nep-isf New Economics Papers
on Islamic Finance
Issue of 2020‒10‒12
129 papers chosen by

  1. Conflict, Peace-Building and Post-Conflict Reconstruction in Yemen By Mahmoud Al Iriani; Hiba Hassan; Irene Martinez
  2. International Trade Finance from the Origins to the Present: Market Structures, Regulation and Governance By Olivier Accominotti; Stefano Ugolini
  3. Are Older People Aware of Their Cognitive Decline? Misperception and Financial Decision Making By Mazzonna, Fabrizio; Peracchi, Franco
  4. ETHNIC DIVISIONS AND THE ONSET OF CIVIL WARS IN SYRIA By Salah Abosedra; Ali Fakih; Nathir Haimoun
  5. Growth Transitions in India: Myth and Reality By Pulapre Balakrishnan; Mausumi Das; M. Parameswaran
  6. Robust Inference in Risk Elicitation Tasks By Andersson, Ola; Holm, Håkan J.; Tyran, Jean-Robert; Wengström, Erik
  7. Financial Sector Transparency and Net Interest Margins: Should the Private or Public Sector lead Financial Sector Transparency? By Kusi, Baah; Agbloyor, Elikplimi; Gyeke-Dako, Agyapomaa; Asongu, Simplice
  8. Una aproximación al análisis de causalidad entre la inflación y el desempleo en Colombia durante el nuevo milenio. By John Michael, Riveros Gavilanes
  9. Measuring Monetary Policy with Residual Sign Restrictions at Known Shock Dates By Harald Badinger; Stefan Schiman
  10. Investigating The Libyan Conflict and Peace-Building Process: Past Causes and Future Prospects By Amal Hamada; Melike Sökmen; Chahir Zaki
  11. Uncertainty and the Great Slump By Lennard, Jason
  12. Children and the Remaining Gender Gaps in the Labor Market By Cortes, Patricia; Pan, Jessica
  13. Exchange rate policy and external vulnerabilities in Sub-Saharan Africa: nominal, real or mixed targeting? By Fadia Al Hajj; Gilles Dufrénot; Benjamin Keddad
  14. Roots of dissent: Trade liberalization and the rise of populism in Brazil By Francesco Iacoella; Patricia Justino; Bruno Martorano
  15. Business Cycle Sensitivity of Statutory Health Insurance: Evidence from the Czech Republic By Petra Landovska
  16. Effects of interest rate caps on microcredit: evidence from a natural experiment in Bolivia By María José Roa; Alejandra Villegas; Ignacio Garrón
  17. How Do Exchange Rate Depreciations Affect Trade and Prices? A Survey and Lessons about UK Experience after June 2016 By Yohannes Ayele; L. Alan Winters
  18. Watching Ads for Free Mobile Data: A Game-Theoretic Analysis of Sponsored Data with Reward Task By Subodha Kumar; Xiaowei Mei; Liangfei Qiu; Lai Wei
  19. Laboratory Experiments By James Alm; Matthias Kasper
  20. Preferential Trade Liberalization with Endogenous Cartel Discipline: Implications for Welfare and Optimal Trade Policies By Agnosteva, Delina; Syropoulos, Constantinos; Yotov, Yoto
  21. Financial integration in the EU28 equity markets: measures and drivers By Nardo, Michela; Ossola, Elisa; Papanagiotou, Evangalia
  22. Still the Employer of Choice: Evolution of Public Sector Employment in Egypt By Ghada Barsoum; Dina Abdalla
  23. Implications of the changing nature of work for employment and inequality in Ghana By Carlos Gradín; Simone Schotte
  24. An Introduction to the Economics of Immigration in OECD Countries By Edo, Anthony; Ragot, Lionel; Rapoport, Hillel; Sardoschau, Sulin; Steinmayr, Andreas; Sweetman, Arthur
  25. Resilient Urban Housing Markets: Shocks vs. Fundamentals By Amine Ouazad
  26. Research of current economic policy instruments in the field of renewable energy in Russia and in the world By Lanshina, Tatiana (Ланьшина, Татьяна)
  27. Financial Capital and Immigrant Self-Employment: Evidence from a Swedish Reform By Aldén, Lina; Hammarstedt, Mats; Miao, Chizheng
  28. English Skills and Early Labour Market Integration of Humanitarian Migrants By Cheng, Zhiming; Wang, Ben; Jiang, Zhou; Taksa, Lucy; Tani, Massimiliano
  29. Conflict, Institutions and The Iraqi Economy, 2003- 2018 By Bassam Yousif; Rabeh Morrar; Omar El-Joumayle
  30. Vulnerability Exposure in Informal Manufacturing Sector A Reflection on Conceptual and Analytical Issues By Jain, Varinder
  31. Do Recruiters Select Workers with Different Personality Traits for Different Tasks? A Discrete Choice Experiment By Wehner, Caroline; de Grip, Andries; Pfeifer, Harald
  32. The short-term impact of the COVID-19 pandemic on Portuguese companies By Ana Sequeira; Cristina Manteu; Nuno Monteiro
  33. Real†Time Weakness of the Global Economy By Danilo Leiva†Leon; Gabriel Perez†Quiros; Eyno Rots
  34. Online Appendix for Canonical Correlation-based Model Selection for the Multilevel Factors By In Choi; Rui Lin; Yongcheol Shin
  35. How did the early stages of the COVID-19 pandemic affect teacher wellbeing? By Rebecca Allen; John Jerrim; Sam Sims
  36. Computational Methods and Classical-Marxian Economics By Jonathan F. Cogliano; Roberto Veneziani; Naoki Yoshihara
  37. Online reviews and customer satisfaction: The use of Trustpilot by UK retail energy suppliers and three other sectors By Littlechild, S.
  39. Financial Flows Centrality: Empirical Evidence using Bilateral Capital Flows By Rogelio V. Mercado Jr.; Shanty Noviantie
  40. Self-employment by gender in the EU: convergence and clusters By João Ricardo Faria; Juan Carlos Cuestas; Luis Gil-Alana; Estefania Mourelle
  41. Tax Evasion, Market Adjustments, and Income Distribution By James Alm; Matthias Kasper
  43. An Empirical Assessment of Monetary Policy Channels on Income and Wealth Disparities By José Alves; Tomás Silva
  44. The Labor Market Integration of Refugee Migrants in High-Income Countries By Courtney Brell; Christian Dustmann; Ian Preston
  45. Swiss Trade During the COVID-19 Pandemic: An Early Appraisal By Konstantin Bu¨chel, Stefan Legge, Vincent Pochon, Philipp Wegmu¨ller
  46. Banks' bail-in and the new banking regulation: an EU event study By Bellia, Mario; Maccaferri, Sara
  47. Investor Sentiment and (Anti-)Herding in the Currency Market: Evidence from Twitter Feed Data By Xolani Sibande; Rangan Gupta; Riza Demirer; Elie Bouri
  49. Do Harder Local Budget Constraints Affect Patient Mobility? By Sergio Beraldo; Michela Collaro; Immacolata Marino
  50. A Bit of Salt a Trace of Life - Gender Norms and The Impact of a Salt Iodization Program on Human Capital Formation of School Aged Children By Zichen Deng; Maarten Lindeboom
  51. Understanding the Estimation of Oil Demand and Oil Supply Elasticities By Lutz Kilian
  52. Food safety verification by block chain; a consumer-focused solution to the global food fraud crisis By Agetu, Richard
  53. The Pandemonics of Informal Credit Markets By Filipe Correia; António Martins
  54. "Ecology, Economics, and Network Dynamics" By Harold M. Hastings; Tai Young-Taft; Chih-Jui Tsen
  55. Debt holder monitoring and implicit guarantees: did the BRRD improve market discipline? By Cutura, Jannic Alexander
  56. Relationships and nature of contracts in the distribution structure for responsible trade By Florence Lachet-Touya
  57. A sectoral approach to measuring output gap: Evidence from 20 US industries over 1948-2019 By Remzi Baris Tercioglu
  58. Investor-State Dispute Settlement and Multinational Firm Behavior By Guttorm Schjelderup; Frank Stähler
  59. Measuring the non-use value of the Dugong (Dugong dugon) in Thailand By Petcharat, Areeyapat; Lee, Yohan
  60. Sectoral Capital Flows: Covariates, Co-movements, and Controls By Etienne Lepers; Rogelio Mercado, Jr.
  61. An Economic Perspective on Payments Migration By Anneke Kosse; Zhentong Lu; Gabriel Xerri
  62. Agro-industry, exports, and income distribution: A multiplier decomposition analysis for Myanmar By Dirk van Seventer; Finn Tarp
  63. The development of AI and its impact on business models, organization and work By Lucrezia Fanti; Dario Guarascio; Massimo Moggi
  64. Toward a More Inclusive Economy By Loretta J. Mester
  65. A Subscription vs. Appropriation Framework for Natural Resource Conflicts By Bakshi, Dripto; Dasgupta, Indraneel
  66. Analysis of the factors that determine the long-term profitability of the initial supply of cryptocurrencies By Simonov, Andrey (Симонов, Андрей); Zyamalov, Vadim (Зямалов, Вадим); Sukhobok, Olga (Сухобок, Ольга)
  67. Expanding the Measurement of Culture with a Sample of Two Billion Humans By Obradovich, Nick; Özak, Ömer; Martín, Ignacio; Awad, Edmond; Cebrián, Manuel; Cuevas, Rubén; Desmet, Klaus; Rahwan, Iyad; Cuevas, Ángel
  68. Affirmative Action in Large Population Contests By Ratul Lahkar; Rezina Sultana
  69. Governance and the Capital Flight Trap in Africa By Asongu, Simplice; Nnanna, Joseph
  70. Institutional design and spatial (in)equality: The Janus face of economic integration By Ott, Ingrid; Soretz, Susanne
  71. Global Firms, National Corporate Taxes: An Evolution of Incompatibility By Shafik Hebous
  72. Slums and Pandemics By Luiz Brotherhood; Tiago Cavalcanti; Daniel da Mata; Cezar Santos
  73. Fuel Poverty Exposure and Drivers: A Comparison of Vulnerability Landscape between Egypt and Jordan By Fateh Belaid
  74. Covid-19 shocking global value chains By Eppinger, Peter S.; Felbermayr, Gabriel; Krebs, Oliver; Kukharskyy, Bohdan
  75. Corona politics: The cost of mismanaging pandemics By Herrera, Helios; Konradt, Maximilian; Ordoñez, Guillermo; Trebesch, Christoph
  76. Scenario-Based Forecast for Post-Conflict’s Growth in Syria By Mouyad Alsamara; Zouhair Mrabet; Ahmad Shikh Ebid
  77. Who is Most Vulnerable to Climate Change Induced Yield Changes? A Dynamic Long Run Household Analysis in Lower Income Countries By Wilts, Rienne; Latka, Catharina; Britz, Wolfgang
  78. A proposal for the unification of social protection benefits for children, youth and those vulnerable to poverty By Sergei Soares; Letícia Bartholo; Rafael Guerreiro Osorio
  79. A proposal for the unification of social protection benefits for children, youth and those vulnerable to poverty By Sergei Soares; Letícia Bartholo; Rafael Guerreiro Osorio
  80. Economic Agenda for Post-Conflict Reconstruction By Samir Makdisi
  81. Risks and optimal migration duration: The role of higher order risk attitudes By Siwar Khelifa
  82. Understanding Alcohol Consumption across Countries By Clements, Ken; Lan, Yihui; Liu, Haiyan
  83. A New Financial Stress Index for Ukraine By Vladyslav Filatov; ;
  84. An Econometric Analysis of PFI Roadside Stations in Japan By Ryusaku Matsuo; Mitoshi Yamaguchi
  85. Effects of Environment-Related Stimulus Policies: An Event Study Approach By Tamechika, Hanae
  86. Minerals: What Are They and What Makes Them Critical? By Carol A. Dahl
  87. Equity Premium and Monetary Policy in a Model with Limited Asset Market Participation By Roman Horvath; Lorant Kaszab; Ales Marsal
  88. Social Protection Systems in Latin America and the Caribbean: Dominican Republic By Milena Lavigne; Luis Hernán Vargas
  89. Stock Markets and Exchange Rate Behaviour of the BRICS By Afees A. Salisu; Juncal Cunado; Kazeem Isah; Rangan Gupta
  90. Framing the Predicted Impacts of COVID-19 Prophylactic Measures in Terms of Lives Saved Rather Than Deaths Is More Effective for Older People By Biroli, Pietro; Bosworth, Steven J.; Della Giusta, Marina; Di Girolamo, Amalia; Jaworska, Sylvia; Vollen, Jeremy
  91. Corporate Social Responsibility and the Role of Rural Women in Strengthening Agriculture-Tourism Linkages in Nigeria’s Oil Producing Communities By Joseph I. Uduji; Elda N. Okolo-Obasi; Vincent A. Onodugo; Justitia O. Nnabuko; Babatunde A. Adedibu
  92. Bottom Incomes and the Measurement of Poverty and Inequality By Vladimir Hlasny; Lidia Ceriani; Paolo Verme
  93. Education, cooperative conflicts and child malnutrition—a gender-sensitive analysis of the determinants of wasting in Sudan By Lea Smidt
  94. Development of a concept for the formation of a unified talent management system in Russia By Komissarov, Aleksey (Комиссаров, Алексей); Selezneva, Elena (Селезнева, Елена); Sinyagin, Yuriy (Синягин, Юрий); Sinyagina, Natalia (Синягина, Наталья); Chirkovskaya, Elena (Чирковская, Елена)
  95. All I have to do is dream? The role of aspirations in intergenerational mobility and well-being By Warn N. Lekfuangfu; Reto Odermatt
  96. One transition story does not fit them all: Initial regional conditions and new business formation after socialism By Michael Fritsch; Maria Kristalova; Michael Wyrwich
  97. Nudging Demand for Academic Support Services: Experimental and Structural Evidence from Higher Education By Pugatch, Todd; Wilson, Nicholas
  98. Did Too-Big-To-Fail Reforms Work Globally? By Asani Sarkar
  99. The Big Sell: Privatizing East Germany's Economy By Lukas Mergele; Moritz Hennicke; Moritz Lubczyk
  100. Uncertainty and Monetary Policy during Extreme Events By Giovanni Pellegrino; Efrem Castelnuovo; Giovanni Caggiano
  101. Macroeconomic Effects of Global Shocks in The GCC: Evidence from Saudi Arabia By Kamiar Mohaddes; Mehdi Raissi; Niranjan Sarangi
  102. Identifying Behavioral Responses to Tax Reforms: New Insights and a New Approach By Katrine Marie Jakobsen; Jakob Egholt Søgaard
  103. A comparative study of export processing zones in the wake of sustainable development goals: Cases of Botswana, Kenya, Tanzania and Zimbabwe By Adu-Gyamfi, Richard; Asongu, Simplice; Mmusi, Tinaye; Wamalwa, Herbert; Mangori, Madei
  104. Racial Disparities in Frontline Workers and Housing Crowding during COVID-19: Evidence from Geolocation Data By Milena Almagro; Joshua Coven; Arpit Gupta; Angelo Orane-Hutchinson
  105. Child Skill Production: Accounting for Parental and Market-Based Time and Goods Investments By Elizabeth Caucutt; Lance Lochner; Joseph Mullins; Youngmin Park
