|
on Central and Western Asia |
| By: | Priyaranjan Jha (Department of Economics, University of California-Irvine); Karan Talathi (Department of Economics, University of California-Irvine) |
| Abstract: | We study the implications of two historical institutions, direct British rule, and the heterogeneous land tenure institutions implemented by the British, on disparity in present day development using district level data from India. Using nightlights per c apita as a proxy for district level per capita income, we find that modern districts that were historically under direct British rule had 39.47% less nightlights per capita in 1993 relative to modern districts that were historically under indirect British rule. The large gap persists even after including other controls such as educational attainment, health, and physical infrastructure. Looking at the growth pattern during 1993 to 2013, directly ruled districts had a 1.84% lower annual growth rate compared to indirectly ruled districts. As well, directly ruled districts were converging at a rate of 2% per year while indirectly ruled districts were converging at a rate of 5.7% per year. Much of the development gap between areas under indirect rule and direct rule can be accounted for by the adverse effect of landlord-based revenue collection system in the directly ruled areas. |
| Keywords: | Institutions; Direct British Rule; Economic Growth; Nightlights per Capita; Land Tenure System; Economic Development; Human Capital |
| JEL: | O11 O43 P16 P51 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:irv:wpaper:202102&r=all |
| By: | Osinubi, Tolulope; Asongu, Simplice |
| Abstract: | This study examines the effect of globalization on female economic participation (FEP) in MINT (Mexico, Indonesia, Nigeria & Turkey) and BRICS (Brazil, Russia, India, China & South Africa) countries between 2004 and 2018. Four measures of globalization are employed and sourced from KOF globalization index, 2018, while the female labour force participation rate is a proxy for FEP. The empirical evidence is based on Pooled Mean Group (PMG) estimators. The findings of the PMG estimator from the Panel ARDL method reveal that political and overall globalization in MINT and BRICS countries have a positive impact on FEP, whereas social globalization exerts a negative impact on FEP in the long-run. It is observed that economic globalization has no long-run effect on FEP. Contrarily, all the measures of globalization posit no short-run effect on FEP in the short-run. This supports the argument that globalization has no immediate effect on FEP. Thus, it is recommended that both MINT and BRICS countries should find a way of improving the process of globalization generally to empower women to be involved in economic activities. This study complements the extant literature by focusing on how globalization dynamics influence FEP in the MINT and BRICS countries. |
| Keywords: | Globalization; female; gender; labour force participation; MINT and BRICS countries |
| JEL: | D60 E60 F40 F59 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107138&r=all |
| By: | Cascos Fernández, Ignacio; Grané Chávez, Aurea; Cueto, José Manuel |
| Abstract: | In this paper we propose a procedure to obtain and test multifactor models based on statistical and financial factors. In order to select the factors included in the model,as well as the construction of the portfolios, we use a multivariate technique called Common Principal Components. A block-bootstrap methodology is developed to assess the validity of the model and the significance of the parameters involved. Data come from Reuters, correspond to nearly 1250 EU companies, and span from October 2009 to October 2019. We also compare our bootstrap-based inferential results with those obtained via classical testing proposals. Methods under assessment are time-series regression and cross-sectional regression. The main findings indicate that the multifactor model proposed improves the Capital Asset Pricing Model with regard to the adjusted-R2 in the time-series regressions. Cross-section regression results reveal that Market and a factor related to Momentum and mean of stocks' returns have positive risk premia for the analysed period. Finally, we also observe that tests based onblock-bootstrap statistics are more conservative with the none than classical procedures. |
| Keywords: | Time Series; Factor Models; Cross-Sectional Regression; Common Principal Component Analysis; Bootstrap; Asset Pricing |
| Date: | 2021–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:cte:wsrepe:32258&r=all |
| By: | Nazish Ashfaq; Zubair Nawaz; Muhammad Ilyas |
| Abstract: | For the development of successful share trading strategies, forecasting the course of action of the stock market index is important. Effective prediction of closing stock prices could guarantee investors attractive benefits. Machine learning algorithms have the ability to process and forecast almost reliable closing prices for historical stock patterns. In this article, we intensively studied NASDAQ stock market and targeted to choose the portfolio of ten different companies belongs to different sectors. The objective is to compute opening price of next day stock using historical data. To fulfill this task nine different Machine Learning regressor applied on this data and evaluated using MSE and R2 as performance metric. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2104.07469&r=all |
| By: | Ring, Marius |
| Abstract: | I provide evidence that adverse shocks to the wealth of business owners during the Financial Crisis had large effects on their firms' financing, \ employment, and investment. I use individual-level portfolio data from Norway to exploit the dispersion in stock returns during 2008–09 as a source of exogenous variation in entrepreneurs' wealth. I then trace out the effects of these shocks to the entrepreneurs' privately-held firms. I find that the adverse employment and investment effects are primarily driven by young firms who—relative to mature firms—obtain considerably less bank financing following an owner wealth shock. Firms adjust employment primarily through hiring less, rather than firing, consistent with firms providing extensive-margin insurance for existing workers. These findings provide a causal link between asset price shocks and the real economy; \ and document that equity-financing frictions and the procyclicality of entrepreneurial wealth are important channels through which economic shocks amplify. |
| Keywords: | Financial Crisis; Employment; Entrepreneurs; Equity Financing |
| JEL: | D14 E24 G01 G32 J23 |
| Date: | 2019–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107020&r=all |
| By: | Pham, Thai Minh; Tran, Tuyen Quang |
| Abstract: | Drawing on the Young Lives data obtained from three cycles of surveys from 2006 to 2016, our study examines factors affecting children’s cognitive ability in Vietnam. Controlling for the conditional wealth, which is the residual of the regression equation of the household wealth index in 2006 and 2013, our study provides evidence that conditional wealth has an effect of increasing the cognitive capacity of 15-year-old children, manifested in all three methods of measurement: by vocabulary points, math scores and reading comprehension scores in Vietnamese. This finding once again confirms that late intervention after the first 1,000 days has a positive impact on children's cognitive ability. Notably, our finding suggests that using the conditional wealth enables to capture the impact of economic shocks, which in turn have a significant effect on the cognitive ability of children in Vietnam. |
| Keywords: | household wealth; conditional wealth; cognitive skills; the gender gap |
| JEL: | D1 D10 D13 D6 D62 D63 |
| Date: | 2021–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107168&r=all |
| By: | Zarina Adilkhanova (NAC Analytica, Nazarbayev University); Aruzhan Nurlankul (Department of Economics and Finance, EIEF and LUISS); Aizat Token (Department of Economics, Nazarbayev University); Berk Yavuzoglu (Department of Economics, Nazarbayev University) |
| Abstract: | This paper studies the trade credit and delinquency behavior in Kazakhstan paying attention to the effects of two recent crises using a unique dataset of large firms and SMEs from the year 2009 to 2016. Our estimates suggest that the relationship between trade credit and bank loans is mainly substitutional except that it was complementary for large firms following the year 2014-5 crisis. This new piece of evidence might provide more insight into the mixed findings in the literature. We also discern that trade credit demand is more prevalent among capital-intensive firms. Kazakhstani firms pass a sizeable portion of their delinquent receivable to their trade credit suppliers. The transmission of trade credit delinquency, additionally, is amplified during the year 2014-5 economic crisis but the year 2009 global financial crisis. |
| Keywords: | Trade Credit; Delinquency; Financial Crisis; Large Enterprises; SMEs |
| JEL: | D22 G01 G20 G32 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:ajx:wpaper:15&r=all |
| By: | Colburn, Christopher; Zhou, Haiwen |
| Abstract: | The process of industrialization was accompanied by the switch from household production to firm production. The industrialization process was also a process of population growth, the appearance of general-purpose technologies, and the expansion of international trade. This paper studies the partition of production between households and firms in an analytically tractable general equilibrium model with a continuum of goods. We show that population growth, development of general-purpose technologies, and the opening of international trade increase the percentage of goods produced by firms. However, with the appearance of a technology biased toward home production, the percentage of goods produced by households can increase. |
| Keywords: | Household production, economic development, structural change, technology choice, increasing returns |
| JEL: | F12 L13 O14 |
| Date: | 2021–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107158&r=all |
| By: | Federico, Domenica; Grazioli, Riccardo; Milioli, Maria Adele; Notte, Antonella; Poletti, Lucia |
| Abstract: | This paper looks at the state of financial and social inclusion and financial sector development in EU Member States. More precisely, one of the objectives is to find out whether financial and social exclusion can coexist in the same countries, taking into account the development of the financial sector. The study outlines extensive literature on definitions and measures of financial and social inclusion. It also identifies clusters of countries, with internally similar but externally distinct characteristics. Methodologically, the research collects and analyses data extrapolated from different sources in the period 2016-2017. The methodology exploits a Principal Component Analysis (ACP) and a Cluster Analysis. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eifwps:202172&r=all |
