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2020-04-03

• How Many Jobs Can Be Done at Home? In the United States, It’s 34 percent
  by Jonathan Dingel and Brent Neiman in Pro-Market, 2020-04-03 18:29:12 UTC

  Evaluating the economic impact of “social distancing” measures taken to arrest the spread of Covid-19 raises a fundamental question about the modern economy: How many jobs can be performed at home? Jonathan Dingel and Brent Neiman classified the feasibility of working at home for all occupations: In the United States, it’s 34 percent of jobs.     Evaluating the economic impact of “social distancing” measures taken to arrest the spread of Covid-19 raises a number of fundamental questions about the modern economy: How many jobs can be performed at home? What share of total wages are paid to su [...]

2020-04-02

• Do Social Networks Increase or Decrease the COVID-19 Contagion Rate?
  by Matthew E. Kahn in Environmental and Urban Economics, 2020-04-02 14:57:00 UTC

  Do Social Networks Increase or Decrease the COVID-19 Contagion Rate? Dora L. Costa Kenneth T. Sokoloff Professor of Economic History UCLA Costa@econ.ucla.edu .  Matthew E. Kahn Bloomberg Distinguished Professor of Economics and Business Director of the 21st Century Cities Initiative mkahn10@jhu.edu Each nation will face less contagion risk if we as individuals engage in social distancing.    But some people are choosing to continue to live their lives under business as usual.    Behavioral economics assumes that many of us, like the college students who stormed the beaches [...]

2020-03-31

• Fiscal Policy during a Pandemic
  by Christian Zimmermann in NEP-DGE blog, 2020-03-31 03:24:07 UTC

  By Miguel Faria-e-Castro http://d.repec.org/n?u=RePEc:fip:fedlwp:87616&r=dge I use a dynamic stochastic general equilibrium model to study the effects of the 2019-20 coronavirus pandemic in the United States. The pandemic is modeled as a large negative shock to the utility of consumption of contact-intensive services. General equilibrium forces propagate this negative shock to the non-services and financial sectors, triggering a deep recession. I use a calibrated version of the model to analyze different types of fiscal policies: (i) government purchases, (ii) income tax cuts, (iii) unemploym [...]

2020-03-30

• COVID-19 Stress Test
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2020-03-30 12:08:06 UTC

  “[The 2019 stress test results] show that our financial system remains resilient [….] The largest and most complex banks […] demonstrated [their] ability to withstand a severe and lasting economic downturn and still be able to lend to households and businesses.” FRB Vice Chair for Supervision Randal K. Quarles, “ Stress Testing: A Decade of Continuity and Change ”, July 9, 2019 “Banks worked hard to build their capital buffers following the crisis. It is imprudent to reduce the loss absorbing capital at the core of the system at this point in the cycle, when […] payouts have been exceeding ear [...]

2020-03-26

• 6 post-Corona Institutional questions
  by Paul Frijters in Club Troppo, 2020-03-26 12:34:59 UTC

  The mass hysteria of the corona crisis is raging, with the resulting self-isolation of whole economies and populations. The loss seems greater with every new forecast on the economic collapse than I initially though t, and the benefit of imprisoning and terrorizing the population smaller than I initially thought , leading courageous little Sweden to forego these options . High-level media and calm commentators are waking up to the longer-term implications, though the population is still too overcome by fear. I want to share 6 areas where we should think of international institutional reform to [...]

2020-03-25

• Will the US Pandemic Response Strengthen Workers?
  by Teresa Ghilarducci in Project Syndicate, 2020-03-25 11:37:27 UTC

  NEW YORK – Despite the deep polarization of American politics, there appears to be more agreement than disagreement over how to deal with the economic fallout from the COVID-19 pandemic. The US Federal Reserve is already pursing bold monetary-policy measures, and Congress is quickly working toward a large fiscal-stimulus package featuring government bailouts with equity stakes in private companies and one- or two-time cash infusions to households. But this rare moment of bipartisanship will turn out to have been a missed opportunity if it does not also reverse the long decline of worker protec [...]