  106. Modeling and Forecasting Economic Growth in Sub-Saharan Africa in the Post-Covid Era By Van, Germinal G.
  107. A Dynamic Evaluation of Central Bank Credibility By Cem Cakmakli; Selva Demiralp
  108. Parents’ Separation: What Is The Effect On Parents’ and Children’s Time Investments? By Hélène Le Forner
  109. Fostering Innovation Activities with the Support of a Development Bank: Evidence from Brazil By Marco Carreras
  110. Scaring or scarring? Labour market effects of criminal victimisation By Anna Bindler; Nadine Ketel
  111. Is the Selfish Life-Cycle Model More Applicable in Japan and, If So, Why? A Literature Survey By Charles Yuji Horioka
  112. Saving for retirement through the public pension system: Evidence from the self-employed in Spain By Ander Iraizoz
  113. EU start-up calculator: impact of COVID-19 on aggregate employment: Scenario analysis for Austria, Belgium, Germany, Hungary, Italy and Spain By Cristiana Benedetti Fasil; Petr Sedlacek; Vincent Sterk
  114. Prospects for Egypt’s Population and Labor Force: 2000 to 2050 By Ragui Assaad
  115. Audits, Audit Effectiveness, and Post-audit Tax Compliance By Matthias Kasper; James Alm
  116. Competition and Career Advancement:The Hidden Costs of Paid Leave By Julian Johnsen; Hyejin Ku; Kjell G Salvanes
  117. Setting up a bioeconomy monitoring: Resource base and sustainability By Iost, Susanne; Geng, Natalia; Schweinle, Jörg; Banse, Martin; Brüning, Simone; Jochem, Dominik; Machmüller, Andrea; Weimar, Holger
  118. Perceived Uncertainty Shocks, Excess Optimism-Pessimism, and Learning in the Business Cycle By Pratiti Chatterjee; Fabio Milani
  119. Intergenerational Transmission of Educational Attainment in China By Jiaxin Fan; Bei Li; Ishita Chatterjee
  120. "Quality of Match for Statistical Matches Used in the Development of the Levy Institute Measure of Time and Consumption Poverty (LIMTCP) for Ethiopia and South Africa" By Fernando Rios-Avila
  121. The future of (negative) emissions trading in the European Union By Rickels, Wilfried; Proelß, Alexander; Geden, Oliver; Burhenne, Julian; Fridahl, Mathias
  122. Giver and Taker States Over the Business Cycle By Koray Caglayan; Steven M. Sheffrin
  123. From Parent to Child? The Long-Lasting Effects of Social Support By Poggi, Ambra; Kalb, Guyonne
  124. State Investment in Higher Education: Effects on Human Capital Formation, Student Debt, and Long-Term Financial Outcomes of Students By Rajashri Chakrabarti; Nicole Gorton; Michael Lovenheim
  125. The Competitive Effects of Declining Entry Costs over Time: Evidence from the Static Random Access Memory Market By An-Hsiang Liu; Ralph Siebert
  126. Fintech and big tech credit: a new database By Giulio Cornelli; Jon Frost; Leonardo Gambacorta; Raghavendra Rau; Robert Wardrop; Tania Ziegler
  127. Heterogeneous effects of Internet use and adoption of sustainable production practices on rural incomes: Evidence from China By Ma, Wanglin
  128. Unwanted daughters: The impact of a ban on sex-selection on the educational attainment of women By Anisha Sharma; Garima Rastogi
  129. Regional resilience in China: The response of the provinces to the growth slowdown By Anping Chen; Nicolaas Groenewold

  1. By: Mahmoud Al Iriani (Economic Research Forum); Hiba Hassan (Political analyst and researcher specialized in Yemeni and Gulf affairs); Irene Martinez (Barcelona Center for International Affairs (CIDOB))
    Abstract: Violent conflicts are not new to Yemen. For centuries, the country has been plagued by political and social instability, inadequate and inefficient state institutions, insufficient infrastructure, and absolute poverty. Prior to the current conflict, Yemen was already identified a “failing states”. The current violent conflict has entered its sixth year with little hope for the return of peace to the impoverished country. This paper aims to provide a basic understanding of factors that led to the uprising of 2011 and the eruption of hostilities three years later. For Yemen, the conventional explanation of violent conflicts through economic, social, political, ethnic, and religious grievances is an oversimplification of other realities. This analysis instead suggests that such grievances represent means by which the elite struggle for power and resource-capture. Therefore, in order to arrive at long-lasting peace and prevent reoccurrence of the conflict in the long run, the peace-building process must start by uncovering the root causes of the conflict. On the other hand, post-war reconstruction requires the implementation of a sound economic agenda that involves learning from pre-conflict mismanagement of the economy and experiences of other war-affected countries but taking into consideration the distinct nature of the Yemeni economy and society
    Date: 2020–04–20
  2. By: Olivier Accominotti (LSE - Economic History Department - London school of economics and political science - LSE - London School of Economics and Political Science); Stefano Ugolini (LEREPS - Laboratoire d'Etude et de Recherche sur l'Economie, les Politiques et les Systèmes Sociaux - UT1 - Université Toulouse 1 Capitole - UT2J - Université Toulouse - Jean Jaurès - Institut d'Études Politiques [IEP] - Toulouse - ENSFEA - École Nationale Supérieure de Formation de l'Enseignement Agricole de Toulouse-Auzeville)
    Abstract: This chapter presents a history of international trade finance - the oldest domain of international finance - from its emergence in the Middle Ages up to today. We describe how the structure and governance of the global trade finance market changed over time and how trade credit instruments evolved. Trade finance products initially consisted of idiosyncratic assets issued by local merchants and bankers. The financing of international trade then became increasingly centralized and credit instruments were standardized through the diffusion of the local standards of consecutive leading trading centres (Antwerp, Amsterdam, London). This process of market centralization/product standardization culminated in the nineteenth century when London became the global centre for international trade finance and the sterling bill of exchange emerged as the most widely used trade finance instrument. The structure of the trade finance market then evolved considerably following the First World War and disintegrated during the interwar de-globalization and Bretton Woods period. The reconstruction of global trade finance in the post-1970 period gave way to the decentralized market structure that prevails nowadays.
    Keywords: Bills of exchange,Letter of credit,Market structure,Trade finance
    Date: 2020–09–02
  3. By: Mazzonna, Fabrizio (USI Università della Svizzera Italiana); Peracchi, Franco (University of Rome Tor Vergata)
    Abstract: We investigate whether older people correctly perceive their own cognitive decline, and the potential financial consequences of misperception. First, we document the fact that older people tend to underestimate their cognitive decline. We then show that those who experienced a severe cognitive decline, but are unaware of it, are more likely to suffer wealth losses compared to those who are aware or did not experience a severe decline. These losses largely reflect decreases in financial wealth and are mainly experienced by wealthier people who were previously active on the stock market. Our findings support the view that financial losses among older people unaware of their cognitive decline are the result of bad financial decisions, not of rational disinvestment strategies.
    Keywords: aging, cognitive ability, household finance, HRS
    JEL: J14 J24 C23
    Date: 2020–09
  4. By: Salah Abosedra (American University in the Emirates); Ali Fakih (Lebanese American University); Nathir Haimoun (University of Lethbridge)
    Abstract: While most civil wars seem to have an economic basis, they are generally pushed by political, ethnic, and religious differences. This paper attempts to identify the drivers of the Syrian civil war of 2011 by investigating the role of ethnic divisions in starting a conflict. We integrate a variety of variables such as excluded population, power-sharing, anocracy, ethnic groups in addition to a number of economic factors. The main results indicate that ethnicity does not seem to be a very important factor in starting both the civil and ethnic conflict in Syria, but it shows that the lack of power-sharing to be the most significant factor. Therefore, where power in Syria was not inclusive and shared among different demographic segments, such as religious or urban groups, it created upheavals between different groups, as some groups disidentify with the state, paving the way to causing the conflict. Economic factors also provide an explanation of the onset of conflicts in Syria. The paper offers detailed policy suggestions that could serve as a recovery mechanism for the Syrian crisis and a preventive measurement for its reoccurrence.
    Date: 2020–03–20
  5. By: Pulapre Balakrishnan (Ashoka University); Mausumi Das (University of Delhi); M. Parameswaran (IIM, Kozhikode)
    Abstract: Growth has for long remained a central topic in economic policy considerations of the government in India. However, there has also been a scholarly interest in it among social scientists. As a part of the latter tradition, this paper addresses the proper delineation of the phases of growth in India, a matter of some discussion in the literature. Using state-of-the art statistical methodology it first establishes the trajectory of growth and then provides a theoretical explanation for that history. With data spanning the period 1950- 2020, the procedure adopted is also able to assess the impact on economic growth of the policies of the present government. The results are conclusive. First, it is established that growth in India has accelerated continuously since the fifties, implying that dynamism in the economy did not have to wait for the liberalising reforms launched in 1991. Next, the performance of India's economy is compared to growth that has taken place in the rest of the world. It is seen that while India's economy has in recent years shown a dynamism relative to the rest of the world, it has consistently fallen behind its most dynamic regions, notably in East Asia.
    Keywords: Growth, Indian Economic History, Developmental State
    Date: 2020–09
  6. By: Andersson, Ola (Department of Economics, Uppsala University); Holm, Håkan J. (Department of Economics, Lund University); Tyran, Jean-Robert (University of Vienna); Wengström, Erik (Department of Economics, Lund University, and)
    Abstract: Recent experimental evidence suggests that noisy behavior correlates strongly with personal characteristics. Since decision noise leads to bias in most elicitation tasks, there is a risk of falsely interpreting noise-driven relationships as preference driven. This puts previous studies that found a negative relation between personality measures and risk aversion into perspective and in particular raises the question of how to achieve robust inference in this domain. This paper shows, by way of an economic experiment with subjects from all walks of life, that using structural estimation that models heterogeneity of noise in combination with a balanced design allows us to mitigate the bias problem. Our estimations show that cognitive ability is related to noisy behavior rather than risk preferences. We also find age and education to be strongly related to noise, but the personality characteristics obtained using the Big Five inventory are less related to noise and more robustly correlated to risk preferences.
    Keywords: Risk preference; Cognitive ability; Experiment; Noise
    JEL: C81 C91 D12 D81
    Date: 2020–09–28
  7. By: Kusi, Baah; Agbloyor, Elikplimi; Gyeke-Dako, Agyapomaa; Asongu, Simplice
    Abstract: This study examines the effect of private and public sector led financial sector transparency on bank interest margins across eighty-six economies. Using a two-step dynamic system generalized method of moments, least square dummy variables, fixed effects and bootstrap quantile panel models between 2005 and 2016, the findings of the two-step GMM are reported as follows. First, results reveal that financial sector transparency whether led by private or public sector reduces interest margins. Second, while no statistical evidence was found on which of the two (private or public sector led transparency) is more effective in dealing with bank interest margins, public sector-led financial transparency is found to be more consistent in reducing bank interest margins across many more economies. Third, the study shows that the effect of financial sector transparency is visible at lower and middle levels of bank interest margins implying that economies with lower and moderately high bank interest margin level can benefit more from policies targeted at improving transparency in the financial sector. These findings imply that the sampled countries must enact policies and laws that deepen and expand financial sector transparency in order to potentially reduce bank interest margins for the good of banking market participants and society at large.
    Keywords: Financial Sector Transparency; Net Interest margins; Private Sector; Public Sector
    JEL: G20 G29 O40 O55
    Date: 2020–01
  8. By: John Michael, Riveros Gavilanes
    Abstract: The present article establishes an empirical approximation of the causality analysis between inflation and unemployment over the period of 2001 and 2019 for the Colombian economy from the theoretical contributions of Phillips (1957), Phelps (1967), Friedman (1968) and Ball & Mankiw (2002). The methodology based on time series through monthly data, incorporates cointegration analysis and the estimation of VAR models to proceed with the Granger causality tests. The estimations include the natural unemployment rate assumed by the NAIRU estimated with the Hodrick-Prescott (1997) filter. The results indicate the inexistence of long-run relationships between the variables, a decreasing tendency of the natural unemployment rate and the Granger causality reflects only one direction from the inflation to the unemployment. The conclusions establish a significative force from the adaptive expectations in Colombia probably linked with speculation, which through the changes in the price level rebound in the economy and in the variation of the unemployment rate.
    Keywords: Inflation; Unemployment; Expectations; Granger Causality; NAIRU
    JEL: C10 E31 E42 J69
    Date: 2020
  9. By: Harald Badinger; Stefan Schiman
    Abstract: We propose a novel identification strategy to measure monetary policy in a structural VAR. It is based exclusively on known past policy shocks, which are uncovered from high-frequency data, and does not rely on any theoretical a-priori restrictions. Our empirical analysis for the euro area reveals that interest rate decisions of the ECB surprised financial markets at least fifteen times since 1999. This information is used to restrict the sign and magnitude of the structural residuals of the policy rule equation at these shock dates accordingly. In spite of its utmost agnostic nature, this approach achieves strong identification, suggesting that unexpected ECB decisions have an immediate impact on the short-term money market rate, the narrow money stock, commodity prices, consumer prices and the Euro-Dollar exchange rate, and that real output responds gradually. Our close to assumption-free approach obtains as an outcome what traditional sign restrictions on impulse responses impose as an assumption.
    Keywords: structural VAR, set identification, monetary policy, ECB
    JEL: C32 E52 N14
    Date: 2020
  10. By: Amal Hamada (Cairo University); Melike Sökmen (Independent researcher); Chahir Zaki (Cairo University)
    Abstract: Libya has been in continuous civil conflict with varying intensity since the Arab uprisings in 2011. It has suffered from recurrent cycles of social, political, security and economic crises, each reinforcing one another. State institutions and the economy have weakened thus facilitating fragmentation, disunity and dysfunction, creating fertile grounds for violence and a war-driven economy. The regional and international powers have been adding to the complexities of the conflict and the difficulties of its resolving. Against this background, this paper aims to analyze the social, political and economic dynamics of Libya from the local to the regional and international levels since the start of the uprisings, and understand the interplay between these forces. It aims to look at three issues: (1) the underlying causes of conflict, (2) why the conflict has sustained and (3) the political and economic agenda for post-conflict reconstruction. In other words, it aims to bring forward an inclusive agenda of peace-building and economic reconstruction, in line with the dynamics of the country.
    Date: 2020–03–20
  11. By: Lennard, Jason
    Abstract: This article investigates the impact of economic policy uncertainty on the British interwar economy. The first type of evidence examined is qualitative. The historical record shows that contemporaries regularly reported the incidence and consequences of major uncertainty shocks. The second type of evidence analysed is quantitative. Based on a new index of economic policy uncertainty constructed from newspapers and vector autoregressions, the results suggest that uncertainty was an important source of economic fluctuations in Britain between the wars.
    JEL: N0
    Date: 2020–08–01
  12. By: Cortes, Patricia (Boston University); Pan, Jessica (National University of Singapore)
    Abstract: The past five decades have seen a remarkable convergence in the economic roles of men and women in society. Yet, persistently large gender gaps in terms of labor supply, earnings, and representation in top jobs remain. Moreover, in countries like the U.S., convergence in labor market outcomes appears to have slowed in recent decades. In this article, we focus on the role of children and show that many potential explanations for the remaining gender disparities in labor market outcomes are related to the fact that children impose significantly larger penalties on the career trajectories of women relative to men. In the U.S., we document that close to two-thirds of the overall gender earnings gap can be accounted for by the differential impacts of children on women and men. We propose a simple model of household decision-making to motivate the link between children and gender gaps in the labor market, and to help rationalize how various factors potentially interact with parenthood to produce differential outcomes for men and women. We discuss several forces that might make the road to gender equity even more challenging for modern cohorts of parents, and offer a critical discussion of public policies in seeking to address the remaining gaps.
    Keywords: labor market, children, gender gap, gender
    JEL: J16 J24 J31 J13
    Date: 2020–09
  13. By: Fadia Al Hajj (College of Business Administration - GUST - Gulf University for Science and Technology); Gilles Dufrénot (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, AMU - Aix Marseille Université); Benjamin Keddad (PSE - Paris School of Economics)
    Abstract: This paper discusses the theoretical choice of exchange rate regimes in Sub-Saharan African countries that are facing external vulnerabilities. To reduce instability, policymakers choose among promoting external competitiveness using a real anchor, lowering the burden of foreign debt using a nominal anchor or using a policy mix of both anchors. We observe that these countries tend to adopt mixed anchor policies. We solve a state space model to explain the determinants of and the strategy behind this policy. We find that the mixed targeting policy is a two-step strategy: First, monetary authorities choose the degree of nominal exchange rate flexibility according to the velocity of money, trade openness, foreign debt, degree of exchange rate pass-through and exchange rate target zone. Second, authorities seek to stabilize the real exchange rate depending on the degree of competition in the domestic goods market and the degree of foreign exchange intervention. We conclude with regime-switching estimations to provide empirical evidence of how these economic fundamentals influence exchange rate policy in Sub-Saharan Africa.
    Keywords: regime-switching model,external vulnerabilities,exchange rate policy,Sub-Saharan Africa
    Date: 2020
  14. By: Francesco Iacoella; Patricia Justino; Bruno Martorano
    Abstract: This paper investigates the long-term impact of economic shocks on populism, by exploiting a natural experiment created by the trade liberalization process implemented in Brazil between 1990 and 1995. This high impact and low duration event generated a profound shock to the economy with, we argue, long term implications for political outcomes. We focus on the 2002 and 2018 presidential elections in Brazil, which resulted in the election of a left-wing and a right-wing populist president, respectively.
    Keywords: Trade liberalization, Populism, austerity, Inequality, Brazil, insecurity
    Date: 2020
  15. By: Petra Landovska (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Opletalova 26, 110 00, Prague, Czech Republic)
    Abstract: Since the Czech healthcare system financing is based on Statutory Health Insurance scheme, it relies heavily on wage-based contributions from employers and employees and thus may be prone to business cycle fluctuations. This turned out to be a problem after the 2008 financialcrisis when the government had to issue loans to the insurance funds in order to cover the loss of revenue from the economically active population. This paper examines how the insurance funds' revenues react to economic downturns and expansions, and whether the effect is visible immediately or with a lag. The data from Ministry of Health, Czech Republic, are used, as well as several macroeconomic variables representing the business cycle. The static and lagged regression models on log differenced data are employed throughout the analysis. Significant pro-cyclicality in total health insurance funds' revenues and contributions from employers/employees is found, with the lagged effect being slightly stronger. On the contrary, contributions from state on behalf of economically inactive people do not display a significant relationship with business cycle. These results imply the need to increase state contributions during economic downturns in order to compensate for the loss of health insurance funds' revenues from economically active individuals.