| By: | Gaelan MacKenzie |
| Abstract: | This paper studies the effects of endogenous firm-level market power in input and product markets on equilibrium prices and wages as well as the gains from trade using a general equilibrium model with heterogeneous firms. Firm-level prices and wages are functions of two endogenous distortions: (i) a markup of price over marginal cost that depends on product market shares and (ii) a markdown of wages relative to marginal revenue product that depends on labor market shares. Both distortions cause large firms to be too small relative to local labor market competitors compared to a setting with perfect competition in input and product markets. Opening product markets up to trade reallocates market shares in product and labor markets towards countries' large firms, which can reduce misallocation but also increases the labor market power of these firms. After estimating the structural parameters of the model using Indian plant-level data, I show that accounting for endogenous labor market power implies only small welfare losses due to misallocation and therefore a negligible increase in the gains from trade. Trade has significantly larger effects on firms' markups than on their markdowns. Nevertheless, because of the increase in large firms' input market power, there is a redistribution of the gains from trade from wages to firm profits. |
| Keywords: | Economic models; Labour markets; Market structure and pricing; Productivity; Trade integration |
| JEL: | D43 F12 J L13 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:21-17&r=all |
| By: | Sofie Cabus (KU Leuven HIVA); Joanna Napierala (European Commission - JRC); Stephanie Carretero |
| Abstract: | This paper discusses the returns to non-cognitive skills based on results of a meta-analysis. The systematic literature review of articles published in the last decade and analysing labour market outcomes and non-cognitive skills allowed us to extract more than 300 estimates linking earnings and non-cognitive skills, most often measured by the Big Five inventory. The results of meta-analysis point to heterogeneity in the estimated signs and significance of a particular non-cognitive skill. We observe that conscientiousness and openness are two personality traits that bring higher earnings, while agreeableness and neuroticism (low emotional stability) are associated with receiving lower earnings. Some gender differences are also observed. Older and female participants seemed to benefit more from programmes targeted at developing non-cognitive skills than younger participants and men. However, there is a positive selection of female participants to enrol to programmes with better prospects (e.g. longer in duration). |
| Keywords: | Big Five, Meta-analysis, Non-cognitive skills, earnings, Programme effectiveness, Returns |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:laedte:202106&r=all |
| By: | E. Ferreira (Department of Quantitative Methods, University of the Basque Country UPV/EHU); S. Orbe (Department of Quantitative Methods, University of the Basque Country UPV/EHU); J. Ascorbebeitia (Department of Economic Analysis, University of the Basque Country UPV/EHU); B. \'Alvarez Pereira (Nova School of Business and Economics); E. Estrada (Institute of Mathematics and Applications, University of Zaragoza, ARAID Foundation. Institute for Cross-Disciplinary Physics and Complex Systems) |
| Abstract: | We use rank correlations as distance functions to establish the interconnectivity between stock returns, building weighted signed networks for the stocks of seven European countries, the US and Japan. We establish the theoretical relationship between the level of balance in a network and stock predictability, studying its evolution from 2005 to the third quarter of 2020. We find a clear balance-unbalance transition for six of the nine countries, following the August 2011 Black Monday in the US, when the Economic Policy Uncertainty index for this country reached its highest monthly level before the COVID-19 crisis. This sudden loss of balance is mainly caused by a reorganization of the market networks triggered by a group of low capitalization stocks belonging to the non-financial sector. After the transition, the stocks of companies in these groups become all negatively correlated between them and with most of the rest of the stocks in the market. The implied change in the network topology is directly related to a decrease in stocks predictability, a finding with novel important implications for asset allocation and portfolio hedging strategies. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2104.06254&r=all |
| By: | Evzen Kocenda (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic& Institute of Information Theory and Automation, Prague & CESifo, Munich & IOS, Regensburg); Ichiro Iwasaki (Institute of Economic Research, Hitotsubashi University, Tokyo, Japan) |
| Abstract: | Bank survival is essential to economic growth and development because banks mediate the financing of the economy. A bank’s overall condition is often assessed by a supervisory rating system called CAMELS, an acronym for the components Capital adequacy, Asset quality, Management quality, Earnings, Liquidity, and Sensitivity to market risk. Estimates of the impact of CAMELS components on bank survival vary widely. We perform a meta-synthesis and meta-regression analysis (MRA) using 2120 estimates collected from 50 studies. In the MRA, we account for uncertainty in moderator selection by employing Bayesian model averaging. The results of the synthesis indicate an economically negligible impact of CAMELS variables on bank survival; in addition, the effect of bank-specific, (macro)economic, and market factors is virtually absent. The MRA and a test for publication selection bias produce findings consistent with the synthesis results. Moreover, best practice estimates show a small economic impact of CAMELS components and no impact of other factors. The study concludes that caution should be exercised when using CAMELS rating to predict bank survival or failure. |
| Keywords: | bank survival, bank failure, CAMELS, meta-analysis, publication selection bias |
| JEL: | C12 D22 G21 G33 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2021_09&r=all |
| By: | A. Singh; A. Forcina; K. Muniyoor |
| Abstract: | Rapid rise in income inequality in India is a serious concern. While the emphasis is on inclusive growth, it seems difficult to tackle the problem without looking at the intricacies of the problem. Social mobility is one such important tool which helps in reaching the cause of the problem and focuses on bringing long term equality in the country. The purpose of this study is to examine the role of social background and education attainment in generating occupation mobility in the country. By applying an extended version of the RC association model to 68th round (2011-12) of the Employment and Unemployment Survey by the National Sample Survey Office of India, we found that the role of education is not important in generating occupation mobility in India, while social background plays a critical role in determining one's occupation. This study successfully highlights the strong intergenerational occupation immobility in the country and also the need to focus on education. In this regard, further studies are needed to uncover other crucial factors limiting the growth of individuals in the country. |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2102.00447&r=all |
| By: | Nadar, Anand |
| Abstract: | This study investigatesthe effectiveness of fiscal policy and monetary policy in India. We collected the time series data for India ranging from 1960 to 2019 from World Development Indicator (WDI). We applied the bound test co-integration approach to check the long-run relationship between fiscal policy, monetary policy, and economic growth in the context of Indian economy. The short-run and long-run effects of fiscal policy and monetary policy have been estimated using ARDL models. The results showed that there is a long-run relationship between fiscal and monetary policies with economic growth. The estimated short-run coefficients indicated that a few immediate short run impacts of fiscal and monetary policies are insignificant. However, the short-run impacts become significant as time passes. The long-run results suggested that the long-run impact of both fiscal and monetary policies on economic growth are positive and significant. More specifically, the GDP level increases if the money supply and government expenditure increase (Expansionary fiscal and monetary policies). On the other hand, the GDP level decreasesif the money supply and government expenditure decrease (contractionary fiscal and monetary policies). Therefore, this study recommends to use expansionary policies to spur the Indian economy. |
| Date: | 2021–04–02 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:39s7a&r=all |
| By: | Fabrizio Lillo; Giulia Livieri; Stefano Marmi; Anton Solomko; Sandro Vaienti |
| Abstract: | We consider a model of a simple financial system consisting of a leveraged investor that invests in a risky asset and manages risk by using Value-at-Risk (VaR). The VaR is estimated by using past data via an adaptive expectation scheme. We show that the leverage dynamics can be described by a dynamical system of slow-fast type associated with a unimodal map on [0,1] with an additive heteroscedastic noise whose variance is related to the portfolio rebalancing frequency to target leverage. In absence of noise the model is purely deterministic and the parameter space splits in two regions: (i) a region with a globally attracting fixed point or a 2-cycle; (ii) a dynamical core region, where the map could exhibit chaotic behavior. Whenever the model is randomly perturbed, we prove the existence of a unique stationary density with bounded variation, the stochastic stability of the process and the almost certain existence and continuity of the Lyapunov exponent for the stationary measure. We then use deep neural networks to estimate map parameters from a short time series. Using this method, we estimate the model in a large dataset of US commercial banks over the period 2001-2014. We find that the parameters of a substantial fraction of banks lie in the dynamical core, and their leverage time series are consistent with a chaotic behavior. We also present evidence that the time series of the leverage of large banks tend to exhibit chaoticity more frequently than those of small banks. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2104.04960&r=all |
| By: | Nicholas Moehle; Stephen Boyd; Andrew Ang |
