00:00 UTC
Scott Barbour / Getty Images That CEOs are overpaid is something, as Leonard Cohen would say, "everybody knows"; including the directors and shareholders who ultimately decide their pay.
Yet firms are unwilling to do anything about it, because to do so would damage internal relations, undermine status and run against the norms of the system.
Across Europe, the US and Australia, , four fifths of people believe business leaders in their countries are overpaid and/or that executive salaries should be capped .
In Britain, the head of the Institute of Directors said the " current rate of executive [...]
- Does the ‘foreign’ in ’foreign direct investment‘ matter?
by Ryan Donahue and Brad McDearman in The Avenue, 2016-01-14 10:57:00 UTC
It is seemingly easy to make the case for why metro areas should dedicate resources to attracting foreign direct investment (FDI). Foreign-owned firms pay 20 percent higher wages, on average, than their domestic peers. They also invest more in R&D, representing just 5 percent of employment but 19 percent of corporate R&D spending. But these and other oft-cited benefits of FDI typically have more to do with the strength of multinational corporate firms and the concentration of FDI in high-wage, high-skill advanced industries than with the foreignness of the firm.
This raises an important que [...]
- Ulotne finansowanie zagraniczne
by k.mokrzycka in Obserwator Finansowy, 2016-01-14 02:03:12 UTC
Od 2007 roku systematycznie zwiększa się znaczenie zagranicy w finansowaniu polskiego długu publicznego. Wartość nominalna długu zagranicznego Polski (według kryterium miejsca emisji długu) wzrosła pomiędzy 2007 a 2014 rokiem ponad dwukrotnie – ze 124 mld zł do 292 mld zł, a udział zadłużenia zagranicznego w całkowitym długu publicznym z 24 do 35 proc. Wzrasta także zaangażowanie inwestorów zagranicznych w polski dług publiczny, którzy coraz chętniej kupują nie tylko dług emitowany przez Polskę za granicą, ale także dług krajowy.
Na koniec 2014 roku znacznie pona [...]
- Declining Trends in the Real Interest Rate and Inflation: Role of aging
by Christian Zimmermann in NEP-DGE blog, 2016-01-13 15:54:25 UTC
By Shigeru Fujita and Ippei Fujiwara
This paper explores a causal link between the aging of the labor force and declining trends in the real interest rate and inflation in Japan. We develop a new Keynesian search/matching model that features heterogeneities in age and firm-specific skill levels. Using the model, we examine the long-run implications of the sharp drop in labor force entry in the 1970s. We show that the changes in the demographic structure driven by the drop induce significant low-frequency movements in per-capita consumption gr [...]
- Bank centralny to zły decydent ostatniej instancji
by k.mokrzycka in Obserwator Finansowy, 2016-01-13 02:00:17 UTC
Banki centralne krajÃ³w caÅego Åwiata biorÄ
na siebie coraz wiÄcej zadaÅ politycznych, a nie towarzyszy temu poszerzenie zakresu narzÄdzi politycznych, ktÃ³rymi dysponujÄ
. Banki te staÅy siÄ decydentami ostatniej instancji, wierzycielami nadwyÅ¼ki polityki makroekonomicznej.
PoniewaÅ¼ banki centralne biorÄ
na siebie obowiÄ
zek zajmowania siÄ problemami odmiennymi od inflacji â a pÃ³Åºniej sÄ
obwiniane o to, Å¼e tych problemÃ³w nie rozwiÄ
zaÅy w peÅni â inni decydenci mogÄ
siÄ swobodnie zajmowaÄ dÄ
Å¼eniem do innych celÃ³w, ktÃ³re nie muszÄ
zku z dobrobytem spoÅ [...]
- Between and Within
by email@example.com (David Stern) in Stochastic Trend, 2016-01-12 23:41:00 UTC
This will be obvious to anyone with a good understanding of econometrics, but it is quite stunning really to think that all the information you see in the first set of graphs in my previous post on the EKC is thrown away by fixed effects panel estimators . That is because the graphs plot the mean value over time in each country of the dependent variable against the mean value over time in each country of the explanatory variable. Fixed effects estimation first deducts these means from the data and then estimates the regression of the two residuals using ordinary least squares. This is why fixe [...]
