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2023-05-23

• No title
  by maximorossi in NEP-LTV blog, 2023-05-23 18:18:44 UTC

  The Labour Market Returns to Sleep By: Joan Costa-Font (LSE – London School of Economics and Political Science, IZA – Forschungsinstitut zur Zukunft der Arbeit – Institute of Labor Economics, CESifo – Center for Economic Studies and Ifo for Economic Research – CESifo Group Munich); Sarah Fleche (CES – Centre d’économie de la Sorbonne – UP1 – Université Paris 1 Panthéon-Sorbonne – CNRS – Centre National de la Recherche Scientifique, UP1 – Université Paris 1 Panthéon-Sorbonne, CEP – LSE – Centre for Economic Performance – LSE – London School of Economics and Political Science, LSE – London S [...]

• No title
  by maximorossi in NEP-LTV blog, 2023-05-23 18:16:40 UTC

  Women’s transitions in the labour market as a result of childbearing: the challenges of formal sector employment in Indonesia By: Lisa Cameron (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne); Diana Contreras Suarez (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne); Yi-Ping Tseng (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne) Abstract: Although it is well established that women’s labour force participation drops markedly with marriage and childbearing, surprisingly little i [...]

• No title
  by maximorossi in NEP-LTV blog, 2023-05-23 18:15:56 UTC

  Air pollution: a review of its economic effects and policies to mitigate them By: Laura Hospido (Banco de España, CEMFI and IZA); Carlos Sanz (Banco de España and CEMFI); Ernesto Villanueva (Banco de España) Abstract: Air pollution is an increasing cause of concern among the scientific community, policymakers and the general public. This interest has led to a sharp increase in the number of scientific papers on air pollution. This paper provides a summary of the most prominent recent economic literature on the effects of air pollution, the main policy lessons that can be drawn from it, [...]

• No title
  by maximorossi in NEP-LTV blog, 2023-05-23 18:14:01 UTC

  Does School Choice Increase Crime? By: Andrew Bibler; Stephen B. Billings; Stephen Ross Abstract: School choice lotteries are an important tool for allocating access to high-quality and oversubscribed public schools. While prior evidence suggests that winning a school lottery decreases adult criminality, there is little evidence for how school choice lotteries impact non-lottery students who are left behind at their neighborhood school. We leverage variation in actual lottery winners conditional on expected lottery winners to link the displacement of middle school peers to adult crimina [...]

• No title
  by maximorossi in NEP-LTV blog, 2023-05-23 18:13:12 UTC

  Paying Moms to Stay Home: Short and Long Run Effects on Parents and Children By: Jonathan Gruber; Tuomas Kosonen; Kristiina Huttunen Abstract: We study the impacts of a policy designed to reward mothers who stay at home rather than join the labor force when their children are under age three. We use regional and over time variation to show that the Finnish Home Care Allowance (HCA) decreases maternal employment in both the short and long term. The effects are large enough for the existence of home care benefit system to explain the higher short-term child penalty in Finland than compara [...]

2023-05-16

• What the people want
  by chris in Stumbling and Mumbling, 2023-05-16 08:14:09 UTC

  Years ago, before the Great Forgetting , economists knew that people's preferences often did not originate with themselves but were instead cultivated by producers themselves. Inspired by Vance Packard's best-selling 1957 book, The Hidden Persuaders , J.K. Galbraith wrote: Production fills only a void that it has itself created...That wants are in fact the fruit of production wll now be denied by few serious scholars...The even more direct link between production and wants is provided by the institutions of modern advertising and salesmanship. These cannto be reconciled with the notion of ind [...]

2023-05-10

• Winners and Losers in the AI Arms Race
  by Barry Eichengreen in Project Syndicate, 2023-05-10 08:45:30 UTC

  BERKELEY – The first rule of forecasting, the financial journalist Jane Bryant Quinn once observed , is this: give them a forecast or give them a date; just never give them both. So, here’s a not very bold forecast: Generative artificial-intelligence models like ChatGPT will revolutionize the economy. We just can’t say when. Nor can we say where. Among the key questions lost amid the flurry of commentary on generative AI is which countries will benefit, and which will not. Will the United States, a first mover in this domain, grow even more dominant economically? Will developing countri [...]

2023-05-01

• Constructing forward interest rates in FRED
  by ? in FRED blog, 2023-05-01 13:00:00 UTC

  A forward interest rate is a rate that pertains to a future loan and/or bond purchase. A forward transaction can be arranged in an over-the-counter market with a financial institution, or it can be constructed from existing fixed income instruments. A forward rate contract has at least two elements: the contract start and length. For example, a forward loan contract might commence 2 years in the future and last for 6 months. Such a contract might be termed a 6-month contract, 2 years ahead. Interest rate contracts (bonds or loans) that start immediately (or nearly so) are called spot market c [...]

2023-04-25

• Decarbonization Requires New Fiscal Rules
  by Max Krahé in Project Syndicate, 2023-04-25 11:45:08 UTC

  BERLIN – Climate policy is at a critical juncture . The world’s leading scientists see a rapidly closing window to avoid the worst ravages of global warming. With the enactment of the Inflation Reduction Act (IRA) last year, the United States has finally taken meaningful domestic action to reduce emissions. Now Europe is scrambling to respond. But the narrowly technical approach prevailing in the European Union – and particularly in Germany, its biggest member state – is steering Europe toward fiscal shoals and social turmoil. To chart a safer, more sustainable course, climate policy must b [...]

• Are startups engaging in innovation in India?
  by Anurodh in Ajay Shah's blog, 2023-04-25 08:46:00 UTC

  by Aneesha Chitgupi, Karthik Suresh and Diya Uday . Introduction What is a startup? The academic literature takes a broad view --- startups: have a high growth rate (Moogk 2012), have a lower number of employees (Beck et al. 2008), are at the early stage of the life cycle of a firm (Eisenmann 2013, Stevenson and Jarillo 1990), and are drivers of innovation (Cohen and Klepper, 1996). However, governments across the world focus on the link between startups and innovation. In the Netherlands , a startup is defined as "a business that translates an innovative idea into a scalable and generic [...]

