The latest posts by language: All en cn de dk ee eo es fi fr gr hr hu id ir it jp nl no pl pt ro rs ru se si sk tr vn

EconAcademics.org

Blog aggregator for economics research

English

2018-10-21

• The 2018 Nobel Prize in Economics
  by Matthew Kahn in Environmental and Urban Economics, 2018-10-21 02:17:00 UTC

  I am delighted that Bill Nordhaus and Paul Romer will share the 2018 Nobel Prize in Economics.� A technical summary of why they have won is posted here. � I am eager to see if Professor Nordhaus engages with Prof. Robert Pindyck's arguments about the "danger" of taking Integrated Assessment Models seriously as predictive models of how the world's economy will be affected by climate change. In my ongoing research, I argue that Paul Romer's work provides a framework for re-evaluating the Nordhaus core model.� I explore this the me in this 2018 paper with Zhao.� � Bill Nordhaus made a major contr [...]

2018-10-20

• A New Keynesian Model with Wealth in the Utility Function
  by Christian Zimmermann in NEP-DGE blog, 2018-10-20 20:40:08 UTC

  By Pascal Michaillat and Emmanuel Saez http://d.repec.org/n?u=RePEc:nbr:nberwo:24971&r=dge This paper extends the New Keynesian model by introducing wealth, in the form of government bonds, into the utility function. The extension modifies the Euler equation: in steady state the real interest rate is negatively related to consumption instead of being constant, equal to the time discount rate. Thus, when the marginal utility of wealth is large enough, the dynamical system representing the equilibrium is a source not only in normal times but also at the zero lower bound. This property eliminates [...]

• Aggregate Effects of Minimum Wage Regulation at the Zero Lower Bound
  by Christian Zimmermann in NEP-DGE blog, 2018-10-20 20:17:16 UTC

  By Andrew Glover http://d.repec.org/n?u=RePEc:red:sed018:1285&r=dge The Fair Minimum Wage Act of 2007 increased the U.S. nominal minimum wage by 41 percent immediately prior to nominal interest rates hitting the Zero Lower Bound in 2008. I study the interaction of these two events in an extension of the sticky-price New Keynesian model. The minimum wage dampens the contractionary effects of the ZLB by preventing rapid wage deflation, halting the deflationary spiral caused by low aggregate demand. For sufficiently persistent ZLB shocks, the minimum wage generates infinite output gains relative [...]

• Progress paradoxes in China, India, and the US: A tale of growing but unhappy countries
  by Carol Graham, Sergio Pinto in Up Front, 2018-10-20 13:27:57 UTC

  By Carol Graham, Sergio Pinto What we know depends on what we measure. Traditional income-based metrics, such as GDP and poverty headcounts, tell a story of unprecedented economic development , as seen by improvements in longevity, health, and literacy . Yet, well-being metrics, which are based on large-scale surveys of individuals around the world and assess their daily moods, satisfaction with life, and meaning and purpose in life, among other things, provide a very different picture of what is happening to people within and across countries—stories that economic numbers often do not tell. D [...]

2018-10-19

• Tribalism, Terranism, and Technology: The Pitfalls and Promises of Globalization
  by Jason Barr in Building the skyline, 2018-10-19 12:14:07 UTC

  Jason M. Barr     October 19, 2018 A Brief History of Homo Sapiens If we look back over the long sweep of Earth history, Homo sapiens has succeeded not only because it can adapt to nearly any environment on the planet, but also because it can change the environment to suit its needs and wants at any given time. One can say that technological innovation is the defining characteristic of Homo sapiens’ success—the ability to consciously manipulate and alter the Earth’s materials to increase productivity and product variety. Arguably this started with the creation of stone tools and animal-skin cl [...]

2018-10-18

• What do we know about jobs and wages and growth?
  by Bruno Duarte in EUnomics, 2018-10-18 21:08:57 UTC

  Quite a bit, actually. We know this is a  labour-intensive recovery  when labour demand increases faster than investment.  We also know the elasticity is perilously close to unit in the US and  likely above unit in the EU . We know the elasticity of capital-labour elasticity is  not reacting  to the pace of wage growth in both EU and US.  And we also know that firms might still prefer hiring instead of investing in capital because  returns to capital in the EU are low  since at least 2000 and even  more so since 2007 .  This preference for labour instead of capital is dragging  productivit [...]