    Keywords: health system financing, sensitivity analysis, business cycle, Czech Republic, social health insurance
    JEL: E32 G28 I13 I18
    Date: 2020–09
  16. By: María José Roa (Investigadora del Instituto de Investigaciones Económicas y Sociales Francisco de Vitoria); Alejandra Villegas (Investigadora de Universidad Iberoamericana Ciudad de México); Ignacio Garrón (Consultor indpendiente)
    Abstract: This paper evaluates the imposition of caps on microcredit lending rates through directed credit policies for productive sectors. This financial inclusion intervention provides a unique quasi-experiment, allowing to estimate its causal effect following a difference-in-differences analysis. Our results suggest that the imposition of interest rate ceilings negatively affected the portfolio balance of new microcredits and loans to SMEs granted by MFIs. Particularly, we find robust results indicating that the balance of the microcredit and SME loans portfolio granted by MFIs, relative to the company portfolio granted by banks, decreased by 26.1% for an average MFI for the period 2011-2018.
    Keywords: Interest rate ceilings, financial inclusion, credit access, microcredit loans, small and medium enterprises loans .
    JEL: G18 G28 G38
    Date: 2020–09
  17. By: Yohannes Ayele (Department of Economics, University of Sussex); L. Alan Winters (Department of Economics, University of Sussex)
    Abstract: The sterling depreciation following the Brexit referendum was expected to boost the export sector of the UK economy. But the boom never arrived. This paper first reviews a selection of empirical research on the effects of exchange rate changes on import prices, consumer prices, export prices and trade quantities over the recent decades and then specifically discusses the effects of the recent sterling depreciation. It asks specifically whether the absence of an export boom should be considered a surprise or not. We find that the weakness of the export boom after the sterling depreciation was not wildly out of line with what the literature suggests. But we also argue, however, that the poor performance was also at least partly due to the huge increase in uncertainty about UK trade policy that accompanied the depreciation.
    Date: 2020–08
  18. By: Subodha Kumar (Fox School of Business, Temple University); Xiaowei Mei (Department of Management and Marketing, Hong Kong Polytechnic University); Liangfei Qiu (Warrington College of Business, University of Florida); Lai Wei (Antai College of Economics & Management, Shanghai Jiao Tong University)
    Abstract: Sponsored data with reward task is an emerging monetization mechanism in which consumers are subsidized with free megabytes by content providers (CPs, e.g., Netflix) in exchange for engagement with advertisers by performing various forms of reward task. Consumers are endowed with the option of whether or not to participate in reward tasks, which is different from traditional push advertising that consumers have no control of. Although it is an emerging phenomenon, to the best of our knowledge, this has not yet been analyzed rigorously. In order to fill this gap in literature, we provide an economic analysis of this mechanism. Our results show that, interestingly, CP’s optimal subsidization rate increases in its marginal revenue of traditional advertising, but decreases in that of reward task. We also find that the amount of reward tasks performed by consumers actually sometimes decreases with these revenue rates. Further, while the profit of both the CP and the mobile network operator (e.g., AT&T) increases with the marginal revenue of traditional advertising, the effect of the marginal revenue of reward task on their profit is not straightforward. Specifically, when the marginal revenue of reward tasks is relatively high, it affects the CP and the mobile network operator’s profit positively; otherwise, the effect is reversed. We further find that, interestingly, the introduction of sponsored data might not necessarily increase consumer surplus. Similarly, although vertical integration of the mobile network operator and the CP reduces double marginalization by aligning incentives and reducing strategic information asymmetry, we find that it could sometimes hurt consumer surplus. Our results provide important insights for both the mobile network operator and the CP. In addition, we also provide useful guidance to policymakers.
    Keywords: mobile network operator; sponsored data; reward task; vertical integration; game theory
    JEL: C72 D47 L96
    Date: 2020–09
  19. By: James Alm (Tulane Economics); Matthias Kasper (Tulane University and University of Vienna)
    Abstract: In this chapter we assess the use of laboratory experiments in tax compliance research. We first discuss the reasons for using laboratory experiments, and we then describe the basic design of most experiments, including their main limitations. We also summarize some of the main results of these studies, and we discuss how the insights obtained from experimental research can help shape better tax policies. We conclude with some suggestions on new areas of research on tax compliance in which laboratory experiments may be usefully applied in the future.
    Keywords: Tax evasion; Behavioral economics; Laboratory experiments.
    JEL: H2 H26 D03 C9
    Date: 2020–09
  20. By: Agnosteva, Delina (Department of Economics); Syropoulos, Constantinos (School of Economics Drexel University LeBow College of Business); Yotov, Yoto (School of Economics Drexel University LeBow College of Business)
    Abstract: We consider an international cartel whose members interact repeatedly in their own as well as in third-country segmented markets. Cartel discipline--an inverse measure of the degree of competition between firms--is endogenously determined by the cartel's incentive compatibility constraint (ICC), which links strategically markets that are seemingly unrelated. Owing to this linkage, trade cost reductions induce cartel members to adjust their sales, not only due to direct effects, but also due to spillover effects related to cartel discipline. We apply these ideas to preferential trade agreements (PTAs) and show that the indirect effects can give rise to trade diversion. We also characterize the welfare effects of preferential tariff cuts for all countries under various circumstances regarding the determination of external PTA trade policy. A persistent finding is that, in the absence of appropriate regulation, preferential trade liberalization can be welfare-reducing even when external policy is jointly optimal.
    Keywords: multimarket contact; repeated interactions; constrained collusion; intra-industry trade; welfare; optimal trade policies
    JEL: D43 F10 F12 F13 F15 L12 L13
    Date: 2020–08–24
  21. By: Nardo, Michela (European Commission); Ossola, Elisa (European Commission); Papanagiotou, Evangalia (European Commission)
    Abstract: We examine time-invariant and time-varying market integration across European stock markets. Market integration has been increasing especially during the crisis period. Among others, market capitalization, technological developments and overall political uncertainty drive financial integration and systematic volatility, while macroeconomic variables do not impact idiosyncratic volatility. High market integration is associated with decreasing diversification benefit. During crisis periods investors select portfolios that are not explained only by firm characteristics.
    Keywords: financial integration, equity markets, common factor approach, diversification benefits, drivers of integration
    JEL: F3 C23
    Date: 2020–09
  22. By: Ghada Barsoum (The American University in Cairo); Dina Abdalla (Economic Researcher)
    Abstract: The public sector in Egypt provides relatively generous benefits, particularly when compared to the working conditions in informal private sector employment. For this reason, it has been described as the employer of choice among youth in Egypt. This paper updates the analysis on this issue by exploring the Egypt Labor Market Panel Survey (ELMPS) 2018 data. Focusing on those employed in the public sector, the paper compares three age groups. The analysis over time shows that the public sector is becoming more educated, slightly more feminized, and is aging. Women, however, have not reached gender parity in public sector employment, despite a slight increase in their proportion among more recent cohorts.
    Date: 2020–04–20
  23. By: Carlos Gradín; Simone Schotte
    Abstract: In this paper, we analyse the role of the changing nature of occupational employment and wages in explaining the trend in earnings inequality in Ghana between 2006 and 2017, a period in which there was a substantial transformation of the economy, with workers moving out of agriculture and generally taking more-skilled and less-routine jobs in services, in a context of a stagnant manufacturing sector and an oil-based expansion. We show that there was an initial decline in earnings inequality which is best explained by the fall in the skill premium that followed the expansion of education.
    Keywords: Skills, tasks, occupational employment and wages, Earnings inequality, Ghana
    Date: 2020
  24. By: Edo, Anthony (CEPII, Paris); Ragot, Lionel (University Paris Ouest-Nanterre); Rapoport, Hillel (Paris School of Economics); Sardoschau, Sulin (Humboldt University Berlin); Steinmayr, Andreas (University of Munich); Sweetman, Arthur (McMaster University)
    Abstract: The share of the foreign-born in OECD countries is increasing, and this article summarizes economics research on the effects of immigration in those nations. Four broad topics are addressed: labor market issues, fiscal questions, the political economy of immigration, and productivity/international trade. Extreme concerns about deleterious labour market and fiscal impacts following from new immigrants are not found to be warranted. However, it is also clear that government policies and practices regarding the selection and integration of new migrants affect labour market, fiscal and social/cultural outcomes. Policies that are well informed, well crafted, and well executed beneficially improve population welfare.
    Keywords: immigration, labor market and fiscal effects of immigration, integration, diversity and productivity, trade and migration, political economy of immigration, refugees
    JEL: F22 J15 J61
    Date: 2020–09
  25. By: Amine Ouazad
    Abstract: In the face of a pandemic, urban protests, and an affordability crisis, is the desirability of dense urban settings at a turning point? Assessing cities' long term trends remains challenging. The first part of this chapter describes the short-run dynamics of the housing market in 2020. Evidence from prices and price-to-rent ratios suggests expectations of resilience. Zip-level evidence suggests a short-run trend towards suburbanization, and some impacts of urban protests on house prices. The second part of the chapter analyzes the long-run dynamics of urban growth between 1970 and 2010. It analyzes what, in such urban growth, is explained by short-run shocks as opposed to fundamentals such as education, industrial specialization, industrial diversification, urban segregation, and housing supply elasticity. This chapter's original results as well as a large established body of literature suggest that fundamentals are the key drivers of growth, and that the shocks considered in this paper have not had historically a measurable long-term impact on metropolitan population growth. The chapter illustrates this finding with two case studies: the New York City housing market after September 11, 2001; and the San Francisco Bay Area in the aftermath of the 1989 Loma Prieta earthquake. Both areas rebounded strongly after these shocks, suggesting the resilience of the urban metropolis.
    Date: 2020–10
  26. By: Lanshina, Tatiana (Ланьшина, Татьяна) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The mechanisms of regulation and support of RES in Russia and abroad have been investigated, proposals have been developed for the implementation of a policy in the field of RES for the period from 2025 to 2035, taking into account the best world experience and the characteristics of the Russian energy industry. The results of the study provide recommendations for the period up to 2035.
    Date: 2020–05
  27. By: Aldén, Lina (Department of Economics and Statistics); Hammarstedt, Mats (Linnæus University and); Miao, Chizheng (Department of Economics and Statistics)
    Abstract: We study the role of capital requirement in immigrants’ self-employment decision with the help of a reform implemented in Sweden in 2010 which reduced capital requirements for limited liability companies. For both men and women, the reform increased both the probability of starting a limited liability firm and the probability of changing corporate form for those self-employed prior to the reform. We found that the reform affected immigrants and natives differently. Natives primarily responded to the reform by changing corporate form whereas immigrant men, especially those originating from the Middle East, responded to the reform by starting limited liability firms. Small differences emerge when we compare native women with immigrant women. Finally, it is the wage employed who start a limited liability business in the post-reform period, underlining the fact that access to financial capital is an obstacle for wage-employed individuals who opt for self-employment. This is true for both immigrants and natives. In contrast, more marginalised groups (i.e. unemployed immigrants), do not respond to the reform by starting limited liability firms.
    Keywords: Self-employment; Financial capital; Limited liability; Immigrants
    JEL: J15 J68 L26 L51
    Date: 2020–09–29
  28. By: Cheng, Zhiming (University of New South Wales); Wang, Ben (Macquarie University, Sydney); Jiang, Zhou (NILS, Flinders University); Taksa, Lucy (Macquarie University, Sydney); Tani, Massimiliano (University of New South Wales)
    Abstract: We use the panel data from the Building a New Life in Australia survey to examine the relationships between proficiency in English and labour market outcomes among humanitarian migrants. Having better general or speaking skills in English is certainly associated with a higher propensity for participation in the labour force and getting a job. However, we also find that, compared to other domains of English proficiency, such as listening, reading and writing, proficiency in English speaking skills has been the least improved domain for humanitarian migrants' who have participated in an English training program. Our paper explores the channels leading to these outcomes, finding that self-esteem, self-efficacy and general health partially mediate the relationship between English proficiency and labour force participation. We also find that self-efficacy, general health and indicative serious mental illness partially mediate the relationship between better English proficiency and the chance of getting a job.
    Keywords: labour force participation, proficiency in English, humanitarian migrant, Australia, employment
    JEL: F22 I26 J24 J61
    Date: 2020–09
  29. By: Bassam Yousif (Indiana State University); Rabeh Morrar (An-Najah National University); Omar El-Joumayle (Independent scholar)
    Abstract: This study analyses the causes of the Iraqi economy’s difficulties in rebuilding, provision of basic services and generally declining performance over the last decades. In contrast to accounts that lay stress on Iraq’s statist past, we argue that the sustained decline in formal institutions and human capabilities is the best explanation for Iraq’s economic decline. That is, weakened political institutions and restricted political space in the 1970s and 1980s along with protracted economic sanctions in the 1990s facilitated conflict and damaged Iraq’s developmental institutions and structures. Moreover, the US, when it occupied Iraq in 2003, relegated many of the existing, if deficient and imperfect, institutions and promoted policies that worked against the established political economy, aggravating conflict and instability. Consequently, broken institutions have remained unrepaired, while new institutions that the US created, with the help of new Iraqi elites, often proved fragile. In addition to select microeconomic interventions, we recommend policies that more dependably and equitably distribute oil rents, such as a universal basic income. Our recommendations thus contrast sharply with approaches that emphasize a reduced role for the state. The aim is to facilitate development of institutions and human capabilities under conditions of lowered conflict and greater stability, a binding constraint on development
    Date: 2020–04–20
  30. By: Jain, Varinder
    Abstract: Informal sector employment suffers from not only inadequate and irregular earnings but they also remain exposed to a variety of vulnerabilities. Available research has been general in nature as most of the time, the analysis has remained narrative and there has been no systematic attempt to arrive at a framework to conceptualise and quantify the incidence of vulnerability in informal manufacturing sector so as to examine its correlates and the related characteristics that influence the exposure to vulnerability. Such lacunae in research provide us an opportunity to arrive at a holistic framework for the quantification of vulnerability in informal manufacturing sector. This paper discussing various conceptual and analytical issues implicit in the quantification of vulnerability exposure in informal manufacturing sector serves as a first step towards that direction.
    Keywords: Informal Sector, Informal Manufacturing, Vulnerability, Livelihood Insecurity, Working Poor
    JEL: A1 J01 J46 J62 J71 J81
    Date: 2020–05–07
  31. By: Wehner, Caroline (BIBB); de Grip, Andries (ROA, Maastricht University); Pfeifer, Harald (BIBB)
    Abstract: This paper explores whether firms recruit workers with different personality traits for different tasks. For our analysis, we used data from a discrete choice experiment conducted among recruiters of 634 firms in Germany. Recruiters were asked to choose between job applicants who differed in seven aspects: professional competence, the 'big five' personality traits and the prospective wage level. We found that all personality traits affect the hiring probability of the job applicant; among them, conscientiousness and agreeableness have the strongest effects. However, recruiters' preferences differed for different job tasks. For analytical tasks, recruiters prefer more open and conscientious applicants, whereas they favour more open, extraverted, and agreeable workers for interactive tasks.
    Keywords: recruitment, personality traits, tasks, discrete choice experiment
    JEL: J23 D91 M51
    Date: 2020–09
  32. By: Ana Sequeira; Cristina Manteu; Nuno Monteiro
    Abstract: The COVID-19 pandemic and the necessary containment measures have caused a very severe shock on Portuguese businesses. This article uses the results of the Fast and Exceptional Enterprise Survey – COVID-19 (COVID-IREE) to characterise the short-term economic impact of the pandemic, in a context in which several support measures have been adopted by public authorities. The main results show a very significant decline in companies’ activity in the second quarter of 2020, with very adverse effects on their liquidity. Accommodation and food services stands out as the most affected sector. In this period, the impact on employment was relatively contained. However, there were marked declines in effectively working staff, albeit partially offset by remote work and alternate presence schemes in companies’ facilities. Finally, the survey reveals that companies in more fragile conditions were the ones that resorted the most to the support policy measures and that these measures played a very important role in safeguarding companies’ financial sustainability and preserving employment.
    JEL: D22 E65
    Date: 2020
  33. By: Danilo Leiva†Leon (Banco de España); Gabriel Perez†Quiros (European Central Bank and CEPR); Eyno Rots (Magyar Nemzeti Bank (Central Bank of Hungary))
    Abstract: We propose an empirical framework to measure the degree of weakness of the global economy in real†time. It relies on non†linear factor models designed to infer recessionary episodes of heterogeneous deepness, and fitted to the largest advanced economies (U.S., Euro Area, Japan, U.K., Canada and Australia) and emerging markets (China, India, Russia, Brazil, Mexico and South Africa). Based on such inferences, we construct a Global Weakness Index that has three main features. First, it can be updated as soon as new regional data is released, as we show by measuring the economic effects of coronavirus. Second, it provides a consistent narrative of the main regional contributors of world economy’s weakness. Third, it allows to perform robust risk assessments based on the probability that the level of global weakness would exceed a certain threshold of interest in every period of time. With information up to March 2nd 2020, we show that the Global Weakness Index already sharply increased at a speed at least comparable to the experienced in the 2008 crisis.
