Use the EconAcademics widget on your webpage or blog. See here for details.
Blog aggregator for economics research
This page is updated every three hours
- Why Study Economics?
by Mark Thoma in Economist's View, 2016-09-27 09:14:56 UTC
Why Study Economics? : I am very pleased to visit today with the students and faculty of the Howard University Economics Department. First, a fact that you know but others may not: The Howard University Economics Department is the only producer of economics Ph.D.'s among the nation's historically black colleges and universities, and it has been teaching economics to undergraduates for nearly a century. 1
Speaking as one economist to a group among whom I hope will be many future economists, let me start by saying that pursuing a degree in economics can bring many rewards. Firs [...]
- 295 â What is a threatened species worth?
by David Pannell in Pannell Discussions, 2016-09-26 15:00:19 UTC
There are around 1800 species included on Australia’s national list of threatened species of fauna and flora . The most severely threatened category, “critically endangered”, includes 6 mammals, 16 birds, 8 fish, 9 reptiles, 5 frogs, 25 other animals and 148 plants.
My feeling is that the general public is more concerned about threatened species than about many other environmental issues. There is something horrifying about the thought of extinction that resonates with most people to some extent.
Nevertheless, our performance at improving the status of threatened species is generally poor, i [...]
- Transparent stress tests?
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2016-09-26 12:22:36 UTC
This month, the Committee on Capital Market Regulation (CCMR) published a paper criticizing the procedures the Federal Reserve uses in conducting its stress tests. The claim is that, in its annual Comprehensive Capital Analysis and Review (CCAR), the Fed is violating the Administrative Procedures Act of 1946 (APA). The CCMR’s proposed solution is more transparency. As big fans of both stress tests and transparency in general, and of the CCAR in particular, we find this legal challenge very troubling. We believe that making the stress tests more transparent in the ways that the CCMR suggests wo [...]
- More Behavioral Economics from the NY Times: The Case of Volcano Risk and Implications for Climate Change Awareness
by Matthew Kahn in Environmental and Urban Economics, 2016-09-26 00:07:00 UTC
The writers for the NY Times are a consistent bunch. In the Book Review section today, there is a short discussion by Kim Tingley reviewing a new book called Eruption by Steve Olson. See if you can spot the "behavioral economics" mindset that we are fools who are ignorant of the risks we have imposed on ourselves. The book author and the reviewer are concerned that "we don't know that we don't know" what climate change will do to us in the future. The author and the reviewer are somehow smarter than everyone else and sit on Mount Olympus and ponder the fate of the common man (think of [...]
- New working paper on the Deepwater Horizon oil spill
by John Whitehead in Environmental Economics, 2016-09-24 09:01:06 UTC
Lost Recreational Value from the Deepwater Horizon Oil Spill Using Revealed and Stated Preference Data
John C. Whitehead , Tim Haab , Sherry Larkin , John Loomis , Sergio Alvarez and Andrew Ropicki
No 16-16, Working Papers from Department of Economics, Appalachian State University
Abstract: The lost recreational use values from the BP/Deepwater Horizon oil spill in the Gulf of Mexico were estimated from cancelled recreational trips to Northwest Florida. The impacts were calculated using the travel cost method for a single site with primary data collected from an online survey conducted after [...]
- New working paper on the demand for seafood safety
by John Whitehead in Environmental Economics, 2016-09-24 08:59:04 UTC
Convergent validity of stated preference methods to estimate willingness-to-pay for seafood traceability: The case of Gulf of Mexico oysters
John C. Whitehead , O. Ashton Morgan and William L. Huth
No 16-15, Working Papers from Department of Economics, Appalachian State University
Abstract: In this study we compare willingness to pay for a seafood traceability system form contingent behavior demand and contingent valuation referendum vote models using data from a survey of Gulf of Mexico oyster consumers following the BP oil spill in 2010. We estimate a fixed effects model of oyster demand us [...]
- IPAâs weekly links
by Jeff Mosenkis (IPA) in Chris Blattman, 2016-09-23 15:26:51 UTC
Guest Post by Jeff Mosenkis of Innovations for Poverty Action .
