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2020-10-28

• DSGE Models Used by Policymakers: A Survey
  by Christian Zimmermann in NEP-DGE blog, 2020-10-28 19:18:28 UTC

  By Takeshi Yagihashi http://d.repec.org/n?u=RePEc:mof:wpaper:ron333&r=dge The paper conducts a comprehensive survey on the current state of the dynamic stochastic general equilibrium (DSGE) models developed by policy institutions, including central banks, government agencies, and international organizations around the world. Our main sample consists of 84 models developed by 58 institutions, and many of them were developed or updated after the 2008 financial crisis. We first document the evolution of macroeconomic models used for policy purpose, and then provide summary statistics on the model [...]

2020-10-26

• The limits to robust monetary policy in a small open economy with learning agents
  by Christian Zimmermann in NEP-DGE blog, 2020-10-26 23:37:43 UTC

  By André Marine Charlotte and Dai Meixing http://d.repec.org/n?u=RePEc:bdm:wpaper:2020-12&r=dge We study the impact of adaptive learning for the design of a robust monetary policy using a small open-economy New Keynesian model. We find that slightly departing from rational expectations substantially changes the way the central bank deals with model misspecification. Learning induces an intertemporal trade-off for the central bank, i.e., stabilizing inflation (output gap) today or stabilizing it tomorrow. The central bank should optimally anchoring private agents expectations in the short term [...]

• Employment losses are largest for the least educated
  by ? in FRED blog, 2020-10-26 13:00:00 UTC

  The FRED Blog has discussed how unemployment rates are inversely related to educational attainment and how they change during recessions . In short: Workers with more education are richer in so-called human capital and tend to be able to adapt more easily to changes in large-scale labor market conditions. The FRED graph above shows employment levels after the COVID-19-related recession began. The length of the bars represents the percent change,  relative to a year ago, in the number of employed people 25 years and older. And these workers are divided into groups according to educational atta [...]

• Chris Sampson’s journal round-up for 26th October 2020
  by Chris Sampson in The Academic Health Economists' Blog, 2020-10-26 12:00:03 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. If you’d like to write one of our weekly journal round-ups, get in touch . The European Journal of Health Economics Volume 21, Issue 8 This issue of EJHE opens with an editorial on how health technology assessment might become more ‘patient-centric’. In some senses, HTA agencies have been ahead of the curve in the inclusion of patient perspectives, relative to other players within our discipline. Y [...]

2020-10-23

• Uncertainty and Monetary Policy during Extreme Events
  by Christian Zimmermann in NEP-DGE blog, 2020-10-23 03:19:34 UTC

  By Giovanni Pellegrino, Efrem Castelnuovo and Giovanni Caggiano http://d.repec.org/n?u=RePEc:ces:ceswps:_8561&r=dge How damaging are uncertainty shocks during extreme events such as the great recession and the Covid-19 outbreak? Can monetary policy limit output losses in such situations? We use a nonlinear VAR framework to document the large response of real activity to a financial uncertainty shock during the great recession. We replicate this evidence with an estimated DSGE framework featuring a concept of uncertainty comparable to that in our VAR. We employ the DSGE model to quantify the im [...]

2020-10-22

• Wage inequality and poverty effects of lockdown and social distancing in Europe
  by maximorossi in NEP-LTV blog, 2020-10-22 12:53:29 UTC

  By: Juan C. Palomino  (University of Oxford (UK), INET and Department of Social Policy and Intervention);  Juan G. Rodríguez  (Universidad Complutense de Madrid (Spain), EQUALITAS, ICAE and CEDESOG);  Raquel Sebastian  (Universidad Complutense de Madrid (Spain), EQUALITAS and ICAE) Abstract: Social distancing and lockdown measures taken to contain the spread of COVID-19 may have distributional economic costs beyond the contraction of GDP. Here we evaluate the capacity of individuals to work under a lockdown based on a Lockdown Working Ability index which considers their teleworking capaci [...]

• Urban Umami or Urban Appakukan?: The Psychology of Streetscapes
  by Jason Barr in Skynomics Blog, 2020-10-22 12:34:19 UTC

  Jason M. Barr       October 22, 2020 Pleasure or Pain? One of the biggest complaints about new construction is that it is harmful to the quality of urban life. For example, architecture writer, Justin Davidson, says that “ shiny towers are invasive species and they are choking our cities and killing off public space. ” Other critics charge that new, taller buildings don’t mesh well with the older urban environment. High-rises, they argue, destroy the “ human scale ” and make cities less satisfying. Supporters of this view see neighborhoods like Manhattan’s low-rise, but dense, Greenwich as the [...]

2020-10-21

• We could abolish child poverty in the U.S. with Social Security benefits for poor kids
  by Melissa S. Kearney in Up Front, 2020-10-21 13:10:54 UTC

  By Melissa S. Kearney The COVID pandemic of 2020 has made abundantly, tragically clear how we as a nation fail to prioritize the protection of our nation’s most vulnerable children. Our neglect of these children has been on display for years, but perhaps never more glaringly so than now. It is both a moral and economic disgrace that will burden our country for years to come that we did not, as a nation, take the steps necessary to make sure children would be able to safely return to school by September 2020, six months after the virus had taken hold in our country. This would have required [...]

2020-10-19

• A Structural Model of the Labor Market to Understand Gender Gaps among Marginalized Roma Communities
  by Christian Zimmermann in NEP-DGE blog, 2020-10-19 21:24:24 UTC

  By Mauricio Salazar-Saenz and Monica Robayo http://d.repec.org/n?u=RePEc:wbk:wbrwps:9398&r=dge This paper constructs and estimates a household-level search model to analyze Roma spouses’ utility maximization for leisure, home production, and work. The paper aims to explain labor market gender gaps in a marginalized Roma population with low labor market participation rates (males 53 percent and females 17 percent). The analysis uses data from the 2017 Regional Roma Survey for six Western Balkan countries. The simulation results show that the main source for gender differentials in the labor mar [...]