- Homicidios: el fin de una epidemia
by Alejandro Gaviria in Alejandro Gaviria, 2016-01-12 23:24:00 UTC
En 1995, escribí un artículo académico sobre el aumento de la tasa de homicidios en Colombia. En pocos años, en menos de una década, Colombia se había convertido en el país más violento del mundo. Los homicidios eran la principal causa de muerte. La violencia homicida se había esparcido por todo el territorio como una epidemia. En Medellín, la tasa de homicidios había superado las 300 muertes anuales por 100.000 habitantes. El artículo mostraba de qué manera, durante los años ochenta, el narcotráfico había puesto en marcha una dinámica de retroalimentación o de refuerzo mutuo [...]
- IQ and Economic Growth
by dvollrath in The Growth Economics Blog, 2016-01-11 17:05:25 UTC
I finally got around the writing up a review of Hive Mind , by Garett Jones . Short version is that the book is excellent, and well worth reading. I’ll get into more detail below, but the book explores the importance of cognitive skills (as measured by IQ) for economic development.
There are several reasons to like it. First, the book has absolutely no fat on it. This is a model of concise explanatory writing. Most books that try to bring recent research to the public end up bloated. Not this one. Five stars for clarity here.
Onto the content. There are really two parts to the book. First, J [...]
- Changing demographics
by ? in FRED blog, 2016-01-11 14:00:50 UTC
The overall U.S. population is aging. As the top graph shows, the percent of the population between 16 and 64 years of age (generally considered working age) has been declining since about 2007. At the same time, the percent of the population 65 years and older has been increasing. From 2007 to 2014, the working age population as a percent of the total population fell from 64.9% to 63.6%, while the 65+ population rose from 12.5% to 14.4%. As the working age population shrinks relative to the total, the dependency burden (the ratio of dependent young and old to those of working age) increases. [...]
- Making Finance Work For Households
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2016-01-11 13:57:32 UTC
"Don't take this the wrong way, but I'm just trying to figure out how you're going to ( expletive deleted ) me." Wall Street professional cited in Michael Lewis,� The Big Short , Norton, 2011, p.95. Last week, our friend, Harvard Professor John Y. Campbell, delivered the American Economic Association’s 2016 Ely Lecture , the group’s most prominent invited lecture. His topic—a central challenge for policymakers and practitioners alike—is how to make modern finance work better for consumers who lack understanding of the opportunities and risks they face. Professor Campbell discussed how [...]
- New working paper: "A Benefit-Cost Analysis of the Middle Fork Greenway Trail"
by John Whitehead in Environmental Economics, 2016-01-11 11:30:57 UTC
Recently posted at RePEc :
A Benefit-Cost Analysis of the Middle Fork Greenway Trail
John C. Whitehead, John Lehman and Melissa Weddell
No 16-01, Working Papers from Department of Economics, Appalachian State University
Abstract: The Town of Boone, NC Greenway Trail is a 3.84 mile long paved trail with additional unpaved sections that attract many types of users including walkers, joggers, and cyclists. The proposed Middle Fork New River extension would add 6.5 miles to the total paved mileage. In order to estimate recreation benefits of the extension we use revealed and stated preference dat [...]
- Il buono, il brutto e l'azero
by Alberto Bagnai in Goofynomics, 2016-01-09 00:34:00 UTC
L'Azerbaijan... Siete sicuri di sapere dov'è? Perché è un pochino passato di moda, per sua fortuna. Ne sentivamo spesso parlare quando c'era la guerra (sapete, quel problemino col Nagorno-Karabakh ?). Comunque, per rinfrescarvi la memoria (ma non l'alito) c'è sempre Wikipedia . Sì, è quello stato che sta (in effetti, se è uno stato, a ben pensarci cos'altro dovrebbe fare?...), aspetta: diciamo così: è quello stato posto a sud del Caucaso, cioè in quel posto, sul Caspio, non si capisce bene se in Europa o in Asia (diciamo che sta in Eurasia, così son tutti contenti). Oh, beninteso: p [...]
- The paradox of plenty
by ? in Stumbling and Mumbling, 2016-01-07 14:28:00 UTC
Tyler Cowen is asked a good question: are there any goods someone on a median income can afford which are the very best of their kind? The answer, as Tyler shows, is plenty – including some important ones such as books and recorded music. To this we [...]