2020-03-23

• This Time Truly Is Different
  by Carmen M. Reinhart in Project Syndicate, 2020-03-23 13:05:29 UTC

  CAMBRIDGE – While pandemics are comparatively rare, and severe ones rarer still, I am not aware of a historical episode that can provide any insight as to the likely economic consequences of the unfolding global coronavirus crisis. This time truly is different. A key feature of this episode that makes it unique is the policy response. Governments around the world are giving priority to measures that limit the spread of disease and save lives, including the complete lockdown of a region (as in China) and even of entire countries (Italy, Spain, and France, for example). A much longer list of cou [...]

• Fourth large-scale asset purchases program: A new hope
  by ? in FRED blog, 2020-03-23 13:00:00 UTC

  We’ve previously discussed the tapering of the three large-scale asset purchase programs popularly known as “ quantitative easing .” On Sunday, March 15 , the Federal Open Market Committee (FOMC) brought back this unconventional monetary policy tool. The FOMC directed the New York Fed’s Open Market Trading Desk (the Desk) to purchase at least $500 billion worth of Treasury securities and at least $200 billion worth of mortgage-backed securities. These asset purchases are called unconventional policy measures to distinguish them from the management of the federal funds rate through open market [...]

• The Fed Goes to War
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2020-03-23 12:14:54 UTC

  “This is no war of chieftains or of princes, of dynasties or national ambition; it is a war of peoples and of causes. There are vast numbers, not only in this island but in every land, who will render faithful service in this war but whose names will never be known, whose deeds will never be recorded. This is a war of the Unknown Warriors; but let all strive without failing in faith or in duty….” Winston Churchill, BBC Broadcast, London, 14 July 1940. Over the past two weeks, the Federal Reserve has resurrected many of the policy tools that took many months to develop during the Great Financia [...]

• Supply Chain Disruptions, Time to Build, and the Business Cycle
  by Christian Zimmermann in NEP-DGE blog, 2020-03-23 03:19:51 UTC

  Bt Matthias Meier http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_160 We provide new evidence that (i) time to build is volatile and countercyclical, and that (ii) supply chain disruptions lengthen time to build. Motivated by these findings, we develop a general equilibrium model in which heterogeneous firms face non-convex adjustment costs and multi-period time to build. In the model, supply chain disruptions lengthen time to build. Calibrating the model to US micro data, we show that disruptions, which lengthen time to build by 1 month, depress GDP by 1% and aggregate TFP by 0.2%. Stru [...]

2020-03-19

• What evidence exists that a child’s health is a form of human capital?
  by Jason Shafrin in Healthcare Economist, 2020-03-19 06:54:25 UTC

  Janet Currie has a nice review article ( Currie 2020 ) in Health Economics covering this topic. She summarizes the literature as follows: In the past 20 years, there has been an explosion of research demonstrating that child health is an important form of human capital. Healthier children live longer and healthier lives, get more education, and earn higher wages. Moreover, the available evidence shows that public policy can relax constraints on families and promote better child health in multiple ways, although guaranteeing access to health care and preventive health screenings remains es [...]

2020-03-18

• Against one-trick ponies
  by chris in Stumbling and Mumbling, 2020-03-18 14:34:27 UTC

  Those of you who believe that bourgeois economics is mere ideology have had two data points of corroboration recently. First, Stephen Moore, Art Laffer and Steve Forbes said : "don’t expand welfare and other income redistribution benefits like paid leave and unemployment benefits that will inhibit growth and discourage work." This contain layers of nonsense. For one thing, during the current public health crisis we want to discourage people from working so they don’t infect others. But even in normal times. Their statement would be wrong. In one survey of the evidence Abhijit Banerjee and Esth [...]

2020-03-17

• In a City FAR, FAR Away: Building Height Regulations and Their Impacts
  by Jason Barr in Skynomics Blog, 2020-03-17 12:17:31 UTC

  Jason M. Barr       March 17, 2020 Your New Job Imagine the governor of your state announces that she is going to create a brand-new city out of whole cloth. The state has purchased 200 square miles (519 km 2 ) of farmland (around the size of Chicago) and will begin auctioning off lots for development. The governor is working with officials to build the transportation and infrastructure network. But she has turned to you with a critical mission: to formulate the regulations about building heights. Your job, as Chief Building Heights Planner, is to develop a series of plans about how dense or t [...]