    Keywords: International, Business Cycles, Factor Model, Nonlinear.
    JEL: E32 C22 E27
    Date: 2020
  34. By: In Choi (Department of Economics, Sogang University, Seoul); Rui Lin (Department of Economics, University of York.); Yongcheol Shin (Department of Economics, University of York.)
    Abstract: We provide additional simulation results and theoretical derivations. Section I provides the simulation results for the performance of the alternative selection criteria for estimating the number of local factors. Section II provides the proofs for Lemmas in Section 4.1.1. Section III describes the detailed estimation algorithms of alternative approaches for selecting the number of global factors. Section IV presents the additional empirical results, showing that the popular systematic risk factors, smb and hml, proposed by Fama and French (1993), do not explain the within and the between correlations. Section V investigates the nite sample performance of the existing model selection criteria that ignore the multilevel structure and demonstrate that the existing selection criteria will produce unreliable inference in nite samples.
    Keywords: Multilevel Factor Models, Principal Components, Canonical Correlation Difference, Multilevel Asset Pricing Models
    JEL: C52 G12
    Date: 2020
  35. By: Rebecca Allen (Teacher Tapp); John Jerrim (Social Research Institute, UCL Institute of Education, University College London); Sam Sims (Centre for Education Policy and Equaliising Opportunities, UCL Institute of Education, University College London)
    Abstract: The COVID-19 pandemic has radically disrupted schooling, placing additional demands on teachers. This paper uses unique longitudinal survey data to track changes in teacher wellbeing as the virus hit the UK. It documents sharp spikes in teachers' anxiety as schools were locked down and as announcements around reopening were made. Teachers in fee-paying schools displayed higher levels of anxiety during the summer term when schools were closed, most likely because they delivered more `live' online lessons than state school teachers. Head teachers experienced particularly large increases in anxiety and reported that they were more likely to leave the profession as a result of the experience.
    Keywords: teachers, wellbeing, mental health, COVID-19
    JEL: I20
    Date: 2020–09
  36. By: Jonathan F. Cogliano; Roberto Veneziani; Naoki Yoshihara
    Abstract: This article surveys computational approaches to classical-Marxian economics. These approaches include a range of techniques - such as numerical simulations, agent-based models, and Monte Carlo methods - and cover many areas within the classical-Marxian tradition. We focus on three major themes in classical-Marxian economics, namely price and value theory; inequality, exploitation, and classes; and technical change, profitability, growth and cycles. We show that computational methods are particularly well-suited to capture certain key elements of the vision of the classical-Marxian approach and can be fruitfully used to make significant progress in the study of classical-Marxian topics.
    Keywords: Computational Methods, Agent-Based Models, Classical Economists, Marx
    JEL: C63 B51 B41
    Date: 2020–09
  37. By: Littlechild, S.
    Abstract: Online consumer reviews are now widely used and influential. Trustpilot is a relatively new but rapidly growing consumer review website. It is by far the most used review website in UK retail energy supply sector. This paper provides some background and insight into how Trustpilot works, how it is used in that sector, and for comparison in three other sectors (supermarkets, banking and mobile phones), and how this usage has evolved over 2019 and 2020. There is great variation in usage of Trustpilot both within and between sectors. Trustpilot was least used by supermarkets and their customers, and most by energy suppliers and customers. Many aspects of usage, including numbers of Trustpilot domains claimed by companies, invitations to review, reviews and responses to reviews, have increased over 2019-20, although not evenly. Former incumbent companies typically make less use of Trustpilot in all four sectors, and have lower TrustScores than entrants. However, five of the six Large energy suppliers have made significantly increased use of Trustpilot over 2019-20, and their TrustScores have increased. Detailed examination of Trustpilot use by ten energy suppliers explains how inviting Trustpilot reviews enables them to improve customer service as well as increase TrustScores. A final pair of comparisons shows that companies advising UK customers on energy supply score highly on Trustpilot, and make active use of it. In contrast, voluntary and regulatory organisations in the UK energy sector and their customers make little use of it, and these organisations have very low TrustScores.
    Keywords: Online reviews, customer satisfaction, customer feedback, Trustpilot, retail energy market, supermarkets, banks, mobile phone providers
    JEL: L15 L84 L94
    Date: 2020–09–16
  38. By: Kenneth W Clements (Economics Discipline, Business School, University of Western Australia); Robert G Gregory (Australian National University)
    Abstract: The PhD Conference in Economics and Business was a unique Australian innovation when it commenced in the late 1980s. With the high-quality feedback from discussants, the conference was a productive special event, even horizon-broadening for some students. The conference is now a partnership between six universities and has involved almost 900 students from many universities. This paper places the conference in a broader context and highlights some of the stars by identifying 54 student-presenters now full professors.
    Date: 2020
  39. By: Rogelio V. Mercado Jr.; Shanty Noviantie (South East Asian Central Banks (SEACEN) Research and Training Centre)
    Abstract: This paper uses a dataset on bilateral capital flows to construct a financial centrality measure for 64 advanced and emerging economies from 2000-16 to capture an economy’s importance within the global financial flows network. The results highlight the varying significance of network systemic and idiosyncratic factors in explaining financial centrality across different types of investments and residency of investors. Most notably, the findings show that financial centres have deeper and more developed financial system, implying their importance in global financial intermediation.
    Keywords: Financial Centrality, Financial Depth, Network Analysis
    JEL: D85 F21 F36 G15
    Date: 2019–12
  40. By: João Ricardo Faria (Department of Economics, Florida Atlantic University, USA); Juan Carlos Cuestas (Department of Economics and Finance, Tallinn University of Technology and Research Unit, Eesti Pank, Estonia; IEI and Department of Economics, Universitat Jaume I, Castellón, Spain); Luis Gil-Alana (Department of Economics, University of Navarra, Pamplona, Spain); Estefania Mourelle (Department of Economics, University of A Coruna, Spain)
    Abstract: This paper studies the convergence of self-employment by gender in the European Union, through tests for the order of integration and cluster analysis, in order to investigate the occurrence of two types of convergence: between genders and among European countries. The paper makes two contributions to the literature: 1) theoretically, it provides useful insights into the macroeconomic determinants of self-employment; 2) methodologically, it uses unit roots, fractional integration and cluster analysis to assess convergence. The empirical results point at mixed evidence of convergence, but with clear differences between the core and the periphery of Europe.
    Keywords: Self-employment, gender, European Union, convergence, cluster analysis
    JEL: J16 J24 O57
    Date: 2020
  41. By: James Alm (Tulane Economics); Matthias Kasper (Tulane University and University of Vienna)
    Abstract: Market adjustments to tax evasion alter factor and product prices, which determine the true impacts and beneficiaries of tax evasion.
    Keywords: Tax evasion, Tax incidence, General equilibrium.
    JEL: H26 H30
    Date: 2020–08
  42. By: Giovanni Scarano
    Abstract: Some recent contributions to economic literature have highlighted the role of corporate savings decisions by big corporations in devoting their profits to direct investment in capital goods, showing how this role is affected by the features of corporate governance and the forms of competition, but also by the possibilities of holding liquid financial assets bearing high returns. However, at the macroeconomic level, some of these analyses show a fallacy of composition in explaining the effects of financialisation on real aggregate investment. The paper proposes an analytical framework in which the growing financialisation of big corporations, interacting with financial globalization, can play a major role in timing the rhythms of real investment in a part of the world economic system. Moreover, the paper shows how the liquidity degree of the assets can also be a very important determinant in portfolio choices by corporations, in close connection with business fluctuations.
    Keywords: Investment theory, Corporate Savings, Capital Movements, Financialisation, Financial Crises
    JEL: B51 E11 E12 E32 F23 G35
    Date: 2020–09
  43. By: José Alves; Tomás Silva
    Abstract: Our paperaims at analysing the relation between monetary policy andits transmission channels on both income and wealthinequality for the Euro Area.We analysed three different channels identified by the literature (Income, Portfolio and Earnings Heterogeneity) that might explainhow monetary policy decisions may affect wealth and income distribution.In this empirical researchwe also set up a fourth regression combining all our selected explanatory variableswith the goal of studyingthe impact of the aforementionedchannels combined. For income inequality we analysed four different measures, namely Gini of disposable income(GDI), Gini of market income(GMI), share of income held by the top 1% and theshare of income of thetop 10%of society. In what regards to wealth inequality due to lack of data we had to createan alternative measure that can both translate the unequal savings rate of the Euro Area countries and evaluate the pace of capital accumulation in order to shed a lighton the gap between high-income and low-income household’sannual savings.So that our study could be conducted we developedan unbalancedpanel data analysis for the Eurozonecountriesbetween 1999 and 2017.The results we reached led us to conclude that the increase in asset prices, mainly equity, seems to be relevant to explain an increase in income inequality. However, it seems that the positive impact that MP had on unemployment by reducing it, contributed to avoid a higher increase on income inequality in the Euro Area.
    Keywords: Income inequalities; Wealth inequalities; Monetary Policy; Transmission Channels
    JEL: C23 D31 E25 E52 E58
    Date: 2020–09
  44. By: Courtney Brell (Centre for Research and Analysis of Migration, University College London); Christian Dustmann (Centre for Research and Analysis of Migration, University College London); Ian Preston (Centre for Research and Analysis of Migration, University College London)
    Abstract: We provide an overview of the integration of refugees into the labor markets of a number of high-income countries. Discussing the ways in which refugees and economic migrants are differently selected and so might be expected to perform differently in a host country’s labor market, we examine employment and wages for these groups over time after arrival. There is significant heterogeneity between host countries, but in general refugees experience persistently worse outcomes than other migrants. While the gaps between the groups can be seen to decrease on a timescale of a decade or two, this is more pronounced in employment rates than it is in wages. We also discuss how refugees are distinct in terms of other factors affecting integration, including health, language skills and social networks. We provide a discussion of insights for public policy in receiving countries, concluding that supporting refugees in early labor market attachment is crucial.
    Date: 2020–01
  45. By: Konstantin Bu¨chel, Stefan Legge, Vincent Pochon, Philipp Wegmu¨ller
    Abstract: This study uses trade data from Switzerland's Federal Customs Administration to examine the impact of COVID-19 on international goods trade between January and July 2020. We show that Swiss trade during that period fell by 11% compared to 2019, and that the contraction following the “Federal Lockdown” in mid-March was considerably steeper than the Swiss trade collapse in the aftermath of the Lehman Brothers bankruptcy in September 2008. Exploiting country variation in the spread of COVID-19, the stringency of containment measures, and Swiss trade flows, we document that the pandemic adversely affected both the demand and supply side of foreign trade. We discuss several channels at work and show that our COVID-19 measures are correlated with country-specific consumer and producer confidence series, which explain considerable heterogeneity in the observed trade dynamics.
    Keywords: COVID-19, Trade, Switzerland
    JEL: E32 F14 H12 I18
    Date: 2020–09
  46. By: Bellia, Mario (European Commission); Maccaferri, Sara (European Commission)
    Abstract: The purpose of the study is to estimate the short term reaction of equity and CDS prices of a sample of European banks to various events and announcements, such as bail-ins, recapitalisations, and the proposal and final agreement of the EU reform package of prudential and resolution rules in banking (“banking package†). This study replicates and expand Schafer et al. (2017) to include more recent EU events, such as the resolution of Banco Popular and the further tightening of EU prudential and resolution rules in 2019. Overall, our analysis shows the most recent events did not seem to trigger abnormal reactions in bank funding markets after bank prudential and resolution reforms were implemented in the EU in 2016. An exception is the 2018 Council agreement on its general approach to the proposed banking package. While the 2016 and 2019 reforms of EU prudential and resolution rules seem to have increased perceived probabilities of
    Keywords: Too-Big-To-Fail, Bail-in, FSB, event study, Credit Default Swap, CDS
    JEL: G21 G28
    Date: 2020–09
  47. By: Xolani Sibande (Department of Economics, University of Pretoria, Pretoria, South Africa); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa); Riza Demirer (Department of Economics and Finance, Southern Illinois University Edwardsville, Edwardsville, IL 62026-1102, USA); Elie Bouri (Adnan Kassar School of Business, Lebanese American University, Lebanon)
    Abstract: This paper investigates (anti) herding in the US foreign exchange market while assessing the role of investor happiness as a predictor of herding. To achieve this objective, it uses dispersion metrics (CSAD and CSSD) and applies OLS regressions with rolling window and quantile-on-quantile regressions (QQR). The results show that the US foreign exchange market is characterized by a strong anti-herding behavior. In normal times, anti-herding and investor happiness are negatively related. However, in extreme bearish and bullish times, investor happiness is associated with more severe anti-herding. The findings are of particular interest to policymakers who are concerned with the stability of the US foreign exchange market.
    Keywords: Herding, Exchange Rates, Time-varying Regression, Investor Happiness
    JEL: G15
    Date: 2020–09
  48. By: Kenneth W. Clements (Economics Discipline, Business School, University of Western Australia); Long Vo (Economics Discipline, Business School, University of Western Australia); Marc Jim Mariano (KPMG Economics)
    Abstract: This paper analyses import penetration with a consumer demand approach that distinguishes domestically and foreign-produced varieties. Consistent aggregation leads to a macro-level import demand equation that faithfully reflects the underlying micro demands for foreign varieties. The approach avoids restrictive assumptions such as homotheticity and permits an array of hypothesis tests of functional form. We show how to estimate the model with a relative short time series -- important for countries with limited data -- and as an illustrative example, apply it to Australia. We find that income growth is largely responsible for the recent surge in imports into that country.
    Keywords: Disaggregated import demand; Consumer demand; Estimating demand equations; Bootstrap simulation
    JEL: D12 F41
    Date: 2020
  49. By: Sergio Beraldo (Università di Napoli Federico II and CSEF); Michela Collaro (Università di Napoli Federico II); Immacolata Marino (Università di Napoli Federico II and CSEF)
    Abstract: A recent article by Bordignon et al. (2020) looks at the experience of Financial Recovery Plans (FRPs) imposed on regional governments running large fiscal deficits in the management of Health Services, finding convincing evidence that FRPs led in Italy to a significant containment in health spending and almost entirely wiped out regional deficits. The article also suggests that FRPs did not produce any significant deterioration in the quality of health services and in citizens’ health. In this paper we reconsider the effects that FRPs may have produced on health services, by focusing on patient migration. By reframing the empirical analysis within the relevant strand of literature that considers migration as mainly driven by the supply side features of the healthcare systems (Levaggi and Zanola, 2004) and by considering the announcement effects related to this form of fiscal discipline, we estimate an increase in patient mobility in the range 15-18% as due to FRPs (18-25% when a commissioner is appointed). Our results suggest that the improvements in fiscal discipline may have widened the quality gap in the health services regionally delivered, with undesirable consequences in terms of increased disparities in the distribution of access opportunities to healthcare.
    Keywords: Recovery Plans; Patient mobility, Equality of access to healthcare
    JEL: H75 I14 I18
    Date: 2020–09–25
  50. By: Zichen Deng (Norwegian School of Economics); Maarten Lindeboom (Vrije Universiteit Amsterdam)
    Abstract: This paper examines the effects of a massive salt iodization program on human capital formation of school-aged children in China. Exploiting province and time variation, we find a strong positive impact on cognition for girls and no effects for boys. For non-cognitive skills, we find the opposite. We show in a simple model of parental investment that gender preferences can explain our findings. Analyses exploiting within the province, village-level variation in gender attitudes confirm the importance of parental gender preferences. Consequently, large scale programs can have positive (and possibly) unintended effects on gender equality in societies with son preference.
    Keywords: Iodine, parental investments, gender attitudes, cognitive skills, non-cognitive skills
    JEL: I15 J16 J24 O15
    Date: 2020–09–29
  51. By: Lutz Kilian
    Abstract: This paper examines the advantages and drawbacks of alternative methods of estimating oil supply and oil demand elasticities and of incorporating this information into structural VAR models. I not only summarize the state of the literature, but also draw attention to a number of econometric problems that have been overlooked in this literature. Once these problems are recognized, seemingly conflicting conclusions in the recent literature can be resolved. My analysis reaffirms the conclusion that the one-month oil supply elasticity is close to zero, which implies that oil demand shocks are the dominant driver of the real price of oil. The focus of this paper is not only on correcting some misunderstandings in the recent literature, but on the substantive and methodological insights generated by this exchange, which are of broader interest to applied researchers.