• Chris Sampson’s journal round-up for 19th October 2020
  by Chris Sampson in The Academic Health Economists' Blog, 2020-10-19 11:00:05 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. If you’d like to write one of our weekly journal round-ups, get in touch . Applied Health Economics and Health Policy Volume 18, Issue 5 The latest issue of AHEHP leads with an editorial on the inclusion of environmental impacts in health technology assessments. Given the scale and impact of the health care industry, it should go without saying that HTA policy has relevance to the climate emergency [...]

• The winner takes it all (part two)
  by Byte Size Story in Byte-Size Story, 2020-10-19 10:01:00 UTC

  Consistently rewarding winners with the ability to keep winning exacerbates social divisions This article follows on from , 'Winner takes all (part one)' For unto every one that hath shall be given, and he shall have abundance: but from him , that hath not shall be taken away even that which he hath. And cast ye the unprofitable servant into outer darkness: there shall be weeping and gnashing of teeth - ,, Parable of Talents Matthew 25:14–30 The Matthew effect, named after the Bible verse above, suggests that success begets success. Given a certain advantage, the owner of that advantage wil [...]

2020-10-15

• Milton Friedman and labor-managed enterprises
  by Branko Milanovic in globalinequality, 2020-10-15 17:16:00 UTC

    I n the Spring of 1973 Milton Friedman visited Yugoslavia. A few weeks after his trip, he recorded this very interesting conversation ( see the link ; the link was unearthed by my friend Milos Vojnovic). Friedman’s impressions and conclusions are remarkably clear and spot-on. They were not something new: the problems that he mentions regarding Yugoslav cooperatives (or more exactly, self-managed enterprises, SME) were quite well known by 1973. Nevertheless Friedman summarized them very accurately. He also must have had a very well organized visit and good interlocutors. I vaguely remember re [...]

• Thesis Thursday: Anthony Hatswell
  by Chris Sampson in The Academic Health Economists' Blog, 2020-10-15 06:00:06 UTC

  On the third Thursday of every month, we speak to a recent graduate about their thesis and their studies. This month’s guest is Dr Anthony Hatswell who has a PhD from University College London . If you would like to suggest a candidate for an upcoming Thesis Thursday, get in touch . Title A modelling framework for estimation of comparative effectiveness in pharmaceuticals using uncontrolled clinical trials Supervisors Gianluca Baio , Nick Freemantle Repository link https://discovery.ucl.ac.uk/id/eprint/10101174/ Are uncontrolled clinical trials an important source of data? The simple [...]

2020-10-12

• Today's Nobel and the Future of Settlement Bargaining
  by Michael Abramowicz in Hit & Run blog, 2020-10-12 15:18:54 UTC

  This year's Nobel Memorial Prize in Economic Sciences was awarded today to Paul Milgrom and Robert Wilson for their work on auction theory and improvement of auction designs. (See Marginal Revolution's excellent coverage here , here , and here .) Milgrom and Wilson not only made major contributions to auction theory, but also designed auctions that the Federal Communications Commission used to distribute spectrum. The study of auctions today is advanced by a marriage of economics and computer science known as algorithmic game theory. (See here for a book-length introduction.) Another strand of [...]

• [Michael Abramowicz] Today's Nobel and the Future of Settlement Bargaining
  by Michael Abramowicz in The Volokh Conspiracy, 2020-10-12 15:18:54 UTC

  This year's Nobel Memorial Prize in Economic Sciences was awarded today to Paul Milgrom and Robert Wilson for their work on auction theory and improvement of auction designs. (See Marginal Revolution's excellent coverage here , here , and here .) Milgrom and Wilson not only made major contributions to auction theory, but also designed auctions that the Federal Communications Commission used to distribute spectrum. The study of auctions today is advanced by a marriage of economics and computer science known as algorithmic game theory. (See here for a book-length introduction.) Another strand of [...]

• Setting Bank Capital Requirements
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2020-10-12 11:41:47 UTC

  Bank capital requirements are the focus of contentious and heated debates. Since they limit banks’ ability to take on risk and leverage, owners and managers almost always argue for lowering them. To reduce the likelihood of using public funds for further bailouts, both libertarians and progressives argue strenuously that they should be higher. Focusing on the balance between the social benefits of a more resilient financial system and the social costs of curtailing liquidity and loan provision, academicians usually conclude that current levels are too low. So, with well-financed banks and thei [...]

• Chris Sampson’s journal round-up for 12th October 2020
  by Chris Sampson in The Academic Health Economists' Blog, 2020-10-12 11:00:03 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. If you’d like to write one of our weekly journal round-ups, get in touch . Health Economics Volume 29, Issue 10 Are articles included in these round-ups dominated by the US? A short analysis in this issue, on the geography of health economics research, suggests that they might be. Of empirical articles published in Health Economics and Journal of Health Economics since 2010, 37% were based on US da [...]

2020-10-08

• Announcing the Formation of Climate Economics: A New Climate Resilience Consulting Firm
  by Matthew E. Kahn in Environmental and Urban Economics, 2020-10-08 18:28:00 UTC

   In the midst of this recession, I think it is time that I engage in some job creation.  I have created a webpage for my new consulting firm called Climate Economics.    I won't take on too many clients but my goal is to help businesses use ideas from environmental and urban economics to both shrink their carbon footprints and to prepare for the climate change risk.   The novel feature of my efforts will be to build a connection between the leading climate economists and firms that both want to mitigate their emissions and adapt to climate risk.   Here I want to point out some my relevant work [...]