IPA’s looking to fund research in financial services for the poor (especially digital ones), deadline Nov 4th.
José A. Quiñonez of the Mission Asset Fund in San Francisco was named a MacArthur Fellow (or “genius”) for his work formalizing informal lending among immigrants to create credit histories, which in turn gives them access to credit cards, loans, and the like.
Bruce Wydick and colleagues’ second paper from an RCT evaluating the effects of TOMS shoes in El Salvador came out , concluding:
Thus, in a context where most ch [...]
- The safe asset girdle on liquidity
by SFF in policy economics, 2016-09-23 00:51:03 UTC
We have mixed views about the phrase “maturity transformation”, found in economic and bank regulatory literature. We like it because it is suggestive of alchemy or developmental biology, and finance is full of alchemy. We don’t like some of the baggage that has been hung on the term, and while we will never defend tradition for its own sake, we wonder what is wrong with “asset/liability mismatch”, which to us seems clearer, and reminds us to think of both sides of the balance sheet. Maturity transformation has a static quality to it, and indeed some of the worst examples of maturity transforma [...]
- The centrist crisis
by chris in Stumbling and Mumbling, 2016-09-22 12:36:59 UTC
Tim Farron said this week that “there is a hole in the centre of British politics right now.” This is true, if not in the sense he intends.
What I mean is that several big political developments of recent years are a backlash against centrist politics: the rise of Corbyn; Brexit; the collapse in the LibDems vote in 2015; growing distrust of experts; and increasing hostility to immigration. The hole in centre exists because voters have deserted it. Such trends, of course, have counterparts in the US and much of Europe.
There’s a reason for this. Centrism requires a healthy capitalism. Support f [...]
- In defence of technology shocks
by chris in Stumbling and Mumbling, 2016-09-20 12:38:32 UTC
In his attack (pdf) upon macroeconomic theory, Paul Romer is especially critical of the real business cycle view that recessions are caused by negative technology shocks. He calls them “phlogiston shocks” and says:
there is no microeconomic evidence for the negative phlogiston shocks that the model invokes nor any sensible theoretical interpretation of what a negative phlogiston shock would mean.
Simon accuses him of attacking a straw man, saying that “the insistence on productivity shocks as business cycle drivers is pretty dated.” And the standard undergraduate textbook, Carlin and Soskice [...]
- Whatâs the optimum debt / GDP ratio, and whatâs the optimum interest to pay on that debt?
by Ralph Musgrave in Ralphonomics, 2016-09-20 08:02:00 UTC
Summary. This article deals with the differences between Modern Monetary Theory and what Simon Wren-Lewis (Oxford economics prof) calls the “consensus assignment” (which more or less equals the conventional wisdom). I argue below that if the best of MMT and the best of SW-L’s ideas are combined, one ends with the ideal system, and that involves two important elements. First it results in a national debt that pays the optimum rate of interest: zero or near zero. Second, it results in the optimum debt / GDP ratio. But since the interest on that debt is zero or near zero, that so called debt is [...]
- Economic complexity, institutions and income inequality
by Guest author in OECD Insights, 2016-09-20 06:22:48 UTC
César Hidalgo and Dominik Hartmann , Macro Connections, The MIT Media Lab
Is a country’s ability to generate and distribute income determined by its productive structure? Decades ago Simon Kuznets proposed an inverted-u-shaped relationship describing the connection between a country’s average level of income and its level of income inequality. Kuznets’ curve suggested that income inequality would first rise and then fall as countries’ income moved from low to high. Yet, the curve has proven difficult to verify empirically. The inverted-u-shaped relationship fails to hold when several Latin Ame [...]
- Immigration as social mobility
by chris in Stumbling and Mumbling, 2016-09-19 12:49:08 UTC
Last week, Theresa May spoke of wanting to increase social mobility, so that “it’s your talent and hard work that matter, not where you were born.” This week she wants to restrict immigration. There’s a massive contradiction here.