    Keywords: oil supply elasticity, oil demand elasticity, IV estimation, structural VAR, Bayesian inference, oil price, gasoline price
    JEL: Q43 Q41 C36 C52
    Date: 2020
  52. By: Agetu, Richard
    Abstract: Food fraud is an age long challenge motivated by economic reasons. It is defined as the intentional substitution, addition, tampering and misrepresentation of food, food ingredients or food packaging for economic gain . Research has shown that food fraud costs at least $65 billion globally . Food experts tagged 2018 as the year of food fraud and fraud prevention strategies due to the shocking amounts and forms witnessed. Some of these included fake cherries, counterfeit honey, fake (plastic) rice, counterfeit wine, fake fish, etc. To combat counterfeiting, various certification programmes have been launched. However, counterfeit labelling which is the act of claiming certifications which have not been obtained by food producers on product packaging have ensued and become popular in developing countries. This new challenge has increased the need for a food safety verification system that enables prospective consumers to verify the authenticity of food products as quickly and as convenient as possible. In 2008, blockchain technology made its public debut and in just over a decade, it has shown potential for usefulness in every sector, including agriculture. It gained public trust and wide acceptance because they are distributed, utilizes cryptography, is open and has timestamps on every data recorded. Due to the combination of these features, it is considered unique and the most secure data framework for big data. Given the features of the blockchain system listed above, it is considered a more effective tool for food authenticity verification. The combination of serialization and blockchain will certainly proffer a fast and effective solution to counterfeit labelling issues in the global food industry, but this is also dependent on its level of adoption. A review of literature and industry articles revealed that a lot of attempts are being made in the use of blockchain for value chain traceability, farmer positioning, logistics, entering new markets and transaction costs. Most of these tools are utilized by most actors in the value chain but the consumer. Very little has been done in creating consumer centered verification tools using blockchain and this is a huge gap. This poster presentation intends to highlight the features and possible ways blockchain can equip consumers in developing countries with tools to verify the safety of food reliably and timely.
    Keywords: Food Consumption/Nutrition/Food Safety
    Date: 2020–09–16
  53. By: Filipe Correia; António Martins
    Abstract: Credit markets are at the core of any economic crisis, and informal loans are largely under studied. We collect a dataset on an online informal lending community to study the impact that the 2020 pandemic crisis had on informal credit markets. We find that these informal loans are short duration, expensive and that borrowers and lenders exhibit some sense of community. Our results suggest that the financial hardship imposed by stay athome orders is perceived as persistent, and borrowers expect lower future income, hencereducing loan demand. Moreover, loans directly associated with the pandemic are more likely to be transacted by newcomers to this market, and mentioning the pandemic in a loan request lowers the chance that it originates a loan. The absence of an increase of violations ofcommunity rules and the reduction in promised repayment time highlights the importance of informal credit communities in hard times.
    Keywords: informal credit, online lending, pandemic, non-pharmaceutical interventions
    JEL: G21
    Date: 2020–09
  54. By: Harold M. Hastings; Tai Young-Taft; Chih-Jui Tsen
    Abstract: In a seminal 1972 paper, Robert M. May asked: "Will a Large Complex System Be Stable?" and argued that stability (of a broad class of random linear systems) decreases with increasing complexity, sparking a revolution in our understanding of ecosystem dynamics. Twenty-five years later, May, Levin, and Sugihara translated our understanding of the dynamics of ecological networks to the financial world in a second seminal paper, "Complex Systems: Ecology for Bankers." Just a year later, the US subprime crisis led to a near worldwide "great recession," spread by the world financial network. In the present paper we describe highlights in the development of our present understanding of stability and complexity in network systems, in order to better understand the role of networks in both stabilizing and destabilizing economic systems. A brief version of this working paper, focused on the underlying theory, appeared as an invited feature article in the February 2020 Society for Chaos Theory in Psychology and the Life Sciences newsletter (Hastings et al. 2020).
    Keywords: Stability; Complexity; May-Wigner; Noise; Subprime Crisis; Liquidity Shock
    JEL: C02 C62 E17 H12
    Date: 2020–09
  55. By: Cutura, Jannic Alexander
    Abstract: This paper argues that the European Unions Banking Recovery and Resolution Directive (BRRD) improved market discipline in the European bank market for unsecured debt. The different impact of the BRRD on bank bonds provides a quasi-natural experiment that allows to study the effect of the BRRD within banks using a difference-in-difference approach. Identification is based on the fact that (otherwise identical) bonds of a given bank maturing before 2016 are explicitly protected from BRRD bail-in. The empirical results are consistent with the hypothesis that debt holders actively monitor banks and that the BRRD diminished bail-out expectations. Bank bonds subject to BRRD bail-in carry a 10 basis points bail-in premium in terms of the yield spread. While there is some evidence that the bail-in premium is more pronounced for non-GSIB banks and banks domiciled in peripheral European countries, weak capitalization is the main driver. JEL Classification: G18, G21, H81
    Keywords: bail-in, banking regulation, BRRD, moral hazard
    Date: 2020–10
  56. By: Florence Lachet-Touya (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour)
    Abstract: Aware of the high importance of consumers' private information concerning their willingness-to-buy fair trade goods and taking into account the superior price they are willing to pay for this kind of goods with respect to conventional ones, we choose to feed the debate relative to the appropriateness of the di¤erent potential retailing channels. We use a common agency game framework to analyze the changes in the price level according various schemes of upstream-downstream organization and relationships. It appears that the private information parameter as well as the nature of the relationship between suppliers on the one hand and the retailer on the other hand are the key variables that determine the price paid by consumers. We examine several competitive setting, that proves that only the presence of benevolent retailers can bring the outcome close to the socially optimal one in a simultaneous game whereas a sequential process cannot be implemented if the mainstream firm is not granted the leader role. We also propose other types of organisation (as a dedicated retailer, corresponding to a merged case) and of cooperative equilibrium, the latter resulting as a new direction to consider in order to reduce the double-margin e¤ect of the expropriating one resulting from the competitive schemes.
    Keywords: Responsible trade,Informational asymmetry,Common Agency,Nonlinear prices,Retail,Cooperatives,Cooperation,Pro-social preferences
    Date: 2019–08
  57. By: Remzi Baris Tercioglu (Department of Economics, New School for Social Research)
    Abstract: The existing output gap estimations rely on aggregate output data, assume constant utilization over industries (see Coibion et al. (2018), Owyang et al. (2018) and Chen and Górnicka (2020)). However, each sector has its cycle, and missing sectoral dynamics creates underestimation of the economy-wide slack. By using a new peak to peak method, motivated by the business cycle analysis of Mitchell (1946), I estimate output gaps of 20 US industries over 1948-2019. To increase the last cycle measures’ precision, I estimate a generalized Poisson model with Bayesian statistical inference, predicting the next peaks’ timing and magnitude for 20 industries. I find a generally negative output gap at the aggregate except for the second half of the 1960s, and a persistent excess-capacity since 1990. For 2019, I estimate a negative output gap of 2.5%, coming from the under-utilization in utilities, manufacturing, wholesale trade, transportation-warehousing, finance-insurance and education, while the Congressional Budget Office and Hodrick–Prescott filter indicate overheating since 2017. My findings show that secular stagnation is not an inevitable future for the US economy and suggest demand supporting policies to eliminate the chronic output gap.
    Keywords: Sectoral output gap, generalized Poisson model, Bayesian statistics, secular stagnation
    JEL: E32 E60 C11
    Date: 2020–10
  58. By: Guttorm Schjelderup; Frank Stähler
    Abstract: This paper shows that Investor-State Dispute Settlements (ISDS) makes multinational firms more aggressive by increasing cost-reducing investments with the aim to enlarge the potential compensation an ISDS provision may offer. While a larger investment reduces the market distortion, it will also make potential compensations larger. Consequently, potential compensations to a foreign investor do not imply a zero-sum game. ISDS may decrease domestic welfare, in particular if the investment leads to the establishment of an export platform, and we find that even global welfare may decline.
    Keywords: investor-state dispute settlement, multinational enterprises, foreign direct investment, TTIP, TPP
    JEL: F21 F23 F53 F55
    Date: 2020
  59. By: Petcharat, Areeyapat; Lee, Yohan
    Abstract: The dugong is an herbivorous marine mammal species, being vulnerable to extinction throughout its range in the Indo-Pacific region. This paper used the choice experiment method to elicit the non-use value, or the non-users’ willingness to pay (WTP) for conserving the dugongs in Thailand. A face-to-face interview was used to obtain data from 300 residents in five selected districts of Bangkok. The results show that the average WTP for the most preferred dugong conservation scheme (a marker buoy system, recreating habitats, and slowing down the population decline) was 4,382 Thai Baht (USD122) annually per household. Significantly, developing the marker buoy system to identify dugong habitats was the most valued by the general public. However, the respondents were not willing to pay for educating local fishers about the conservation of dugongs. Our results implies that a conservation policy should concentrate on the participation of key fishers in dugong protection projects using incentive measures. We also suggest the government to create protected areas as dugong sanctuaries that consistently support the remaining dugong population.
    Keywords: Environmental Economics and Policy
    Date: 2020–09–16
  60. By: Etienne Lepers (Organisation for Economic Co-operation and Development (OECD)); Rogelio Mercado, Jr. (The SEACEN Centre)
    Abstract: This paper assembles a comprehensive sectoral capital flows dataset for 64 advanced and emerging economies, from 2000-18, including direct, portfolio, and other investment to and from five sectors: namely, central banks (CB), general government (GG), banks (BKs), non-financial corporates (NFCs) and other financial corporates (OFCs). Using such data, this paper highlights the usefulness of a sectoral approach in assessing capital flow covariates, co-movements, and the effectiveness of capital controls. We show that 1) sectoral flows have varying sensitivities to measures of the global financial cycle and different cyclicality with respect to output growth; 2) co-movements in intra-sectoral resident and non-resident and co-movements with OFC sectoral flows explain a large part of the observed positive correlation between gross inflows and outflows; and, 3) sector-specific tightening capital control measures appear effective in reducing the volume of flows to NFCs and OFCs.
    Keywords: sectoral capital flows, capital flows correlations, capital controls
    Date: 2020–05
  61. By: Anneke Kosse; Zhentong Lu; Gabriel Xerri
    Abstract: Consumers, businesses and banks make millions of payments each day using a variety of instruments, such as debit cards, cheques and wires. Canada is currently developing three new systems to process these transactions: Lynx, Settlement Optimization Engine (SOE) and Real-Time Rail (RTR).
    Keywords: Financial services; Financial system regulation and policies; Payment clearing and settlement systems
    JEL: E4 E42 G2 G21
    Date: 2020–06
  62. By: Dirk van Seventer; Finn Tarp
    Abstract: This paper considers the impacts of agro-industry development and international trade on income distribution in Myanmar, focusing on low-income rural households. We use a social accounting matrix multiplier (SAM) decomposition model featuring detailed economic linkages. After describing the Myanmar economy through the lens of a SAM for 2017, we focus on agriculture development. Our results suggest that low-income rural households benefit considerably from exogenous increases in crop and agro-processing activities.
    Keywords: Social Accounting Matrix, Decomposition, Myanmar
    Date: 2020
  63. By: Lucrezia Fanti; Dario Guarascio; Massimo Moggi
    Abstract: This project explores the development of Artificial Intelligence (AI) and its impact on business models, market structure, organization and work. By adopting a history-friendly perspective, the present contribution traces a stylized history of the AI technological domain in order to highlight moments in time, places and sectoral domains that fostered its diffusion and transformative potential. Some descriptive analyses are also provided to investigate the diffusion of AI technologies and, at the same time, the underlying industrial and market dynamics.
    Keywords: Artificial intelligence; industrial dynamics; work organization
    Date: 2020–09–24
  64. By: Loretta J. Mester
    Abstract: It is clear that the adverse effects of the pandemic have not been evenly distributed. They have been borne by the most vulnerable in our economy: lower-income and minority workers and communities; those who do not have the opportunity to work from home; those who do not live in areas with reliable telecommunications and internet services or access to adequate healthcare; and the smaller of small businesses. Indeed, the results from a recent Fed survey show that between March and July, a larger percentage of low-income workers, less educated workers, and Black and Hispanic workers were laid off compared to higher-income, more educated, and white workers. Rehiring by employers has been slower for lower-income workers than for higher-income workers. In addition, from February to April, the number of active small business owners dropped by 3.3 million, a record 22 percent decline.3 Compared to small firms overall, Black-owned businesses have been twice as likely to close and Hispanic-owned businesses have been one-and-a-half times as likely to close. It is distressing to see the disparate impact of the pandemic, but the differences in economic outcomes did not start with COVID-19. There were already long-standing economic disparities in our economy.
    Keywords: diversity; economic inequality;
    Date: 2020–09–28
  65. By: Bakshi, Dripto (Indian Statistical Institute); Dasgupta, Indraneel (Indian Statistical Institute)
    Abstract: We examine how cross-community cost or benefit spillovers, arising from the consumption of group-specific public goods, affect both inter-group conflicts over the appropriation of such goods and decentralized private provision for their production. Our model integrates production versus appropriation choices, vis-Ã -vis group-specific public goods, with their decentralized voluntary supply, against a backdrop of such cross-community consumption spillovers. Our flexible and general formulation of consumption spillovers incorporates earlier specifications as alternative special cases. We show that stronger negative (or weaker positive) consumption spillovers across communities may reduce inter-group conflict and increase aggregate income (and consumption) in society under certain conditions. Thus, stronger negative consumption spillovers may have socially beneficial consequences. We also identify conditions under which their impact will be both conflict-augmenting and income-compressing. Our general theoretical analysis offers a conceptual structure within which to organize investigation of feedback loops linking ethnic conflict and natural resource degradation in developing country contexts.
    Keywords: public good contest, rent-seeking, production versus appropriation, public bad, natural resource conflict
    JEL: D72 D74 O10 O20
    Date: 2020–10
  66. By: Simonov, Andrey (Симонов, Андрей) (The Russian Presidential Academy of National Economy and Public Administration); Zyamalov, Vadim (Зямалов, Вадим) (The Russian Presidential Academy of National Economy and Public Administration); Sukhobok, Olga (Сухобок, Ольга) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: Cryptocurrencies have recently begun to attract attention of investors. Initial Coin Offering (ICO), being essentially one of the forms of crowdfunding, offer investment opportunities that are close to traditional securities. Cryptocurrencies are currently being traded on specialized exchanges, also the first funds focused on investing in cryptocurrencies are emerging. Nevertheless, this type of investment has a large number of “pitfalls”: legal uncertainty regarding the status of this market, extremely high price volatility, a high percentage of unsuccessful or scum ICOs, and the absence of any guarantees. On the other hand, there is still an extremely small number of studies on this topic. This makes the present work extremely useful in terms of understanding the processes in the new cryptocurrency market.
    Date: 2020–05
  67. By: Obradovich, Nick (Max Planck Institute for Human Development); Özak, Ömer (Southern Methodist University); Martín, Ignacio (Universidad Carlos III de Madrid); Awad, Edmond (University of Exeter); Cebrián, Manuel (Max Planck Institute for Human Development); Cuevas, Rubén (Universidad Carlos III de Madrid); Desmet, Klaus (Southern Methodist University); Rahwan, Iyad (Max Planck Institute for Human Development); Cuevas, Ángel (Universidad Carlos III de Madrid)
    Abstract: Culture has played a pivotal role in human evolution. Yet, the ability of social scientists to study culture is limited by the currently available measurement instruments. Scholars of culture must regularly choose between scalable but sparse survey-based methods or restricted but rich ethnographic methods. Here, we demonstrate that massive online social networks can advance the study of human culture by providing quantitative, scalable, and high-resolution measurement of behaviorally revealed cultural values and preferences. We employ publicly available data across nearly 60,000 topic dimensions drawn from two billion Facebook users across 225 countries and territories. We first validate that cultural distances calculated from this measurement instrument correspond to traditional survey-based and objective measures of cross-national cultural differences. We then demonstrate that this expanded measure enables rich insight into the cultural landscape globally at previously impossible resolution. We analyze the importance of national borders in shaping culture, explore unique cultural markers that identify subnational population groups, and compare subnational divisiveness to gender divisiveness across countries. The global collection of massive data on human behavior provides a high-dimensional complement to traditional cultural metrics. Further, the granularity of the measure presents enormous promise to advance scholars' understanding of additional fundamental questions in the social sciences. The measure enables detailed investigation into the geopolitical stability of countries, social cleavages within both small and large-scale human groups, the integration of migrant populations, and the disaffection of certain population groups from the political process, among myriad other potential future applications.
