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- Tiebout Revisited: What Happens if the Federal EPA is Gutted?
by Matthew Kahn in Environmental and Urban Economics, 2016-12-09 15:01:00 UTC
The N Y Times isn't optimistic about the path that the EPA will take under the leadership of Scott Pruitt. � His policy shifts (relative to President Obama's team) will allow future environmental economists �to study whether "national policy maters" in causing environmental quality progress. �In this old JEEM paper, Michael Greenstone argued that the EPA wasn't the main cause of the major cause of the air pollution (as measured by sulfur dioxide) progress observed over a 30 year period. � In my Rust Belt work, I have argued that the phase out of old power plants and steel plants and heavy manu [...]
- Mismeasurement of Distance Effects: The Role of Internal Location of Production
by Hakan Yilmazkuday in Hakan Yilmazkuday's Blog, 2016-12-08 15:27:00 UTC
Mismeasurement of DistanceEffects: The Role of Internal Location of Production � One sentence summary : The overestimation of distance effects in gravity studies is an aggregation problem due to ignoring the internal location of production, which can be fixed by a corrective distance index based on the dispersion of economic activity within the exporter country and its remoteness from the rest of the world. The corresponding paper by Hakan Yilmazkuday has been published at Review of International Economics . The working paper version is available here. [...]
- Quantitative Impact of Reducing Barriers to Skilled Labor Immigration: The Case of the US H-1B Visa
by Christian Zimmermann in NEP-DGE blog, 2016-12-07 14:37:54 UTC
By Hyun Lee
In this paper, I develop a novel two-country general equilibrium model of immigration and return migration with incomplete markets and heterogeneous agents. I use the model to quantify the short-run and the long-run macroeconomic impacts of permanently doubling the US H-1B visa quota. In the short-run, I find huge endogenous increase in visa application by less talented skilled foreigners, which increases the probability of obtaining the H-1B visa by only 11 percentage points. In the long-run, US experiences a modest gain in out [...]
- Better capitalized banks lend more and lend better
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2016-12-05 13:49:01 UTC
Many people seem to think that when authorities increase capital requirements, banks lend less. The advocates of this view go on to argue that, since credit is essential for economic growth, we should not impose overly tough constraints on banks. Put another way, a number of people believe that we have gone too far in making the financial system safe and the cost is lower growth and employment. Treasury Secretary-designate Steven Mnuchin appears to share the view that financial regulation has restrained the supply of credit: in a recent interview , he is quoted as saying “The number one proble [...]
- A Comment on Prof. Krugman's New "Trade Paper"
by Matthew Kahn in Environmental and Urban Economics, 2016-12-04 16:33:00 UTC
Dr. Krugman posted a short note� �arguing that China is not responsible for the decline of U.S manufacturing. �With one graph, he shows that a simple negative linear trend does a great job of explaining the share of people working in manufacturing from 1950 to 2010 and that this share has been roughly constant over the last 6 years. In absolute terms, �5 million fewer people now work in manufacturing relative to back in the 1970s. Dr. K wants to approach the "manufacturing's dynamics question" from the perspective of macroeconomics but this is a mistake. �Wisconsin, Michigan, PA , Ohio voters [...]
- High-skilled migrants matter â and weâre not winning
by Johan Fourie in Johan Fourie's Blog, 2016-12-03 04:38:47 UTC
One of the baffling things in explaining the Industrial Revolution is that education, that pillar most economists believe to be critical for economic growth, seems to have played a relatively minor role. Universal public education was a consequence rather than a cause of the Industrial Revolution. Eighteenth-century England did not first have a skilled population before they had an economic transformation; the uncomfortable truth is that it was the other way round.
This uncomfortable truth does not suggest that formal education was completely unimportant. It suggests, instead, that much of wh [...]