2023-04-15

• When clever people do stupid things
  by chris in Stumbling and Mumbling, 2023-04-15 09:09:47 UTC

  Simon Wren Lewis asks : There is no doubt that Lawson was far better qualified than many other Chancellors, and also that he was clever, so why did he get these major judgements wrong? It's a good question because it broadens. Clever people gave us the poll tax, the invasion of Iraq, financial crisis and collapses of Silicon Valley and Credit Suisse. So why do they so often get it wrong. There are many reasons. One, which Simon attributes to Lawson, is arrogance. In ignoring his advisors, Lawson did not go as far as Kwasi Kwarteng (double first, PhD and Browne medal) who sacked one of his. [...]

2023-04-13

• A Bank Murder Mystery
  by Barry Eichengreen in Project Syndicate, 2023-04-13 15:33:42 UTC

  BERKELEY – When a banking crisis erupted in early March, pundits rushed to the battlements, or at least to their studies, to hammer out columns assigning the blame. Unsurprisingly, those early assessments, based on still-incomplete information, often contradicted one another. It is worth recalling Walter Raleigh’s dictum: those who follow too close on the heels of history risk getting kicked in the teeth. A month later, the narrative has coalesced around four aspects, or interpretations, of the crisis. The first is what might be called the incompetent-management view. Silicon Valley Bank’s [...]

2023-04-05

• I ran Sarah Jacobson's "Ore Money Ore Problems" resource extraction game in class yesterday @SarahJacobsonEc
  by John Whitehead in Environmental Economics, 2023-04-05 08:15:00 UTC

  Here is the abstract from the paper which is forthcoming in the Journal of Economic Education: Economic theories of the exploitation of depletable natural resources are built around a core model of intertemporal profit maximization that predicts that (barring unforeseen shocks) scarcity crises will not arise because forward looking resource owners will smooth extraction over time. The model that provides this result can seem opaque to students, but its intuition can be more easily grasped from experience. This paper shares a game that provides that experience. Participants play the role of mi [...]

2023-04-04

• Legal and finance jobs are among the most at risk from AI, while construction and trade jobs face minimal influence, studies suggest
  by bnolan@insider.com (Beatrice Nolan) in Business Insider, 2023-04-04 10:33:58 UTC

  Generative AI could lead to the widespread automation of jobs, new research found. sorbetto/Getty Images Generative AI could lead to the widespread automation of jobs, new research found. But blue-collar roles in manufacturing and construction face minimal influence, data indicates. Here's why some industries will likely be more affected than others by the technology. Rapid advances in artificial intelligence are stoking employee concerns about the automation of jobs. Generative AI , a type of AI capable of generating text and other content in response to user prompts, has exploded in populari [...]

• La France face à l’abîme : la dette publique dépasse les 3000 milliards d’euros
  by Philippe Lacoude in Contrepoints, 2023-04-04 03:15:08 UTC

  La France a finalement atteint 3000 milliards d’euros de dette publique pour un produit intérieur brut (PIB) de seulement 2643 milliards d’euros. En 2014, je déplorais le passage aux 2000 milliards d’euros de dettes, et en 2018 le franchissement de la barre symbolique de 100 % du PIB. Alors qu’il avait fallu 11 ans pour passer de 1000 à 2000 milliards d’euros de dettes publiques, il n’aura donc fallu que 8 ans pour passer de 2000 à 3000 milliards d’euros. La vitesse à laquelle le Titanic français prend l’eau s’accélère donc. Peut-on continuer longtemps à ce rythme effréné ?   Gérer la dette  [...]

2023-03-29

• Announcements
  by Anurodh in Ajay Shah's blog, 2023-03-29 05:06:00 UTC

  TrustBridge is an organisation working in the area of rule of law in the economy. We engage in academic and policy oriented research and advocacy in the areas of Energy Transition, Financial Markets, Governance in Private Capital, and Government Contracting and Litigation. TrustBridge is looking for full time researchers to work on projects in the area of regulation of financial markets, governance and energy transition. Financial markets The financial markets project involves studying the working of regulators in securities markets, banking and payments, insolvency, and insurance. This incl [...]

2023-03-21

• What the World Bank Can Do About Climate Change
  by Pinelopi Koujianou Goldberg in Project Syndicate, 2023-03-21 09:21:06 UTC

  NEW HAVEN – Few institutions have shown as much versatility and adaptability as the World Bank. Initially founded to address global capital-market imperfections after World War II, the institution’s primary mission evolved over time to focus on fighting extreme poverty. But now that the World Bank is welcoming a new president this July, it should adapt again, this time to address climate change. Poverty reduction, of course, should remain a high priority, considering that the COVID-19 pandemic has left many low-income countries in dire straits. But climate change has emerged as an equally i [...]

2023-03-20

• Fifty Years of Floating Currencies
  by Jeffrey Frankel in Project Syndicate, 2023-03-20 13:58:41 UTC

  CAMBRIDGE – Fifty years ago this month, in March 1973, the Bretton Woods arrangement of fixed exchange rates was abandoned, and the world’s major currencies – including the US dollar, pound, yen, and Deutsche Mark – were allowed to float. At the time, the system’s demise was generally considered a policy failure. But the shift from fixed to flexible exchange rates was probably inevitable. The international monetary system that was designed at Bretton Woods, New Hampshire, in 1944, helped lay the economic foundation for the postwar international order. Over the next three decades, known in F [...]

2023-03-13

• Technical regress
  by chris in Stumbling and Mumbling, 2023-03-13 09:05:07 UTC

  There's a fascinating TV series on now about modern social and economic history. I refer of course to the re-runs of Brookside on STV Player. One thing this shows is how many opportunities there in the 80s were for workers to top up their wages by stealing from their employers, either by putting their hands in the till or by nicking stuff to sell to their friends. The closure of such opportunities thanks in part to technical change might help explain increased inequality and the Easterlin paradox, as I discussed here . But there's something else. In one episode the post arrives at breakfast t [...]

2023-03-06

• 6 consejos para ascender en el trabajo, según la ciencia
  by José Andrés García in Elblogsalmon, 2023-03-06 10:00:30 UTC

  Cobrar más es la manera más efectiva de mejorar nuestra economía doméstica. Los trucos de ahorro funcionan, pero no cambiarán nada radicalmente a menos que los ingresos aumenten. Por eso, aunque también es cierto que cuanto más ganas, más gastas , quiero detallar algunos factores que, según los datos, nos ayudarán a ascender en el trabajo y que nos paguen más. Antes de nada, comentar que ya vimos varios consejos polémicos para promocionar en nuestro empleo. Funcionan y deberíamos conocerlos , nos gusten o no. [...]