    Keywords: gender differences, regional culture, identity, cultural distance, culture
    JEL: C80 F1 J1 O10 R10 Z10
    Date: 2020–09
  68. By: Ratul Lahkar (Ashoka University); Rezina Sultana (IIM, Udaipur)
    Abstract: We consider affirmative action in large population Tullock contests. The standard Tullock contest is an equal treatment contest in which agents who exert equal effort have an equal probability of success. In contrast, under affirmative action, agents with equal cost of effort have equal probability of success. We analyze such contests as generalized aggregative potential games and characterize their Nash equilibria. We show that affirmative action equalizes equilibrium payoffs without causing any loss of aggregate welfare. It enhances the welfare and effort levels of agents facing high effort cost. Thus, affirmative action engenders equality without having any detrimental effects on efficiency, at least when the number of agents involved are large. It does, however, reduce aggregate effort in society.
    Keywords: Affirmative Action, Tullock Contests; Aggregative Games; Potential Games
    Date: 2020–09
  69. By: Asongu, Simplice; Nnanna, Joseph
    Abstract: The study examines the use of governance tools to fight capital flight by reducing the capital flight trap. Two overarching policy syndromes are addressed in the study. It first assesses whether governance is an effective deterrent to the capital flight trap in Africa, before examining what thresholds of government quality are required to fight the capital flight trap in the continent. The following findings are established. Evidence of a capital flight trap is apparent because past values of capital flight have a positive effect on future values of capital flight. The net effects from interactions of the capital flight trap with political stability, regulation quality, economic governance and corruption-control on capital flight are positive. The critical masses at which “voice & accountability” and regulation quality can complement the capital flight trap to reduce capital flight are respectively, 0.120 and 0.680, which correspond to the best performing countries. Policy implications are discussed.
    Keywords: Governance; capital flight; capital flight trap; Africa
    JEL: C50 E62 F34 O55 P37
    Date: 2020–01
  70. By: Ott, Ingrid; Soretz, Susanne
    Abstract: This paper analyzes within a spatial endogenous growth setting the impact of public policy coordination on agglomeration. Governments in each of the two symmetric regions provide a local public input that becomes globally effective due to integration. Micro-foundation of governmental behavior is based on three different coordination schemes: autarky, full or partial coordination. Scale effects act as agglomeration force and in addition to private capital agglomeration increase the concentration of the public input. Integration promotes dispersion forces with respect to the distribution of physical capital which are based on decreasing private returns. However, within the governments' decision on the concentration of the public input, increasing integration reinforces agglomeration because it promotes the interregional productive use of the public input. Taking feedback effects between the private and the public sector into account leads to mutual reinforcement, hence agglomeration forces almost always dominate and the spreading equilibrium becomes unstable. If convergence is a separate (additional) political objective, it needs sustained additional political effort.
    Keywords: income convergence,integration,micro foundation of public policy,policy coordination,productive public input,multiple equilibria,bifurcation,spatial economic growth,stability of spatial equilibrium,global public input
    JEL: H10 E60 O40 R50
    Date: 2020
  71. By: Shafik Hebous
    Abstract: How did the rise of multinational enterprises (MNEs) put pressure on the prevailing international corporate tax framework? MNEs, and firms with market power, are not new phenomena, nor is the corporate income tax, which dates to the early 20th century. This prompts the question, what is distinctly new (about multinational enterprises)—if anything—that has triggered unprecedented recent concerns about vulnerabilities in international tax arrangements and the taxation of MNEs? This paper presents a set of empirical observations and a synthesis of strands of the literature to answer this question. A key message is that MNEs of the 21st century operate differently from prior periods and have evolved to become global firms—with important tax ramifications. The fragility of international tax arrangements was present at the outset of designing international tax rules, but the challenges have drastically intensified with the global integration of business, the increased trade in hard-to-price services and intangibles, and the rapid growth of the digital economy.
    Keywords: multinational enterprises, global firm, tax avoidance, international tax profit shifting
    JEL: F14 F23 H25 H26
    Date: 2020
  72. By: Luiz Brotherhood; Tiago Cavalcanti; Daniel da Mata; Cezar Santos
    Abstract: This paper studies the role of slums in shaping the economic and health dynamics of pandemics. Using data from millions of mobile phones in Brazil, an event-study analysis shows that residents of overcrowded slums engaged in less social distancing after the outbreak of Covid-19. We develop a choice-theoretic equilibrium model in which individuals are heterogeneous in income and some people live in high-density slums. The model is calibrated to Rio de Janeiro. Slum dwellers account for a disproportionately high number of infections and deaths. In a counterfactual scenario without slums, deaths increase in non-slum neighborhoods. Policy simulations indicate that: reallocating medical resources cuts deaths and raises output and the welfare of both groups; mild lockdowns favor slum individuals by mitigating the demand for hospital beds, whereas strict confinements mostly delay the evolution of the pandemic; and cash transfers benefit slum residents to the detriment of others, highlighting important distributional effects.
    JEL: C63 D62 E17 I10 I18 O18
    Date: 2020
  73. By: Fateh Belaid (Lille Catholic University)
    Abstract: This article, using ERF-LIS harmonized microdata, develops an empirical model to investigate the unexplored extent and fuel poverty explanatory factors in Egypt and Jordan. First, we use the “Low income – High Consumption” indicator to measure the fuel poverty extent. Second, we implement a multivariate statistical approach to untangle the fuel poor household profile. Then,to explore the factors driving the risk of falling into fuel poverty situations we use a logistic regression model. This research is an important empirical contribution to the sparse literature of fuel vulnerability in MENA countries. It puts forward an empirical approach, which is helpful in discerning and targeting families most in need of energy and financial related assistance. From policy perspectives, the findings provide promising ways of accounting for the fuel poverty phenomenon as a vector of inequality trends in the MENA region. The main findings of the research point to the crucial instrumental role of economic conditions, reducing inequalities and access to education facilities in attenuating fuel poverty in Egypt and Jordan. Policies that mitigate fuel poverty may thus have direct impacts on both well-being and inequalities reduction.
    Date: 2020–04–20
  74. By: Eppinger, Peter S.; Felbermayr, Gabriel; Krebs, Oliver; Kukharskyy, Bohdan
    Abstract: In early 2020, the disease Covid-19 caused a drastic lockdown of the Chinese economy. We use a quantitative trade model with input-output linkages to gauge the effects of this adverse supply shock in China on the global economy through international trade and global value chains (GVCs). We find moderate welfare losses in most countries outside of China, while a few countries even gain from the shock due to trade diversion. As a key methodological contribution, we quantify the role of GVCs (in contrast to final goods trade) in transmittingthe shock. In a hypothetical world without GVCs, the welfare loss due to the Covid-19 shock in China is reduced by 40% in the median country. In several other countries, the effects aremagnified or reversed for several countries. Had the U.S. unilaterally repatriated GVCs, the country would have incurred a substantial welfare loss while its exposure to the shock would have barely changed.
    Keywords: Covid-19,quantitative trade model,input-output linkages,global value chains,supply chain contagion,shock transmission
    JEL: F11 F12 F14 F17 F62
    Date: 2020
  75. By: Herrera, Helios; Konradt, Maximilian; Ordoñez, Guillermo; Trebesch, Christoph
    Abstract: The Covid-19 pandemic is a major test for governments around the world. We study the political consequences of (mis-)managing the Covid crisis by constructing a highfrequency dataset of government approval for 35 countries. In the first weeks after the outbreak, approval rates for incumbents increase strongly, consistent with a global 'rally around the flag' effect. Approval, however, drops again in countries where Covid cases continue to grow. This is especially true for governments that do not implement stringent policies to control the number of infections. Overall, the evidence suggests that loose pandemic policies are politically costly. Governments that placed more weight on health rather than short-term economic outcomes obtained higher approval.
    Keywords: Political Popularity,Political Economy,Crisis Management,Covid-19
    JEL: D72 H12 F50
    Date: 2020
  76. By: Mouyad Alsamara (Qatar University); Zouhair Mrabet (Qatar University); Ahmad Shikh Ebid (UN ESCWA)
    Abstract: This paper investigates the relationship between the main macroeconomic indicators, namely real GDP, consumer prices and parallel market exchange rate in the Syrian economy during the period 1990-2017. We provide a comprehensive analysis for the macroeconomic policies and performance in the pre-conflict and during the conflict periods. For this purpose, we employ two advanced estimation approaches, namely, nonlinear ARDL and Structural VAR. these techniques are very useful to estimate how real GDP has reacted to shocks stemming from three major macroeconomic variables namely, money supply, consumer prices, and parallel exchange rate market. The empirical results indicate that the responses of real GDP to negative shocks in money supply are greater than its responses to positive shocks in money supply during the conflict period. Moreover, we distinguish four different scenario for money supply as possible views of rebuilding scenarios. The achievement of this scenario depends on the political settlement agreement and the size of capital inflow into the economy.
    Date: 2020–04–20
  77. By: Wilts, Rienne; Latka, Catharina; Britz, Wolfgang
    Abstract: Climate change impacts on agricultural production will shape the challenges of reaching food security and reducing poverty across households in the future. Existing literature lacks analysis of these impacts on different household groups under consideration of changing socio-economic developments. Here, we analyze how crop yield shifts induced by climate change will affect different household types in three low and low middle-income countries, namely Vietnam, Ethiopia and Bolivia. The long-run analysis is based on a recursive-dynamic Computable General Equilibrium model. We first construct a baseline scenario projecting global socio-economic developments up to 2050. From there, we implement business-as-usual climate change shocks on crop yields. In the baseline, all households benefit from welfare increases over time. Adding climate change induced yield changes reveals impacts different in size and direction depending on the level of the households’ income and on the share of income generated in agriculture. We find that the composition of the factor income is of large importance for the vulnerability of households to climate change, as, the loss for non-agricultural households is highest in absolute terms. The complementary comparative static analysis shows smaller absolute and relative effects for most households as the differentiated factor income growth over time is not considered, which makes household types more or less vulnerable. A sensitivity analysis varying the severity of climate change impacts on yields confirms that more negative yield shifts exacerbate the situation of the most vulnerable households. Furthermore, it underlines that yield shocks on staple crops are of major importance for the welfare effect. Our findings reveal the need for differentiated interventions to mitigate consequences especially for the most vulnerable households.
    Keywords: Consumer/Household Economics, Crop Production/Industries, Demand and Price Analysis, Food Security and Poverty, International Development, International Relations/Trade
    Date: 2020–10–02
  78. By: Sergei Soares (IPC-IG); Letícia Bartholo (IPC-IG); Rafael Guerreiro Osorio (IPC-IG)
    Abstract: "Social protection policy in Brazil is a historically built patchwork of programmes that pay different values to people in the same situation, leaves many unprotected (in particular, 17 million children) and is fraught with duplications and other inefficiencies. This incongruous patchwork as a whole is only slightly progressive and has very modest effects on the income distribution". (...)
    Keywords: proposal, unification, social protection, benefits, children, youth, vulnerable, poverty
    Date: 2019–11
  79. By: Sergei Soares (IPC-IG); Letícia Bartholo (IPC-IG); Rafael Guerreiro Osorio (IPC-IG)
    Abstract: "Social protection policy in Brazil is a historically built patchwork of programmes that pay different values to people in the same situation, leaves many unprotected (in particular, 17 million children) and is fraught with duplications and other inefficiencies. This incongruous patchwork as a whole is only slightly progressive and has very modest effects on the income distribution". (...)
    Keywords: proposal, unification, social protection, benefits, children, youth, vulnerable, poverty
    Date: 2019–11
  80. By: Samir Makdisi (American University in BeirutAuthor-NAME: Raimundo Soto; Economic Researcher)
    Abstract: This paper focuses on the design and implementation of economic reforms, which are an integral part of the process of peace and reconstruction. The challenge for economic reforms is immense. On one hand, economic policies should aim at minimizing the risk of conflict recurrence, restoring confidence in economic institutions, generating employment and fostering investment, and enhancing the ability of the state to provide security for households and communities, enforce the rule of law and deliver essential services. On the other hand, structural economic reforms cannot be postponed in order to cope with a preconflict economic structure that did very little to avoid the conflict and that can be highly distorted as a result of the war effort. Therefore, reconstruction policies should be primarily geared towards changing, improving or, even in an extreme case, eliminating altogether the pre-conflict institutional fabric of the country. That is, the set of economic institutions –and their embedded structure of incentives—that helped create the conditions for failure.
    Date: 2020–06–20
  81. By: Siwar Khelifa (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UL2 - Université Lumière - Lyon 2 - ENS Lyon - École normale supérieure - Lyon)
    Abstract: Using a bivariate expected utility framework, we develop a two-period model where households determine, in the presence of risks, the parents' migration duration when children are left behind. Our model suggests that the optimal migration duration may respond differently to an increase in a given risk. We provide conditions under which it is optimal for households to decrease the parents' migration duration despite an income risk in the place of origin, and to increase it even though the income in the place of destination is risky. The idea of preference for "harm disaggregation" is used to explain the results. In the absence of uncertainty, we also show the role of the interaction between child human capital and wealth in the household's utility function in determining the optimal migration duration of parents. Empirical implications of this analysis are presented in the last part of the paper.
    Keywords: Child human capital,Higher order risk attitudes,Labor migration,Nth degree Risk,Stochastic dominance
    Date: 2020
  82. By: Clements, Ken; Lan, Yihui; Liu, Haiyan
    Abstract: Do drinkers respond to prices signals in the usual way by economising on beverages with higher prices and vice versa? Is the currency unit used in different countries irrelevant, or are drinkers subject to money illusion? Are the substitution effects of price changes symmetric? More fundamentally, can drinking patterns be adequately accounted for by the conventional utility-maximising approach? If so, how does consumption of beer, wine and spirits interact (if at all) in generating utility? According to the most recent data from the International Comparisons Program, on average, consumers in countries in the bottom quartile of the global income distribution devote something approaching one-half of all expenditures to food, while this falls to about 11% in the richest countries, in accordance with Engel’s law. The share for alcohol also drops, but much slower, so drinking rises noticeably relative to food as income increases. The within-alcohol distribution of spending (beer, wine and spirits) also changes quite dramatically. We use these cross-country data to address the above research questions. To visualise the data, we plot the budget shares for beer, wine and spirits in the form of a “drinking triangle”, which highlights the dominant beverage in each country. We also employ a Divisia-index-number approach to summarise the degree of price-quantity covariation. We cross-classify consumption and prices of beer, wine and spirits for nonparametric tests of the law of demand that higher prices lead to reduced consumption and vice versa. A system-wide model is estimated for the demand for beer, wine and spirits. As there is no unique way of ordering countries, a “levels version” of a differential system (similar to the Rotterdam model) is used. The system is used to test the hypotheses of homogeneity (the absence of money illusion) and symmetry of the substitution effects. For a substantial majority of countries, the Divisia price-quantity correlation is negative, which is suggestive evidence in favour of the economic approach to drinking. In the main, the results here support the law of demand. The hypotheses of homogeneity and symmetry cannot be rejected. Tests also reveal the coefficients are reasonable stable across countries, which sheds some light on the question of the similarity of tastes. Estimated price elasticities are tabulated for each beverage.
    Keywords: Food Consumption/Nutrition/Food Safety
    Date: 2020–09–16
  83. By: Vladyslav Filatov (National Bank of Ukraine); ;
    Abstract: This study improves on the methodology for calculating the financial stress index (FSI) for Ukraine by introducing time-varying correlation into the aggregation of 5 sub-indices (representing the banking sector, households, the corporate sector, government securities, and the foreign exchange (FX) market). The index consists of 20 indicators selected from an initial list of 47 potential candidates. To check the performance of the indicators, sub-indices, and index, we use area under the receiver operating characteristic curve (AUROC) and logit tests. Each sub-index is assigned a weight that reflects the impact of each market on the financial system. This new FSI peaks during periods of crisis that are in line with the consensus of financial experts and performs better than the previous FSI, which makes it more attractive for policy decisions. In particular, the new FSI can be used as a monitoring tool for the macroprudential policy of the National Bank of Ukraine.
    Keywords: financial stability, financial stress index, indicator performance
    JEL: E44 G01 G18
    Date: 2020–09–22
  84. By: Ryusaku Matsuo (Graduate School of Economics, Kobe University); Mitoshi Yamaguchi (Graduate School of Economics, Kobe University)
    Abstract: The number of Roadside Stations in Japan is increasing rapidly. The purpose of this paper is to conduct econometric analyses of the business of PFI (private finance initiative) and other Roadside Stations. The PFI is a system in which private companies build social infrastructures using funds and know-how from the private sector, which the government then pays to use. Sales revenue is one of the most important targets for Roadside Stations. It depends on the number of customers who visited the station, number of events, parking space, management expenses, and gross business expenses. Conversely, all the latter variables also depend on sales revenue. Therefore, we used a two-stage least squares method to study the mutual influence between these variables. We found that PFI Roadside Stations had distinct economic performances. Therefore, we investigated the reason for their success. Then, we will show some policy implications.