2018-10-17

• Do we need to call the unions already?
  by Bruno Duarte in EUnomics, 2018-10-17 22:14:03 UTC

  Not really, it’s just that more of us are working.  Martin Wolf  posted a puzzling chart: Three structural changes contribute to this chart: longer careers (h/t Argyrios),  higher capital intensity per worker , a  labour intensive recovery . Subdued investment after 2008 decreased the capital intensity of output. Firms opted to replace capital with labour yet non-discretionary spending kept people in the workforce while nudging lower the inactivity rate.  As labour supply increased, so did the number of firms as it happened between 2003 and 2007.  During those years, wage growth was also subd [...]

• Education policy and intergenerational transfers in equilibrium
  by Christian Zimmermann in NEP-DGE blog, 2018-10-17 20:09:16 UTC

  By Brant Abbott, Giovanni Gallipoli, Costas Meghir and Giovanni L. Violante http://d.repec.org/n?u=RePEc:ifs:ifsewp:18/16&r=dge This paper examines the equilibrium effects of alternative financial aid policies intended to promote college participation. We build an overlapping generations life cycle model with education, labor supply, and consumption/saving decisions. Cognitive and non-cognitive skills of children depend on the cognitive skills and education of parents, and affect education choice and labor market outcomes. Driven by both altruism and paternalism, parents make transfers to the [...]

• Redistributing the Gains From Trade Through Progressive Taxation
  by Christian Zimmermann in NEP-DGE blog, 2018-10-17 19:54:28 UTC

  By Spencer Lyon and Michael Waugh http://d.repec.org/n?u=RePEc:red:sed018:1210&r=dge Should a nation’s tax system become more progressive as it opens to trade? Does opening to trade change the benefits of a progressive tax system? We answer these question within a standard incomplete markets model with frictional labor markets and Ricardian trade. Consistent with empirical evidence, adverse shocks to comparative advantage lead to labor income loses for import-competition-exposed workers; with incomplete markets, these workers are imperfectly insured and experience welfare losses. A progressive [...]

• Convergence, Big Time
  by Alex Tabarrok in Marginal Revolution, 2018-10-17 11:29:50 UTC

  In his influential paper, Divergence, Big Time , Lant Pritchett estimated: …that from 1870 to 1990 the ratio of per capita incomes between the richest and the poorest countries increased by roughly a factor of five and that the difference in income between the richest country and all others has increased by an order of magnitude. Pritchett was correct but Patel, Sandeful and Subramanian show that just as Pritchett’s study was ending, convergence was beginning! While unconditional convergence was singularly absent in the past, there has been unconditional convergence, beginning (weakly) around [...]

2018-10-15

• Why the Recession could happen again
  by Bruno Duarte in EUnomics, 2018-10-15 20:23:54 UTC

  The underlying causes of the Recession continue to manifest today. Amongst the most interesting articles I read this weekend was an article  authored by  Bruha and Podpiera  for the Czech National Bank on the causes of Recession that started in 2008. The data-consistent model argues declining investment costs decrease the opportunity-cost to invest in other labour-intensive economies, underpinning the significant capital outflow from the US and (to a lesser extent) EU into Asia and lead a current account surplus. The paper suggests the main mechanism acting to increase consumption in the US an [...]

• A cheap intervention that helped partially formalize firms and increased profits – just don’t ask about taxes
  by David McKenzie in Development Impact, 2018-10-15 13:18:00 UTC

  Governments have at least four reasons to try and bring firms into the formal system: To broaden and increase the tax base To enable firms to access the formal economy and help spur firm growth through the potential benefits of being formal (such as access to financial services and government contracts) To increase the sense of rule of law by having the default be that everyone is obeying the law To have firms provide information about themselves to the state, which can help the government better understand the structure of the economy and to better target business programs. The most comm [...]

• Assessing Housing Risk
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2018-10-15 11:28:50 UTC

  Housing debt typically is on the short list of key sources of risk in modern financial systems and economies. The reasons are simple: there is plenty of it; it often sits on the balance sheets of leveraged intermediaries, creating a large common exposure ; as collateralized debt, its value is sensitive to the fluctuations of housing prices (which are volatile and correlated with the business cycle), resulting in a large undiversifiable risk; and, changes in housing leverage (based on market value) influence the economy through their impact on both household spending and the financial system (s [...]