2023-03-05

• If You Say “Convenience Yield” I Will Not Take You (or Your Research) Seriously
  by cpirrong in Streetwise Professor, 2023-03-05 22:57:06 UTC

  I have a relatively simple way to filter out serious research on commodity prices from the not-so-serious. If you rely on “convenience yield” I will not take you seriously. Alas, based on this filter, the bulk of commodities research is unserious. For the uninitiated (consider yourself lucky!), convenience yield is an attempt to explain that commodity futures prices are typically at less than “full carry”, i.e ., that futures prices are below the spot price plus the cost of carrying inventory (financing plus physical storage costs). Furthermore, convenience yield is invoked to explain [...]

• Health impact of increasing access to physicians
  by Jason Shafrin in Healthcare Economist, 2023-03-05 20:49:16 UTC

  Out recently is an interesting AEA paper by Okeke 2023 , who examines a policy experiment by the Nigerian government that aimed determine whether expand access to physicians improved health outcomes. In this experiment, some communities were randomly selected to receive a new doctor. These doctors were posted to the local public health center. Prior to their arrival, health care was provided by midlevel health-care providers (MLP). To separate the effect of (ostensibly higher) quality from that of quantity, another group of communities was provided with an additional midlevel provider. [...]

2023-03-03

• Now we just wait for the comment from Desvousges, Mathews and Train
  by John Whitehead in Environmental Economics, 2023-03-03 10:10:00 UTC

  Yesterday I spent 2 hours revising a final version of this paper so that we can say it is "forthcoming" in Applied Economic Perspectives & Policy . Here is Figure 1: [...]

2023-03-01

• No title
  by maximorossi in NEP-LTV blog, 2023-03-01 10:35:12 UTC

  Labor market insurance policies in the XXI century By: Boeri, Tito; Cahuc, Pierre Abstract: The recovery from the Covid-19 crisis will force governments to accelerate transformation in their menu of labor market policy tools. The crisis was a stress test for unemployment insurance schemes as it involved a sudden and unexpected shutdown of a very large set of activities. This forced countries to introduce, often from scratch, income support schemes for workers under new forms of employment, and the self-employed. There was also a considerable expansion of short-time work schemes notably tow [...]

• No title
  by maximorossi in NEP-LTV blog, 2023-03-01 10:34:26 UTC

  2022: A SUMMARY OF ARTEFACTUAL FIELD EXPERIMENTS ON FIELDEXPERIMENTS.COM: THE WHO’S, WHAT’S, WHERE’S, AND WHEN’S By: John List Abstract: 2022 Summary of Artefactual Experiments Date: 2023 URL: http://d.repec.org/n?u=RePEc:feb:artefa:00767&r=ltv [...]

• No title
  by maximorossi in NEP-LTV blog, 2023-03-01 10:32:26 UTC

  What makes a satisfying life? Prediction and interpretation with machine-learning algorithms By: Clark, Andrew E.; D’Ambrosio, Conchita; Gentile, Niccoló; Tkatchenko, Alexandre Abstract: Machine Learning (ML) methods are increasingly being used across a variety of fields and have led to the discovery of intricate relationships between variables. We here apply ML methods to predict and interpret life satisfaction using data from the UK British Cohort Study. We discuss the application of first Penalized Linear Models and then one non-linear method, Random Forests. We present two key model [...]

2023-02-27

• No title
  by maximorossi in NEP-LTV blog, 2023-02-27 18:52:29 UTC

  Explaining Happiness Trends in Europe By: Easterlin, Richard A. (University of Southern California); O’Connor, Kelsey J. (STATEC Research – National Institute of Statistics and Economic Studies) Abstract: In Europe differences among countries in the overall change in happiness since the early 1980s have been due chiefly to the generosity of welfare state programs— increasing happiness going with increasing generosity and declining happiness with declining generosity. This is the principal conclusion from a time series study of ten Northern, Western, and Southern European countries with [...]

• No title
  by maximorossi in NEP-LTV blog, 2023-02-27 18:50:57 UTC

  The Adventure of Running Experiments with Teenagers By: Antonio Alfonso-Costillo (Universidad Loyola); Pablo Brañas-Garza (Universidad Loyola); Diego Jorrat (Universidad Loyola); Pablo Lomas (Universidad Loyola); Benjamin Prissé (Universidad Loyola); Mónica Vasco (Universidad Loyola) Abstract: Economists are increasingly interested in how to conduct experiments with teenagers. This paper evaluates whether different methodological factors impact the answers of teenagers to standard experimental tasks on measuring time preferences, risk preferences, cognitive abilities and financial abili [...]

• No title
  by maximorossi in NEP-LTV blog, 2023-02-27 18:49:49 UTC

  Persecution and Escape By: Sascha O. Becker (Monash University and University of Warwick); Volker Lindenthal (LMU Munich); Sharun Mukand (University of Warwick); Fabian Waldinger (LMU Munich) Abstract: We study the role of professional networks in facilitating emigration of Jewish academics dismissed from their positions by the Nazi government. We use individual-level exogenous variation in the timing of dismissals to estimate causal effects. Academics with more ties to early émigrés (emigrated 1933-1934) were more likely to emigrate. Early émigrés functioned as “bridging nodes” that fa [...]

• No title
  by maximorossi in NEP-LTV blog, 2023-02-27 18:47:42 UTC

  Home alone: Widows’ Well-Being and Time By: Maja Adena (WZB Berlin); Daniel Hamermesh (University of Texas at Austin); Michal Myck (Centre for Economic Analysis); Monika Oczkowska (Centre for Economic Analysis) Abstract: Using data from the Survey of Health, Ageing and Retirement in Europe (SHARE, 2004-17) and time diaries from Poland (2013), the U.S. (2006-16), the U.K. (2014-15) and France (2009-10), we examine differences between widowed and partnered older women in well-being and its development in widowhood. Most importantly, our analysis accounts for time use, an aspect which has [...]