    Date: 2020–10
  85. By: Tamechika, Hanae
    Abstract: As part of the environment-related stimulus package implemented in the wake of the 2008 global financial crisis, the Japanese government introduced tonnage and acquisition tax breaks and a subsidy programme for eco-friendly vehicles. However, there has been limited research on their economic effects. Therefore, this paper employs the event study methodology to examine not only the direct economic effects on automobile firms’ performance but also the spillover economic effects on automobile parts firms’ performance of the eco-car tax breaks and eco-car subsidy programme. Our results show that the eco-car tax breaks had lower positive economic direct effects and no positive spillover effects. The eco-car subsidy programme had more significantly positive direct economic effects and positive spillover effects. The eco-car tax breaks and eco-car subsidy programme had dissimilar economic effects because the length of the implementation period and preferential monetary benefits were different in each case. A mixed policy that combines the eco-car tax breaks and the eco-car subsidy programme is preferable to the eco-car tax breaks alone.
    Keywords: Environmental Economics and Policy
    Date: 2020–09–16
  86. By: Carol A. Dahl (Division of Economics and Business, Payne Institute for Public Policy, Colorado School of Mines)
    Abstract: Minerals and materials are the backbone of industrial productivity and might. With annual sales in the billions, they are key inputs into fulfilling the goal of lifting billions out of poverty and putting us all on a cleaner more sustainable trajectory. This paper provides background information on these crucial markets. I provide some background on the size of markets by tonnage and sales value, market evolution and recurring cycles of scarcity scares for critical minerals. Recent concerns have spawned dozens of government studies to determine which materials are critical in meeting our goals. From reviewing these studies, I consider factors that make materials critical --- high economic and/or strategic value coupled with supply insecurity, which might be geological, technical, political, social, and economic. By comparing studies, I come up with a global list of critical materials that make it on the list of many of the existing studies. I summarize what we know about demand and supply elasticities for minerals and use an example of space mining to illustrate their use.
    Keywords: Demand, Supply, Mineral Industry Structure, Critical Minerals
    JEL: L1 L71 L78 M14 Q31 Q33
    Date: 2020–07
  87. By: Roman Horvath (Charles University in Prague); Lorant Kaszab (Magyar Nemzeti Bank (Central Bank of Hungary)); Ales Marsal (Vienna University of Economics and Business)
    Abstract: We develop a dynamic stochastic general equilibrium model calibrated to US data to examine how monetary policy shocks affect income inequality and the equity premium. The model features Ricardian and non-Ricardian households and shows that a monetary policy tightening causes an endogenous redistribution of income from non-Ricardians to Ricardians. Ricardians' consumption comoves more strongly with asset returns, giving rise to high equity premia. We extend our model with several frictions and estimate it with generalized method of moments using US macroeconomic and financial data from 1960-2007. We find that the estimated model jointly matches the bond and equity premia. We complement our theoretical model with vector autoregression estimations and show that a tightening of US monetary policy increases equity premia.
    Keywords: Limited Asset Market Participation, Monetary Policy, DSGE, Equity Premium
    JEL: E32 E44 G12
    Date: 2020
  88. By: Milena Lavigne (IPC-IG); Luis Hernán Vargas (IPC-IG)
    Abstract: "During the 20th century, the political and social development of the Dominican Republic was marked by the dictatorship of Rafael Trujillo (1930–1961), who forged the institutional and legal bases of Dominican social policies, and successive governments headed by Joaquín Balaguer (1960–1962, 1966–1978 and 1986–1996). During the 1990s, the Dominican government started once more to implement social policies, among which we can highlight the Fund for the Promotion of Community Initiatives (PROCOMUNIDAD), the countrys first poverty reduction programme. During the 2000s, some social reforms were undertaken, such as the creation of the Social Cabinet and reform of the pension system, which set up a model of individual capitalisation. Finally, after the economic crisis that affected the Dominican Republic in 2003, programmes aiming to reduce malnutrition (Comer es Primero) and poverty (Solidaridad) began to be implemented".(…)
    Keywords: Social Protection Systems, Latin America, Caribbean, Dominican Republic
    Date: 2019–11
  89. By: Afees A. Salisu (Centre for Econometric & Allied Research, University of Ibadan, Ibadan, Nigeria); Juncal Cunado (Economics Department, University of Navarra, Spain); Kazeem Isah (Centre for Econometric & Allied Research, University of Ibadan, Ibadan, Nigeria); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa)
    Abstract: Relying on the Uncovered Equity Parity, we examine whether stock returns contain useful information that can be exploited to improve the forecast accuracy of exchange rate movements of the BRICS using a long range of data sample. Thus, we formulate a predictive model that links exchange rate movements to stock return differential between the domestic market and the foreign (US) market. We also test for any probable asymmetric relationship between the two variables while also accounting for the role of observed common (global) factor such as oil price. We find a positive relationship between stock return differential and exchange rate return for three of the BRICS countries namely Brazil, India and South Africa, thus validating the UEP hypothesis while a contrasting evidence is observed for China as well as Russia (after accounting for “asymmetry†effect†). Our in-sample and out-of-sample forecasts validate the significance of the predictive content of stock returns for exchange rate movements of the BRICS while accounting for the role of observed common (global) factor and asymmetry may further improve the forecast accuracy. Our results have implications for portfolio diversification and foreign exchange management.
    Keywords: Stock market, Exchange rate, Uncovered Equity Parity, Forecast evaluation
    JEL: F31 G11 G15
    Date: 2020–09
  90. By: Biroli, Pietro (University of Zurich); Bosworth, Steven J. (University of Reading); Della Giusta, Marina (University of Reading); Di Girolamo, Amalia (University of Birmingham); Jaworska, Sylvia (University of Reading); Vollen, Jeremy (University of Zurich)
    Abstract: This paper contributes to the literature on public health communication by studying how the framing of a message relaying the forecast impact of COVID-19 prevention measures affects compliance behaviour amongst both the young and old. A representative sample of survey respondents in the UK and US, along with selected respondents in Italy, were presented with forecasts for the number of deaths from COVID-19 in their countries with and without public adherence to various preventive behaviours. We experimentally varied whether this information was presented in terms of likely deaths or lives saved. The lives saved frame increases reported protective behaviours, but only amongst older respondents. We present evidence consistent with the hypothesis that framing is likelier to affect decisions whose consequences are felt by oneself (i.e. protective behaviours by the elderly) rather than solely others (i.e. protective behaviours amongst the young).
    Keywords: framing, protective behaviours, cooperation, age, gender, COVID-19
    JEL: D03 D83 D84 D85 J16 J24
    Date: 2020–09
  91. By: Joseph I. Uduji (University of Nigeria, Nsukka, Nigeria); Elda N. Okolo-Obasi (University of Nigeria, Nsukka, Nigeria); Vincent A. Onodugo (University of Nigeria, Nsukka, Nigeria); Justitia O. Nnabuko (University of Nigeria, Nsukka, Nigeria); Babatunde A. Adedibu (Redeemer’s University, Ede, Nigeria)
    Abstract: This paper extends and contributes to the literature on tourism for transformative and inclusive growth from the corporate social responsibility (CSR) perspective. Specifically, we examine the impact of CSR of multinational oil companies (MOCs) on empowerment of rural women in strengthening agriculture-tourism linkages in Niger Delta region of Nigeria. A total of 800 rural women were sampled across the region. Results from the use of a logit model indicates that rural women seldom participate in the global memorandum of understandings (GMoUs) interventions in agritourism value chain projects, due to the norms and culture of the rural communities. This implies that if the tradition of the people continues to hinder direct participation of the rural women from GMoUs programmes, achieving gender equality and cultural change would be limited in the region, and rural women would remain excluded from the economic benefits of agritourism when compared with the male counterparts. The finding suggests that, GMoU interventions engaging women smallholders in the tourism value chain can be an important vehicle for advancing gender empowerment and fostering social inclusion. Also, cluster development boards (CDBs) should pay close attention to which extent the participation of rural women in the GMoUs projects may be limited by traditions.
    Keywords: Agriculture-tourism linkages; corporate social responsibility; multinational oil companies; young rural women; sub-Saharan Africa
    Date: 2020–01
  92. By: Vladimir Hlasny (Ewha Womans University); Lidia Ceriani (Georgetown University); Paolo Verme (The World Bank)
    Abstract: Incomes in surveys suffer from various measurement problems, most notably in the tails of their distributions. We study the prevalence of negative and zero incomes, and their implications for inequality and poverty measurement relying on 57 harmonized surveys covering 12 countries over the period 1995-2016. The paper ex-plains the composition and sources of negative and zero incomes and assesses the distributional impacts of alternative correction methods on poverty and inequality measures. It finds that the main source of negative disposable incomes is negative self-employment income, and that high tax, social security withholdings and high self-paid social-security contributions account for negative incomes in some countries. Using detailed information on expenditure, we conclude that households with negative incomes are typically as well off as, or even better, than other households in terms of material wellbeing. By contrast, zero-income households are found to be materially deprived. Adjusting poverty and inequality measures for these findings can alter these measures significantly.
    Date: 2020–04–20
  93. By: Lea Smidt (IPC-IG)
    Abstract: "Gender inequality in education is a strong predictor for child health deprivation across countries. Household-level studies seem to corroborate cross-national research: they find a link between mothers education and child health outcomes. Yet authors disagree on whether education is a proxy for a womans economic capacity, her abilities or her status. Further, previous studies disregard the fact that the effect of maternal education may depend on the level of paternal education. For example, a mothers level of education may only decrease her childs vulnerability if it is at least equal to her partners education." (...)
    Keywords: Education, cooperative, conflicts, child, malnutrition, gender-sensitive, analysis, determinants, wasting, Sudan
    Date: 2019–10
  94. By: Komissarov, Aleksey (Комиссаров, Алексей) (The Russian Presidential Academy of National Economy and Public Administration); Selezneva, Elena (Селезнева, Елена) (The Russian Presidential Academy of National Economy and Public Administration); Sinyagin, Yuriy (Синягин, Юрий) (The Russian Presidential Academy of National Economy and Public Administration); Sinyagina, Natalia (Синягина, Наталья) (The Russian Presidential Academy of National Economy and Public Administration); Chirkovskaya, Elena (Чирковская, Елена) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: In the work, the existing global and domestic approaches to talent management systems in the corporate environment and at the state level were generalized. Authors identified the significant talent management practices. Authors determined the importance of talent development in improving the performance of public authorities and business companies. The collected material made it possible to conclude that a unified system of work with citizens with personal and professional talents should be aimed at creating conditions and opportunities for the development, disclosure and realization of potentials based on key personal and professional resources, abilities and competencies.
    Date: 2020–05
  95. By: Warn N. Lekfuangfu (Universidad Carlos III de Madrid, CReAM, and CEP); Reto Odermatt (University of Basel)
    Abstract: In this paper, we study the determinants and consequences of educational and occupational aspirations. Basing our enquiry on the British NCDS 1958 cohort data, we assess the importance of aspirations for social mobility above and beyond other established determinants. We document educational and occupational inequalities in young individuals’ aspirations, whereby parental aspirations are a strong predictor of children’s aspiration-levels. While we find a positive correlation between aspirations and later achievement, we also provide evidence for reduced well-being in adulthood if aspirations in adolescence were higher than actual achievements later in life.
    Keywords: Aspirations, intergenerational mobility, life satisfaction, longitudinal study,CAMSIS score, UK
    JEL: I21 I24 J62 O15
    Date: 2020–07
  96. By: Michael Fritsch (Friedrich Schiller University Jenam and Halle Institute for Economic Research (IWH)); Maria Kristalova (Friedrich Schiller University Jena); Michael Wyrwich (University of Groningen, and Friedrich Schiller University Jena)
    Abstract: We investigate the reasons for the pronounced regional differences of new business formation after the transformation from a socialist planned system to a market economy in East Germany. Relatively high start-up rates are found in regions that had a well-qualified workforce and a relatively high share of remaining self-employed at the end of the socialist period. This also holds for high-tech manufacturing start-ups. Based on our conclusion that policy should account for these initial regional conditions, we use two criteria to introduce a classification of regions.
    Keywords: Entrepreneurship, new business formation, regional conditions, transformation, East Germany
    JEL: L26 R11 N94 P25
    Date: 2020–09–18
  97. By: Pugatch, Todd (Oregon State University); Wilson, Nicholas (Reed College)
    Abstract: More than two of every five students who enroll in college fail to graduate within six years. Prior research has identified ineffective study habits as a major barrier to success. We conducted a randomized controlled advertising experiment designed to increase demand for academic support services among more than 2,100 students at a large U.S. public university. Our results reveal several striking findings. First, the intervention shifted proxies of student attention, such as opening emails and self-reported awareness of service availability. However, the experimental variation indicates that approximately one-third of students are never attentive to student services. Second, advertising increased the use of extra practice problems, but did not affect take-up of tutoring and coaching, the other two services. Structural estimates suggest that transaction costs well in excess of plausible opportunity costs explain the differences in service use. Third, the characteristics of advertising messages matter. Several common nudging techniques—such as text messages, lottery-based economic incentives, and repeated messages—either had no effect or in some cases reduced the effectiveness of messaging.
    Keywords: email, higher education, incentives, nudges, text, randomized control trial
    JEL: A22 D91 I23 M31
    Date: 2020–09
  98. By: Asani Sarkar
    Abstract: Once a bank grows beyond a certain size or becomes too complex and interconnected, investors often perceive that it is “too big to fail” (TBTF), meaning that if the bank were to fail, the government would likely bail it out. Following the global financial crisis (GFC) of 2008, the G20 countries agreed on a set of reforms to eliminate the perception of TBTF, as part of a broader package to enhance financial stability. In June 2020, the Financial Stability Board (FSB), a sixty-eight-member international advisory body set up in 2009, published the results of a year-long evaluation of the effectiveness of TBTF reforms. In this post, we discuss the main conclusions of the report—in particular, the finding that implicit funding subsidies to global banks have decreased since the implementation of reforms but remain at levels comparable to the pre-crisis period.
    Keywords: too-big-to-fail; global banks; systemic risk; Financial Stability Board
    JEL: G32 G21
    Date: 2020–09–30
  99. By: Lukas Mergele; Moritz Hennicke; Moritz Lubczyk
    Abstract: The end of communism in the 1990s probably is the most fundamental restructuring of institutions witnessed in recent history. At its core was the large-scale redistribution of previously state-owned companies. We construct a unique firm-level dataset to study this redistribution in East Germany where the entire state-owned economy was either privatized or liquidated within less than five years. We examine whether the privatization authority followed its mandate to privatize competitive firms using initial labor productivity to indicate firms’ competitiveness. Our results highlight that firms with higher baseline productivity are more likely to be privatized, yield higher sales prices, are more often acquired by West German investors, and are more likely to remain in business even 20 years after leaving public ownership. The privatization agency plausibly contributed to these outcomes by rating and prioritizing productive firms.
    Keywords: privatization, labor productivity, German reunification
    JEL: D24 G38 H11 L33 P31
    Date: 2020
  100. By: Giovanni Pellegrino; Efrem Castelnuovo; Giovanni Caggiano
    Abstract: How damaging are uncertainty shocks during extreme events such as the great recession and the Covid-19 outbreak? Can monetary policy limit output losses in such situations? We use a nonlinear VAR framework to document the large response of real activity to a financial uncertainty shock during the great recession. We replicate this evidence with an estimated DSGE framework featuring a concept of uncertainty comparable to that in our VAR. We employ the DSGE model to quantify the impact on real activity of an uncertainty shock under different Taylor rules estimated with normal times vs. great recession data (the latter associated with a stronger response to output). We find that the uncertainty shock-induced output loss experienced during the 2007-09 recession could have been twice as large if policymakers had not responded aggressively to the abrupt drop in output in 2008Q3. Finally, we use our estimated DSGE framework to simulate different paths of uncertainty associated to different hypothesis on the evolution of the coronavirus pandemic. We find that: i) Covid-19-induced uncertainty could lead to an output loss twice as large as that of the great recession; ii) aggressive monetary policy moves could reduce such loss by about 50%.
    Keywords: house price prediction, machine learning, genetic algorithm, spatial aggregation
    JEL: G22 Q54 R11 R31
    Date: 2020
  101. By: Kamiar Mohaddes (University of Cambridge); Mehdi Raissi (International Monetary Fund); Niranjan Sarangi (United Nations Economic and Social Commission for Western Asia (ESCWA))
    Abstract: We develop a quarterly macro-econometric model for the Saudi economy over the period 1981Q2- 2018Q2 and integrate it within a compact model of the world economy (including the global oil market). This framework enables us to disentangle the size and speed of the transmission of growth shocks originating from the United States, China and the world economy to Saudi Arabia, as well as study the implications of stress in global financial markets, low oil prices and domestic fiscal adjustment on the Saudi economy. Results show that Saudi Arabia's economy is more sensitive to developments in China than to shocks in the United States—in line with the direction of evolving trade patterns and China's growing role in the global oil market. A global growth slowdown (e.g., from trade tensions or geopolitical developments) could have significant implications for Saudi Arabia (with a growth elasticity of about 2½ after one year) and the oil market (reducing prices by about 5 percent for 0.5 percentage point reduction in global growth). We also illustrate that a 10 percent lower oil prices and stress in global financial markets could both have a negative effect on the Saudi economy, but given the prevailing social contract in Saudi Arabia, their impact is countered by fiscal easing. Finally, we argue that a domestic fiscal adjustment in Saudi Arabia does not show a negative impact on economic growth in the data. The impact on growth would depend upon the quality of fiscal adjustment and whether it is complemented with structural reforms or not.