| Abstract: | We consider an investment process that includes a number of features, each of which can be active or inactive. Our goal is to attribute or decompose an achieved performance to each of these features, plus a baseline value. There are many ways to do this, which lead to potentially different attributions in any specific case. We argue that a specific attribution method due to Shapley is the preferred method, and discuss methods that can be used to compute this attribution exactly, or when that is not practical, approximately. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2102.05799&r=all |
| By: | Matias Selser; Javier Kreiner; Manuel Maurette |
| Abstract: | We apply Reinforcement Learning algorithms to solve the classic quantitative finance Market Making problem, in which an agent provides liquidity to the market by placing buy and sell orders while maximizing a utility function. The optimal agent has to find a delicate balance between the price risk of her inventory and the profits obtained by capturing the bid-ask spread. We design an environment with a reward function that determines an order relation between policies equivalent to the original utility function. When comparing our agents with the optimal solution and a benchmark symmetric agent, we find that the Deep Q-Learning algorithm manages to recover the optimal agent. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2104.04036&r=all |
| By: | KITAGAWA Ritsu; KURODA Sachiko; OKUDAIRA Hiroko; OWAN Hideo |
| Abstract: | The coronavirus disease 2019 (COVID-19) pandemic has impacted the world economy in various ways. In particular, the drastic shift to telework has dramatically changed how people work. Whether the new style of working from home (WFH) will remain in our society highly depends on its effects on workers' productivity. However, to the best of our knowledge, the effects of WFH on productivity are still unclear. By leveraging unique surveys conducted at four manufacturing firms in Japan, we identify the possible factors of productivity changes due to WFH. Our main findings are as follows. First, after ruling out the time-invariant component of individual productivity and separate trends specific to employee attributes, we find that productivity declined more for workers who worked from home than those who did not. Second, our analysis shows that poor WFH setups and communication difficulties are the major reasons for productivity losses. Third, we find that the mental health of workers who work from home is significantly better than that of workers who are unable to work from home. Our result suggests that if appropriate investments can be made in upgrading WFH setups and facilitating communication, WFH may improve productivity by improving employees' health and well-being. |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:21024&r=all |
| By: | Yapanto, Lis M (Universitas Negeri Gorontalo); Harahab, Nuddin; , Sudarto; Olii, Abdul Hafidz |
| Abstract: | This study aims to assess the household diversification of coastal fishing on coastal communities' welfare in the District of Kabila Bone, since August 2019-November 2019, 184 respondents, with a survey method. The data collected are primary and secondary data was done by using observation, interview techniques, documentation techniques. The lives and livelihoods of coastal fishing communities are very vulnerable to climate change and the environment. Diversification of fishermen's income sources outside of fisheries can be an effective way to overcome environmental change's adverse effects. This study aims to analyze the effect of business diversification on welfare, environmental sustainability, and welfare on environmental sustainability. The data collected are primary and secondary data, which is done using observation, interview, and documentation techniques. The independent variable is selected according to considerations based on the empirical conditions of the coastal area, the researcher's ability and the availability of supporting theories, and the characteristics of the research area. The researcher's ability and the availability of supporting theories, and the characteristics of the research area. The independent or exogenous variables chosen are fishery business (X1), livestock business. Based on the model developed from the relevant theory, the endogenous variables are welfare (Y1) and environmental sustainability (Y2); the model is tested using the PLS-based Structure Equation Model (SEM). The researcher's ability and the availability of supporting theories, and the characteristics of the research area. The independent or exogenous variables chosen are fishery business (X1), livestock business. Based on the model developed from the relevant theory, the endogenous variables are welfare (Y1) and environmental sustainability (Y2); the model is tested using the PLS-based Structure Equation Model (SEM). The model developed from the relevant theory, then tested on a model using the Structural Equation Model (SEM) based on SMART PLUS. The results of the analysis of effort diversification models suggest that the utilization of environmental services does not affect coastal communities' welfare. |
| Date: | 2021–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:yvjez&r=all |
| By: | Georg Leitner (Department of Economics, Vienna University of Economics and Business); Teresa Hübel (Department of Economics, Vienna University of Economics and Business); Anna Wolfmayr (Department of Economics, Vienna University of Economics and Business); Manuel Zerobin (Department of Economics, Vienna University of Economics and Business) |
| Abstract: | This paper empirically investigates the effect of monetary policy on systemic risk within the Euro area. We estimate a Bayesian proxy-VAR where we exploit high-frequency identified monetary policy surprises for identification. Employing aggregate as well as market specific systemic risk measures, we provide novel evidence on the heterogeneous risk transmission of conventional and unconventional monetary policy on different financial markets. We find that expansionary conventional monetary policy, near term guidance and forward guidance decrease systemic risk whereas quantitative easing (QE) increases systemic risk. While the effects are qualitatively homogeneous for near term guidance and forward guidance, there exists heterogeneity in the risk transmission of conventional monetary policy and QE across different financial markets. The latter increases systemic risk significantly within bond markets, foreign exchange markets and among financial intermediaries. This might be caused by increased search for yield behaviour as QE distinctively reduces longer term interest rates. Our analysis shows that there is a potential threat to financial stability caused by QE which should be concerned by monetary- and macroprudential policymakers. |
| Keywords: | Monetary Policy, CISS, Systemic Risk, Bayesian-Proxy-VAR, High-Frequency Identification |
| JEL: | C32 E44 E52 G10 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp312&r=all |
| By: | Iwan Bos (Department of Organisation, Strategy and Entrepreneurship, Maastricht University); Marco A. Marini (Department of Social and Economic Sciences, Sapienza University of Rome); Riccardo D. Saulle (Department of Economics and Management, University of Padova) |
| Abstract: | This paper examines capacity-constrained oligopoly pricing with sellers who seek myopic improvements. We employ the Myopic Stable Set stability concept and establish the existence of a unique pure-strategy price solution for any given level of capacity. This solution is shown to coincide with the set of pure-strategy Nash equilibria when capacities are large or small. For an intermediate range of capacities, it predicts a price interval that includes the mixed-strategy support. This stability concept thus encompasses all Nash equilibria and offers a pure-strategy solution when there is none in Nash terms. In particular, it provides a behavioral rationale for different types of pricing dynamics, including real-world economic phenomena such as Edgeworth-like price cycles, price dispersion and supply shortages. |
| Keywords: | Behavioral IO, Bounded Rationality, Capacity Constraints, Oligopoly Pricing, Myopic Stable Set |
| JEL: | C72 D43 L13 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2021.09&r=all |
| By: | Ivan Kitov |
| Abstract: | Ten years ago we presented a modified version of Okun law for the biggest developed economies and reported its excellent predictive power. In this study, we revisit the original models using the estimates of real GDP per capita and unemployment rate between 2010 and 2019. The initial results show that the change in unemployment rate can be accurately predicted by variations in the rate of real economic growth. There is a discrete version of the model which is represented by a piece wise linear dependence of the annual increment in unemployment rate on the annual rate of change in real GDP per capita. The lengths of the country-dependent time segments are defined by breaks in the GDP measurement units associated with definitional revisions to the nominal GDP and GDP deflator (dGDP). The difference between the CPI and dGDP indices since the beginning of measurements reveals the years of such breaks. Statistically, the link between the studied variables in the revised models is characterized by the coefficient of determination in the range from R2=0.866 (Australia) to R2=0.977 (France). The residual errors can be likely associated with the measurement errors, e.g. the estimates of real GDP per capita from various sources differ by tens of percent. The obtained results confirm the original finding on the absence of structural unemployment in the studied developed countries. |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2104.04595&r=all |
| By: | Coibion, O; Gorodnichenko, Y; Kudlyak, M; Mondragon, J |
| Abstract: | Using household-level debt data over 2000-2012 and local variation in inequality, we show that low-income households in high-inequality regions (zip codes, counties, states) accumulated less debt relative to their income than low-income households in lower inequality regions. We also find evidence that low-income households face higher credit prices and reduced access to credit as inequality increases. We argue that these patterns are consistent with inequality tilting credit supply away from low-income households and toward high-income households, which may have long-run implications for outcomes like homeownership or entrepreneurship. |
| Keywords: | Economics |
| Date: | 2020–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:econwp:qt9bn4w75j&r=all |
| By: | ITO Takatoshi; KOIBUCHI Satoshi; SATO Kiyotaka; SHIMIZU Junko; YOSHIMI Taiyo |