2020-10-07

• On feudal exploitation
  by chris in Stumbling and Mumbling, 2020-10-07 13:42:55 UTC

  “We have abolished capitalism in Poland. Now we must abolish feudalism.” So said Michal Kalecki in the 60s. I suspect that western economies today face a similar task, as feudalism is still rife. By this, I don’t mean merely that we have the high inequality and low social mobility that characterised feudalism, nor that immigration controls are a form of feudalism in that they ensure that one’s life chances are determined at birth. Instead, I’m thinking of modes of exploitation. We must distinguish between capitalist exploitation as Marx understood it and feudal exploitation. The former is an e [...]

2020-10-05

• The Unique Power of Carbon Taxes? These Climate Hawks Are Missing It
  by Charles Komanoff in Carbon Tax Center, 2020-10-05 13:15:21 UTC

  Pricing carbon pollution brings out the knives. In 2009, right-wing denialists scuttled the ambitious Waxman-Markey bill by carving up its cap-and-trade centerpiece . In 2016, lefty ideologues like Food and Water Watch butchered  what would have been a groundbreaking Washington state carbon tax. Now comes a new twist: attacks from brainy pro-climate types like activist-scholar Leah Stokes , poli sci professor at the University of California’s Santa Barbara campus and a popular climate commentator on progressive media. Laying down the gauntlet Stokes let loose last month with a broadside: The T [...]

• Chris Sampson’s journal round-up for 5th October 2020
  by Chris Sampson in The Academic Health Economists' Blog, 2020-10-05 11:00:05 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. If you’d like to write one of our weekly journal round-ups, get in touch . Journal of Health Economics Volume 73 The latest issue of JHE includes a couple of papers on newborn health. One is on parental leave policies and is written by Caroline Chuard, who previously featured on the blog as a Thesis Thursday guest . In this paper, Caroline uses three policy changes in Austria to demonstrate that mo [...]

2020-09-29

• The Elite Quality Index
  by Tyler Cowen in Marginal Revolution, 2020-09-29 04:31:27 UTC

  Here are the top ten, by Tomas Casas and Guido Cozzi: 1. Singapore 2. Switzerland 3. Germany 4. United Kingdom 5. United States China comes in #12, Mexico wins for Latin America, Poland overperforms and France (!) underperforms.  Botswana is #23, and Argentina…uh-oh.  I don’t quite understand how the index is constructed, but how much a given elite focuses on Value Creation and avoids rent-seeking seems to be a key consideration.  The degree of Regulatory Capture counts as a negative.  Overall, the U.S. does very, very well on many metrics, but does poorly on Value Extraction. Here is the unde [...]

2020-09-28

• Monetary policy under imperfect information and consumer confidence
  by Christian Zimmermann in NEP-DGE blog, 2020-09-28 23:11:21 UTC

  By Jan-Niklas Brenneisen http://d.repec.org/n?u=RePEc:zbw:cauewp:202004&r=dge Although it is generally accepted that consumer confidence measures are informative signals about the state of the economy, theoretical macroeconomic models designed for the analysis of monetary policy typically do not provide a role for them. I develop a framework with asymmetric information in which the efficacy of monetary policy can be improved, when the imperfectly informed central banks include confidence measures in their information set. The beneficial welfare effects are quantitatively substantial in both a [...]

• Angela Devine’s journal round-up for 28th September 2020
  by Angela Devine in The Academic Health Economists' Blog, 2020-09-28 11:00:07 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. If you’d like to write one of our weekly journal round-ups, get in touch . Journal of Public Economics Volume 189 The Journal of Public Economics produced a special issue on ‘The Public Economics of COVID-19’, which aimed to provide a quick process for publishing short papers in economics. The issue has six articles addressing a range of topics, with five of these relevant to health. The editorial [...]

• Financial market equilibrium with bounded awareness
  by John Quiggin in John Quiggin, 2020-09-28 08:53:32 UTC

  For decision theory and finance fans, my latest working paper with Ani Guerdjikova https://ideas.repec.org/p/gbl/wpaper/2020-10.html Some difficult math, but there are fundamental implications for financial markets, which will be spelt out later. [...]

2020-09-24

• Relative Price Rigidity and Austrian Economics
  by LK in Social Democracy for the 21st Century: A Post Keynesian Perspective, 2020-09-24 11:20:00 UTC

  The purpose of this post is to examine and provide a critique of Austrian price theory, and in particular the Austrian denial of relative price rigidity in the real world. In the Austrian economist Ludwig Lachmann’s book Capital, Expectations, and the Market Process (Kansas City, 1977) there is a section where Lachmann reviews John Hicks’s book Capital and Growth (Oxford, 1965). The significance of Hick’s discussion is described by Lachmann: “Two other matters of great significance are dealt with in the first part of the book. As others have done before him, Professor Hicks finds it necessary [...]

2020-09-23

• Opportunity costs, marginal productivity, and cost-effectiveness thresholds: what are they and how are they related?
  by Rita Faria, Jessica Ochalek, jameslomas88 in The Academic Health Economists' Blog, 2020-09-23 06:00:00 UTC

  In this post, we explain key concepts of cost-effectiveness analysis in healthcare and how they are linked: opportunity cost, marginal productivity (of a healthcare system), net benefit, and cost-effectiveness threshold. In another post, to be published tomorrow, we will propose how to use cost-effectiveness thresholds and the existing estimates of marginal productivity in a cost-effectiveness analysis of policy options in healthcare. We also suggest some stock sentences to use when explaining results to audiences from an economics, medical, or lay background. Cost-effectiveness decisio [...]

2020-09-22

• The Master and the Prodigy
  by William Janeway in INET Blog, 2020-09-22 18:13:18 UTC

  Zachary D. Carter, The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes , Random House, 2020. Cheryl Misak, Frank Ramsey: A Sheer Excess of Powers , Oxford University Press, 2020. CAMBRIDGE – In January 1922, a 19-year-old University of Cambridge undergraduate challenged a recently published work of philosophy by a fellow of King’s College, Cambridge, a man twice his age and well on his way to recognition as Britain’s leading public intellectual. In the uninhibited style that is so characteristic of Cambridge argumentation, Frank Ram [...]

