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2018-04-20

• Quotation of the Day…
  by Don Boudreaux in Cafe Hayek, 2018-04-20 10:33:09 UTC

  (Don Boudreaux) Tweet … is from page 417 of my late colleague Gordon Tullock’s 1997 paper “ Thoughts about Representative Government ” as this essay is reprinted in volume 4 ( The Economics of Politics ) of Tullock’s Selected Works (Charles K. Rowley, ed., 2005): In general, the bills themselves are written by the civil service, by congressional assistants, or, in many cases, by special interests who offer “advice” sometimes in the form of completely worked out pieces of legislation. [...]

2018-04-18

• A history of randomized assignment in the social sciences
  by Tyler Cowen in Marginal Revolution, 2018-04-18 14:28:39 UTC

  Although the concept of randomized assignment to control for extraneous factors reaches back hundreds of years, the first empirical use appears to have been in an 1835 trial of homeopathic medicine. Throughout the 19th century, there was primarily a growing awareness of the need for careful comparison groups, albeit often without the realization that randomization could be a particularly clean method to achieve that goal. In the second and more crucial phase of this history, four separate but related disciplines introduced randomized control trials within a few years of one another in the 1920 [...]

• The history of randomized control trials: scurvy, poets and beer
  by Markus Goldstein in Development Impact, 2018-04-18 12:55:00 UTC

  The other night I was reading Julian Jamison’s well written and intriguing recent paper : “The Entry of Randomized Assignment into the Social Sciences,” which plumbs history to understand where it is that RCTs come from.      [...]

2018-04-16

• Sam Watson’s journal round-up for 16th April 2018
  by Sam Watson in The Academic Health Economists' Blog, 2018-04-16 13:30:50 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 . The impact of NHS expenditure on health outcomes in England: alternative approaches to identification in all‐cause and disease specific models of mortality . Health Economics [ PubMed ]  Published 2nd April 2018 [...]

• On the Distribution of Wealth
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2018-04-16 11:56:16 UTC

  “Both Social Security and Medicare face long-term financing shortfalls under currently scheduled benefits and financing. […] The Trustees recommend that lawmakers take action sooner rather than later to address these shortfalls […to] minimize adverse impacts on vulnerable populations ….” Social Security and Medicare Boards of Trustees, Message to the Public , 2017 Scholars who examine the distribution of income often focus on the issue of poverty. From this perspective, one of the great achievements of our time is the extraordinary reduction of extreme poverty worldwide. In an effort to unders [...]

• The FOMC: Inflation Theory and Inflation Control
  by Stephen Williamson in Stephen Williamson: New Monetarist Economics, 2018-04-16 01:33:00 UTC

  In this post, I'm going to attempt to answer 3 questions: 1. What does the FOMC think it's doing? 2. Given what it thinks it's doing, is the FOMC consistent? 3. What should the FOMC be doing, given its stated goals? What does the FOMC think it's doing? The easy part here is what most of us know by heart. The FOMC has a statement, most recently amended in January, which says that the Fed is targeting headline PCE inflation at 2%, that it cares in the same way about deviations from that target on the up side as on the down side and, consistent with its Congressional dual mandate, the FOMC is con [...]

2018-04-15

• Public Sector Pensions Crowd Out Public Sector Investment in Capital and New Workers
  by Matthew Kahn in Environmental and Urban Economics, 2018-04-15 16:54:00 UTC

  The NY Times has written a very good piece about the high costs of public sector defined benefit pension plans.� � Given that governments face budget constraints and have trouble raising taxes, if a local government "overpays" its retirees then there will be less $ to hire new public workers to provide essential services and there will be less $ to purchase capital (think of the low quality of New York City subway cars) that is key to providing public goods such as public transit.� I have written three papers on this topic. Matthew E. Kahn, 2017. " Is Local Public Sector Rent Extraction Higher [...]