• No title
  by maximorossi in NEP-LTV blog, 2023-02-27 18:46:37 UTC

  Gender Gaps and Family Policies in Latin America By: Estefanía Galván (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Cecilia Parada (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Martina Querejeta (Universidad de la República (Uruguay)); Soledad Salvador (Centro Interdisciplinario de Estudios sobre el Desarrollo, Uruguay) Abstract: Gender equality in the labor market remains a difficult challenge in Latin America and recent literature shows that chi [...]

2023-02-24

• Three types of "error"
  by chris in Stumbling and Mumbling, 2023-02-24 13:09:38 UTC

  It's often the case that sport can give us lessons for other walks of life. So it is with Mikel Arteta's recent reaction to Lee Mason's failure to draw the lines on the TV replay which would have shown that Brentford's equalizing goal was offside. He said : That wasn’t a human error…it was a big, big, big, not conceiving or understanding your job. That’s not acceptable. This distinction is a nice one. In environments where there is uncertainty, time pressure and incomplete information human errors are inevitable and thus forgivable (although the history of the airline industry shows they can [...]

2023-02-21

• Anti-business
  by chris in Stumbling and Mumbling, 2023-02-21 13:07:57 UTC

  Rachel Reeves claims to be "pro-business." At risk of mistaking a vacuous cliche for a serious proposition, I'm not sure she should be. It's not obvious that business has intrinsic virtues. Yes, some businessmen are genuinely committed to virtues of excellence even if they don't use that MacIntyrean term, but equally business is a location of hierarchy, unfreedom, bullshit jobs and bullshit language. What's more, the single-minded pursuit of short-term profit often displaces such virtues. It can crowd out altruism or professional pride; incentivize managers to chase a quick buck through fraud [...]

2023-02-10

• Weird politicians
  by chris in Stumbling and Mumbling, 2023-02-10 12:55:20 UTC

  Our political system is dysfunctional. It selects for the incompetent, the dishonest and the downright deluded. So much is obvious to those who care to think about it. What's not so obvious is that there is a more subtle bias in politics which distorts and diminishes political debate. Recall that all institutions are selection devices: they select for some people and ideas and against others by filtering out some types and by disproportionately attracting others. Even if we had a well-functioning system which selected against crooks, fools, narcissists, egomaniacs and sociopaths our politici [...]

2023-02-05

• Chartbook #194 Can Beijing halt China’s housing avalanche? The most important economic-policy question for 2023?
  by Adam Tooze in Adam Tooze, 2023-02-05 21:37:56 UTC

  Source: FT Few things matter more for the world economy in 2023 than China’s fortunes. Not since the reform period began, have there been more serious question marks over the trajectory of China’s growth. The 2015-6 near-miss crisis, when the RMB depreciated and capital flooded out of China was a more acute moment of danger. Fear of a repetition still hangs over the current scene. But in 2015-6, the growth engine was not spluttering to the same degree. China did not face the kind of labour market pressures it does today, with youth unemployment rising towards 20 percent and graduate [...]

2023-01-30

• Money, e-money and consumer welfare
  by Christian Zimmermann in NEP-DGE blog, 2023-01-30 14:19:00 UTC

  By Francesco Carli and Burak Uras http://d.repec.org/n?u=RePEc:zbw:bofrdp:152022&r=dge We develop a micro-founded monetary model to inquire the role of a privately provided e-money instrument for household consumption smoothing and welfare. Different from fiat money, e-money users pay electronic transaction fees, but in turn e-money reduces spatial separation frictions and enables risk-sharing. We characterize the conditions that promotes e-money to be Pareto improving and the conditions when e-money reduces its users’ welfare – despite for the consumption-smoothing it induces. We calibrate ou [...]

2023-01-26

• Cycles in lending standards : Data from the senior loan officer opinion survey
  by ? in FRED blog, 2023-01-26 14:00:00 UTC

  FRED recently added more data from the Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) . The survey, conducted by the Board of Governors, is currently sent to 124 domestic banks and US branches and agencies of foreign banks. The senior loan officers at those organizations answer a series of questions about their opinions on current lending practices. This qualitative information is used by monetary policymakers to gauge credit market and banking conditions. The FRED graph above shows the fraction of domestic banks that reported having tightened their lending standards min [...]

2023-01-24

• Job Ladder, Human Capital, and the Cost of Job Loss
  by Christian Zimmermann in NEP-DGE blog, 2023-01-24 18:13:03 UTC

  By Richard Audoly, Federica De Pace and Giulio Fella http://d.repec.org/n?u=RePEc:fip:fednsr:95392&r=dge High-tenure workers losing their job experience a large and prolonged fall in wages and earnings. The aim of this paper is to understand and quantify the forces behind this empirical regularity. We propose a structural model of the labor market with (i) on-the-job search, (ii) general human capital, and (iii) firm specific human capital. Jobs are destroyed at an endogenous rate due to idiosyncratic productivity shocks and the skills of workers depreciate during periods of non-employment. Th [...]

2023-01-17

• The Dynamics of the Racial Wealth Gap
  by Christian Zimmermann in NEP-DGE blog, 2023-01-17 16:46:36 UTC

  By Dionissi Aliprantis, Daniel Carroll and Eric Young http://d.repec.org/n?u=RePEc:hka:wpaper:2022-044&r=dge What drives the dynamics of the racial wealth gap? We answer this question using a dynamic stochastic general equilibrium heterogeneous-agents model. Our calibrated model endogenously produces a racial wealth gap matching that observed in recent decades along with key features of the current cross-sectional distribution of wealth, earnings, intergenerational transfers, and race. Our model predicts that equalizing earnings is by far the most important mechanism for permanently closing th [...]

• Homelessness
  by Christian Zimmermann in NEP-DGE blog, 2023-01-17 16:15:45 UTC

  By Ayşe İmrohoroğlu and Kai Zhao http://d.repec.org/n?u=RePEc:uct:uconnp:2022-17&r=dge This paper examines the effectiveness of several policies in reducing the aggregate share of homeless in a dynamic general equilibrium model. The model economy is calibrated to capture the most at-risk groups and generates a diverse population of homeless with a significant fraction becoming homeless for short spells due to labor market shocks and a smaller fraction experiencing chronic homelessness due to health shocks. Our policy experiments show housing subsidies to be more effective in reducing the agg [...]