• Optimal Dynamic Capital Requirements and Implementable Capital Buffer Rules
  by Christian Zimmermann in NEP-DGE blog, 2020-09-22 15:50:06 UTC

  By Matthew B. Canzoneri; Behzad T. Diba; Luca Guerrieri; Arsenii Mishin http://d.repec.org/n?u=RePEc:fip:fedgfe:2020-56&r=dge We build a quantitatively relevant macroeconomic model with endogenous risk-taking. In our model, deposit insurance and limited liability can lead banks to make risky loans that are socially inefficient. This excessive risk-taking can be triggered by aggregate or sectoral shocks that reduce the return on safer loans. Excessive risk-taking can be avoided by raising bank capital requirements, but unnecessarily tight requirements lower welfare by limiting liquidity produc [...]

2020-09-21

• An Economic Zombie Survival Guide
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2020-09-21 11:58:44 UTC

  “ The dead walk among us. Zombies, ghouls—no matter what their label—these somnambulists are the greatest threat to humanity, other than humanity itself. ” Max Brooks, The Zombie Survival Guide Everyone surely hopes that zombies will remain confined to the growing list of horror movies . But unless we shut them down, insolvent firms can become economic zombies that suffocate innovation and growth. As the COVID pandemic continues, policymakers will face some difficult decisions. Many businesses are coming under increasingly severe financial stress. Some, like dry-cleaning establishments that re [...]

• Chris Sampson’s journal round-up for 21st September 2020
  by Chris Sampson in The Academic Health Economists' Blog, 2020-09-21 11:00:06 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. If you’d like to write one of our weekly journal round-ups, get in touch . Health Economics Volume 29, Issue 9 This issue of Health Economics includes six full articles and four Letters, all on applied microeconometrics (although one article on switching costs includes a CT scan image , so there may be more going on here than I think). I was drawn to some research on maternal mental health and e [...]

2020-09-19

• This one unconscious reaction may be holding women back at work
  by ? in Co.Exist, 2020-09-19 05:00:32 UTC

  Regardless of gender, employees have a hard time taking critical feedback from a woman. Imagine that your boss Ethan calls you into his office. He expresses disappointment in your recent performance and lack of commitment. How would you react? Would you ac [...]

2020-09-18

• Happy Birthday Credit Cards! Redux
  by bbatiz in The Cashless Society, 2020-09-18 21:56:56 UTC

  Photo by Paul Felberbauer on Unsplash For a long time, one of the pillars of the cashless economy has been the advent of bank-sponsored credit cards (at the time called universal payment cards). There are several books about it as well as academic papers, of these my favourite is that by Dave Stearns . You can also see a video by Lana Swartz discussing her book which touches on the genesis of Diner’s Club. Today (18.Sep.2020), David Birch reminds of the genesis of this payment medium in his column while celebrating the 58th anniversary to what was to become VISA. Throughout his writings [...]

2020-09-16

• The Skyline versus the Sprawl-line: CO2 Emissions and Building Types in New York City
  by Jason Barr in Skynomics Blog, 2020-09-16 12:35:23 UTC

  Jason M. Barr           September 16, 2020 Hong Kong on the Hudson? When we think of New York City, we think of Manhattan and its supertall skyscrapers. As a result, we believe that New York is one of the densest places on Earth: a Hong Kong on the Hudson. And yet, craning our necks upwards diverts our attention from another fact. New York is not very dense at all when you look towards the horizon. Once you get out of Manhattan and past the historical outer-borough neighborhoods, you will find a distinctly suburban city. The landscape comprises block after block of one- and two-family homes, s [...]

2020-09-15

• With No Legal Guardrails for Patients, Ambulances Drive Surprise Medical Billing
  by ? in Physician's Weekly, 2020-09-15 04:04:04 UTC

  School librarian Amanda Brasfield bent over to grab her lunch from a small refrigerator and felt her heart begin to race. Even after lying on her office floor and closing her eyes, her heart kept pounding and fluttering in her chest. The school nurse check [...]

2020-09-14

• Structuring Mortgages for Macroeconomic Stability
  by Christian Zimmermann in NEP-DGE blog, 2020-09-14 23:24:18 UTC

  By John Y. Campbell, Nuno Clara and João F. Cocco http://d.repec.org/n?u=RePEc:nbr:nberwo:27676&r=dge We study mortgage design features aimed at stabilizing the macroeconomy. We model overlapping generations of mortgage borrowers and an infinitely lived risk-averse representative mortgage lender. Mortgages are priced using an equilibrium pricing kernel derived from the lender’s endogenous consumption. We consider an adjustable-rate mortgage (ARM) with an option that during recessions allows borrowers to pay only interest on their loan and extend its maturity. We find that this maturity extens [...]

• What difference did lockdowns make?
  by Michael Reddell in Croaking Cassandra, 2020-09-14 22:36:50 UTC

  I’ve written a couple of posts over the months drawing on work by Waikato economics professor John Gibson. Back in April there was this post , and then last month I wrote about an empirical piece Gibson had done using US county-level data suggesting that government-imposed restrictions in response to Covid may have made little consistent contribution to reducing death rates (in turn consistent with evidence suggesting that much of the decline in social contact, and economic activity, was happening anyway, in advance of government restrictions). Fascinating as I found that paper, I was [...]

• Rita Faria’s journal round-up for 14th September 2020
  by Rita Faria in The Academic Health Economists' Blog, 2020-09-14 11:00:07 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. Visit our Resources page for links to more journals or follow the HealthEconBot . If you’d like to write one of our weekly journal round-ups, get in touch . PharmacoEconomics Volume 38, Issue 9 A couple of the papers caught my eye in the September issue of PharmacoEconomics . The first is by Paul Catchpole and Victoria Barrett, from the APBI, who suggest three topics for the ongoing review of the N [...]