• Chris Sampson’s journal round-up for 15th October 2018
  by Chris Sampson in The Academic Health Economists' Blog, 2018-10-15 11:00:13 UTC

  Every Monday our authors provide a round-up of some of the most recently published peer reviewed articles from the field. We don’t cover everything, or even what’s most important – just a few papers that have interested the author. 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 . Reliability and validity of the contingent valuation method for estimating willingness to pay: a case of in vitro fertilisation . Applied Health Economics and Health Policy [ PubMed ] Published 13th October 2018 [...]

2018-10-14

• Brexit, Marxists & the state
  by chris in Stumbling and Mumbling, 2018-10-14 11:33:22 UTC

  Was Marx wrong? This is the question posed by Brexit. I’m prompted to ask by this from the government’s advice to business on what to do about a no-deal Brexit: UK companies and limited liability partnerships that have their central administration or principal place of business in an EU member state may wish to consider whether they need to restructure to satisfy the requirements for incorporation in that EU member state. Faisal Islam says this is the “first time in history a UK Govt [has] effectively suggested shifting HQs out of UK.” We’ve gone from Johnson’s “ fuck business ” to “fuck off [...]

• Corporate Tax Cuts and the Decline of the Labor Share
  by Christian Zimmermann in NEP-DGE blog, 2018-10-14 03:13:21 UTC

  By Baris Kaymak and Immo Schott http://d.repec.org/n?u=RePEc:red:sed018:943&r=dge We document a strong empirical connection between corporate taxation and the labor’s share of income in the manufacturing sector across OECD countries. The estimates indicate that the decline in corporate taxes is, on average, associated with 40% of the observed decline in labor’s share. We then present a model of industry dynamics where firms differ in their capital intensity as well as their productivity. A drop in the corporate tax rate reduces the labor share by shifting the distribution of production towards [...]

• Welfare Implications of Switching to Consumption Taxation
  by Christian Zimmermann in NEP-DGE blog, 2018-10-14 03:03:10 UTC

  By Juan Carlos Conesa; Bo Li; Qian Li http://d.repec.org/n?u=RePEc:nys:sunysb:18-09&r=dge We evaluate a reform of the US tax system switching to consumption taxation instead of income taxation. We do so in an environment that allows for progressivity of consumption taxes through differential tax rates between basic and non-basic consumption goods. The optimal tax system involves substantial subsidies to the consumption of basic goods. We find large efficiency gains in the long run, with a very small increase in inequality. However, once we consider the transitional dynamics associated to the [...]

2018-10-12

• Is China in a middle-income trap?
  by Bruno Duarte in EUnomics, 2018-10-12 18:42:20 UTC

  It likely is. It’s easy to forget China is still a (upper)  middle-income country . Considering a middle-income trap as the concurrent decline of productivity (as gains from technology adoption end) and increasing wages (as reallocation from low productivity sectors exhausts the excess labour supply) a negative value of an indicator measuring the growth of total factor productivity (TFP) and wages could indicate a middle-income trap. What defines the trap is the erosion of competitiveness such that the economy fails to grow by  investing in advanced infrastructure, stimulating innovation and i [...]

2018-10-11

• Carbon taxes: many losers, some winners
  by Alan Moran in Catallaxy Files, 2018-10-11 09:52:24 UTC

  In a Wall Street Journal opinion piece, Bjorn Lomborg drew attention to the inconsistency of the global warming costs and benefit estimates made by newly minted Nobel Prize recipient William Nordhaus, and the alarmist IPCC climate review issued out of Inchon.  Lomborg, is a believer in the global warming myth but tends to think the money spent alleviating it is better spent elsewhere (his socialist background does not allow him to include an option of leaving the money with its owners!) A New York Times article put the level of a carbon tax necessary to curtail emissions in line with an estima [...]