I say this for a trivially obvious reason – that migration is a fantastic form of social mobility because it raises people out of poverty . Orley Ashenfelter, for example, shows (pdf) that real wages at McDonalds are seven times higher in the US than in India: Indians are poorer than westerners not because they’re less talented or lazier but because India is a poorer [...]
- Reforming mutual funds: a proposal to improve financial market resilience
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2016-09-19 12:46:34 UTC
U.S. capital markets are the deepest and broadest in the world, fortifying the country’s financial system and making its assets both liquid and attractive. A major part of this capital market advantage is due to the role played by mutual funds, which provide retail investors with a low-cost means of diversifying risk while earning a market return on their savings. However, a growing class of mutual funds—those that hold mostly illiquid assets—appear to be a potential source of systemic risk. In this post we explain why, and then go on to suggest a change that is simple to implement and might m [...]
- Could sortition help against corruption, part II
by Paul Frijters in Club Troppo, 2016-09-19 05:25:33 UTC
In part 1, I looked at whether it made sense to have random individuals inserted into parliament, or to let policies be decided by juries full of randomly chosen individuals. Both were argued to be unworkable and likely to lead to more corruption, rather than less: policies that favour the special interests are so entwined with large legislative programs that it is not feasible or desirable to have them judged by juries of amateurs. And random members of the public spending years in parliament have even less incentive to be honest than members of long-standing political parties with brand-name [...]
- Gains to Trade in Carbon Markets Between Liberals and Conservatives
by Matthew Kahn in Environmental and Urban Economics, 2016-09-18 18:17:00 UTC
This blog post will e xpand on my recent blog post �on breaking the political gridlock over carbon pricing. �As I have explained before, liberals and conservatives disagree over the "property right" concerning whether we have the right to produce GHG emissions for a price of $0. �Conservatives say "yes" and Liberals say no and they want to use collective action to increase the price of carbon dioxide per ton to $35 and to let people know that this price will rise over time. �In my peer reviewed research, I have documented that Conservatives vote against this proposed policy. Recently, Michael [...]
- The Economics Research Agenda on Climate Change Adaptation
by Matthew Kahn in Environmental and Urban Economics, 2016-09-17 15:28:00 UTC
There are plenty of economics researchers estimating historical reduced form models estimating how past climate shocks (i.e heat waves, natural disasters) impacted economic activity in the developing and developed world. �While Nick Kristof salutes this work , this isn't the right way to approach the adaptation question of how costly will it be to adapt to the new climate change conditions that we have collectively unleashed. �I can say this because I have written many of these papers (read this and this ). The cost of adapting to climate change hinges on expectations, innovation, durable capi [...]
- Grammar schools & stereotype threat
by chris in Stumbling and Mumbling, 2016-09-16 13:22:19 UTC
In the debate about grammar schools, everybody assumes that it is those who pass the 11+ who should be admitted to them. But why should this be? Mightn’t it be more efficient instead to admit those who do badly?
I ask because of some recent experiments by Victor Gonzales at Tilburg University. He got people to solve some Raven’s matrices . Then he randomly gave out medals and asked people to redo the tests. He found that low-ability people who got a medal improved substantially, whilst high-ability people who didn’t get one did just as well.
The reason for this lies in self-serving biases . Lo [...]
- Economics, DSGE and Reality: a personal story
by Mainly Macro in Mainly Macro, 2016-09-16 08:11:00 UTC
As I do not win prizes very often, I thought I would use the occasion of this one to write something much more personal than I normally allow myself. But this mini autobiography has a theme involving something quite topical: the relationship between academic macroeconomics and reality, and in particular the debate over DSGE modelling and the lack of economics in current policymaking.  I first learnt economics at Cambridge, a department which at that time was hopelessly split between different factions or ‘schools of thought’. I thought if this is what being an academic is all about I want n [...]
- Will Progressives Pay Climate Skeptics to Stop Polluting?
by Matthew Kahn in Environmental and Urban Economics, 2016-09-15 13:12:00 UTC
There are two pieces to the climate change policy debate focused on "pricing carbon". �One is an incentive effect. All economists agree that if a $35 a ton carbon dioxide tax could be introduced that this would create supply and demand side incentives to decarbonize the world economy. �But, there is also a property rights/income effects question. �Today, �fossil fuel consumers do not pay a tax proportional to their GHG emissions. �Progressives want to take away this "property right" by making this group pay for their emissions. � In a sense, progressives want to punish the suburban, meat eatin [...]