2020-09-12

• Mitos y verdades de la complejidad económica
  by César Hidalgo in Foco Económico, 2020-09-12 17:31:25 UTC

  ¿Lograremos desarrollarnos si seguimos produciendo esencialmente materias primas o necesitamos saltar a una economía más compleja? César Hidalgo, creador del concepto de complejidad económica entra a un debate que revivieron Sebastián Edwards, José Miguel Ahumada y Nicolás Grau, entre otros. Hoy por hoy, la complejidad económica ha entrado con fuerza en el debate nacional. Sin embargo, no es un concepto simple. Solemos pensar en la complejidad económica como la capacidad de producir aparatos de alta tecnología. En ese sentido, a todos nos parece evidente que economías como la de Japón o Suiz [...]

2020-09-11

• The Hayek question
  by chris in Stumbling and Mumbling, 2020-09-11 13:09:36 UTC

  Thatcher was right. This is my reaction to reports that Dominic Cummings regards Brexit as a way of getting out of limits on state aid and so enabling the government to funnel cash towards the UK’s own future big tech companies. The problem with this is that, as Thatcher said, the state cannot pick winners. Corporate growth is largely unpredictable. “The stochastic element is predominant” concluded Alex Coad in one survey. “Corporate growth rates are random” found Paul Geroski in another (pdf) . “There is low predictability [of corporate earnings growth] even with a wide variety of predictor v [...]

• Measuring court output in the pandemic: evidence from India's largest commercial tribunal
  by Anurodh in Ajay Shah's blog, 2020-09-11 04:00:00 UTC

  by Anjali Sharma and Bhargavi Zaveri . Introduction A critical element of organisational planning is the ability to anticipate and manage risks. Many organisations worry about the risk of disruptions to their operations. They spend time and resources to anticipate such events, and put in place mechanisms to mitigate their impact. This is known as business continuity planning (BCP). It can range from keeping standby suppliers for raw materials, finding alternate delivery channels to reach customers, building redundancies along networks and so on. The objective of BCP is to ensure that business [...]

• Why women bosses get different reactions than men when they criticize employees
  by ? in DJG Blogger, 2020-09-11 00:42:29 UTC

  Both men and women find critical feedback harder to take from a woman. pixelfit/E+ via Getty Images Imagine that your boss Ethan calls you into his office. He expresses disappointment in your recent performance and lack of commitment. How would you rea [...]

• Why female bosses get different reactions than men when they criticize employees
  by ? in DJG Blogger, 2020-09-11 00:42:29 UTC

  Both men and women find critical feedback harder to take from a woman. pixelfit/E+ via Getty Images Imagine that your boss Ethan calls you into his office. He expresses disappointment in your recent performance and lack of commitment. How would you rea [...]

2020-09-10

• America’s Dire Inequality Demands a New Conceptual Framework. This Economist Has One.
  by Lynn Parramore in INET Blog, 2020-09-10 19:02:00 UTC

  In Lance Taylor’s new book, Macroeconomic Inequality from Reagan to Trump , the noted economist examines how and why the United States, starting in the 80s, started to break down into a sharply divided country of haves and have-nots. How it happened is hotly debated among experts. Is it the lofty rate of return on wealth enjoyed by the affluent? Or the impact of monopolistic corporations that can charge high prices for basic goods and services? What about globalization? Technological change? Taylor, Emeritus Professor of Economics at the New School [...]

• Patience vs FAIT: Which is key in the new FOMC strategy?
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2020-09-10 11:56:35 UTC

  “ This change implies that the Committee effectively will set monetary policy to […] not preemptively withdraw support based on a historically steeper Phillips curve that is not currently in evidence and inflation that is correspondingly much less likely to materialize.” Federal Reserve Governor Lael Brainard, “ Bringing the Statement on Longer-run Goals and Monetary Policy Strategy into Alignment with Longer-Run Changes in the Economy ,” Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution, September 1, 2020. The Federal Open Market Committee’s (FOMC) policy strategy upd [...]

2020-09-08

• Cochrane on why debt matters
  by David Andolfatto in MacroMania, 2020-09-08 18:13:00 UTC

  The stock of national debt is now larger than our annual national income in the United States. Is this something to worry about? Does it matter how big the debt-to-GDP ratio gets? Is there any limit to how large it can grow and, if so, what is it this limit and what factors determine it? A lot of people have been asking these questions lately. John Cochrane is the latest to opine on these questions here: Debt Matters .� I'm not even sure where to begin. I suppose we can start with the famous debt clock pictured on the right. Whenever I look at the debt clock, I'm reminded of James Tobin who, i [...]

• Will coronavirus accelerate the move towards a cashless economy?
  by bbatiz in The Cashless Society, 2020-09-08 16:54:28 UTC

  Note: This was originally posted in The Economics Observatory . It is reblogged verbatim under the Creative Commons licence. The use of cash fell substantially in the early days of the Covid-19 pandemic with the acceleration in online shopping and contactless payments – but cash usage has bounced back as lockdown has eased. Long-term prospects for retail payments remain uncertain. It is still too early to tell whether Covid-19 and the public health interventions implemented in response will have permanent effects on retail payments in the UK. Initially, the hoarding of cash was overs [...]

2020-09-07

• How the Collapse of Communism Has Undermined Faith in American Capitalism
  by ? in Econlog, 2020-09-07 13:01:06 UTC

  A t their presidential campaign stops, U.S. Senators Bernie Sanders and Elizabeth Warren charged that American capitalism has, since the early 1970s, been “rigged” and “corrupted” by the rich and powerful for self-aggrandizement, to the detriment of middle- and lower-income Americans. 1 The drumbeat continues in the media: The root cause of American workers’ economic problems over the past half-century has been the “disastrous” policies of the U.S. government, including the diminishment of union bargaining power, suppression of real wages by corporate elites, destruction of the country’s [...]

