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- Rent Control Bomb Set Off in New York City by De Blasio Rent Guidelines Board
by Ronald Bailey in Hit & Run blog, 2015-06-30 18:47:00 UTC
Back in the late 1970s, I was couch-surfing with a doctor friend who had an apartment in the North Bronx. I rode the subway every day past hundreds of abandoned apartment buildings to my job in mid-town Manhattan. The city government had installed and painted thousands of fake windows in the tenements so that we commuters evidently wouldn't be too depressed by viewing the devastation. Neutron bombs could not have emptied and destroyed the Bronx more effectively than did rent control.
Now the economic loons who inhabit New York City's Rent Guidelines Board voted 7 to 2 to freeze one-year [...]
- Sure #LoveWins. Now What?
by Mike Isaacson in Vulgar Economics, 2015-06-30 14:00:00 UTC
Now that the institution of marriage -- though perhaps problematic in its own right -- has been successfully challenged on the basis of part of its exclusivity, perhaps now we can move on to issues that materially affect the queer community irrespective of their assimilation into heteromonogamous modes of romance and kinship. The next battles for queer rights will likely be against housing discrimination , healthcare access , and public services for homeless and low income folks. A while back I wrote about the perennial battle against job discrimination: Even with their libertarian bent, mai [...]
- Guest Contribution: “Macroeconomic Effects of High-Frequency Uncertainty Shocks”
by Menzie Chinn in Econbrowser, 2015-06-30 07:30:51 UTC
Today, we are fortunate to have a guest contribution written by Laurent Ferrara (Banque de France and University Paris Ouest Nanterre La Défense) and Pierre Guérin (Bank of Canada). The views expressed here are those of the authors and do not necessarily represent those of the Banque de France or of the Bank of Canada.
Macroeconomic and financial uncertainty is often considered as one of the key drivers of the collapse in global economic activity in 2008-2009 as well as one of the factors hampering the ensuing economic recovery (see, e.g., Stock and Watson (2012) ). While it has long been ac [...]
- I'm not at the Hilton Hawaiian Village, Waikiki ...
by John Whitehead in Environmental Economics, 2015-06-29 13:48:37 UTC
... for the Western Economic Association International 90th Annual Conference (June 28- July 2, 2015); but my co-authors are:
Program Addenda (6/25/15) |� Preliminary Program (5/20/15) | Participants Directory (5/20/15)
Session Information & Instructions �|� Housing Information �| General Information � Participating Allied Societies �|� Exhibitor Info
Tanga McDaniel is presenting " Payment and policy consequentiality in contingent valuation " (see the 6/25 Addenda) and Pamela Wicker is presenting "The Germans' support for hosting summer Olympic games." Both papers find that [...]
- Poking Bigger Holes in China's Great Financial Wall
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2015-06-29 11:39:06 UTC
At the third plenary session of China’s 18th Central Committee (the “Third Plenum”) in November 2013, China’s leaders adopted a broad national reform strategy (see here for a scorecard of the economic plans). Included were the liberalization of the country’s government-controlled financial system and the internationalization of its currency, the renminbi (RMB). A year ago, we argued that when it comes to freeing both its domestic and its external finances , China had a long way to go. We also suggested that the pace of liberalization would remain gradual, reflecting policymakers’ g [...]
- Self Protection Against Air Pollution in Urban China
by Matthew Kahn in Environmental and Urban Economics, 2015-06-28 20:09:00 UTC
Back in 1972, �Issac Ehrlich and Gary Becker wrote a very important JPE paper on endogenous probabilities. � Consider a simple example of a fire that burns down your house. �This event is a random variable that every family fears. �The probability of this event is partially under the family's control. If nobody in the house smokes or lights candles, this reduces the probability of this horrible event. �If the members of the family enjoy smoking, then it is costly for them to "self protect" by choosing not to smoke. �Avoiding smoking is an ex-ante choice that lowers the probability of a fire. � [...]