| Abstract: | The purpose of this study is to analyze the factors that promote the usage of local currencies in Japanese trade in Asia by utilizing a large-scale firm-level questionnaire survey in 2018 on Japanese overseas subsidiaries in Asia and to discover why the usage of Asian currencies has increased recently. The major findings are as follows: first, with respect to the choice of invoicing currency, subsidiaries with large sales tended to choose the U.S. dollar while those with small sales tended to choose the yen or local currency; second, subsidiaries established for sales to the local market tended to choose the local currency; third, overseas subsidiaries tended to unify the transaction currency on both the import and export sides, a practice called the natural hedge; fourth, subsidiaries with large local currency borrowing, a high share of local procurement, and a joint venture with local firms who try to maximize their profits measured using local currency, tend to adopt local currency invoicing. These results suggest that the role of the U.S. dollar as the main invoice currency is in decline, as Japanese exporting firms move away from using Asian subsidiaries as a platform to export to the United States and increasingly use Asian subsidiaries as a local sales base in Asian countries and an export platform to China and back to Japan. |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:21016&r=all |
| By: | Eric Benhamou (MILES - Machine Intelligence and Learning Systems - LAMSADE - Laboratoire d'analyse et modélisation de systèmes pour l'aide à la décision - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique, LAMSADE - Laboratoire d'analyse et modélisation de systèmes pour l'aide à la décision - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Beatrice Guez |
| Abstract: | Computing incremental contribution of performance ratios like Sharpe, Treynor, Calmar or Sterling ratios is of paramount importance for asset managers. Leveraging Euler's homogeneous function theorem, we are able to prove that these performance ratios are indeed a linear combination of individual modified performance ratios. This allows not only deriving a condition for a new asset to provide incremental performance for the portfolio but also to identify the key drivers of these performance ratios. We provide various numerical examples of this performance ratio decomposition. |
| Keywords: | portfolio analysis,recovery and incremental Sharpe ratio,Treynor,Sharpe,Marginal contribution |
| Date: | 2021–04–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03189299&r=all |
| By: | Sebastian Becker; Hermann Buslei; Johannes Geyer; Peter Haan |
| Abstract: | For the design of the pension system, it is crucial to disentangle the employment responses related to the substitution effect and the income effect. In this paper, we provide causal evidence regarding the importance of the income effect, which is generally assumed to be small or non-existent. We exploit a pension reform in Germany that raised pension bene- fits related to children. For the identification, we exploit the discontinuity induced by the reform: only mothers with children born before 1.1.1992 were affected by the pension reform. Children born after this cut-off date did not change pension income. We use a difference-in-differences estimator based on administrative data from the German pension insurance that includes complete individual employment histories. We find that income effects are significant and economically important. We show that the policy led to a reduction in the employment of affected females. Further, we are able to show effect heterogeneity on different dimensions: by treatment intensity, age of the mother, and pre-reform pension wealth. |
| Keywords: | Natural experiment, female labor supply, pension benefit |
| JEL: | H55 J13 J22 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1941&r=all |
| By: | Shoag, Daniel W. (Case Western Reserve University); Strain, Michael R. (American Enterprise Institute for Public Policy Research); Veuger, Stan A. (American Enterprise Institute for Public Policy Research) |
| Abstract: | How do truck drivers perceive the risk they face from automation and their opportunities to retrain for employment in a different occupation? Autonomous vehicle (AV) technology has made rapid progress in recent years, so these questions are likely salient to truckers. Based on surveys of the new RAND American Truck Driver Panel, we find that those drivers who are most concerned about automation are, counterintuitively, also most likely to say they intend to re-invest in driving by seeking additional endorsements or purchasing their own truck. This zero-sum "arms race" for remaining positions is socially inefficient, and it may be driven by incorrect information about outside options. Specifically, the effect disappears among those drivers who are most familiar with the generally low costs of community college. We show that this is consistent with a simple model in which idiosyncratic noise in the perceived cost of retraining can lead to inefficient outcomes. This mechanism suggests that effective information provision can have large positive externalities and welfare consequences. However, a calibration of labor market prospects suggests that information provision about the true costs of retraining may not be adequate to induce occupational switching if truckers believe wages for survivors will continue to grow. This points to another important role for perceptions about the future, and for a policy of information interventions. |
| Keywords: | automation, autonomous vehicles, retraining |
| JEL: | J23 J24 J62 J68 O33 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14249&r=all |
| By: | Andrew Clark (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Conchita Ambrosio (University of Luxembourg [Luxembourg]); Anthony Lepinteur (University of Luxembourg [Luxembourg]) |
| Abstract: | We here use panel data from the COME-HERE survey to track income inequality during COVID-19 in France, Germany, Italy, Spain and Sweden. Relative inequality in equivalent household disposable income among individuals changed in a hump-shaped way over 2020. An initial rise from January to May was more than reversed by September. Absolute inequality also fell over this period. As such, policy responses may have been of more benefit for the poorer than for the richer. |
| Keywords: | COVID-19,COME-HERE,Income Inequality |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03185534&r=all |
| By: | Alexander Chudik; Kamiar Mohaddes; Mehdi Raissi |
| Abstract: | This paper uses a threshold-augmented Global VAR model to quantify the macroeconomic effects of countries’ discretionary fiscal actions in response to the Covid-19 pandemic and its fallout. Our results are threefold: (1) fiscal policy is playing a key role in mitigating the effects of the pandemic; (2) all else equal, countries that implemented larger fiscal support are expected to experience less output contractions; (3) emerging markets are also benefiting from the synchronized fiscal actions globally through the spillover channel and reduced financial market volatility. |
| Keywords: | TGVAR; Covid-19; threshold effects; fiscal policy |
| JEL: | C32 E44 E62 F44 |
| Date: | 2021–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:90680&r=all |
| By: | Shalini Sharma (IIIT-Delhi - Indraprastha Institute of Information Technology [New Delhi]); Víctor Elvira (School of Mathematics - University of Edinburgh - University of Edinburgh); Emilie Chouzenoux (OPIS - OPtimisation Imagerie et Santé - CVN - Centre de vision numérique - CentraleSupélec - Université Paris-Saclay - Inria - Institut National de Recherche en Informatique et en Automatique - Inria Saclay - Ile de France - Inria - Institut National de Recherche en Informatique et en Automatique); Angshul Majumdar (IIIT-Delhi - Indraprastha Institute of Information Technology [New Delhi]) |
| Abstract: | In this work, we introduce a new modeling and inferential tool for dynamical processing of time series. The approach is called recurrent dictionary learning (RDL). The proposed model reads as a linear Gaussian Markovian state-space model involving two linear operators, the state evolution and the observation matrices, that we assumed to be unknown. These two unknown operators (that can be seen interpreted as dictionaries) and the sequence of hidden states are jointly learnt via an expectation-maximization algorithm. The RDL model gathers several advantages, namely online processing, probabilistic inference, and a high model expressiveness which is usually typical of neural networks. RDL is particularly well suited for stock forecasting. Its performance is illustrated on two problems: next day forecasting (regression problem) and next day trading (classification problem), given past stock market observations. Experimental results show that our proposed method excels over state-of-the-art stock analysis models such as CNN-TA, MFNN, and LSTM. |
| Keywords: | Stock Forecasting,Recurrent dictionary learning,Kalman filter,expectation-minimization,dynamical modeling,uncertainty quantification |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03184841&r=all |
| By: | Jia Wang; Tong Sun; Benyuan Liu; Yu Cao; Degang Wang |
| Abstract: | Financial markets are difficult to predict due to its complex systems dynamics. Although there have been some recent studies that use machine learning techniques for financial markets prediction, they do not offer satisfactory performance on financial returns. We propose a novel one-dimensional convolutional neural networks (CNN) model to predict financial market movement. The customized one-dimensional convolutional layers scan financial trading data through time, while different types of data, such as prices and volume, share parameters (kernels) with each other. Our model automatically extracts features instead of using traditional technical indicators and thus can avoid biases caused by selection of technical indicators and pre-defined coefficients in technical indicators. We evaluate the performance of our prediction model with strictly backtesting on historical trading data of six futures from January 2010 to October 2017. The experiment results show that our CNN model can effectively extract more generalized and informative features than traditional technical indicators, and achieves more robust and profitable financial performance than previous machine learning approaches. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2104.05413&r=all |
| By: | Thibault de Swarte (LASCO - Laboratoire Sens et Compréhension du Monde Contemporain - IMT - Institut Mines-Télécom [Paris] - IMT Atlantique - IMT Atlantique Bretagne-Pays de la Loire - IMT - Institut Mines-Télécom [Paris] - IMT-BS - Institut Mines-Télécom Business School - Mines Saint Etienne, IMT Atlantique - SRCD - Département Systèmes Réseaux, Cybersécurité et Droit du numérique - IMT Atlantique - IMT Atlantique Bretagne-Pays de la Loire - IMT - Institut Mines-Télécom [Paris]) |