- How India is using public-private partnerships to expand healthcare
by ? in Agenda - The World Economic Forum, 2016-01-07 09:45:00 UTC
This article was originally published on The World Bank’s Public-Private Partnerships blog.
Public-private partnerships (PPPs) are all about balance: maintaining equilibrium between public and private, risk and reward, cost and impact. Understanding [...]
- Two Comments About Richard Thaler's 2016 AEA Presidential Address
by Matthew Kahn in Environmental and Urban Economics, 2016-01-07 00:22:00 UTC
The AEA has posted a webcast of Richard Thaler's Presidential Address . I highly recommend it. �Professor Thaler brings a new perspective that didn't exist when I was a student at the University of Chicago from late 1988 until mid-1993. �I was surprised that he didn't mention the relevance of the work of three UChicago Nobel Laureates; namely Gary Becker, Jim Heckman, and Lars Hansen for his core subject. In this brief blog post, I will try to "connect the dots". Professor Thaler's talk celebrates the rise and relevance of behavioral economics as a field seeking to explain and predict behavior [...]
- Information and efficiency in Vietnamese patients’ choice of health-care provider: a short report
by Già Bản in Op-Economica, 2016-01-06 10:10:52 UTC
Working Papers CEB No 16-001, from ULB — Universite Libre de Bruxelles http://econpapers.repec.org/paper/solwpaper/2013_2f222896.htm Abstract: This paper communicates results from a statistical investigation into questions of relationships between sources of health-care information, data sufficiency, and final outcomes of Vietnamese patients’ choice of health-care provider. The study employs a data set of 1459 observations collected from a […] [...]
- Flags design and economics
by Inaki Villanueva in Applied economist, 2016-01-05 22:30:00 UTC
Last month we saw on the news the New Zealanders (or Kiwis) getting involved in a referendum to choose a new national flag. ��� New Zealand confirmed that a blue, white, red and black fern and stars design won the referendum to become the contender of the current flag. A second referendum will be held in March to decide whether to adopt the new flag or keep the old one. No research, as far as I know, analysed before the relation between flag designs and economic or political performance (all I found is this ). That is because there is no point whatsoever in doing that. Any relation should be s [...]
- U.S Climate Politics: An Economist's Perspective
by Matthew Kahn in Environmental and Urban Economics, 2016-01-05 16:05:00 UTC
On the LegalPlanet blog, UC Berkeley's Dan Farber has posted an entry �where he pessimistically argues that opposition to carbon pricing is here to stay in the medium term. � He focuses attention on the coal and oil industries as he tells a pressure group strategic story focusing on their incentives to "dig in their heels" and fight carbon pricing. �To my surprise, he ignores that these industries don't vote. �Of course pressure groups matter, but at the end of the day voters vote! Let's turn to some basic economics related to voting on climate change mitigation. �Suppose we have a one time di [...]
- Creating a sustainable health diagnostics network for low income populations in India through private sector participation
by ? in World Bank Blogs, 2016-01-05 15:00:00 UTC
Mother and baby in Jharkhand of India
Credit: Video Volunteers
PPPs are all about balance: maintaining equilibrium between public and private, risk and reward, cost and impact. Understanding this balance is especially important in regions with extreme pov [...]
- A Consumer City Emerges in the Suburbs of Dallas by Partnering with the Dallas Cowboys
by Matthew Kahn in Environmental and Urban Economics, 2016-01-04 15:59:00 UTC
The NFL's Dallas Cowboys are owned by Jerry Jones' family. �Today the NY Times reports about how they are earning a few more millions and further skewing the U.S income distribution. �How are the "rich growing richer"? �In this case, they are building a new city subcenter. The "golden goose" of this community is attracting the Dallas Cowboys' practice facility. �� Some DIRECT QUOTES "Now Blue Star Land, a real estate development company owned by the Jones family, is building what will be the largest team headquarters in the league. For the past two years, Jones; his son Stephen; and his daught [...]
- Falling Interest Rates and Government Investment
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2016-01-04 14:01:38 UTC
Switzerland is an amazing place, not least the skiing, the chocolate, and the punctual trains. The latter is part of the country’s exquisitely maintained infrastructure: there are no potholes, and no deferred maintenance of train tracks, tunnels, airports, or public buildings. Few countries go so far, but many can take a lesson: it pays to maintain infrastructure at least so that it doesn’t fail. We bring this up now because financial markets are telling us that it’s a very good time to build and repair infrastructure: real (inflation-adjusted) interest rates have fallen so low that it h [...]