• Chris Sampson’s journal round-up for 7th September 2020
  by Chris Sampson in The Academic Health Economists' Blog, 2020-09-07 11:00:07 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. Visit our Resources page for links to more journals or follow the HealthEconBot . If you’d like to write one of our weekly journal round-ups, get in touch . The European Journal of Health Economics Volume 21, Issue 7 The latest issue of EJHE manages to cover many of my research interests, with papers on mental health, valuing ‘dead’, and screening for diabetic retinopathy. There’s also plenty beyon [...]

• Consumption and Income Inequality across Generations
  by Christian Zimmermann in NEP-DGE blog, 2020-09-07 03:19:30 UTC

  By Giovanni Gallipoli, Hamish Low and Aruni Mitra http://d.repec.org/n?u=RePEc:hka:wpaper:2020-061&r=dge We characterize the joint evolution of cross-sectional inequality in earnings, other sources of income and consumption across generations in the U.S. To account for cross-sectional dispersion, we estimate a model of intergenerational persistence and separately identify the influences of parental factors and of idiosyncratic life-cycle components. We find evidence of family persistence in earnings, consumption and saving behaviours, and marital sorting patterns. However, the quantitative con [...]

2020-09-01

• How to recycle a huge ship – safely and sustainably
  by ? in Forum:Blog, 2020-09-01 10:17:54 UTC

  The process of shipbreaking, breaking down old ships into spare parts, is among the most dangerous jobs in the world. It's also very harmful to the environment. [...]

2020-08-31

• Doubts about the Model and Optimal Policy
  by Christian Zimmermann in NEP-DGE blog, 2020-08-31 20:30:26 UTC

  By Anastasios Karantounias http://d.repec.org/n?u=RePEc:fip:fedawp:88478&r=dge This paper analyzes optimal policy in setups where both the leader and the follower have doubts about the probability model of uncertainty. I illustrate the methodology in two environments: a) an industry populated with a large firm and many small firms in a competitive fringe, where both types of firms doubt the probability model of demand shocks, and b) a general equilibrium economy, where a policymaker taxes linearly the labor income of a representative household in order to finance an exogenous stream of stocha [...]

• What’s happened so far with the return on safe and liquid assets?
  by ? in FRED blog, 2020-08-31 13:00:00 UTC

  Today, we use an assortment of FRED data to consider a straightforward question: What has happened to the returns on safe assets (in this case, Treasury securities) since the pandemic hit? We look especially at the possible contributions of inflation expectations and demand for liquidity. The FRED graph above shows nominal rates for the 1-year Treasury (dark blue) and the 5-year Treasury (red) the difference between the “instantaneous” 5-year-ahead Treasury rate and the 5-year, 5-year forward expected inflation rate (green) the difference between corporate bond yields and the 5-year Treasury [...]

2020-08-28

• Blackouts and Fires Caused by California’s Ineffective Green Policies
  by Joel Kotkin in The Foundry, 2020-08-28 20:47:02 UTC

  In the soft warmth of spring the swallows famously return to  Capistrano , but in recent years they are followed by what seems inevitable summer  power outages  and fires. This is not as pleasant an experience for Californians as the return of our favored feathered companions. Every summer, usually around this time of year, we get our inevitable heat waves. In the past, we used to endure them without fearing our lights–and computers–would be shut down, and our houses left in ruins. No more. Almost every year we do not just have a fire season, we have a conflagration. Millions of acres g [...]

2020-08-27

• How Transaction Costs Change the Analysis
  by ? in Econlog, 2020-08-27 19:11:32 UTC

  Hang around freedom-friendly circles long enough and you’ll eventually hear a claim like the following. “Under private ownership of roads, congestion would be eliminated through the implementation of market pricing.” Claims like this range the gamut of sophistication. In the more sophisticated, truly dynamic pricing would adjust in real time as cars enter and exit the roadway. A somewhat less sophisticated idea still improves on the current non-price means of allocation under public ownership: the private road owner charges a higher fee during hours when he anticipates more demand for the road [...]

• Climate Finance Intermediation: Interest Spread Effects in a Climate Policy Model
  by Christian Zimmermann in NEP-DGE blog, 2020-08-27 03:44:19 UTC

  By Kai Lessmann and Matthias Kalkuhl http://d.repec.org/n?u=RePEc:ces:ceswps:_8380&r=dge Interest rates are central determinants of saving and investment decisions. Costly financial intermediation distort these price signals by creating a spread between the interest rates on deposits and loans with substantial effects on the supply of funds and the demand for credit. This study investigates how interest rate spreads affect climate policy in its ambition to shift capital from polluting to low-carbon sectors of the economy. To this end, we introduce financial intermediation costs in a dynamic gen [...]

2020-08-25

• If only monetary policy in 2008 had been what it was in 2020.
  by Marcus Nunes in Historinhas, 2020-08-25 19:01:30 UTC

  Many like to compare the Covid19 contraction with the Great Depression. In addition to the nature of the two contractions being completely unrelated, while in the first two months of the Covid19 crisis (from the February peak to the April trough) RGDP dropped 15%, it took one year from the start of the Great Depression for RGDP to drop by that amount. Although the Covid19 shock has also no common element with the Great Recession, a comparison between the two is instructive from the monetary policy point of view. This is so because the Great Recession was the “desired outcome” of the Fed´s mone [...]