- Some Airplane Energy Demand Economics
by Matthew Kahn in Environmental and Urban Economics, 2016-12-01 16:55:00 UTC
Before I talk about airplanes, I want to thank USC's media team for writing this very nice article about the� The USC Economics Review �(our new undergraduate economics journal). �Two weeks ago, J erry Nickelsberg a nd I released a new NBER Working Paper �titled " An Economic Analysis of U.S Airline Fuel Economy Dynamics from 1991 to 2015" Airline transport generates a growing share of global greenhouse gas emissions but as of late 2016, this sector has not faced U.S. fuel economy or emissions regulation. At any point in time, airlines own and lease a set of durable vehicles and have invested [...]
- Can mobile money increase investment by businesses?
by Asif Islam in Let's Talk Development, 2016-12-01 15:45:00 UTC
Investment is one of the pillars of private sector development. The acquisition of assets enables firms to increase their capacity and improve their efficiency, unlocking avenues of growth. Promoting firms’ growth is especially critical in Sub-Saharan African countries that have predominantly low levels of economic development and high rates of poverty. Against this backdrop, there has been a rapid increase in mobile money use - that is the use of mobile phones for financial transfers. At the end of 2015, mobile money services were available in 93 countries -with a total of over 411 million r [...]
- Elites or people?
by chris in Stumbling and Mumbling, 2016-12-01 13:13:41 UTC
The votes for Trump and Brexit have highlighted a division between “elites” and the “people”. For me, though, this is the wrong dichotomy. The question instead is: under what conditions are the people right, and under what conditions are elites right?
Both can sometimes go wrong. Experts are prone not just to professional deformation (pdf) – the tendency for perceptions to be warped by their training – but also groupthink. For example, the replication crisis – which is by no means confined to psychology – suggests that peer review fails to weed out poor academic research and might even enhance [...]
- Gender, Marriage, and Life Expectancy
by Christian Zimmermann in NEP-DGE blog, 2016-11-29 21:33:18 UTC
By Margherita Borella, Mariacristina De Nardi and Fang Yang
Wages and life expectancy, as well as labor market outcomes, savings, and consumption, differ by gender and marital status. In this paper we compare the aggregate implications of two dynamic structural models. The first model is a standard, quantitative, life-cycle economy, in which people are only heterogenous by age and realized earnings shocks, and is calibrated using data on men, as typically done. The second model is one in which people are also heterogeneous by gender, marital [...]
- Financial Regulation in a Quantitative Model of the Modern Banking System
by Christian Zimmermann in NEP-DGE blog, 2016-11-29 21:33:00 UTC
By Tim Landvoigt and Juliane Begenau
This paper builds a quantitative general equilibrium model with commercial banks and shadow banks to study the unintended consequences of capital requirements. In particular, we investigate how the shadow banking system responds to capital regulation changes for traditional banks. A key feature of our model are defaultable bank liabilities that provide liquidity services to households. In case of default, commercial bank debt is fully insured and thus provides full liquidity services. In contrast, shadow ba [...]
- Ending Too Big to Fail
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2016-11-28 13:33:26 UTC
“We very, very much did not want to make the loan.” Ben Bernanke testimony (October 10, 2014) regarding the Federal Reserve’s emergency provision of credit to AIG in September, 2008. More than six years after the Dodd-Frank Act passed in July 2010, the controversy over how to end “too big to fail” (TBTF) remains a key focus of financial reform. Indeed, TBTF—which led to the troubling bailouts of financial behemoths in the crisis of 2007-2009—is still one of the biggest challenges in reducing the probability and severity of financial crises. By focusing on the largest, most complex, most interc [...]
- Near-term expectations for the federal funds rate
by thebusinesscycleblog in The business cycle blog, 2016-11-28 12:53:27 UTC
A note on extracting expectations for policy rates when deviations from the expectations hypothesis may be important, from Kim and Tanaka [...]
- Did Coastal Local Zoning in Progressive States Caused the Trump Win? Post #2
by Matthew Kahn in Environmental and Urban Economics, 2016-11-27 15:27:00 UTC
This post represents a sequel to this recent popular post . � �In that post, I argue that an unintended consequence of stringent local zoning in the progressive states of California, Oregon and Washington is that these states created a near vertical housing supply curve and priced out middle class people who moved to Texas instead. �This dispersal of the population cost Hilary Clinton dozens of electoral votes. �Now some data. �Go to this IRS state to state migration gross flows data . Download the 2014-2015 data and you will learn the following facts. For U.S residents who move to California; [...]