| Abstract: | Artificial Intelligence has evolved over the years, despite a sort of stagnation in fundamental research for about twenty years between the end of the 20th century and the beginning of the 21st century. For AI practitioners, there is now a great diversity of applications. This article focuses on the aspects that are useful for understanding the articulation between AI and marketing. |
| Abstract: | L'Intelligence Artificielle a évolué au cours des années, malgré une sorte de stagnation de la recherche fondamentale durant une vingtaine d'années entre la fin du XX° siècle et le début du XXI°. Pour les praticiens de l'IA, il existe aujourd'hui une grande diversité d'applications. Cet article focalise sur les aspects utiles à la compréhension de l'articulation entre l'IA et le marketing. |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03187151&r=all |
| By: | Paolo Abarcar; Rashmi Barua; Dean Yang |
| Abstract: | We implemented a randomized controlled trial among transnational households in the Philippines estimating impacts of a financial education treatment, a financial access treatment, and the combination of the two on financial behaviors. |
| Keywords: | Phillippines, randomized controlled trial, financial |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:32f8660dc37848dc9d41ad3780ff978d&r=all |
| By: | Daniel J. Benjamin (University of California Los Angeles & NBER); Mark Alan Fontana (Hospital for Special Surgery & Weill Cornell Medical College); Miles Kimball (University of Colorado Boulder & NBER) |
| Abstract: | Risk aversion is typically inferred from real or hypothetical choices over risky lotteries, but such “untutored” choices may reflect mistakes rather than preferences. We develop a procedure to disentangle preferences from mistakes : after eliciting untutored choices, we confront participants with their choices that are inconsistent with expected-utility axioms (broken down enough to be self-evident) and allow them to reconsider their choices. We demonstrate this procedure via a survey about hypothetical retirement investment choices administered to 596 Cornell students. We find that, on average, reconsidered choices are more consistent with almost all expected-utility axioms, with one exception related to regret. |
| Keywords: | risk aversion, mistakes, retirement investing, framing effects, expected utility |
| JEL: | D63 D81 G11 H8 |
| Date: | 2020–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:cth:wpaper:gru_2020_026&r=all |
| By: | Agarwal, Vikas; Hanouna, Paul; Moussawi, Rabih; Stahel, Christof W. |
| Abstract: | We examine the impact of ETF ownership on the commonality in liquidity of underlying stocks, while controlling for other institutional ownership. Analyses using aggregate stock-level ETF ownership and common ETF ownership at the stock-pair level indicate that ETF ownership significantly increases commonality. We show that greater arbitrage activities are associated with a larger effect of ETF ownership on commonality. We use quasi-natural experiments that exploit the reconstitution of Russell indexes, and ETF trading halts, to establish the causal effect of ETF ownership and the arbitrage mechanism, respectively. Our results suggest that ETFs reduce investors' ability to diversify liquidity risk. |
| Keywords: | Exchange-Traded Funds (ETFs),Liquidity,Commonality,Arbitrage,Trading Halts,Index Reconstitution |
| JEL: | G10 G12 G14 G23 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfrwps:2104&r=all |
| By: | Laura Choi; Mary C. Daly; Lily Seitelman |
| Abstract: | How much is inequity costing us? Using a simple growth accounting framework we apply standard shift-share techniques to data from the Current Population Survey (1990-2019) to compute the aggregate economic costs of persistent educational and labor market disparities by gender and race. We find significant economic losses associated with these gaps. Building on this finding, we consider which disparities generate the largest costs, paying specific attention to differences in employment, hours worked, educational attainment, educational utilization, and occupational allocation. We also examine gaps in the returns on these variables. Our findings suggest that differences in employment opportunities and educational attainment make the largest contributions by race; differences in returns on these variables also contribute materially to the total costs. Differences by gender are primarily driven by gaps in employment and hours. Given the disproportionate impact of COVID-19 on the labor market outcomes of women and people of color, as well as the fact that the U.S. population is increasingly racially diverse, these costs will only increase in the future. |
| Keywords: | Economic growth; productivity; labor market gaps; misallocation; equity |
| JEL: | E24 J15 J7 O4 |
| Date: | 2021–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:90707&r=all |
| By: | Berger, Tino; Dubbert, Tore; Schoonackers, Ruben |
| Abstract: | When estimating fiscal policy reaction functions (FRF), the literature has well recognized the importance of non-linearities. However, there is yet very little attempt to formally test for the presence and potential sources of a non-linear fiscal responsiveness. In this paper we address this gap by formally adressing model specification of the FRF in a panel of five EU countries. Employing a Bayesian stochastic model specification search algorithm, we provide formal evidence for time-varying fiscal prudence over the last 50 years. The primary balance responsiveness exhibits smooth but significant variation over time and thus confirms the necessity of a non-linear model. Moreover, the extended results show that dynamics can be partially linked to the interest rate growth differential and the level of public debt itself. However, no clear evidence is found in favor of the fiscal fatigue proposition. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:417&r=all |
| By: | Magdalena Adamus (Masaryk University, MUEEL); Matúš Grežo (Slovak Academy of Sciences, Centre of Social and Psychological Sciences) |
| Abstract: | Using a representative sample of 400 Slovaks, the study investigated the mediating role of subjective perception of financial threat to the relation between psychological resources and behavioural responses in the adaptation to financial stress posed by the COVID-19. The results showed that greater neuroticism and uncertainty intolerance were positively related to aggravated perception of financial threat. This led to greater willingness to change consumption patterns and use of mostly problem-focused coping strategies. The model remained robust after controlling for chronic financial hardship moderators, including the absence of savings and indebtedness. In contrast, acute financial hardship caused by the deterioration of one’s financial situation during the pandemic showed to significantly moderate the relation between one’s psychological resources and perceived financial threat. |
| Keywords: | financial threat, neuroticism, uncertainty intolerance, consumption patterns, coping strategies, COVID-19 |
| JEL: | D91 G41 |
| Date: | 2021–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:mub:wpaper:2021-09&r=all |
| By: | OGAWA Eiji; Pengfei LUO |
| Abstract: | Globalization has brought larger spillovers of global risks across borders since the 2000s. Specifically, global policy risk has sharply increased due to policy uncertainty in major countries in the recent decade, as seen in Brexit, US-China trade friction, and the COVID-19 pandemic. This paper empirically investigates the effects of both global policy risk and global financial risk on macroeconomy and financial markets in eight major countries from January 1997 to June 2020. We employed a Vector Autoregressive (VAR) framework to obtain interesting empirical results. First, global risks have recessionary effects on the macroeconomy, reducing production, deteriorating employment, lowering long-term interest rates, depressing prices, and reducing global trade. Second, global risks also have recessionary effects on financial markets, reducing stock prices, appreciating safe-haven currencies, and depreciating the other currencies. Third, the macroeconomies and the financial markets respond to global financial risk more significantly than global policy risk. Fourth, the recessionary effects of global risks vary depending on countries. |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:21020&r=all |
| By: | Andrea Giuseppe Di Iura; Giulia Terenzi |
| Abstract: | We perform a quantitative analysis of the gain/loss asymmetry for financial time series by using a Bayesian approach. In particular, we focus on some selected indices and analyze the statistical significance of the asymmetry amount through a Bayesian generalization of the t-Test, which relaxes the normality assumption on the underlying distribution. We propose two different models for data distribution, we study the convergence of our method and we provide several graphical representations of our numerical results. Finally, we perform a sensitivity analysis with respect to model parameters in order to study the reliability and robustness of our results. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2104.06044&r=all |
| By: | Tianxiang Zhan; Fuyuan Xiao |
| Abstract: | In the framework of evidence theory, data fusion combines the confidence functions of multiple different information sources to obtain a combined confidence function. Stock price prediction is the focus of economics. Stock price forecasts can provide reference data. The Dempster combination rule is a classic method of fusing different information. By using the Dempster combination rule and confidence function based on the entire time series fused at each time point and future time points, and the preliminary forecast value obtained through the time relationship, the accurate forecast value can be restored. This article will introduce the prediction method of evidence theory. This method has good running performance, can make a rapid response on a large amount of stock price data, and has far-reaching significance. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2104.05204&r=all |
| By: | Samir Cedic (Linköping University); Alwan Mahmoud (Linköping University); Matteo Manera (University of Milano-Bicocca, Fondazione Eni Enrico Mattei); Gazi Salah Uddin (Linköping University) |
| Abstract: | The aim of this paper is to analyze the relationship between different types of uncertainty and stock returns of the renewable energy and the oil & gas sectors. We use the quantile regression approach developed by Koenker and d’Orey (1987; 1994) to assess which uncertainties are the potential drivers of stock returns under different market conditions. We find that the bioenergy and the oil & gas sectors are most sensitive to uncertainties. Both sectors are affected by financial, euro currency, geopolitical and economic policy uncertainties. Our results have several policy implications. Climate policy makers can prioritize policies that support bioenergy in order to reduce the potentially negative effects of uncertainties on bioenergy investment. Investors aiming to diversify their portfolio should be aware that many uncertainties are common drivers of bioenergy and oil & gas returns, the connectedness between assets of these energy types could therefore increase when uncertainty increases. |