2018-04-14

• Ancient Infrastructure and Economic Activity
  by msoderhall in NEP-HIS blog, 2018-04-14 04:19:32 UTC

    Roman Roads to Prosperity: Persistence and Non-Persistence of Public Goods Provision Carl-Johan Dalgaard ( University of Copenhagen and CEPR ), Nicolai Kaarsen ( Danish Economic Council ), Ola Olsson ( University of Gothenburg ) and Pablo Selaya ( University of Copenhagen ) Abstract : How persistent is public goods provision in a comparative perspective? We explore the link between infrastructure investments made during antiquity and the presence of infrastructure today, as well as the link between early infrastructure and economic activity both in the past and in the present, across the ent [...]

2018-04-12

• Financial Fragility with SAM?
  by Christian Zimmermann in NEP-DGE blog, 2018-04-12 13:53:29 UTC

  By Tim Landvoigt, Stijn Van Nieuwerburgh and Daniel Greenwald http://d.repec.org/n?u=RePEc:red:sed017:1525&r=dge Shared Appreciation Mortgages (SAMs) feature mortgage payments that adjust with house prices. Such mortgage contracts can stave off home owner default by providing payment relief in the wake of a large house price shock. SAMs have been hailed as an innovative solution that could prevent the next foreclosure crisis, act as a work-out tool during a crisis, and alleviate fiscal pressure during a downturn. They have inspired Fintech companies to offer home equity contracts. However, [...]

2018-04-11

• How to Steal the Populists’ Clothes
  by Ngaire Woods in Project Syndicate, 2018-04-11 13:49:58 UTC

  OXFORD – “Don’t get mad, get even.” That aphorism needs to become the new norm in democratic politics across Europe, Latin America, Asia, and Africa. Rather than complaining about populist successes, established political parties should take a page from the populist playbook. Three lessons, in particular, cry out for attention. The first lesson is to connect to the people you wish to represent by learning about them and winning their trust. The time when politicians could rely on party machines, focus groups, and traditional polling is over. The complacent assumption that people will always vo [...]

2018-04-10

• Out of Sync Subnational Housing Markets and Macroprudential Policies
  by Christian Zimmermann in NEP-DGE blog, 2018-04-10 21:56:17 UTC

  By Michael Funke; Petar Mihaylovski; Adrian Wende http://d.repec.org/n?u=RePEc:ces:ceswps:_6887&r=dge n view of regional house prices drifting apart, we examine whether regionally differentiated macroprudential policies can address financial stability concerns and moderate house price differences. To this end, we disaggregate both the household sector and the housing stock in a two-region DSGE model with out of sync subnational housing markets and compare four macroprudentail policy types: standard monetary policy by means of a standard Taylor rule, leaning against the wind monetary policy, na [...]

• Politics as risk management
  by chris in Stumbling and Mumbling, 2018-04-10 12:40:08 UTC

  There’s one point about politics which seems to me to be childishly obvious but which is under-appreciated, and which helps illuminate a number of policy issues. It’s that we don’t live in a wholly knowable deterministic world in which setting policy is a matter of pulling the right levers with predictable effects. Instead, policy operates upon a distribution of uncertainties*. In some cases, the best policy is not so much one that achieves the best outcome but one which reduces the risk of bad outcomes – either the small risk of something really bad or the larger risk of moderately bad outcom [...]

• Cities and CO2: What Can be Done?
  by Jason Barr in Building the skyline, 2018-04-10 12:20:18 UTC

  Jason M. Barr     April 10, 2018 Imagine it’s the dead of winter and you’ve just come home from work. Your house is chilly and so you move to the thermostat to crank up the heat. But, just as your hand is about to turn the dial, you think, “Wait! If I heat my house, I will put additional CO 2 into the atmosphere, which will increase the probability that the good people of the Solomon Islands will be harmed by sea level rise. Therefore, I’ll keep the heat down!” If I had to guess, very few of us have done this. But, the truth is, carbon dioxide is the mother of all externalities . Most of us go [...]

2018-04-09

• Challenged by migration: Europe’s options
  by maximorossi in NEP-LTV blog, 2018-04-09 18:41:10 UTC

  By: Constant, Amelie F.  (Princeton University) ;  Zimmermann, Klaus F.  (UNU-MERIT, and Maastricht University) This paper examines the migration and labour mobility in the European Union and elaborates on their importance for the existence of the EU. Against all measures of success, the current public debate seems to suggest that the political consensus that migration is beneficial is broken. This comes with a crisis of European institutions in general. Migration and labour mobility have not been at the origin of the perceived cultural shift. The EU in its current form and ambition coul [...]