- Not understanding the right
by chris in Stumbling and Mumbling, 2016-11-27 13:07:30 UTC
We leftists should make more effort to understand the rise of the populist right, says Janice Tuner in the Times:
After defeat you must ask why. It is easy to blame Breitbart or the tabloids, to label every Trump voter a white supremacist, every Leaver a “Brextremist”. Easier than asking…what the hell you missed.
Here we must sharply distinguish two different meanings of “understand”: being aware of the cause of something versus being sympathetic to something. I can do the former without the latter.
For my purposes, perhaps the biggest cause of the rise of populism was pointed out back in 20 [...]
- A Gift From Europe to the World: Globalization, Capitalist Expansionism and Professional Bicycle Road Racing
by stefanotijerina in NEP-HIS blog, 2016-11-23 20:49:44 UTC
The History of Professional Road Cycling
by Jean-François Mignot
Why did cycling become professional as early as the late nineteenth century, while other sports (such as rugby) and other sport events (such as the Olympic Games) remained amateur until the 1980s? Why are the organizers of the most important bicycle races private companies, while in other sports such as soccer the main event organizer is a nonprofit organization? To what extent have bicycle races changed since the late nineteenth century? And how does cycling reflect long-term economic changes? The history of profession [...]
- Three decades of publishing research in population economics
by maximorossi in NEP-LTV blog, 2016-11-23 15:37:17 UTC
By: Brown, Alessio J.G. (UNU‐MERIT) ; Zimmermann, Klaus F. (UNU-MERIT, and Harvard University)
The Journal of Population Economics is celebrating its thirtieth birthday. When the first issue was published, population economics was non-existent as a field. Hence, the aim has been to provide a high quality outlet to publishing excellent theoretical and applied research in all areas of population economics. The article summarises key developments in the Journal’s editorial process, thematic orientation, international reach and successes. Furthermore, we discuss the benefits of working papers in e [...]
- Taxation of Temporary Jobs: Good Intentions with Bad Outcomes?
by maximorossi in NEP-LTV blog, 2016-11-23 15:35:51 UTC
By: Cahuc, Pierre (Ecole Polytechnique, Paris) ; Charlot, Olivier (University of Cergy-Pontoise) ; Malherbet, Franck (CREST (ENSAE)) ; Benghalem, Helène (CREST) ; Limon, Emeline (University of Cergy-Pontoise)
This paper analyzes the consequences of the taxation of temporary jobs recently introduced in several European countries to induce firms to create more open-ended contracts and to increase the duration of jobs. The estimation of a job search and matching model on French data shows that the taxation of temporary jobs does not reach its objectives: it reduces the mean duration of jobs and d [...]
- What Grades and Achievement Tests Measure
by maximorossi in NEP-LTV blog, 2016-11-23 15:34:20 UTC
By: Borghans, Lex (Maastricht University) ; Golsteyn, Bart H.H. (Maastricht University) ; Heckman, James J. (University of Chicago) ; Humphries, John Eric (University of Chicago)
Intelligence quotient (IQ), grades, and scores on achievement tests are widely used as measures of cognition, yet the correlations among them are far from perfect. This paper uses a variety of data sets to show that personality and IQ predict grades and scores on achievement tests. Personality is relatively more important in predicting grades than scores on achievement tests. IQ is relatively more important in predict [...]