| Keywords: | Uncertainty, Macroeconomic Conditions, Renewable Energy, Stock Returns, Quantile Regression |
| JEL: | C1 G15 Q2 Q3 Q43 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2021.11&r=all |
| By: | Susanto Basu (Boston College); Giacomo Candian (HEC Montréal); Ryan Chahrour (Boston College); Rosen Valchev (Boston College) |
| Abstract: | We identify a shock that explains the bulk of fluctuations in equity risk premia, and show that the shock also explains a large fraction of the business-cycle comovements of output, consumption, employment, and investment. Recessions induced by the shock are associated with reallocation away from full-time permanent positions, towards part-time and flexible contract workers. A real model with labor market frictions and fluctuations in risk appetite can explain all of these facts, both qualitatively and quantitatively. The size of risk-driven fluctuations depends on the relationship between the riskiness and productivity of different stores of value: if safe savings vehicles have relatively low marginal products, then a flight to safety will drive a larger aggregate contraction. |
| Keywords: | Business Cycles; Risk Premia; Uncertainty |
| JEL: | E32 E24 |
| Date: | 2021–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:1029&r=all |
| By: | Tiziana Assenza (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Christian Hellwig (Unknown); Fabrice Collard (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Martial Dupaigne (Unknown); Patrick Fève (Unknown); Sumudu Kankanamge (Unknown); Nicolas Werquin (Unknown) |
| Abstract: | We develop a comprehensive framework for analyzing optimal economic policy during a pandemic crisis in a dynamic economic model that trades off pandemic-induced mortality costs against the adverse economic impact of policy interventions. We use the comparison between the planner problem and the dynamic decentralized equilibrium to highlight the margins of policy intervention and describe optimal policy actions. As our main conclusion, we provide a strong and novel economic justification for the current approach to dealing with the pandemic, which is different from the existing health policy rationales. This justification is based on a simple economic concept, the shadow price of infection risks, which succinctly captures the static and dynamic trade-offs and externalities between economic prosperity and mortality risk as the pandemic unfolds. |
| Date: | 2021–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03186935&r=all |
| By: | Christopher Turansick |
| Abstract: | The random utility model is known to be unidentified. However, there are times when a data set is uniquely rationalizable by the random utility model. We ask the question for which data sets does the random utility model have a unique representation. Our first result characterizes which data sets admit a unique representation. Our second result provides a finite test which determines if a distribution of preferences is observationally equivalent to some other distribution of preferences. We then explore the implications of our results in the context of other random utility models. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2102.05570&r=all |
| By: | Jaydip Sen; Abhishek Dutta; Sidra Mehtab |
| Abstract: | Designing robust systems for precise prediction of future prices of stocks has always been considered a very challenging research problem. Even more challenging is to build a system for constructing an optimum portfolio of stocks based on the forecasted future stock prices. We present a deep learning-based regression model built on a long-and-short-term memory network (LSTM) network that automatically scraps the web and extracts historical stock prices based on a stock's ticker name for a specified pair of start and end dates, and forecasts the future stock prices. We deploy the model on 75 significant stocks chosen from 15 critical sectors of the Indian stock market. For each of the stocks, the model is evaluated for its forecast accuracy. Moreover, the predicted values of the stock prices are used as the basis for investment decisions, and the returns on the investments are computed. Extensive results are presented on the performance of the model. The analysis of the results demonstrates the efficacy and effectiveness of the system and enables us to compare the profitability of the sectors from the point of view of the investors in the stock market. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2104.06259&r=all |
| By: | Edouard Ribes (CERNA i3 - Centre d'économie industrielle i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The professional services industry (legal, accounting, consulting, architectural services…) employs an important share of the active population in mature countries. However, after decades of undisputed growth, the sector appears to be at a turning point in certain geographies. This article therefore proposes a simple framework to help diagnose where growth opportunities (if any) may lie. When applied to the US economic context, the model indicates that at a macro-economic national level the sector should stall, which concurs with the trend observed over the past decade. However, it also highlights that a few industrial sectors (e.g. the US beverage industry) still offer pockets of growth for a variety of professional expertises. Replicating and fine-tuning those findings could be interesting for practitioners to steer their marketing and business development efforts. On the other hand, the quantitative framework presented in this study could pave the way for future research in the academic community. |
| Keywords: | Firm growth,Professional services |
| Date: | 2021–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03181967&r=all |
| By: | Christl, Michael; Bélanger, Alain; Conte, Alessandra; Mazza, Jacopo; Narazani, Edlira |
| Abstract: | The increasing flows of immigrants in Europe over the last decade has generated a range of considerations in the policy agenda of many receiving countries. One of the main considerations for policy makers and public opinions alike is whether immigrants contribute their ”fair” share to their host country tax and welfare system. This paper seeks to answer this question based on an empirical assessment of the net fiscal contributions of immigrants in the 27 EU Member States using EUROMOD, a EU-wide tax-benefit microsimulation model. In addition to the traditional view of the tax-benefit system, we add indirect taxation and in-kind benefits to the analysis of net contributions. Our findings highlight that migrants on average contributed about 250 euro per year more than natives to the welfare state in 2015. However, when we take an average age-specific life-cycle perspective, we find that natives generally show a higher net fiscal contribution than both, intra-EU and extra-EU migrants, while extra-EU migrants contribute on average less than intra-EU migrants. |
| Keywords: | Migration,Microsimulation,Tax-benefit system,EUROMOD |
| JEL: | F22 J15 H2 H5 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:814&r=all |
| By: | Zachary Feinstein |
| Abstract: | In this paper, we propose a clearing model for prices in a financial markets due to margin calls on short sold assets. In doing so, we construct an explicit formulation for the prices that would result immediately following asset purchases and a margin call. The key result of this work is the determination of a threshold short interest ratio which, if exceeded, results in the discontinuity of the clearing prices due to a feedback loop. This model and threshold short interest ratio is then compared with data from early 2021 to consider the observed price movements of GameStop, AMC, and Naked Brand which have been targeted for a short squeeze by retail investors and, prominently, by the online community r/WallStreetBets. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2102.02176&r=all |
| By: | O'Sullivan, Mary |
| Abstract: | In spring 2020, in the face of the covid-19 pandemic, central bankers in rich countries made unprecedented liquidity injections to stave off an economic crisis. Such radical action by central banks gained legitimacy during the 2008-2009 global financial crisis and enjoys strong support from prominent economists and economic historians. Their certainty reflects a remarkable agreement on a specific interpretation of the Great Depression of the 1930s in the United States, an interpretation developed by Milton Friedman and Anna Schwartz in A Monetary History of the United States (1963). In this article, I explore the origins, the influence and the limits of A Monetary History’s interpretation for the insights it offers on the relationship between theory and history in the study of economic life. I show how historical research has been mobilised to show the value of heretical ideas in order to challenge economic orthodoxies. Friedman and Schwartz understood the heretical potential of historical research and exploited it in A Monetary History to question dominant interpretations of the Great Depression in their time. Now that their interpretation has become our orthodoxy, I show how we can develop the fertile link between history and heresy to better understand our economic past. |
| JEL: | N0 N1 N2 B3 B4 B5 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:gnv:wpaper:unige:150852&r=all |
| By: | Claudiu Albulescu (CRIEF); Michel Mina; Cornel Oros |
| Abstract: | We provide a new investigation of the relationship between oil and stock prices in the context of the outbreak of the new coronavirus crisis. Specifically, we assess to what extent the uncertainty induced by COVID-19 affects the interaction between oil and the United States (US) stock markets. To this end, we use a wavelet approach and daily data from February 18, 2020 to August 15, 2020. We identify the lead-lag relationship between oil and stock prices, and the intensity of this relationship at different frequency cycles and moments in time. Our unique findings show that co-movements between oil and stock prices manifest at 3-5-day cycle and are stronger in the first part of March and the second part of April 2020, when oil prices are leading stock prices. The partial wavelet coherence analysis, controlling for the effect of COVID-19 and US economic policy-induced uncertainty, reveals that the coronavirus crisis amplifies the shock propagation between oil and stock prices. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2104.05273&r=all |