• Wealth, Top Incomes and Inequality
  by maximorossi in NEP-LTV blog, 2018-04-09 18:40:20 UTC

  By: Frank Cowell  ;  Brian Nolan  ;  Javier Olivera  ;  Philippe Van Kerm Although it is heartening to see wealth inequality being taken seriously, key concepts are often muddled, including the distinction between income and wealth, what is included in “wealth”, and facts about wealth distributions. This chapter highlights issues that arise in making ideas and facts about wealth inequality precise, and employs newly-available data to take a fresh look at wealth and wealth inequality in a comparative perspective. The composition of wealth is similar across countries, with housing wealth b [...]

• Misperceptions of income distributions: Cross-country evidence from a randomized survey experiment
  by maximorossi in NEP-LTV blog, 2018-04-09 18:39:12 UTC

  By: Elisabeth Bublitz This paper investigates whether the individual misperception of income distributions helps explain why, opposite to Meltzer and Richard (1981), higher initial inequality levels do not correlate positively with redistribution. I conduct a representative survey experiment in Brazil, France, Germany, Russia, Spain, and the United States, providing a personalized information treatment on the income distribution to a randomly chosen subsample. Most respondents misperceive their own position in the income distribution. These biases di_er by country and the true income pos [...]

• Gender Wage Gaps and Risky vs. Secure Employment: An Experimental Analysis
  by maximorossi in NEP-LTV blog, 2018-04-09 18:38:06 UTC

  By: SeEun Jung  (Department of Economics, Inha University) ;  Chung Choe  (Hanyang University) ;  Ronald L. Oaxaca  (University of Arizona) In addition to discrimination, market power, and human capital, gender differences in risk preferences might also contribute to observed gender wage gaps. We conduct laboratory experiments in which subjects choose between a risky (in terms of exposure to unemployment) and a secure job after being assigned in early rounds to both types of jobs. Both jobs involve the same typing task. The risky job adds the element of a known probability that the typin [...]

• Tony Atkinson and His Legacy
  by maximorossi in NEP-LTV blog, 2018-04-09 18:37:01 UTC

  By: Brandolini, Andrea  (Bank of Italy) ;  Jenkins, Stephen P.  (London School of Economics) ;  Micklewright, John  (University College London) Tony Atkinson is universally celebrated for his outstanding contributions to the measurement and analysis of inequality, but he never saw the study of inequality as a separate branch of economics. He was an economist in the classical sense, rejecting any sub-field labelling of his interests and expertise, and he made contributions right across economics. His death on 1 January 2017 deprived the world of both an intellectual giant and a deeply com [...]

• The Difficult School-To-Work Transition of High School Dropouts: Evidence from a Field Experiment
  by maximorossi in NEP-LTV blog, 2018-04-09 18:36:06 UTC

  By: Cahuc, Pierre  (Ecole Polytechnique, Paris) ;  Carcillo, Stéphane  (OECD) ;  Minea, Andreea  (Sciences Po, Paris) This paper investigates the effects of the labor market experience of high school dropouts four years after leaving school by sending fictitious résumés to real job postings in France. Compared to those who have stayed unemployed since leaving school, the callback rate is not raised for those with employment experience, whether it is subsidized or non-subsidized, in the market or non-market sector, if there is no training accompanied by skill certification. In particular, [...]

• Survey Under-Coverage of Top Incomes and Estimation of Inequality: What Is the Role of the UK’s SPI Adjustment?
  by maximorossi in NEP-LTV blog, 2018-04-09 18:33:55 UTC

  By: Burkhauser, Richard V.  (Cornell University) ;  Herault, Nicolas  (Melbourne Institute of Applied Economic and Social Research) ;  Jenkins, Stephen P.  (London School of Economics) ;  Wilkins, Roger  (Melbourne Institute of Applied Economic and Social Research) Survey under-coverage of top incomes leads to bias in survey-based estimates of overall income inequality. Using income tax record data in combination with survey data is a potential approach to address the problem; we consider here the UK’s pioneering ‘SPI adjustment’ method that implements this idea. Since 1992, the principa [...]