2020-08-24

• How Does the COVID Recession Compare?
  by Michael J. Boskin in Project Syndicate, 2020-08-24 14:00:36 UTC

  STANFORD – The historically deep COVID-19 recession appears to have turned the corner in most countries. But current private and official forecasts , if correct, imply that most economies will not return to their previous performance peaks until late 2022. Much will depend not only on the evolution of the pandemic and effective therapeutic and vaccine deployment, but also on the monetary, fiscal, trade, and regulatory policies that are pursued. Policymakers and commentators are thus examining previous episodes in search of an effective response. All recessions differ in terms of their proximat [...]

• Chris Sampson’s journal round-up for 24th August 2020
  by Chris Sampson in The Academic Health Economists' Blog, 2020-08-24 11:00:07 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. Visit our Resources page for links to more journals or follow the HealthEconBot . If you’d like to write one of our weekly journal round-ups, get in touch . American Economic Journal: Economic Policy Volume 12, Issue 3 Of the 14 articles in the latest issue of AEJ:EP , there are three that focus on health care. A study from Taiwan estimates price elasticities to identify the impact of cost-shari [...]

• Average Inflation Targeting
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2020-08-24 10:57:02 UTC

  “To achieve buy-in by households and businesses, a comprehensible, credible, and actionable makeup strategy will need to be followed by years of central bank policy consistent with that strategy.” FRB Chair Jerome H. Powell, Opening Remarks at the Conference on Monetary Policy Strategy, Tools and Communications Practices,”  June 4, 2019.  The Federal Open Committee’s first-ever comprehensive monetary policy review looks to be coming to an end. Since the announcement on November 15, 2018, the Fed has focused on strategies, tools, and communications practices, and engaged the public through nume [...]

2020-08-20

• Thesis Thursday: Chris Sampson
  by captaincanaway in The Academic Health Economists' Blog, 2020-08-20 06:00:04 UTC

  On the third Thursday of every month, we speak to a recent graduate about their thesis and their studies. This month’s guest is Dr Chris Sampson who has a PhD from the University of Nottingham . If you would like to suggest a candidate for an upcoming Thesis Thursday, get in touch. Title Optimising the cost-effectiveness of risk-based screening for diabetic retinopathy Supervisors Marilyn James , David Whynes Repository link http://eprints.nottingham.ac.uk/60411/ Congratulations on finally finishing your PhD and thank you for acknowledging my ‘spiritual guidance’ in your thesis. First t [...]

• Macroeconomic effects of tariffs shocks: the role of the effective lower bound and the labour market
  by Christian Zimmermann in NEP-DGE blog, 2020-08-20 00:28:29 UTC

  By Pascal Jacquinot, Matija Lozej and Massimiliano Pisani http://d.repec.org/n?u=RePEc:ecb:ecbwps:20202434&r=dge We simulate a version of the EAGLE, a New Keynesian multi-country model of the world economy, to assess the macroeconomic effects of US tariffs imposed on one country member of the euro area (EA), and the rest of the world (RW). The model is augmented with an endogenous effective lower bound (ELB) on the monetary policy rate of the EA and country-specific labour markets with search-and-matching frictions. Our main results are as follows. First, tariffs produce recessionary effects [...]

• Choices and options, public and private
  by ? in croaking cassandra, 2020-08-20 00:25:00 UTC

  I was going to move on to another topic, but last night University of Waikato economics academic John Gibson sent me the links to a couple of other papers I hadn’t seen, and I thought it might be worth writing about them. Gibson is one of New Zealand [...]

2020-08-19

• Making the Treasury Market Resilient
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2020-08-19 11:50:39 UTC

  “ [A]ny significant disruption in the Treasury market would likely impact financial stability .” Treasury Market Practices Group, “ White Paper on Clear and Settlement in the Secondary Market for U.S. Treasury Securities ,” July 11, 2019. “Having pushed for the move to greater central clearing, global authorities have a responsibility to ensure that CCPs do not themselves become a point of failure for the system.” Then-FRB Governor Jerome H. Powell, Speech at the FRB Chicago Symposium on Central Clearing , June 23, 2017. Ensuring financial stability requires both resilient institutions and res [...]

2020-08-18

• Does India need a public procurement law?
  by Shubho Roy in Ajay Shah's blog, 2020-08-18 19:36:00 UTC

  by Shubho Roy and Diya Uday. One of the proposed solutions to India’s public procurement problems is new legislation to govern how the government buys goods and services from the private sector. Will a law help India? We connect two data sources to test this idea. Instead of a new law, monitoring public procurement, identifying failures, and then building state capacity may be a better solution. Legislation may not be the silver bullet for our problems. In India, legislation is often viewed as a panacea when faced with policy problems. Whether it is bankruptcy , privacy , warehousing, or [...]

2020-08-17

• Boon or Boondoggle? The Long Run Economics of the Empire State Building
  by Jason Barr in Skynomics Blog, 2020-08-17 12:28:49 UTC

  Jason M. Barr and Gabriel Ahlfeldt                       August 17, 2020 The Bricks of Ego When most people look up at supertall skyscrapers , like the Burj Khalifa or the Shanghai Tower, they assume they have been constructed for irrational purposes . The most common belief is that they are built by ego-driven developers seeking to build monuments to themselves. This certainly seemed like the case in 1931, when the two developers of the Empire State Building, former New York governor and 1928 Democratic presidential candidate, Al Smith, and former General Motors executive, John J. Raskob, bui [...]

2020-08-12

• ‘Preference-based measure’ is misleading – can we agree on something better?
  by Nancy Devlin in The Academic Health Economists' Blog, 2020-08-12 06:00:08 UTC

  From time to time, a little puff of steam emerges from my Twitter feed as Paul Kind (one of the founding members of the EuroQol Group and a key figure in the development of the EQ-5D) objects to yet another paper describing the EQ-5D as a ‘preference-based measure’ (PBM). I find myself agreeing with Paul. Of course, this may simply mean I have become old and cranky. While nomenclature isn’t a very exciting topic, I thought it might be useful to set out the reasons why I think the term ‘preference-based measure’ (PBM) is unhelpful and potentially misleading. What do health economists mean w [...]