- Inequality: the right's problem
by chris in Stumbling and Mumbling, 2015-06-28 12:22:15 UTC
Are trends in UK inequality more of a problem for the right than left?
I'm prompted to ask by the fact that recent years have seen two different trends. On the one hand, there's been increased equality between the moderately well-off and the moderately badly off: the 90/10 and 80/20 ratios for post-tax income have fallen back to 1980s' levels. But on the other hand, top incomes have risen; although the share of incomes going to the top 1% ( Excel ) has fallen since the recession, it is twice what it was in the mid-70s.
One could argue that both these trends should worry the right more than the [...]
- A withdrawal from the Eurozone: Some Simulation Studies
by brianmlucey in Brian M. Lucey, 2015-06-27 19:19:52 UTC
A withdrawal of a member state from the EMU due to market pressure has been a rather popular topic in the public debate in recent years. However, the effects of a withdrawal have been analysed quantitatively surprisingly little. Discussions have been concentrated on the crisis countries, but as the Finnish economic difficulties have deepened also on Finland. In the report, the effects of the potential withdrawal of Greece, one of the weakest economies in the EMU, is studied first. In addition we try to sketch the economic effects of a withdrawal of the relatively more bal- anced Finla [...]
- Dual Currency System as a Solution to the Eurozone Crisis
by brianmlucey in Brian M. Lucey, 2015-06-27 19:09:49 UTC
The paper discusses the role of a dual currency system as a solution to problems experienced by some eurozone countries, especially Greece. The dual currency system as suggested by the author would consist of the euro and a reintroduced national currency, referred to as the ânew drachmaâ. The concept originates from an analysis of the roots of the present crisis, which include a severe loss of international competitiveness by countries hardest hit by the crisis. The analysis leads to the conclusion that devaluation (as opposed to âinternal devaluationâ) may be crucial to dea [...]
- The future of the euro — what happens if a Member State leaves?
by brianmlucey in Brian M. Lucey, 2015-06-27 19:08:46 UTC
The future of the euro — what happens if a Member State leaves?
The continued viability of the Eurozone as a single currency area is challenged from time to time. Some doubt the ability of Italy and other Member States to remain in the zone, given their difficulties in complying with the applicable budgetary rules. Even the French Prime Minister has commented that life was sometimes easier with the franc. This article considers some of the consequences which may ensue in the event that a Member State felt compelled to seek an exit from the Eurozone, and to reintroduce its own nation [...]
- How monetary systems cope with a multitude of dollars
by JP Koning in Moneyness, 2015-06-25 14:34:00 UTC
Over the last few decades, dollars have become incredibly heterogeneous. People can pay for stuff with traditional paper bank notes, debit cards, or a plethora of different credit cards. Each of these dollar brands comes with its own set of services and related costs. On the no frills side is cash. Paying with paper still incurs the lowest transaction costs, although at the same time it offers its owner no associated perks. On the fancy side is an American Express card, which costs around 3.5% per transaction but is twinned with a raft of benefits including reward points, the right to dispute [...]
- Residential Choice Patterns by Middle-Class Black and Hispanic Households
by Matthew Kahn in Environmental and Urban Economics, 2015-06-25 03:40:00 UTC
David Leonhardt has written a nice piece �about a recent 2015 Stanford Study by some Sociologists. �The Stanford Study is available here.� � � I am slightly amused because Denise DiPasquale and I made this point 16 years ago in our published 1999 Real Estate Economics paper. � An ungated version of our paper is here. � � While our paper has only generated 38 cites, I think its results are still interesting and relevant. � The empirical sociologists would be wise to read some of the older literature. Here is our abstract: [...]
- MTurk costs more (so what?)
by John Whitehead in Environmental Economics, 2015-06-24 14:45:29 UTC
It still costs less than all of the higher quality substitutes, right?
This week Amazon changed the terms for a service that has become a standard tool in social-science research, and many scholars are complaining that it will mean higher costs to conduct surveys.
The service is called Mechanical Turk, and it is a marketplace that connects people on the Internet looking for paid piecework with anyone who has a small task and is willing to pay someone to do it. The concept is known as crowd-work, and many researchers have used it to pay strangers small amounts to take part in social-science su [...]