2023-01-13

• China and the Sovereign-Debt Bomb
  by Anne O. Krueger in Project Syndicate, 2023-01-13 14:05:37 UTC

  WASHINGTON, DC – International capital flows have long been a major source of economic growth. Savings in higher-income countries have financed high-yielding investments in low-income countries, generating benefits for all. After World War II, capital flows under the Marshall Plan drove the rapid reconstruction of Europe, and after those countries recovered, they extended their own foreign aid and other official financial flows to the developing world. Private financing also increased substantially; by the 1990s, it accounted for over half of total capital flows to developing countries. Some [...]

• 51. Informes de la Asociación Euro-Americana 2023: Brasil y otros países americanos en 1960-2022
  by MCG Blogs de Economía in Asociación de Estudios Euro-Americanos: Desarrollo internacional de América, Europa y otras áreas, 2023-01-13 13:50:00 UTC

    Tabla 1. Evolución del PIB per cápita, 2012-2018 en 9 países de América (Dólares del año 2010 según paridades)                               2012 2018 Diferencia Estados Unidos 49518 54401 4883 Canada 41195 43430 2235 Argentina 19000 18829 -171 Brazil 14979 14026 -953 Chile 19846 21408 1562 Colombia 11707 13181 1474 Mexico 16004 17315 1311 Peru 10731 12169 1438 Venezuela 1473 [...]

2023-01-11

• The full employment challenge
  by chris in Stumbling and Mumbling, 2023-01-11 13:44:09 UTC

  Many technocrats think the UK is at or around full employment. What they don't say is that this requires some radical thinking about economic policy. The Bank's chief economist Huw Pill recently said that the labour market so tight that higher interest rates might be needed to cut aggregate demand and inflation. And Sir Keir Starmer says : "We’re going to have to be fiscally disciplined." The only charitable reading of this is that it means he thinks he's going to inherit a reasonably tight labour market (albeit perhaps not as much so as now) and so a fiscal expansion would be inflationary. W [...]

2023-01-07

• Weekend reading links
  by noreply@blogger.com (Urbanomics) in Urbanomics, 2023-01-07 14:36:00 UTC

  1. Industrial policy in the US The chips and Science Act , a $280bn effort to shore up America’s microchips industry... the administration eventually compromised enough to overcome the resistance of Joe Manchin of West Virginia, often the swing Democrat in a 50-50 Senate, to pass a more modest, inaptly named Inflation Reduction Act , promising spending of $369bn over a decade. Its climate spending will be the most substantial in American history. Together with an infrastructure package passed in November 2021, the trio of bills will make for annual spending of nearly $100bn on industrial polic [...]

2022-12-26

• Long-Term Economic Implications of Demeny Voting: A Theoretical Analysis
  by Christian Zimmermann in NEP-DGE blog, 2022-12-26 17:11:29 UTC

  By Luigi Bonatti and Lorenza Alexandra Lorenzetti http://d.repec.org/n?u=RePEc:ces:ceswps:_10039&r=dge This paper places itself at the intersection between the literature on “Demeny voting” (the proposal of letting custodial parents exercise their children’s voting rights until they come of age) and the vast literature on formal models with endogenous fertility that address the problem of fiscal redistribution between young and old cohorts in the presence of an aging population. Linking these issues to the process of economic growth through a simple overlapping generations model, we show that [...]

• New indicators of perceived inflation in France based on media data
  by raphael.moncomble in Eco Notepad, 2022-12-26 14:31:41 UTC

  Published on 12/27/2022 By Jean-Charles Bricongne , Olivier de Bandt , Annabelle de Gaye, Julien Denes, Paul Hubert , Pierre-Antoine Robert The recent rise in inflation could affect households' and businesses' perception of inflation. This post describes new indicators of perceived inflation in France constructed from alternative data: newspaper articles and messages from the social network Twitter. The advantage of such data is that they are available at high frequency and in real time. Billet_299_VE.pdf Chart 1. Indicators of perceived inflation based on media data (standardised and re [...]

2022-12-23

• Optimal GDP-indexed Bonds
  by Christian Zimmermann in NEP-DGE blog, 2022-12-23 05:04:59 UTC

  By Yasin Kürsat Önder http://d.repec.org/n?u=RePEc:rug:rugwps:22/1056&r=dge I investigate the introduction of GDP-indexed bonds as an additional source of government borrowing in a quantitative default model. The idea of linking debt payments to developments in GDP resurfaced with the 1980s debt crisis and peaked with the COVID-19 outbreak. I show that the gains from this idea depend on the underlying indexation method and are highest if payments are symmetrically tied to developments in GDP. Optimized indexed debt can eradicate default risk, halve consumption volatility, and increase asset pr [...]

2022-12-18

• Annual Review 2022
  by noreply@blogger.com (David Stern) in Stochastic Trend, 2022-12-18 02:45:00 UTC

  I've been doing these annual reviews since 2011. They're mainly an exercise for me to see what I accomplished and what I didn't in the previous year.    This was the second year since I have been back living in Canberra in 2007 that I spent the entire year in the Canberra region (extending to the coast) and the second year since 1991 that I didn't fly on a plane. I also haven't been outside of Australasia since 2018. It's pretty hard to travel for any length of time without taking the family and with two small children neither of us feels like traveling anywhere very far. I think we can finall [...]

2022-12-15

• Die Wirkunng der Besteuerung von Spitzeneinkommen und die Selektionstheorie der Lohnbildung
  by Ekkehart Schlicht in Funktionale Staatsfinanzen, 2022-12-15 16:56:00 UTC

  In einer interessanten Untersuchung gehen Daniel Keniston und  Abigail Peralta der Frage nach, ob hohe Steuern Superstars dazu veranlassen weniger zu arbeiten. Sie schreiben: Wir testen diese Hypothese anhand vollständiger Daten zum Arbeitsangebot von Hollywood-Filmstars von 1927 bis 2014. Änderungen der Grenzsteuersätze in hohen Steuerklassen haben keinen signifikanten Einfluss auf die Anzahl der Filme, die ein Filmstar pro Jahr dreht. In Jahren mit hohen Steuern produzieren die Stars jedoch mehr hoch bewertete Filme mit preisgekrönten Regisseuren, wobei sie möglicherweise prestigeträchtige F [...]