- Shaking things up in China
by ? in FRED blog, 2016-09-15 13:00:07 UTC
During President Obama’s recent visit to China, even getting off the plane involved political upheaval: The New York Times described the mood as “tense” when disagreements between Chinese and U.S. officials compelled the president to use an alternative stairway to deplane Air Force One.
Chinese economic policy has also been tense for some time now, independent of their ability or willingness to accommodate a foreign 747. The graph above plots the Economic Policy Uncertainty Index from Baker, Bloom, and Davis for the U.S. and China. This index scans news articles about a country and records [...]
- Constant versus Variable Markups: Implications for the Law of One Price
by Hakan Yilmazkuday in Hakan Yilmazkuday's Blog, 2016-09-14 23:35:00 UTC
Constant versus Variable Markups: Implications for the Law of One Price One sentence summary : The case of constant markups corresponds to log-linear trade regressions, while a special case of variable markups corresponds to lin-log trade regressions; marginal costs of production contribute most to the deviations from the Law of One Price. The corresponding paper by Hakan Yilmazkuday has been accepted for publication at International Review of Economics and Finance . The working paper version is available here. Abstract This paper compares the implications of having constant versus variable ma [...]
- Household Borrowing Constraints and Residential Investment Dynamics
by Christian Zimmermann in NEP-DGE blog, 2016-09-14 21:08:01 UTC
By Hashmat Khan and Jean-François Rouillard
Why does residential investment lead output in the US and Canada but it is coincident in eurozone countries? In this paper we explore the role of home-equity loans used to boost consumption as a channel that affects residential investment. We consider a multi-agent model where some home-owning households face borrowing constraints that reflect home-equity loans or refinancing constraints. The main contribution of our paper is to highlight that the severity of the households’ borrowing constraints in [...]
- Dirk Ehnts â The euro zone crisis: What would John Maynard do?
by firstname.lastname@example.org (Mike Norman) in Mike Norman Economics, 2016-09-14 14:53:00 UTC
Abstract In his letter to US President Franklin D. Roosevelt Keynes (1933) wrote about "the technique of recovery itself". An increase in output is brought about by an increase in purchasing power, Keynes argues, which can come from three sectors: households, firms and government. Using the IS/MY macroeconomic model developed by Ehnts (2014), which features sectoral balances and endogenous money, the situation of some euro zone members is examined with a focus on the three techniques of recovery: increases in debt of the respective sectors as defined by Keynes. A fourth technique, an increase [...]
- Some Links
by Don Boudreaux in Cafe Hayek, 2016-09-14 14:02:52 UTC
Tweet Shikha Dalmia looks with clear eyes on Muslims in America .
Edward Conard argues that American innovationism is a source of both rising financial inequality in America and rising standards of living for the masses around the world . (Ignore Conard’s closing complaint about American trade deficits; as David Henderson explained , Conard gets this topic wrong.) Here’s a slice from Conard’s essay:
Instead, advocates of redistribution cavalierly diminish the importance of incentives. They claim the success of America’s 1% stems from rising cronyism despite overwhelming [...]
- I'm thinking about changing the name of this blog to "Environmental and Urban Economics"
by John Whitehead in Environmental Economics, 2016-09-14 10:44:20 UTC
From the inbox:
The editors of Urban Studies have now had a chance to read the revised version of your article entitled "Public support for hosting the Olympic Summer Games in Germany: The CVM approach" and I am happy to say that we would like to publish it in Urban Studies.
Yay! Here is a link to the working paper: http://econpapers.repec.org/paper/aplwpaper/15-06.htm .�
My key takeaway from this paper (and this one ) is that CVM does not necessarily need to be conducted with a one-shot dichotomous choice referendum valuation question, which turns out to be the least efficient type of quest [...]