2020-03-16

• Endogenous Preferences for Parenting and Macroeconomic Outcomes
  by Christian Zimmermann in NEP-DGE blog, 2020-03-16 04:28:49 UTC

  By Nigar Hashimzade http://d.repec.org/n?u=RePEc:ces:ceswps:_8062&r=dge This paper investigates the effects of parenting time on macroeconomic outcomes and welfare when parenting choices are determined by own childhood experience and social norms in an overlapping generations framework. Parenting time and material expenditures on children generate children’s human capital. When the share of parenting time is relatively low and parenting and leisure are complements or weak substitutes the model has two steady-state equilibria with different welfare levels. In the high-welfare equilibrium paren [...]

2020-03-12

• The Urban and Environmental Economics of Voluntary Social Distancing
  by Matthew E. Kahn in Environmental and Urban Economics, 2020-03-12 13:51:00 UTC

  The aggregate contagion risk posed by the Coronavirus declines if more people engage in voluntary social distancing.� � Given that social distancing reduces one's own risk of being infected, is this a sufficient incentive to enforce this public health mandate? Standard microeconomic logic would predict that there will be a free rider problem here as everyone hopes that everyone else will engage in social distancing.� �This issue of course arises with respect to greenhouse gas emissions production in an economy where there is no carbon tax.� This free rider concern may not be important here bec [...]

2020-03-09

• Chris Sampson’s journal round-up for 9th March 2020
  by Chris Sampson in The Academic Health Economists' Blog, 2020-03-09 12:00:00 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 relative value of different QALY types . Journal of Health Economics [ PubMed ] Published 13th February 2020 There’s comfort and safety in equal treatment. The idea that a ‘QALY is a QALY is a QALY’ w [...]

• The global macroeconomic impacts of COVID-19: Seven scenarios
  by Christian Zimmermann in NEP-DGE blog, 2020-03-09 05:00:48 UTC

  By Warwick McKibbin and Roshen Fernando http://d.repec.org/n?u=RePEc:een:camaaa:2020-19&r=dge The outbreak of coronavirus named COVID-19 has disrupted the Chinese economy and is spreading globally. The evolution of the disease and its economic impact is highly uncertain which makes it difficult for policymakers to formulate an appropriate macroeconomic policy response. In order to better understand possible economic outcomes, this paper explores seven different scenarios of how COVID-19 might evolve in the coming year using a modelling technique developed by Lee and McKibbin (2003) and extend [...]

2020-03-05

• The economic impact of a pandemic : Wages during the Spanish Influenza
  by ? in FRED blog, 2020-03-05 14:00:00 UTC

  How does a pandemic affect an economy? Obviously, it’s a multilayered topic and FRED has limits to what it can reveal. The good news, of course, is that large-scale pandemics are rare. So the economic effects for most of these outbreaks are hard to see by graphing data. But we can take two of the most extreme examples, which will have visible effects in the data: the Black Death of the mid 14th century and the Spanish flu of 1918-1920. We already covered the first one in a post from December 2018. So we look at the second one today: the influenza outbreak of 1918, commonly known as the Spanis [...]

• Why Did Wuhan’s Officials Respond Slowly to the Spread of the Coronavirus?
  by Matthew E. Kahn in Environmental and Urban Economics, 2020-03-05 11:43:00 UTC

  My short answer is “benchmarking”.   In this age of ubiquitous Big Data, how do we benchmark whether a given urban leader is doing a "good job" when imputing a counter-factual is very difficult?   China’s urban leaders compete against each other to be promoted within the Chinese Communist Party.   In the early years, they competed with respect to urban economic growth.   The leaders of cities featuring a greater economic growth rate were more likely to be promoted in this tournament. In recent years, “green criteria” such as air pollution reductions and energy intensity of the economy have bee [...]