• Les déterminants macroéconomiques de la défaillance des emprunteurs : Cas d’une banque marocaine
  by pmakdissi in NEP-ARA blog, 2018-04-09 15:57:58 UTC

  Par  Anas Yassine  (Doctorant en Sciences de Gestion, Laboratoire Management, Systèmes Financiers et Gestion des Risques (MSFGR) Université Hassan II – Casablanca- Maroc) et  Abdelmadjid Ibenrissoul (Professeur de l’enseignement supérieur, Laboratoire Ingénierie Scientifique des Organisations (ISO) Université Hassan II – Casablanca- Maroc) https://EconPapers.repec.org/RePEc:hal:wpaper:hal-01683225 Policy brief : La réglementation bancaire marocaine a connu des évolutions sensibles, qui ont impacté les banques de façon systématique. Le secteur bancaire marocain ne présentant aucune particularit [...]

• On socialized preferences
  by chris in Stumbling and Mumbling, 2018-04-09 13:38:16 UTC

  I recently wrote approvingly of SImone de Beauvoir’s claim that “one is not born, but rather becomes, a woman”. “Feminine” preferences such as a lack of pushiness and tendency not to study maths and science might, I said, be socialized ones rather than innate. This prompted some to ask how much evidence we have that preferences are shaped by social pressures. Quite a bit. Some more evidence in support of de Beavoir’s theory has come from recent research in China. Alison Booth and colleagues say : Women in Beijing who grew up during the communist regime, when gender equality was emphasised, ar [...]

• Trends in capacity utilization around the world
  by ? in FRED blog, 2018-04-09 13:00:46 UTC

  The capacity utilization rate of a country is constructed as the percentage of resources (i.e., labor and capital) used by corporations and factories to produce enough finished goods to meet demand. In normal times, factories tend to use around 80% of their available productive resources. (Want to learn  more ?) The graph above shows the evolution of capacity utilization in the U.S. (light blue), Brazil (red), the U.K. (green), and Germany (purple) from 2000:Q1 to 2017:Q3 at a quarterly frequency. During this period, the average capacity utilization in the U.S. was the lowest in our sample, a [...]

• Phillips Curve bashing and immaculate inflation
  by Tony Yates in longandvariable, 2018-04-09 12:34:56 UTC

  A few points prompted by the recent exchange between David Andolfatto and Paul Krugman , and the recurrent phenomenon of comment pieces on the demise of the Philips Curve.  These pieces are hot lately because of the surprising coincidence of falls in unemployment with a failure of inflation to pick up materially, particularly in the UK and the US. First, fluctuations in the correlation between unemployment and inflation – which have been a thing ever since I can remember paying attention [see, for example, this paper by Luca Benati] – don’t tell us much on their own about the existence or not [...]

• Brent Gibbons’s journal round-up for 9th April 2018
  by brentgibbons in The Academic Health Economists' Blog, 2018-04-09 11:00:08 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 . The effect of Medicaid on management of depression: evidence from the Oregon Health Insurance Experiment . The Milbank Quarterly [ PubMed ] Published 5th March 2018 For the first journal article of this week’s A [...]

2018-04-07

• Term structure and real-time learning
  by Christian Zimmermann in NEP-DGE blog, 2018-04-07 00:41:41 UTC

  By Pablo Aguilar and Jesús Vázquez http://d.repec.org/n?u=RePEc:bde:wpaper:1803&r=dge This paper introduces the term structure of interest rates into a medium-scale DSGE model. This extension results in a multi-period forecasting model that is estimated under both adaptive learning and rational expectations. Term structure information enables us to characterize agents’ expectations in real time, which addresses an imperfect information issue mostly neglected in the adaptive learning literature. Relative to the rational expectations version, our estimated DSGE model under adaptive learning larg [...]

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