- The Environmental Kuznets Curve after 25 Years
by firstname.lastname@example.org (David Stern) in Stochastic Trend, 2016-01-04 10:20:00 UTC
This year marks the 25th anniversary of the release of the working paper: " Environmental Impacts of a North American Free Trade Agreement " by Gene Grossman and Alan Krueger , which launched the environmental Kuznets curve industry. I have a new working paper out whose title capitalizes on this milestone. This is my contribution to the special issue of the Journal of Bioeconomics based on the workshop at Griffith University that I attended in October. It's a mix between a survey of the literature and a summary of my recent research with various coauthors on the topic. Despite the pretty pictu [...]
- Monetary Policy, Financial Stability, and the Zero Lower Bound
by Guest Author in The Big Picture, 2016-01-04 10:00:31 UTC
Monetary Policy, Financial Stability, and the Zero Lower Bound
Vice Chairman Stanley Fischer
At the Annual Meeting of the American Economic Association, San Francisco, California
January 3, 2016
Thank you. It is a great pleasure to be here today and to participate in this panel together with such a distinguished group.
Much has happened in the world of central banking in the past 10 years. The list of challenges we face is long and includes fundamental issues such as lender-of-last-resort policies in the modern financial system, the role of central banks in the supervision of the finan [...]
- Le responsabilità della Germania, e quelle degli Stati Uniti
by Alberto Bagnai in Goofynomics, 2016-01-01 17:34:00 UTC
Nei finti stati federali di derivazione anglosassone (Stati Uniti d’America, Canada, Australia…) ultimamente si porta molto l’idea secondo cui la Germania dovrebbe finalmente prendersi le sue responsabilità di leader regionale, e laddove non lo faccia, sarebbe sua la colpa del fallimento del progetto europeo. Una variante del tema “Germania cattiva” caro alle nostre élite, le stesse per le quali fino a ieri la Germania era un esempio. Volete esempi di questo atteggiamento? Qui trovate un illustre esempio a stelle e strisce , e qui un meno illustre, ma ugualmente interessante, esem [...]
- Endogenous "Amenities": The Case of Free Rides on Atlanta Streetcars
by Matthew Kahn in Environmental and Urban Economics, 2016-01-01 16:39:00 UTC
The NY Times reports that an unintended consequence of the Atlanta Streetcar charging $0 for a ride is that it attracted the homeless and this repelled the middle class from riding it. �So, is this a case of demand curves sloping up? �Should Greg Mankiw revise his text? � No, all else isn't equal. As Atlanta dropped its price of riding this public transit to zero, it attracted a certain type of rider who lowered the overall quality of the riding experience and this shifted in the middle class' demand for riding this piece of public transit. �So, the "free ride" had two effects. It dropped the [...]
- Adapting to St. Louis Flood Risk
by Matthew Kahn in Environmental and Urban Economics, 2016-01-01 16:15:00 UTC
Residents at the outskirts of St. Louis live in a flood plain and are now wrestling with the issue of whether they should continue to live there, �or move to higher ground. The NY Times reports. This is calm and sensible analysis of adaptation at work and the net effect of these individual choices is a more resilient United States. �Yes, Mother Nature will punch us harder but we anticipate this and we invest and plan accordingly. �Forward looking households, firms and governments with millions of potential locations to move to within the U.S have the right incentives to identify higher ground [...]
- Bayesian forecasting with small and medium scale factor-augmented vector autoregressive DSGE models
by Christian Zimmermann in NEP-DGE blog, 2015-12-31 15:28:19 UTC
By Stelios Bekiros and Alessia Paccagnini
Advanced Bayesian methods are employed in estimating dynamic stochastic general equilibrium (DSGE) models. Although policymakers and practitioners are particularly interested in DSGE models, these are typically too stylized to be taken directly to the data and often yield weak prediction results. Hybrid models can deal with some of the DSGE model misspecifications. Major advances in Bayesian estimation methodology could allow these models to outperform well-known time series models and effectivel [...]