2020-08-11

• Dynamic General Equilibrium modelling of tiny countries
  by Christian Zimmermann in NEP-DGE blog, 2020-08-11 14:47:26 UTC

  Fiscal Policy Multipliers in Small States By Ali Alichi, Ippei Shibata and Kadir Tanyeri http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/072&r=dge Government debt in many small states has risen beyond sustainable levels and some governments are considering fiscal consolidation. This paper estimates fiscal policy multipliers for small states using two distinct models: an empirical forecast error model with data from 23 small states across the world; and a Dynamic Stochastic General Equilibrium (DSGE) model calibrated to a hypothetical small state’s economy. The results suggest that fiscal policy [...]

2020-08-10

• Density Forecasts and Density Realizations
  by Francis Diebold in No Hesitations, 2020-08-10 18:53:00 UTC

  Check out the interesting new paper below.   Of course I am a fan of predictive densities (e.g., GDP fan charts).  Usually I compare them to the "realization" (e.g., "published GDP").  But of course, as the authors emphasize, the realization is just a point estimate of true GDP, whereas in reality true GDP is itself uncertain and has its own density, which can be estimated (maybe...) from revisions.  Very interesting.  I wonder, for example, how predictive density assessments based on the probability integral transform (e.g., here ) would need to be modified to account for uncertainty in the m [...]

• Chris Sampson’s journal round-up for 10th August 2020
  by Chris Sampson in The Academic Health Economists' Blog, 2020-08-10 11:00:11 UTC

  Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. Visit our Resources page for links to more journals or follow the HealthEconBot . If you’d like to write one of our weekly journal round-ups, get in touch . Health Care Analysis Volume 28, Issue 3 Health Care Analysis is a journal that I would like to spend more time reading. This issue contains the usual crop of thoughtful articles on matters of fairness in health care. Leading the way is an ar [...]

• PÃ¥vebesök förbättrar de mänskliga rättigheterna
  by Niclas Berggren in Nonicoclolasos, 2020-08-10 05:22:00 UTC

  Som läsare av denna blogg väl känner till är jag ingen större vän av Katolska kyrkan och påven. Icke desto mindre måste jag erkänna att denna kyrka och dess högste företrädare ibland kan föra med sig förbättringar i världen. Ett exempel på detta ges i den nya studien ”Pacem in Terris: Are Papal Visits Good News for Human Rights?” av Marek Endrich och Jerg Gutmann: Our estimated causal treatment effect of papal visits indicates an increase in human rights protection. This effect sets in before the pope’s visit, which can be explained by the pope’s ability and frequently demonstrated willing [...]

2020-08-05

• Truth, utility & education
  by chris in Stumbling and Mumbling, 2020-08-05 13:10:01 UTC

  Katharine Birbalsingh, headteacher of Michaela Community School, says the Black Lives Matter movement is a distraction. I think her claim is defensible – albeit because it raises an issue many of us would rather ignore. The Times quotes her: The problem with getting angry about racism is it’s distracting. It leaves you with less energy to help you succeed, like working hard. This alerts us to a nasty conflict – between beliefs that are true and those that are useful. It is true that black people face discrimination: for example, the ONS says that Black Britons earn 7.7 per cent less than the [...]

• Abandoning a Paper
  by noreply@blogger.com (David Stern) in Stochastic Trend, 2020-08-05 00:26:00 UTC

  Now and then it's time to give up on a project. In September 2018, I attended a climate econometrics conference at Frascati near Rome. For my presentation, I did some research on the performance of different econometric estimators of the equilibrium climate sensitivity (ECS) including the multicointegrating vector autoregression (MVAR) that we used in our paper in the Journal of Econometrics . The paper included estimates using historical time series observations (from 1850 to 2014), a Monte Carlo analysis, estimates using output of 16 Global Circulation Models (GCMs), and a meta-analysis of t [...]

2020-08-04

• A replication database for economics and social sciences: The ReplicationWiki
  by repecblogguest in RePEc blog, 2020-08-04 14:43:54 UTC

  This is a guest post by Jan H. Höffler The ReplicationWiki currently offers a database of 4,484 studies from the social sciences for which empirical methods were used. It lists which of the studies have data and code available online. In cases where replications are known they are classified by their type and results. The topic of replication has become more and more prominent in the scholarly discourse in recent years. Yet, much needs to be done to make the availability of code and data more mainstream. To highlight how much work still lies ahead, even recent publications on the topic of repl [...]

2020-08-03

• Windowing, anti-competition and the Amendments to the 6th Edition of the Nigerian Broadcasting Code
  by Chijioke Okorie in The IPKat, 2020-08-03 15:33:00 UTC

  Earlier in June, Nigeria’s National Broadcasting Commission (NBC) published Amendments to the 6th Edition of the Nigerian Broadcasting Code (NBC Code amendments), after public presentation of the amendments to stakeholders in the broadcast media industry in Nigeria. The NBC Code amendments provide inter alia for web/online broadcasting, prohibition of agreements in restraint of trade; requirements for acquisition of sports rights; local content requirements and compulsory sub-licensing. The NBC Code amendments have attracted both strong support and critici [...]

• Has the U.S. Distribution of Wealth Worsened?
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2020-08-03 11:48:13 UTC

  “ [T]he ratio of the wealth of the wealthy to the wealth of the less wealthy …may reflect something about the adequacy or inadequacy of social insurance arrangements…” Lawrence Summers, comments at Peterson Institute panel, October 17, 2019 . Wealth inequality in the United States is obvious to everyone. The Federal Reserve’s triennial Survey of Consumer Finance (SCF) documents the glaring and persistent divide between rich and poor, confirming that ownership of financial and real assets in the United States has been highly concentrated for decades (see our earlier post ). The most recent 2016 [...]

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