| By: | Patrick Bareinz (Friedrich Schiller University Jena, School of Economics); Fabian Koenings (Friedrich Schiller University Jena, School of Economics) |
| Abstract: | We investigate the effect of how news outlets communicate macroeconomic information to consumers on support for governmental policy in the context of the COVID-19 crisis. In our survey experiment based on a representative sample of 3000 individuals in Germany, respondents are exposed to an expert forecast of GDP growth. Individuals are randomly assigned to either receive no information, the baseline forecast information, or real-world frames of the same information used in newspaper articles on the topic. We find that in contrast to the baseline information, positive framing of forecasted economic growth by news outlets increases support for pandemic policy. This effect is especially pronounced for respondents with more pessimistic macroeconomic expectations. Further evidence suggests that negative economic news are perceived as more credible and hence less surprising in times of recession, not translating into a change in political opinion. |
| Keywords: | expectation formation, information experiment, media framing, macroeconomic information, policy support, COVID-19 crisis |
| JEL: | C90 D83 D84 D91 |
| Date: | 2021–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2021-004&r=all |
| By: | Zheng Gong; Carmine Ventre; John O'Hara |
| Abstract: | The trade off between risks and returns gives rise to multi-criteria optimisation problems that are well understood in finance, efficient frontiers being the tool to navigate their set of optimal solutions. Motivated by the recent advances in the use of deep neural networks in the context of hedging vanilla options when markets have frictions, we introduce the Efficient Hedging Frontier (EHF) by enriching the pipeline with a filtering step that allows to trade off costs and risks. This way, a trader's risk preference is matched with an expected hedging cost on the frontier, and the corresponding hedging strategy can be computed with a deep neural network. We further develop our framework to improve the EHF and find better hedging strategies. By adding a random forest classifier to the pipeline to forecast market movements, we show how the frontier shifts towards lower costs and reduced risks, which indicates that the overall hedging performances have improved. In addition, by designing a new recurrent neural network, we also find strategies on the frontier where hedging costs are even lower. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2104.05280&r=all |
| By: | Jozef Barunik (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic & Institute of Information Theory and Automation, Academy of Sciences of the Czech Republic); Josef Kurka (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic & Institute of Information Theory and Automation, Academy of Sciences of the Czech Republic) |
| Abstract: | Based on intraday data for a large cross-section of individual stocks and Exchange traded funds, we show that short-term as well as long-term fluctuations of realized market and average idiosyncratic higher moments risks are priced in the cross-sectionof asset returns. Specifically, we find that market and average idiosyncratic volatility and kurtosis are significantly priced by investors mainly in the long-run even if controlled by market moments and other factors, while skewness is mostly short-run phenomenon. A conditional pricing model capturing the time-variation of moments confirms downward-sloping term structure of skewness risk and upward-sloping term structure of kurtosis risk, moreover the term structures connected to market skewness risk and average idiosyncratic skewness risk exhibit different dymanics. |
| Keywords: | Higher Moments, frequency, Spectral Analysis, Cross-sectional |
| JEL: | C14 C22 G11 G12 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2021_11&r=all |
| By: | Markus Dertwinkel-Kalt (University of Konstanz); Holger Gerhardt (UniversityofBonn); Gerhard Riener (Heinrich Heine University Düsseldorf); Frederik Schwerter (University of Cologne); Louis Strang (University of Cologne) |
| Abstract: | Many intertemporal trade-offs are unbalanced: while the advantages of options are concen- trated in a few periods, the disadvantages are dispersed over numerous periods. We provide novel experimental evidence for “concentration bias”, the tendency to overweight advantages that are concentrated in time. Subjects commit to too much overtime work that is dispersed over multiple days in exchange for a bonus that is concentrated in time: concentration bias increases subjects’ willingness to work by 22.4% beyond what standard discounting models could account for. In additional conditions and a complementary experiment involving mon- etary payments, we study the mechanisms behind concentration bias and demonstrate the robustness of our findings. |
| Keywords: | Attention, Focusing, Bounded rationality, Intertemporal choice, Future bias, Present bias, Framing |
| JEL: | D01 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:076&r=all |
| By: | Dmitry Khametshin (Banco de España) |
| Abstract: | This article documents the difference in corporate bond issuance between the euro area (EA) and the United States (US) in 2020, especially in the high-yield (HY) segment, and discusses the role that the monetary policy measures undertaken by the US Federal Reserve (Fed) and the ECB in response to the Covid-19 crisis may have played in explaining such difference. We document that the issuance of HY bonds since February 2020 has been lower by historical standards in the EA than in the US. The Fed’s measures aimed at the HY segment, mainly the purchase of HY bond exchange traded funds (ETFs), could have reduced credit spreads and improved market liquidity, which in turn could have stimulated debt issuance. Alternatively, HY issuers in the EA may have faced better bank funding conditions due to the ECB’s targeted longer term refinancing operations (TLTRO) and to other measures by national fiscal authorities, leading such issuers to substitute bank credit for bond finance. The article discusses these possibilities and argues that they all may have played a role to a certain extent. |
| Keywords: | corporate bond purchase programs, monetary policy, COVID-19 |
| JEL: | E58 E43 G12 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:bde:opaper:2110&r=all |
| By: | Samuel N. Cohen; Derek Snow; Lukasz Szpruch |
| Abstract: | Machine learning models are increasingly used in a wide variety of financial settings. The difficulty of understanding the inner workings of these systems, combined with their wide applicability, has the potential to lead to significant new risks for users; these risks need to be understood and quantified. In this sub-chapter, we will focus on a well studied application of machine learning techniques, to pricing and hedging of financial options. Our aim will be to highlight the various sources of risk that the introduction of machine learning emphasises or de-emphasises, and the possible risk mitigation and management strategies that are available. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2102.04757&r=all |
| By: | Matthew Higgins; Thomas Klitgaard |
| Abstract: | Household saving has soared in the United States and other high-income countries during the COVID-19 pandemic, despite widespread declines in wages and other private income streams. This post highlights the role of fiscal policy in driving the saving boom, through stepped-up social benefits and other income support measures. Indeed, in the United States, Japan, and Canada, government assistance has pushed household income above its pre-pandemic trajectory. We argue that the larger scale of government assistance in these countries helps explain why saving in these countries has risen more strongly than in the euro area. Going forward, how freely households spend out of their newly accumulated savings will be a key factor determining the strength of economic recoveries. |
| Keywords: | income; saving; fiscal policy; pandemic; COVID-19; consumption; U.S.; Euro area; Japan; Canada; transfers; wages; benefits |
| JEL: | D14 F0 |
| Date: | 2021–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:90854&r=all |
| By: | Beckman, Jayson |
| Abstract: | Twenty-five years after World Trade Organization member countries agreed to agricultural policy reforms embodied in the Uruguay Round Agreement on Agriculture of 1994 (URAA), multilateral efforts to reduce barriers to agricultural trade have largely stalled. This report estimates the potential gains in global trade and welfare (societal well-being) from two trade reform scenarios: elimination of agricultural tariffs, and a reduction in agriculture trade costs through implementation of the Trade Facilitation Agreement (TFA). Simulations reveal that reducing trade costs through the TFA could increase trade value by 7.27 percent. Removing agricultural tariffs could lead to an even larger global increase in trade value of 11.09 percent. Both scenarios would lead to an increase in societal well-being of $42.9 billion and $56.3 billion annually (respectively). This would represent gains to the global agricultural sector of a little more than 2 percent for each scenario. Although these gains represent an increase in agricultural market access, other market access barriers remain (e.g., nontariff measures). |
| Keywords: | Agribusiness, Agricultural and Food Policy, Demand and Price Analysis, Institutional and Behavioral Economics, International Development, International Relations/Trade, Political Economy |
| Date: | 2021–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:usdami:310408&r=all |
| By: | Blanka Horvath; Josef Teichmann; Zan Zuric |
| Abstract: | We investigate the performance of the Deep Hedging framework under training paths beyond the (finite dimensional) Markovian setup. In particular we analyse the hedging performance of the original architecture under rough volatility models with view to existing theoretical results for those. Furthermore, we suggest parsimonious but suitable network architectures capable of capturing the non-Markoviantity of time-series. Secondly, we analyse the hedging behaviour in these models in terms of P\&L distributions and draw comparisons to jump diffusion models if the the rebalancing frequency is realistically small. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2102.01962&r=all |
| By: | Sergio Florez-Orrego |