- El impacto del sistema tributario y del gasto social sobre la desigualdad y la pobreza en Argentina, Bolivia, Brasil, MÃ©xico, PerÃº y Uruguay: Un panorama general
by maximorossi in NEP-LTV blog, 2016-11-23 15:31:39 UTC
By: Nora Lustig (Stone Center for Latin American Studies, Department of Economics, Tulane University.) ; Florencia Amábile ; Marisa Bucheli ; George Gray Molina ; Sean Higgins ; Miguel Jaramillo ; Wilson Jiménez Pozo ; Veronica Paz Arauco ; Claudiney Pereira ; Carola Pessino ; Máximo Rossi ; John Scott ; Ernesto Yáñez Aguilar
¿Cuánta redistribución y reducción de pobreza puede lograrse a través del gasto social, subsidios e impuestos en América Latina? Los análisis estándar de incidencia fiscal aplicados en Argentina, Bolivia, Brasil, México, Perú y Uruguay, con base en una metodología que per [...]
- El Impacto del Sistema Tributario y el Gasto Social en la DistribuciÃ³n del Ingreso y la Pobreza en AmÃ©rica Latina: Argentina, Bolivia, Brasil, Chile, Colombia, Costa Rica Ecuador, El Salvador, Guatemala, Honduras, MÃ©xico, PerÃº y Uruguay
by maximorossi in NEP-LTV blog, 2016-11-23 15:30:22 UTC
By: Nora Lustig (Stone Center for Latin American Studies, Department of Economics, Tulane University. Commitment to Equity Institute (CEQI).)
Using standard fiscal incidence analysis, this paper estimates the impact of fiscal policy on inequality and poverty in thirteen countries in Latin America around 2010.Argentina, Brazil, Chile, Costa Rica and Uruguay are the countries which redistribute the most and El Salvador, Guatemala and Honduras redistribute the least. Contributory pensions are significantly equalizing in Argentina, Brazil and Uruguay and also in Chile, Costa Rica and Ecuador but, [...]
- Bilateral versus Multilateral Free Trade Agreements: A Welfare Analysis
by Hakan Yilmazkuday in Hakan Yilmazkuday's Blog, 2016-11-23 01:32:00 UTC
- Inequality and Aggregate Demand
by Christian Zimmermann in NEP-DGE blog, 2016-11-22 19:42:48 UTC
By Matthew Rognlie and Adrien Auclert
We explore the quantitative effects of transitory and persistent increases in income inequality on equilibrium interest rates and output. Our starting point is a Bewley-Huggett-Aiyagari model featuring rich heterogeneity and earnings dynamics as well as downward nominal wage rigidities. A temporary rise in inequality, if not accommodated by monetary policy, has an immediate effect on output that can be quantified using the empirical covariance between income and marginal propensities to consume. A permanen [...]
- Are Agricultural Traders Colluding? Experimental Evidence on Competition in Kenyan Maize Markets: Guest Post by Lauren Falcao Bergquist
by Development Impact Guest Blogger in Development Impact, 2016-11-22 15:17:00 UTC
This is the second in our series of posts by Ph.D. students on the job market this year
Setting food-price policy is hard. Smallholder farmers are better off with higher crop prices, but consumers want lower prices. So what is a policymaker to do?
Well-integrated agricultural markets can tackle both sides of this food-price policy dilemma, by pulling crops out of surplus areas (to boost prices received by farmers) and pushing food into deficit areas (to reduce prices faced by consumers).
But, alas, agricultural markets in sub-Saharan Africa are not well-integrated. Wide variation in price [...]
- High versus Low Inflation: Implications for Price-Level Convergence
by Hakan Yilmazkuday in Hakan Yilmazkuday's Blog, 2016-11-22 14:58:00 UTC
High versus Low Inflation:Implications for Price-Level Convergence [...]
- Why not worker-directors?
by chris in Stumbling and Mumbling, 2016-11-21 13:56:20 UTC
I’m disappointed but not surprised that Theresa May has backtracked on the promise to put workers onto company boards. But let’s be clear why I’m disappointed.
A single worker-director would not greatly empower workers – although of course it might be a stepping stone towards a greater voice. Sam might be right to say that giving workers shares might be a better alternative.
Instead, I favour worker-directors not so much because I'm a socialist but because I'm a libertarian. I support them for the same reason that I support free markets (in some contexts) and free speech. It’s because I believ [...]