- How monitoring online ‘Brexit’ talk can weigh the EU referendum result
by Blog Admin in British Politics and Policy at LSE, 2015-06-24 07:00:28 UTC
The UK electorate will vote on whether to exit the EU in a referendum before the end of 2017. Costas Milas writes thatÂ it is important thatÂ for David Cameron and theÂ government to monitor closely whether ‘Brexit’ talk continues to receive, in coming months, the attention of the EU public. This will help form a set of realistic demands whileÂ alsoÂ ensuring that expectations at home remain well-anchored.
David Cameronâs in/out EU referendum is planned to take place before the end of 2017. As things stand, an arguably slim majority of British voters appears to be rejecting Brexit. Yougov po [...]
- “Bonus Culture: Competitive Pay, Screening and Multitasking,” R. Benabou & J. Tirole (2014)
by afinetheorem in A Fine Theorem, 2015-06-23 19:42:28 UTC
Empirically, bonus pay as a component of overall renumeration has become more common over time, especially in highly competitive industries which involve high levels of human capital; think of something like management of Fortune 500 firms, where the managers now have their salary determined globally rather than locally. This doesn’t strike most economists as a bad thing at first glance: as long as we are measuring productivity correctly, workers who are compensated based on their actual output will both exert the right amount of effort and have the incentive to improve their human capital.
- Ed Lazear's WSJ Piece on the Role of State Policy as a Determinant of Economic Growth
by Matthew Kahn in Environmental and Urban Economics, 2015-06-23 14:47:00 UTC
In today's WSJ, Prof. Lazear has written a piece� highlighting the importance of a state's "business climate" as a driver of local growth. �He focuses on "Right to Work" legislation as a key empirical benchmark for identifying "business friendly" states. � While I agree with him, it is important to note that "unfriendly" states such as California can thrive because it has unique exogenous attributes (climate and amenities) that cannot be found anywhere else in the U.S. �A deeper question is whether the "high tax" leadership of state and local policy in California use the tax revenue to impleme [...]
- Cities, infrastructure and growth
by Diane Coyle in The Enlightened Economist, 2015-06-23 10:35:38 UTC
By way of a follow up to yesterday’s post on the new book Urban Economics and Urban Policy , I read recently a very interesting paper by David Starkie (Investment and Growth: The Impact of Britain’s Post-War Trunk Roads Programme, In Economic Affairs, Feb 2015 ) in which he argues that the construction of the British motorways in the 1960s and 70s had no discernible effect on productivity and growth. One reason was that pre-existing commercial traffic was intra-regional whereas the motorways radiated out from London. Contrast yesterday’s map of how the motorways were planned:
Motorway planning [...]
- When Income Depends on Performance and Luck: The Effects of Culture and Information on Giving By: Pedro Rey-Biel (Universitat Autònoma de Barcelona and Barcelona GSE) ; Roman Sheremeta (Weatherhead School of Management at Case Western Reserve University
by maximorossi in NEP-LTV blog, 2015-06-22 19:01:22 UTC
We study how giving depends on income and luck, and how culture and information about the determinants of others’ income affect this relationship. Our data come from an experiment conducted in two countries, the US and Spain, which have different beliefs about how income inequality arises. We find no cross-cultural differences in giving when individuals are informed about the determinants of income, but when uninformed, Americans give less than Spanish. Culture and information not only affect individual giving, but also the determinant [...]
- The Political Economy of Public Income Volatility: With an Application to the Resource Curse By: James A. Robinson ; Ragnar Torvik ; Theirry Verdier
by maximorossi in NEP-LTV blog, 2015-06-22 18:59:09 UTC
We develop a model of the political consequences of public income volatility. As is standard, political incentives create inefficient policies, but we show that making income uncertain creates specific new effects. Future volatility reduces the benefit of being in power, making policy more efficient. Yet at the same time it also reduces the re-election probability of an incumbent and since some of the policy inefficiencies are concentrated in the future, this makes inefficient policy less costly. We show how this model can help think abou [...]