| Abstract: | This paper depicts an often neglected channel of transmission of monetary policy, namely international safety appetite, as an important source of production and risk-taking international monetary spillovers. The model features a local economy with exogenous financial frictions that lead firms to need both local and foreign financing to pay for their factors of production. Global and local risk-averse banks supply firms with risky loans while buying safe assets to governments to hedge themselves against equity shocks. Monetary policy shocks of a hegemon currency issuer affect returns obtained by banks for the risky loans they concede, altering these agents' risk pricing and balance sheet composition. Main results outline that global monetary policy tightening reduces the returns of risky global loans, inducing global banks to reduce risky loan creation, ultimately decreasing both production and consumption volatility internationally. Two more secondary results arise. First, local monetary authorities may counteract global monetary policy spillovers, but this will entail a trade-off between boosting production and reducing consumption volatility. Second, both global and local expansive monetary policy increase the demand for global safe assets, relaxing the budget constraint of monopolistic global safe asset issuers. Understanding the international safety appetite mechanism of transmission appears to be of critical importance as it may impact the effectiveness of monetary policy in open economies as well as its optimal design. |
| Keywords: | global currencies, monetary policy spillovers, exorbitant privilege. |
| JEL: | E42 E44 E52 E63 F42 F44 |
| Date: | 2021–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:019153&r=all |
| By: | Shin-Ichiro Inaba |
| Abstract: | This is an introductory textbook of the history of economics of inequality for undergraduates and genreral readers. The first and second chapters focus on Adam Smith and Karl Marx, in the broad classical tradition of economics, where it is believed that there is an inseparable relationship between production and distribution, economic growth and inequality. Chapters 3 and 4 argue that despite the fact that the founders of the neoclassical school had shown an active interest in worker poverty, the issues of production and distribution became discussed separately among neoclassicals. Toward the end of the 20th century, however, there was a renewed awareness within economics of the problem of the relationship between production and distribution. The young Piketty's beginnings as an economist are set against this backdrop. Chapters 5 to 8 will explain the circumstances of the restoration of classical concerns within the neoclassical framework. Then, in chapters 9 and 10, I will discuss the fact that Thomas Piketty's seminal work is a new development in this "inequality renaissance," and try to gain a perspective on future trends in the debate. Mathematical appendix presents simple models of growth and distribution. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2104.07379&r=all |
| By: | Naijia Guo (Chinese University of Hong Kong); Charles Ka Yui Leung (City University of Hong Kong) |
| Abstract: | Elite college attendance significantly impacts students' entrepreneurship decisions and career dynamics. We find that an elite college degree is positively correlated with entrepreneurship (i.e., owning an incorporated business) but not with other self-employment forms. Our overlapping generations model captures self-selection in education and career choices based on heterogeneous ability and family wealth endowments over the life-cycle. Our estimates show that (1) entrepreneurs and other self-employed individuals require different types of human capital, and (2) elite colleges generate considerably more human capital gain than ordinary colleges, particularly for entrepreneurs. Distinguishing between elite and ordinary colleges improves our prediction of entrepreneurship decisions. Providing subsidies for elite colleges is more efficient than subsidizing their ordinary counterparts to encourage entrepreneurship, enhance intergenerational mobility, and enhance welfare. In contrast, although start-up subsidy increases entrepreneurship, it does not improve their performance, and it is inferior to education subsidy in generating efficiency, equality, and intergenerational mobility. |
| Keywords: | entrepreneurship, elite college, intergenerational transfer |
| JEL: | D15 I20 J24 |
| Date: | 2021–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:cth:wpaper:gru_2021_006&r=all |
| By: | Oberrauch, Luis; Seeber, Günther |
| Abstract: | Various studies have examined how the study of economics affects students’ views on economic phenomena, yet there is little evidence regarding its impact on teenagers. We study the role of a recent curriculum reform introducing mandatory economic education on teenagers’ attitudes towards economics in Southwest Germany. Our findings reveal that students affected by the reform show, on average, more interest in economics, see money as more important and expect more social responsibility from companies. Conversely, we don't observe differences in attitudes towards competition. Regarding socio-economic characteristics, our data reveal strong gender differences already before adulthood. |
| Keywords: | Pre-college economic education,economic attitudes,economic competence,gender gap |
| JEL: | A21 D14 I20 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:232586&r=all |
| By: | Jean-Sébastien Lenfant (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The article is intended as an in-depth study of the development and role of expectations within John R. Hicks' representation of the functioning of a capitalist economy. It covers his contributions to economic theory in the 1930s, with a particular focus on Value and Capital. The question underlying the study is whether Hicks develops a theory of expectations. We argue that there are several elements of such a theory in Hicks's work, though what is most important to him is the historical dynamic generated by heterogeneity of expectations. |
| Abstract: | L'article explore en détail le développement et le rôle des anticipations dans la représentation du fonctionnement d'une économie capitaliste selon John Hicks. Il couvre ses contributions à la théorie économique dans les années, 1930, avec un accent sur Valeur et Capitali. La question posée est de savoir si Hicks propose une théorie des anticipations. Nous soutenons qu'il y a plusieurs éléments d'une telle théorie dans les écrits de Hicks, mais que ce qui est le plus important pour lui est la dynamique historique générée par l'hétérogénéité des anticipations. |
| Keywords: | Hicks (john Richard),expectations,temporary equilibrium,stability,cycles Hicks (John Richard),anticipations,équilibre temporaire,stabilité,cycles |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03183464&r=all |
| By: | Chi Heem Wong; Dexin Li; Nina Wang; Jonathan Gruber; Rena M. Conti; Andrew W. Lo |
| Abstract: | We empirically assess the potential financial impact of future gene therapies on the US economy. After identifying 109 late-stage gene therapy clinical trials currently underway, we estimate the number of new and existing patients with corresponding diseases to be treated by these gene therapies, developing and applying novel mathematical models to estimate the increase in quality-adjusted life years for each approved gene therapy. We then simulate the launch prices and the expected spending for these therapies over a 15-year time horizon. Under conservative assumptions, the results of our simulation suggest that an expected total of 1.09 million patients will be treated by gene therapy from January 2020 to December 2034. The expected peak annual spending on these therapies is $25.3 billion, and the expected total spending from January 2020 to December 2034 is $306 billion. Assuming a linear pace of future gene therapy development fitted to past experience, our spending estimate increases by only 15.7% under conservative assumptions. As a proxy for the impact of expected spending on different public and private payers, we decompose the estimated annual spending by treated age group. Since experience suggests that insurers with annual budget constraints may restrict access to therapies with expected benefit to the patient, we consider various methods of payment to ensure access to these therapies even among those insured by the most budget-constrained payers. |
| JEL: | G17 I11 I13 I18 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28628&r=all |
| By: | Dimova, Ralitza |
| Abstract: | Concerns about the welfare of working children has over time produced a wide range of international and national interventions in the child labor market, culminating most recently in a commitment to eradicate the worst forms of child work via the attainment of target 8.7 of the Sustainable Development Goals. While the literature on the causes and consequences of child labor is voluminous and well established, research that explores the political economy of such interventions is disproportionately scanter. This chapter puts the relatively less prolific literature on the political economy of child labor under conceptual and empirical scrutiny. It starts by looking briefly into the theoretical case for interventions into the child labor market and then verifies whether such interventions are justified in practice. It then presents two types of political economy explanations of potential mismatches between economic theory and practice, one in the domain of international interventions and a second one in the realm of national policy making. |
| Keywords: | political economy,child labor,education,minimum age of work,compulsory education |
| JEL: | P48 O14 O15 J13 J24 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:816&r=all |
| By: | Hans Lustfeld |
| Abstract: | The main advantage of wind and solar power plants is the power production free of CO2. Their main disadvantage is the volatility of the generated power. According to the estimates of H.-W. Sinn[1], suppressing this volatility requires pumped-storage plants with a huge capacity, several orders of magnitude larger than the present available capacity in Germany[2]. Sinn concluded that wind-solar power can be used only together with conventional power plants as backups. However, based on German power data[3] of 2019 we show that the required storage capacity can significantly be reduced, provided i) a surplus of wind-solar power plants is supplied, ii) smart meters are installed, iii) partly a different kind of wind turbines and solar panels are used in Germany. Our calculations suggest that all the electric energy, presently produced in Germany, can be obtained from wind-solar power alone. And our results let us predict that wind-solar power can be used to produce in addition the energy for transportation, warm water, space heating and in part for process heating, meaning an increase of the present electric energy production by a factor of about 5[1]. Of course, to put such a prediction on firm ground the present calculations have to be confirmed for a period of many years. And it should be kept in mind, that in any case a huge number of wind turbines and solar panels is required. |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2102.00587&r=all |