• Why economists need history
  by chris in Stumbling and Mumbling, 2022-12-15 09:25:06 UTC

  Should economists pay more attention to intellectual history? I'm prompted to ask by Jan Eeckhout's book, The Profit Paradox . His thesis is that, since the early 80s, many industries have become dominated by a handful of superstar companies whose increased market power allows them to enjoy higher profit margins. The result is higher prices than would otherwise be the case which in turn means lower output, lower demand for labour and lower real interest rates. It's not just workers who suffer from this but also smaller companies who face tougher competition from giant firms and higher costs fr [...]

2022-12-11

• Crisis Propagation in a Heterogeneous Self-Reflexive DSGE Model
  by Christian Zimmermann in NEP-DGE blog, 2022-12-11 16:20:33 UTC

  By Federico Guglielmo Morelli, Michael Benzaquen, Jean-Philippe Bouchaud and Marco Tarzia http://d.repec.org/n?u=RePEc:hal:journl:hal-03378921&r=dge We study a self-reflexive DSGE model with heterogeneous households, aimed at characterising the impact of economic recessions on the different strata of the society. Our framework allows to analyse the combined effect of income inequalities and confidence feedback mediated by heterogeneous social networks. By varying the parameters of the model, we find different crisis typologies: loss of confidence may propagate mostly within high income househo [...]

2022-11-30

• Credit Misallocation and Macro Dynamics with Oligopolistic Financial Intermediaries
  by Christian Zimmermann in NEP-DGE blog, 2022-11-30 22:04:48 UTC

  By Alessandro Villa http://d.repec.org/n?u=RePEc:fip:fedhwp:94920&r=dge Bank market power shapes firm investment and financing dynamics and hence affects the transmission of macroeconomic shocks. Motivated by a secular increase in the concentration of the US banking industry, I study bank market power through the lens of a dynamic general equilibrium model with oligopolistic banks and heterogeneous firms. The lack of competition allows banks to price discriminate and charge firm-specific markups in excess of default premia. In turn, the cross-sectional dispersion of markups amplifies the impac [...]

• QE with Chinese Characteristics?
  by Andrew Sheng in Project Syndicate, 2022-11-30 11:46:00 UTC

  HONG KONG – In 2020, Sebastian Mallaby of the Council on Foreign Relations announced the beginning of the “age of magic money,” in which advanced economies would “redefine the outer limits of their monetary and fiscal power.” By July 2022, Mallaby was predicting that this age was coming to an end. But, while most major central banks are now reversing quantitative easing (QE) and raising interest rates, China may need to head in the opposite direction. Observers often forget that QE was invented by the Bank of Japan in 2001 as a tool for dealing with balance-sheet deflation. Other tools incl [...]

2022-11-29

• Let the WTO Referee Carbon Border Taxes
  by Jeffrey Frankel in Project Syndicate, 2022-11-29 16:48:24 UTC

  CAMBRIDGE – Perhaps the most important task confronting the international order is enforcement of national limits on greenhouse-gas emissions, such as those that were negotiated in the 2015 Paris agreement. Carbon border adjustments could give these limits teeth, but fair application requires a revived World Trade Organization. Past attempts at curtailing carbon dioxide emissions have yielded limited results. China and other emerging and developing economies resist curbing their rapidly rising emissions, understandably arguing that the industrialized countries should go first because they cr [...]

2022-11-27

• Full-Information Estimation of Heterogeneous Agent Models Using Macro and Micro Data
  by Christian Zimmermann in NEP-DGE blog, 2022-11-27 16:00:33 UTC

  By Laura Liu and Mikkel Plagborg-Møller http://d.repec.org/n?u=RePEc:pri:econom:2022-21&r=dge We develop a generally applicable full-information inference method for heterogeneous agent models, combining aggregate time series data and repeated cross sections of micro data. To handle unobserved aggregate state variables that affect cross-sectional distributions, we compute a numerically unbiased estimate of the model-implied likelihood function. Employing the likelihood estimate in a Markov Chain Monte Carlo algorithm, we obtain fully efficient and valid Bayesian inference. Evaluation of the mi [...]

2022-11-25

• Quotation of the Day…
  by Don Boudreaux in Cafe Hayek, 2022-11-25 09:15:00 UTC

  (Don Boudreaux) Tweet … is from page 62 of Israel Kirzner’s March 1992 South African Journal of Economics paper, “ Subjectivism, Freedom and Economic Law ” as this paper is reprinted in Austrian Subjectivism and the Emergence of Entrepreneurship Theory , (Peter J. Boettke and Frédéric Sautet, eds., 2015), which is a volume in The Collected Works of Israel M. Kirzner : Physical realities and constraints have, of course, enormously important consequences for economic outcomes. But the subjectivist must insist that economic outcomes are not determined by any objective physical phenomena whate [...]

2022-11-24

• Optimal carbon pricing with fluctuating energy prices – emission targeting vs. price targeting
  by Christian Zimmermann in NEP-DGE blog, 2022-11-24 16:48:05 UTC

  By Alkis Blanz, Ulrich Eydam, Maik Heinemann and Matthias Kalkuhl http://d.repec.org/n?u=RePEc:pot:cepadp:51&r=dge Prices of primary energy commodities display marked fluctuations over time. Market-based climate policy instruments (e.g., emissions pricing) create incentives to reduce energy consumption by increasing the user cost of fossil energy. This raises the question of whether climate policy should respond to fluctuations in fossil energy prices? We study this question within an environmental dynamic stochastic general equilibrium (E-DSGE) model calibrated on the German economy. Our res [...]

• La transmission des hausses de taux de la BCE au marché monétaire
  by raphael.moncomble in Bloc-Notes Eco, 2022-11-24 15:42:45 UTC

  Publié le 25/11/2022 Par Benoît Nguyen et Miklos Vari Depuis le mois de juillet 2022, la BCE a relevé ses taux directeurs de 200 points de base au total, successivement 50 pb puis deux fois 75 pb, soit les hausses les plus fortes depuis sa création. Dans quelle mesure se sont-elles transmises au marché monétaire, première étape de la transmission de la politique monétaire ? Sur le marché non sécurisé (€STR), la transmission a été presque parfaite, mais sur le marché sécurisé (repo), elle est restée incomplète. billet_292_vf.pdf Graphique 1 : Variations des taux du marché monétaire en bla [...]