- Monetary policy and financial inclusion
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2015-06-22 12:43:25 UTC
Central bankers usually steer clear of discussions about inequality. They view monetary policy as a tool for stabilizing the economy. For many central banks, like the ECB or the Bank of England, this means price stability. For others, like the Federal Reserve, it means a combination of high employment and low inflation. Regardless of the goals, issues involving the distribution of income are generally left to the fiscal authorities. For the most part, this division of labor is sensible. However, their mandates require central banks to make policy tradeoffs that are influenced by the prevailing [...]
- Another reason to prefer Ancova: dealing with changes in measurement between baseline and follow-up
by David McKenzie in Development Impact, 2015-06-22 11:50:00 UTC
A few months ago, Berk blogged about my paper on the case for more T , and in particular, on the point that Ancova estimation can deliver a lot more power than difference-in-differences when outcomes are not strongly autocorrelated. [...]
- A New Consensus Physics Problem
by Mike Isaacson in Vulgar Economics, 2015-06-20 14:00:00 UTC
This past semester, I took a seminar on economic methodology. Throughout the course, we talked a lot about the New Consensus obsession with microfoundations among other things. I presented this physics problem to the class and the New Consensus answer. Problem: You have enough 1 cm diameter marbles to fill a 40 cm diameter, 30 cm high bucket. If you were to pour them in, how many marbles would be touching the bottom of the bucket. New Consensus Answer: All of them. Since an individual marble will be pulled down by the force of gravity to the bottom of the bucket, this means that each marble wi [...]
- After school shootings, students fare poorly in math, English
by Louis-Philippe Beland, Assistant Professor of Economics at Louisiana State University in The Conversation, 2015-06-17 10:12:17 UTC
School shootings have future consequences for kids. Gun image via www.shutterstock.com While school shootings have received widespread media attention, their impact on enrollment and student performance is not well-known. High school shootings can leave potentially damaging effects on both students and schools.
Could extreme violence in high schools hinder the ability of students to learn? Could it also influence their decision about whether to stay or change school?
As researchers studying the economics of education, we conducted a study on the effect of extreme violence in high schools in [...]
- Meta-Granger Causality Testing
by firstname.lastname@example.org (David Stern) in Stochastic Trend, 2015-06-17 09:50:00 UTC
I have a new working paper with Stephan Bruns on the meta-analysis of Granger causality test statistics. This is a methodological paper that follows up on our meta-analysis of the energy-GDP Granger causality literature that was published in the Energy Journal last year . There are several biases in the published literature on the energy-output relationship, which we document in the Energy Journal paper: 1. Publication bias due to sampling variability - the common tendency for statistically significant results to be preferentially published. This is either because journals reject papers that d [...]
- "Heterodox Economists Don't Do Math" Reader
by Mike Isaacson in Vulgar Economics, 2015-06-16 17:00:00 UTC
Anwar Shaikh - All the Humbug Papers. Literally all of them. Herbert Simon - A Formal Theory of the Employment Relation Thomas Herndon et al. - Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff Duncan Foley and Deepankar Basu - Dynamics of Output and Employment in the U.S. Economy Jesus de Felipe and John McCombie - The CES Production Function, the Accounting Identity, and Occam's Razor [...]
- Robots Seem to Be Improving Productivity, Not Costing Jobs
by Mark Muro in HBR Blog Network, 2015-06-16 14:00:33 UTC
Nearly 30 years ago, in 1987, the Nobel-winning economist Robert Solow surveyed the impact of IT on the economy and concluded that “you can see the computer age everywhere but in the productivity statistics.”
Solow’s quip crystallized a frustrating disconnect in the 1980s. Why did an observed technology boom coincide with a prolonged slump in the productivity data? Companies were using computers, but they didn’t seem to be getting any more productive.
Strangely, it took another seven years for U.S. productivity growth to surge. At last, the computers Solow and everyone else saw around them [...]