2020-03-04

• How Does Credit Access Affect Job-Search Outcomes and Sorting?
  by Blog Author in Liberty Street Economics, 2020-03-04 12:45:00 UTC

  Kyle Herkenhoff and Gordon Phillips How does access to consumer credit affect the job finding behavior of displaced workers? Are these workers looking for jobs at larger and more productive firms? What is the impact of consumer credit on the amount of time it takes to find a job? In recent work with Ethan Cohen-Cole we explore these questions by building a new data set of individual credit reports (from TransUnion) merged with administrative earnings data. We describe our approach and our results in this post. To answer these questions convincingly, we have to overcome the prob [...]

2020-03-03

• Gender equality in China’s labour market: some worrying signs
  by Jeni Klugman, Limin Wang and Meiyan Wang in Development Policy Blog, 2020-03-03 19:00:55 UTC

  Mao Zedong’s famous phrase “Chinese women hold up half of the sky” symbolises China’s commitment to gender equality. When China, under a centrally planned system, was among one of the poorest countries in the world, its achievements for women in human development outcome indicators and gender equality surpassed many middle-income countries. Half a century later, China’s rise as a global economic power has been accompanied by major social, demographic and structural transformations . A key question is how women have fared in the labour market in this process. In our paper published in the most [...]

2020-03-02

• Does the local economy influence voters? : A look at state median household income growth
  by ? in FRED blog, 2020-03-02 14:00:00 UTC

  View on GeoFRED ® The health of our local economy affects our outlook, which in turn can affect our decisionmaking, including how we cast our votes. Some classic research shows the economy is an important factor in national elections; and some newer research specifically links disposable income and military casualties to election results. FRED has data to help you traverse the economic landscape during elections. This map shows the growth rate of median U.S. household income state by state. Median is defined as the value at which half the households are above and half below. In a majority ele [...]

• Bank Runs and Panics: A Primer
  by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2020-03-02 12:38:37 UTC

  “… y ou're thinking of this place all wrong. As if I had the money back in a safe. The money's not here. Your money's in Joe's house .... and a hundred others .” George Bailey, Manager, Bailey Brothers’ Building and Loan; in Frank Capra, It’s a Wonderful Life . A bank promises its clients immediate access to cash. Depositors can redeem their funds on demand at face value—first come, first served. Other short-term creditors can do the same, albeit at varying speeds, by not rolling over their loans. And, households and firms that pay a fee for a credit commitment can take down their loans at wil [...]

• Jacoline Bouvy’s journal round-up for 2nd March 2020
  by Jacoline Bouvy in The Academic Health Economists' Blog, 2020-03-02 12:00:00 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 . Talkin’ about a resolution: issues in the push for greater transparency of medicine prices . PharmacoEconomics [ PubMed ] [ RePEc ] Published 20th January 2020 Any paper with a pun title will naturally gr [...]

• The economic effects of a pandemic
  by Mainly Macro in Mainly Macro, 2020-03-02 09:27:00 UTC

  A little over ten years ago I was approached by some health experts who wanted to look at the economic effects of a  influenza  pandemic. They needed someone with a macroeconomic model to look at the general equilibrium impacts. In the 1990s I had led a small team that constructed a model called COMPACT, and these health experts and I completed a paper that was subsequently published in Health Economics. We reference to other studies that had been done earlier in that paper. The current coronavirus outbreak will have different characteristics to the pandemic we studied, and hopefully it will n [...]

• Micro Jumps, Macro Humps: Monetary Policy and Business Cycles in an Estimated HANK Model
  by Christian Zimmermann in NEP-DGE blog, 2020-03-02 05:22:46 UTC

  By Adrien Auclert, Matthew Rognlie and Ludwig Straub http://d.repec.org/n?u=RePEc:ces:ceswps:_8051&r=dge We estimate a Heterogeneous-Agent New Keynesian model with sticky household expectations that matches existing microeconomic evidence on marginal propensities to consume and macroeconomic evidence on the impulse response to a monetary policy shock. Our estimated model uncovers a central role for investment in the transmission mechanism of monetary policy, as high MPCs amplify the investment response in the data. This force also generates a procyclical response of consumption to investment s [...]

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