- JOHN COCHRANE: Secret Data
by replicationnetwork in The Replication Network, 2015-12-30 21:24:53 UTC
(REPOSTED FROM JOHN COCHRANEâS BLOG, THE GRUMPY ECONOMIST )
On replication in economics. Just in time for bar-room discussions at the annual meetings.
“I have a truly marvelous demonstration of this proposition which this margin is too narrow to contain.” Â Â â Fermat
“I have a truly marvelous regression result, but I can’t show you the data and won’t even show you the computer program that produced the result” Â – Typical paper in economics and finance .
Science demands transparency. Yet much research in economics and finance uses secret data. The journals publish results and [...]
- Can Global Peer Pressure Cause a Reduction in a Nation's GHG Emissions?
by Matthew Kahn in Environmental and Urban Economics, 2015-12-29 17:27:00 UTC
Here is a nice quote from a recent Wired Magazine article; � " And sure, the Paris deal isn’t perfect (it effectively relies on peer pressure to make sure countries comply). But after� 50 years of warnings , even a tiny bit of progress feels nice." So, when is peer pressure effective? �When can we achieve "order without law"? �Yale's Robert Ellickson has written the best stuff on this subject. � When Dora and I were working on social punishment of deserters during the U.S Civil War, we were introduced to his work. �In our setting, Union Army soldiers were more likely to survive the war if th [...]
- Secret Data
by John H. Cochrane in The Grumpy Economist, 2015-12-28 21:03:00 UTC
On replication in economics. Just in time for bar-room discussions at the annual meetings. "I have a truly marvelous demonstration of this proposition which this margin is too narrow to contain." -Fermat "I have a truly marvelous regression result, but I can't show you the data and won't even show you the computer program that produced the result" - Typical paper in economics and finance. The problem� Science demands transparency. Yet much research in economics and finance uses secret data. The journals publish results and conclusions, but the data and sometimes even the programs are not avail [...]
- Inequality and Team Performance
by Arnold Kling in askblog, 2015-12-28 12:22:22 UTC
An alert commenter points to a more recent study of baseball team performance.
Having a larger Gini coefficient (as youâd see in a stars-and-scrubs roster) is ever so slightly associated with better outcomes over the rest of the season. However, the effect wasnât large enough to be statistically significant, so this analysis says a team should probably just be indifferent about which approach it uses to build a roster.
I believe that the study that Turchin cited looked at inequality in terms of salary, whereas this study appears to look at inequality in terms of players’ contributions to w [...]
- Power Couples in Big Cities: Implications for Economic Inequality
by Matthew Kahn in Environmental and Urban Economics, 2015-12-26 23:53:00 UTC
In his Sunday NY Times, Tyler Cowen has written a nice article about power couple formation and their implications for household income inequality. �Back in the year 2000, Dora Costa and I publis hed a QJE paper documenting the rise of power couples clustering in major cities. �There are two mechanisms through which such couples could be found in major cities. Either they moved there as a couple or they moved as singles to the big city, met there and married and then chose to remain there. � Regardless of the mechanism, big cities allow for greater job matching possibilities and thus allow the [...]
- Annual Review 2015
by email@example.com (David Stern) in Stochastic Trend, 2015-12-26 21:48:00 UTC
I've been doing these annual reviews since 2011. They're mainly an exercise for me to see what I accomplished and what I didn't in the previous year. I ended last year noting that I had had a full year since I ended being research director at the Crawford School. I didn't know then that I would be taking on another administration/leadership role before the year was over. But, in July, I took over as director of the International and Development Economics Program . So far, this seems to be less work than being research director was and so more compatible with research productivity! In the first [...]
- 25/12/15: WLASZE: Weekend Links on Arts, Sciences and Zero Economics
by Constantin Gurdgiev in True Economics, 2015-12-25 22:16:00 UTC
Merry Christmas to all! And in spirit of the holiday, time to revive my WLASZE: Weekend Links on Arts, Sciences and Zero Economics �postings that wilted away under the snowstorm of work and minutiae, but deserve to be reinstated in 2016. [Fortunately for WLASZE �and unfortunately for die harder economics readers of the blog, I suspect my work commitments in 2016 will be a little more balanced to allow for this...] Let's start with Artificial Intelligence � - folks at� ArsTechnica are running an excellent essay, debunking some of the AI �myths. Read it here . The list is pretty much on the mone [...]