2022-11-23

• How well have ECB rate hikes been transmitted to the money market?
  by aurelie.dossantos in Eco Notepad, 2022-11-23 16:06:17 UTC

  Published on 11/25/2022 By Benoit Nguyen and Miklos Vari Since July, the ECB increased its key interest rates by 200 basis points in total (once by 50bps and twice by 75 bps). These are the largest single rate hikes of the ECB key interest rates. In this post, we examine to what extent these changes of policy rates passed through to the money market, the first step of monetary policy transmission. Transmission has been nearly complete in the unsecured market (e.g. on €STR) but subdued in the secured market (i.e. on repo transactions). billet_292_ve.pdf Graph 1: Changes for unsecured mone [...]

2022-11-21

• The macroeconomics of establishing a basic income grant in South Africa
  by Christian Zimmermann in NEP-DGE blog, 2022-11-21 16:27:17 UTC

  By Daan Steenkamp, Roy Havemann and Hylton Hollander http://d.repec.org/n?u=RePEc:pra:mprapa:114614&r=dge This paper quantifies the effect of fiscal transfers on the trade-off between social relief and debt accumulation, and discusses the economic growth and fiscal implications of different combinations of expanded social support and funding choices. Given South Africa’s already high level of public debt, the opportunity to fund a basic income grant through higher debt is limited. Using a general equilibrium model, the paper shows that extending the social relief of distress grant could be fis [...]

2022-11-18

• Useful Microeconomics
  by Francesc Trillas in Real Progress, 2022-11-18 16:31:00 UTC

   Microeconomics does not need to be a distant topic. My design of the Applied Microecnomics course  (taught jointly with Javier Asensio) at the Master in Applied Research in Economics and Business of my university combines theory and discussion of empirical papers in top journals. I paste the syllabus here. As we finish the current edition and we prepare the next one, I would most welcome suggestions of topics, references and discussion papers.  Objectives -Learn the basic skills to understand and be able to use the basic models and theories (old and new) in microeconomics, to better analyze b [...]

2022-11-16

• Can civic nationalism help reduce corruption? Insights from Solomon Islands
  by Grant Walton in Development Policy Blog, 2022-11-16 19:00:10 UTC

  In many parts of the world “nationalism” has earned itself a bad rap. Ethnic cleansing, war, genocide and other atrocities have been committed in its name. In recent years we’ve seen political leaders, like Donald Trump, whip up a toxic form of nationalist sentiment defined by race and a disdain for foreigners. On the other hand, nationalism can be a force for good; a devotion to one’s nation can encourage solidarity, pride and belonging. And for some practitioners, policymakers and academics, a certain type of nationalism – civic nationalism – has the potential to help address corruption in p [...]

• Some Links
  by Don Boudreaux in Cafe Hayek, 2022-11-16 16:00:57 UTC

  (Don Boudreaux) Tweet Phil Magness and Michael Makovi report on their important research showing that Karl Marx’s reputation was given a real boost by the ‘success’ of the Bolshevik revolution . A slice: In his classic book the Logic of Collective Action, Mancur Olson observed a peculiar feature about socialist political organizing. Marxist theory envisions itself as a manifestation of collective class interests, with the proletarian class being the most numerous. Yet as Olson noted, “the ‘Marxian’ revolutions that have taken place have been brought about by small conspiratorial elites tha [...]

2022-11-13

• Recent Behavioural Science and Policy Links November 13th
  by Liam Delaney in Economics, Psychology and Policy, 2022-11-13 20:01:00 UTC

  It is still very difficult to know fully what to do about posting on twitter. I have not deleted my account. I am not actively posting. I RT'd the happy announcement of one of our PhD students passing their viva on the basis that many people on my timeline know the student and would want to celebrate. My current mood with it is basically to see this as a transition phase before something new emerges.  I have continued to engage with mastodon ( link here ). It has been exciting to see various people and groups move there and I highly recommend trying it out but it is clearly still open as to wh [...]

• We accurately predicted the fall in the labor force participation rate since 2000 at a two-year horizon
  by Ivan Kitov in Economics as Classical Mechanics, 2022-11-13 15:24:00 UTC

  In 2008, we published a working paper titled " The driving force of labor force participation in developed countries"   in the ECINEQ (Society for the Study of Economic Inequality) Working Paper Series  also available at    Research Papers in Economics  (RePEc/IDEAS). In this paper we proposed a simple  model of the change in the labor force participation rate, dLFP/LFP, as a nonlinear function of the real GDP per capita, G:  N(t 2 ) = N(t 1 ){ 2[dG(t 1 -T)/G(t 1 -T) - A 2 /G(t 1 -T)] + 1}                                                (1 ) dLFP(t 1 )/LFP(t 1 ) = N(t 1 -T)/B + C                [...]

2022-11-02

• Recent behavioural science and policy links November 2nd
  by Liam Delaney in Economics, Psychology and Policy, 2022-11-02 13:22:00 UTC

  Like a lot of people, am thinking about how to proceed with social media. For now, am going to go back to basics and use the blog here to update on anything particularly interesting I see emerging in our areas.  1. Michael Muthukrishna points to a really useful new measure of cultural distance between regions.  2. From last year and open access, Nancy Cartwright's paper on rigour versus the need for evidential diversity is very thought-provoking. In general our literatures should engage more directly with her thinking in this regard.  3. New paper by Leo Lades and Federica Nova  Ethical Consid [...]

2022-11-01

• Poids de la dette et inflation : quelles leçons après l’épisode britannique ?
  by The Conversation in Contrepoints, 2022-11-01 04:10:35 UTC

  Par Éric Mengus et Guillaume Plantin.   Le 23 septembre au Royaume-Uni , l’annonce du mini-budget et les événements qui ont suivi jusqu’à l’annonce de la démission de la Première ministre Liz Truss , le 20 octobre, ont suscité un regain d’intérêt pour le risque de «  dominance budgétaire  », c’est-à-dire une situation dans laquelle la banque centrale abandonne son objectif de stabilité des prix pour aider le gouvernement à financer ses déficits. Mais dans quelle mesure cette séquence d’événements doit-elle nous pousser à repenser les relations entre les gouvernements, en charge de la politique [...]