2018-10-10

• Macroeconomic Implications of Modeling the Internal Revenue Code in a Heterogeneous-Agent Framework
  by Christian Zimmermann in NEP-DGE blog, 2018-10-10 14:52:57 UTC

  By Rachel Moore and Brandon Pecoraro http://d.repec.org/n?u=RePEc:pra:mprapa:87240&r=dge Fiscal policy analysis in heterogeneous-agent models typically involves the use of smooth tax functions to approximate present tax law and proposed reforms. We argue that the tax detail omitted under this conventional approach has macroeconomic implications relevant for policy analysis. In this paper, we develop an alternative approach by embedding an internal tax calculator into a large-scale overlapping generations model that explicitly models key provisions in the Internal Revenue Code applied to labor [...]

• International Medium of Exchange: Privilege and Duty
  by Christian Zimmermann in NEP-DGE blog, 2018-10-10 14:52:26 UTC

  By Ryan Chahrour and Rosen Valchev http://d.repec.org/n?u=RePEc:red:sed018:317&r=dge The United States enjoys an “exorbitant privilege” that allows it to borrow at especially low interest rates. Meanwhile, the dollarization of world trade appears to shield the U.S. from international disturbances. We provide a new theory that links dollarization and exorbitant privilege through the need for an international medium of exchange. We consider a two-country world where international trade happens in decentralized matching markets, and must be collateralized by safe assets — a.k.a. currencies — issu [...]

• Family Job Search and Wealth: The Added Worker Effect Revisited
  by Christian Zimmermann in NEP-DGE blog, 2018-10-10 14:51:53 UTC

  By Silvio Rendon and J. Ignacio García-Pérez http://d.repec.org/n?u=RePEc:red:sed018:503&r=dge We develop and estimate a model of family job search and wealth accumulation. Individuals’ job finding and job separations depend on their partners’ job turnover and wages as well as common wealth. We fit this model to data from the Survey of Income and Program Participation (SIPP). This dataset reveals a very asymmetric labor market for household members, who share that their job finding is stimulated by their partners’ job separation, particularly during economic downturns. We uncover a job search [...]

• Forward Guidance
  by Christian Zimmermann in NEP-DGE blog, 2018-10-10 14:49:59 UTC

  By Marcus Hagedorn, Iourii Manovskii, Jinfeng Luo and Kurt Mitman http://d.repec.org/n?u=RePEc:red:sed018:929&r=dge We assess the power of forward guidance—promises about future interest rates—as a monetary tool in a liquidity trap using a quantitative incomplete-markets model. Our results suggest the effects of forward guidance are negligible. A commitment to keep future nominal interest rates low for a few quarters—although macro indicators suggest otherwise—has only trivial effects on current output and employment. We explain theoretically why in complete markets models forward guidance i [...]

2018-10-09

• 34. Notable Women researchers on Economics
  by Euro American Association EAAEDS in Euro-American Association: World Development, 2018-10-09 19:52:00 UTC

  Source: UN-Women:  http://www.unwomen.org/en/how-we-work/flagship-programmes/making-every-woman-and-girl-count This table present a list of 17 Notable Women Economists, with outstanding results in the rankings of the international Website of academic research Ideas.Repec. Thre first column of rank indicates the position accordingly to the number of downloads of articles corresponding to each author in this list and the second column indicates the position of each author in this list accordingly to the general score of Ideas.Repec.  The highest position is number 1.  These authors are included [...]

2018-10-08

• Inflation and Price Measurement: A Primer
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2018-10-08 12:27:12 UTC

  “When the official statistics on economic growth understate real economic growth, it reduces public faith in the political and economic system.” Martin Feldstein, Journal of Economic Perspectives , Spring 2017 . People use a variety of statistics to gauge how the economy is doing. And policymakers need data to guide their actions and evaluate their performance. How fast is the economy growing? Are prices rising quickly or slowly? The answers to these questions are based on measures like real gross domestic product (GDP) and the consumer price index (CPI). As it turns out, it is fairly straight [...]

• Sam Watson’s journal round-up for 8th October 2018
  by Sam Watson in The Academic Health Economists' Blog, 2018-10-08 11:00:30 UTC

  Every Monday our authors provide a round-up of some of the most recently published peer reviewed articles from the field. We don’t cover everything, or even what’s most important – just a few papers that have interested the author. 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 . A cost‐effectiveness threshold based on the marginal returns of cardiovascular hospital spending . Health Economics [ PubMed ] Published 1st October 2018 There are two types of cost-effectiveness threshold of in [...]

Privacy Legal