2022-10-21

• ‘Sex Positivity,’ Porn May Be Keeping Young Men From Sex, Marriage
  by Marjorie Jackson in The Foundry, 2022-10-21 20:16:41 UTC

  “Young men aren’t having sex!” A  Twitter thread  that has been gaining traction resurfaced a 2019  Washington Post study , which found that young men are not having as much sex as they used to. Alexandra Hunt,  a former stripper  who  lost the 2022 Democratic congressional primary  in Philadelphia, wrote, “Nearly a third of men under 30 have not had sex. And a higher percent do not have as much sex as they’d like—not exactly surprising, but this kind of statistic is a sign of much deeper problems.” Hunt points to men’s declining mental health and low motivation to work as negative [...]

2022-10-17

• Spatial economic dynamics and transport project appraisal
  by Christian Zimmermann in NEP-DGE blog, 2022-10-17 20:33:57 UTC

  By James Lennox http://d.repec.org/n?u=RePEc:cop:wpaper:g-335&r=dge Transport infrastructure is costly to build and very long-lived. Major projects are expected to enhance accessibility, which over time, is likely to affect the distribution of population and employment. In a Dynamic Spatial Equilibrium (DSE) model, the timing and location of a project’s direct costs and benefits can be explicitly represented. Effects of both construction and operational phases are captured in a forward-looking spatial general equilibrium with costly adjustment. Not only are dynamic responses of direct interest [...]

2022-10-16

• The optimal quantity of CBDC in a bank-based economy
  by Christian Zimmermann in NEP-DGE blog, 2022-10-16 16:45:20 UTC

  By Lorenzo Burlon, Carlos Montes-Galdón, Manuel Muñoz and Frank Smets http://d.repec.org/n?u=RePEc:ecb:ecbwps:20222689&r=dge We provide evidence on the estimated effects of digital euro news on bank valuations and lending and find that they depend on deposit reliance and design features aimed at calibrating the quantity of CBDC. Then, we develop a quantitative DSGE model that replicates such evidence and incorporates key selected mechanisms through which CBDC issuance could affect bank intermediation and the economy. Under empirically-relevant assumptions (i.e., central bank collateral require [...]

2022-10-07

• Japan’s currency bursts its post-bubble economy
  by Gunther Schnabl in East Asia Forum, 2022-10-07 11:00:16 UTC

  Author: Gunther Schnabl, Leipzig University At more than 145 yen per dollar, the Japanese yen has slipped to a 24-year low. After the Bank of Japan (BoJ) signalled further depreciation would be tolerated, Finance Minister Shunichi Suzuki stated that ‘excessive, disorderly currency moves could negatively impact the economy and financial conditions’. The massive foreign exchange intervention that followed to strengthen yen could not reverse the depreciation pressure. That may signal that Japan’s post-bubble crisis management has reached its limits. The roots of the current policy dilemma go ba [...]

2022-10-06

• East Asia’s precautionary financing fix
  by Randall Henning in East Asia Forum, 2022-10-06 11:00:11 UTC

  Author: C. Randall Henning, American University Southeast Asian economies, like emerging markets and developing countries globally, are anticipating a rocky financial transition out of the COVID-19 pandemic. The rapid tightening of monetary policy in the United States and the economic fallout from Russia’s invasion of Ukraine are causing a global recession and threatening further capital outflows from emerging markets and developing countries. ASEAN+3 (China, Japan and South Korea) countries can help protect Southeast Asian economies and advance regional institutions by tapping their precauti [...]

2022-10-03

• 49. Actividades de la Asociacion Euro-Americana con América Latina: Años 2011-2022
  by MCG Blogs de Economía in Asociación de Estudios Euro-Americanos: Desarrollo internacional de América, Europa y otras áreas, 2022-10-03 12:12:00 UTC

            En la Entrada 19 de este Blog (del año 2011), hemos incluido varias actividades de colaboración de nuestra Asociación de Estudios Euro-Americanos de Desarrollo Económico con América Latina en el período 2011-2022. Ahora, en el año 2022, incluimos otras actividades desarrolladas en 2011-2022.             19. Actividades de la Asociación Euro-Americana con América Latina: Años 2001-2010 ,  25-3-11 (2644)            ACTIVIDADES DE COLABORACIÓN INTERNACIONAL EN 2011-2022                      Participación de la Profesora María-Carmen Guisán (Presidenta de la Asociación de Estudios Euro-A [...]

2022-09-30

• Mental health in the UK is about to get worse, and inequality will have a lot to do with it
  by ? in Whats New, 2022-09-30 14:49:36 UTC

  Credit: Hyejin Kang/Shutterstock The British government’s recent mini-budget has been widely criticized. The effect on stock markets, pensions and the value of the pound has hardly been out of the news. As a clini [...]

2022-09-23

• Chartbook #154 Who is going to vote for Italy’s right-wing coalition?
  by Adam Tooze in Adam Tooze, 2022-09-23 20:48:00 UTC

  Many of us had hoped that it would not come to this. In Sunday’s elections in Italy, triggered by the premature fall of Mario Draghi’s government, the right-wing coalition of Berlusconi’s Forza Italia, Matteo Salvini’s Lega and Giorgia Meloni’s Fratelli D’Italia, seem set to score a decisive victory. The center-left party PD is not polling badly. It will likely come in second in terms of share of the vote. But without an effective coalition, it is doomed to defeat. Leading in the polls by a decisive margin are the Fratelli d’Italia, who emerged as champions of the hard-right from the fa [...]

• The US economy is on a long-term descent
  by Ivan Kitov in Economics as Classical Mechanics, 2022-09-23 12:55:00 UTC

  The US economy was and is successful, as many people think. Such a view on the economy prevails because the long-term evolution is not discussed by the economic and financial authorities and mainstream experts. Here, I would like to present the US economic performance with the long-term trends in key economic parameters since 1960.� These parameters are the growth rate of the civilian noninstitutional population, CNP, the rate of real GDP growth, the rate of real GDP per capita growth,� the labor force growth rate, and the labor force participation rate. The population-related parameters are k [...]

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