    Date: 2020–04–20
  102. By: Katrine Marie Jakobsen (CEBI, Department of Economics, University of Copenhagen); Jakob Egholt Søgaard (CEBI, Department of Economics, University of Copenhagen)
    Abstract: We revisit the identification of behavioral responses to tax reforms and develop a new approach that allows for graphical validation of identifying assumptions and representation of treatment effects. Considering typical tax reforms, such as a reduction in the top income tax, we show that the state-of-the-art estimation strategy relies on an assumption that trend differences in income across the income distribution remain constant in the absence of reforms. Similar to the pre-trend validation of differencesin-differences studies, this identifying assumption of constant trend differentials can be validated by comparing the evolution of income in untreated parts of the income distribution over time. We illustrate the importance of our new validation approach by studying a number of tax reforms in Denmark, and we show how violations of the identifying assumption may drive the estimates obtained from the state-of-the-art strategy.
    Keywords: Tax Reforms, Behavioral Responses, Identification, Validation
    JEL: C14 H30 J22
    Date: 2020–09–21
  103. By: Adu-Gyamfi, Richard; Asongu, Simplice; Mmusi, Tinaye; Wamalwa, Herbert; Mangori, Madei
    Abstract: The objective of this research is to assess the extent to which export processing zones in Botswana, Kenya, Tanzania, and Zimbabwe integrate the Sustainable Development Goals in their implementation and operations. We focused on four Sustainable Development Goals—gender equality, decent work, industry, and climate action. We interviewed four zone authorities, one in each country. A total of 12 firms in the agro-processing, textiles and garments, construction, and real estate sectors were also interviewed. All four zone authorities demonstrate a measure of environmental inclusiveness in their zone programmes. We found that firms in Kenya and Zimbabwe have a higher number of male than female employees, while zones in Tanzania employ more women. We propose that to promote sustainable development in these zones, policy action should concentrate on attracting firms that (are willing and able to) align with the particular Sustainable Development Goal that zone programmes are intended to achieve.
    Keywords: export processing zones, sustainable development, Botswana, Kenya, Southern Africa, Tanzania, Zimbabwe
    JEL: O25 O55 O57 Q01
    Date: 2020–05
  104. By: Milena Almagro; Joshua Coven; Arpit Gupta; Angelo Orane-Hutchinson
    Abstract: We document that racial disparities in COVID-19 in New York City stem from patterns of commuting and housing crowding. During the initial wave of the pandemic, we find that out-of-home activity related to commuting is strongly associated with COVID-19 cases at the ZIP Code level and hospitalization at an individual level. After layoffs of essential workers decreased commuting, we find case growth continued through household crowding. A larger share of individuals in crowded housing or commuting to essential work are Black, Hispanic, and lower-income. As a result, structural inequalities, rather than population density, play a role in determining the cross-section of COVID-19 risk exposure in urban areas.
    Keywords: Coronavirus; COVID-19; Housing crowding; Mobility; Racial disparities
    JEL: I10 J15 R23
    Date: 2020–09–23
  105. By: Elizabeth Caucutt; Lance Lochner; Joseph Mullins; Youngmin Park
    Abstract: This paper studies the multidimensional nature of investments in children within a dynamic framework. In particular, we examine the roles of parental time investments, purchased home goods/services inputs, and market-based child care services. We first document strong increases in total investment expenditures by maternal education; yet expenditure shares, which skew heavily towards parental time, vary little with parental schooling. Second, we develop an intergenerational lifecycle model with multiple child investment inputs to study these patterns and the impacts of policies that alter the prices of different inputs. We analytically characterize investment behavior, focusing on the substitutability of different investment inputs and the way parental skills affect the productivity of family-based inputs. Third, we develop an estimation strategy that exploits intratemporal optimality conditions based on relative demand to estimate substitutability between inputs, the relative productivity of different inputs, and the role played by parental education. This approach requires no assumptions about the dynamics of skill investment, preferences, or credit markets. We also account for mismeasured inputs and wages, as well as unobserved heterogeneity in parenting skills. We further show how noisy measures of child achievement (measured several years apart) can also be incorporated in a generalized method of moments approach to additionally identify the dynamics of skill accumulation. Fourth, we use data from the Child Development Supplement of the Panel Study of Income Dynamics to estimate the skill production technology for children ages 12 and younger. Our estimates suggest complementarity between parental time and home goods/services inputs as well as between these family-based inputs and market-based child care, with elasticities of substitution ranging from 0.2 to 0.5. We find no systematic effects of parental education on the relative productivity of parental time and other home inputs. Finally, we use counterfactual simulations to explore the extent and sources of variation in investments across families, as well as investment responses to changes in input prices. We find that variation in prices explains 48% of the overall variance in investment expenditures, and differences in wages explain more than half of the investment expenditure gap between college-educated and non-college-educated parents. We further show that accounting for the degree of input complementarity implied by our estimates has important implications for the responses of individual inputs to any price change and for the responses in total investments and skill accumulation to large (but not small) price changes.
    Keywords: Fiscal policy; Labour markets; Potential output; Productivity
    JEL: D1 D13 H3 H31 J2 J22 J24
    Date: 2020–09
  106. By: Van, Germinal G.
    Abstract: The coronavirus has deleteriously affected a great majority of countries in the world. Developed societies such as the United States and the majority of Western countries have had the highest rates of mortality because of the pandemic. Sub-Saharan Africa, on the other hand, has been the continent where the pandemic has not done excessive damages. Africa’s GDP growth did not significantly decrease compared with the other continents. Consequently, the purpose of this paper is to model and forecast economic growth in sub-Saharan Africa in the post-COVID era and to examine the factors that are part of the growth process of the continent. To appropriately develop an econometric model of the economic growth of Sub-Saharan Africa in the post-COVID era, we decided to use the time-series data. This time-series data will be the dataset used to develop the statistical model that will enable us to forecast the economic growth of the continent in the post-COVID era.
    Keywords: Econometrics, Macroeconomics, Mathematical Modeling, Time-Series Analysis, Autoregressive Model, Statistical Modeling
    JEL: C01 C02 C15 C22 C53 O11
    Date: 2020–09–27
  107. By: Cem Cakmakli (Department of Economics, Koc University); Selva Demiralp (Department of Economics, Koc University)
    Abstract: Central bank credibility is critical for the effectiveness of monetary policy. The measures of credibility that are based on the changes in actual inflation rate do not perform very well in environments of chronic inflation. We design an alternative measure that allows us to track the evolution of credibility in an inflationary environment. Credibility is defined as the central bank’s ability to lower inflation expectations towards its inflation target via current interest rate decisions. We adopt a Bayesian set up to exploit this definition and document how credibility changes over time. Our measure differs from the existing measures that are based on the deviation of inflation expectations from the inflation target. We show that the latter tests may be too blunt in the EM context and either overlook marginal improvements in credibility or incorrectly attribute the temporary reductions in the inflation rate to improvements in credibility. Utilizing a time varying parameters modeling structure, we show that the credibility of the Central Bank of the Republic of Turkey (CBRT) has declined significantly over time. Potential reasons for this deterioration could be the CBRT’s disappointing performance in hitting the inflation target and its exposure to political pressures. We apply our methodology to Brazil as well to highlight its advantages and draw a comparison to the existing literature.
    Keywords: Credibility, inflation expectations, Central Bank of the Republic of Turkey, Unobserved component models, TVP-VAR, Central Bank of Brazil.
    JEL: E52 E58 C32
    Date: 2020–10
  108. By: Hélène Le Forner (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper investigates the effect of parental separation on children's allocation of their time and on the time spent with their parents. Based on detailed time-use diaries from the Panel Study of Income Dynamics - Child Development Supplement, I estimate an individual fixedeffects model and find that being in a single-parent family decreases time spent with at least one parent present by 18% of a standard deviation. Time spent with both parents together and alone with the non-custodial parent is greatly affected, but the custodial parent partially compensates for this decrease. The decrease in time spent with at least one parent involved in an activity is, however, not statistically significant. Parents seem to preserve time spent with their children when the child is younger at separation. Children whose parents are more highly educated are also less affected with regard to engaged time if they are in single-mother families. Time spent with a step-parent does not act as a recovery channel ; but time spent with a grandparent increases in single-mother families.
    Keywords: Child’s Time Investments,Time-Use,Family Structure,Parental Time Investment
    Date: 2020
  109. By: Marco Carreras (Institute of Development Studies)
    Abstract: I evaluate the impact of the Banco Nacional de Desenvolvimento Econômico e Social, (BNDES) disbursements on companies’ R&D intensity of companies operating in the Brazilian manufacturing sector for the period of 2003-2011. Using Instrumental Variable (IV) technique, I find a crowding-in impact of receiving funding from BNDES on business-funded innovation intensity, resulting in an increased commitment in innovation activities for funded Brazilian manufacturing companies. The findings of this analysis provide new evidence regarding the industrial sector activity of the Brazilian development bank, adding on the debate about additionality/substitutability of public financial resources.
    Keywords: BNDES, development bank, crowding-in/out, R&D intensity2
    Date: 2020–09
  110. By: Anna Bindler (University of Cologne and University of Gothenburg); Nadine Ketel (Vrije Universiteit Amsterdam)
    Abstract: Little is known about the costs of crime to victims. We use unique and detailed register data on victimisations and monthly labour market outcomes from the Netherlands and estimate event-study designs to assess short- and long-term effects of criminal victimisation. Across offences, both males and females experience significant decreases in earnings (up to -12.9%) and increases in benefit receipt (up to +6%) after victimisation. The negative labour market responses are lasting (up to four years) and accompanied by shorter-lived responses in health expenditure. Additional analyses suggest that the victimisation is a life-changing event leading to escalation points in victims’ lives.
    Keywords: Crime; victimisation; labour market outcomes; event-study design
    JEL: K4 J01 J12 I1
    Date: 2020–09
  111. By: Charles Yuji Horioka (Research Institute for Economics and Business Administration, Kobe University, Asian Growth Research Institute, Institute of Social and Economic Research, Osaka University, and National Bureau of Economic Research, Japan)
    Abstract: The selfish life-cycle model or hypothesis is, together with the dynasty or altruism model, the most widely used theoretical model of household behavior in economics, but does this model apply in the case of a country like Japan, which is said to have closer family ties than other countries? In this paper, we first provide a brief exposition of the simplest version of the selfish life-cycle model and then survey the literature on household saving and bequest behavior in Japan in order to answer this question. The paper finds that almost all of the available evidence suggests that the selfish life-cycle model applies to at least some extent in all countries but that there is more consistent support for this model in Japan than in the United States and other countries. It then explores possible explanations for why the life-cycle model is more consistently supported in Japan than in other countries, attributing this finding to government policies, institutional factors, economic factors, demographic factors, and cultural factors. Finally, it shows that the findings of the paper have many important implications for economic modeling and for government tax and expenditure policies.
    Keywords: Age structure; Altruism; Bequest motives; Borrowing constraints; Consumption; Culture; Dissaving; Dynasty model; Elderly; Family ties; Household saving; Inheritances; Intergenerational transfers; Japan; Life-cycle model; Religiosity; Retirement; Ricardian equivalence; Saving motives; Selfishness; Social norms
    JEL: D11 D12 D14 D64 E21 J14
    Date: 2020–09
  112. By: Ander Iraizoz (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université 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, PSE - Paris School of Economics)
    Abstract: Using the fact that the Spanish self-employed voluntarily choose their contributions to Social Security, I study the effect of financial incentives on public pension savings for self-employed workers in Spain. For this, I implement a difference-in-differences approach exploiting the change in public pension saving incentives induced by the 1997 pension reform. I find that the Spanish self-employed significantly respond to the financial incentives for public pension savings. However, the estimated response could be considered modest relative to the magnitude of the return to contributions provided by pension formulas in Spain. I provide evidence suggesting that the lack of salience of the return to contributions could be one of the main drivers of such a modest response, highlighting the importance of information and salience on the responsiveness of self-employed workers to saving incentives.
    Keywords: Public Pension,Self-Employed,Social Security,Retirement Savings
    Date: 2020–09
  113. By: Cristiana Benedetti Fasil (European Commission – JRC); Petr Sedlacek (University of Oxford, UK, CFM-LSE & CEPR); Vincent Sterk (University College London, UK, CFM-UCL & CEPR)
    Abstract: Early data show that the COVID-19 pandemic has affected particularly strongly start-up activity. This may have dramatic and lasting effects on aggregate employment which persist as the cohort of new firms age. To assess the impact, we developed the EU start-up calculator. This is an empirical tool that allows to conduct scenario analysis to compute the impact that the disruption of start-up activity has on aggregate employment on EU Member States and their economic sectors. In particular, we simulate a strong (i.e. of magnitude equivalent to the Great Recession) but short-lived (i.e. lasting one-year) crisis in Austria, Belgium, Germany, Hungary, Italy and Spain. This shock generates important and persistent job losses in all the countries that range between 0.7 (Belgium) to 2.2% (Austria) in 2020 and adds to a cumulative employment loss for the period 2020-2030 that ranges between 82 thousand (Belgium) to 1186 thousand (Italy). The negative impact is particularly high in Austria, Hungary, Italy and Spain, as well as in the service sector, which are characterized by a high firm turnover and that rely on start-ups and young firms for job creation. We also find that in most countries the deterioration of the survival rate of young firms plays an important role in driving employment, seconded by the number of new entrants. As a consequence, policies aimed at supporting young firms and incentivizing the creation of new ones may significantly mitigate the medium-term effect of the pandemic. In fact, when we simulate bounce-back scenarios where the number of firms entering the economy rapidly increases in 2021, in every country the outlook is significantly improved, the recovery is faster and the aggregate job loss is lower.
    Keywords: COVID-19, start-ups, employment
    Date: 2020–09
  114. By: Ragui Assaad (University of Minnesota)
    Abstract: I argue in this paper that although recent developments had temporarily reduced demographic pressures on the Egyptian labor market, such pressures will return with a vengeance in the next decade. The sizable echo generation born between 2006 and 2014 is the reflection of the large youth bulge generation born in the early 1980s; a reflection that was further compounded by rising fertility rates in the late 2000s and early 2010s. As the echo generation reaches working age, the net annual increase to the labor force will rise from 575 thousand per year in 2020-25 to 800 thousand in 2030-35, which will pose a major job creation challenge. This upcoming wave of new entrants will also be substantially more educated, with 50-60% having secondary or postsecondary education, and another third having university education or higher. To accommodate this upcoming growth in labor supply and absorb the stock of existing unemployed and discouraged workers, I estimate that employment growth would have to reach 2.7% per year, something that would require sustained GDP growth rates in excess of 6% per year. The quality of jobs created by the Egyptian economy would also have to improve substantially to satisfy the higher aspirations of the increasingly educated new entrants and curtail the rising rates of discouragement among female new entrants.
    Date: 2020–08–20
  115. By: Matthias Kasper (Tulane Economics and University of Vienna); James Alm (Tulane Economics)
    Abstract: This study uses a laboratory experiment to investigate the effect of tax audits on post-audit tax compliance. An important feature of our experimental design is the addition of audit ”effectiveness” to our audit mechanism, where effectiveness is defined as the share of undeclared income that the tax agency detects in an audit. This addition allows us to examine the effects of audit effectiveness on post-audit compliance. We also study whether tax audits have differential effects on different types of taxpayers, as distinguished by their prior reporting behavior. Contrary to theoretical predictions, we find that tax audits have differential effects on post-audit compliance and that the effectiveness of audits determines these responses; that is, while effective audits increase post-audit tax compliance, ineffective audits have the opposite effect. We also find that tax audits (whether effective or not) increase subsequent compliance of noncompliant taxpayers while they reduce compliance among individuals who have been found to report their income correctly. Finally, we find no evidence that tax audits crowd out the intrinsic motivation to comply of honest individuals. Our findings suggest that the specific deterrent effect of tax audits is more ambiguous than much previous analysis suggests, with these effects dependent on the effectiveness of the audit process and on the taxpayer’s prior reporting behavior.
    Keywords: Tax compliance; Audit effectiveness; Specific deterrence; General deterrence; Laboratory experiments.
    JEL: C9 H26 H83
    Date: 2020–09
  116. By: Julian Johnsen (Centre for Applied Research, Norwegian School of Economics); Hyejin Ku (University College London, Department of Economics and CReAM); Kjell G Salvanes (Department of Economics Norwegian School of Economics)
    Abstract: Does leave-taking matter for young workers’ careers? If so, why? We propose the competition effect—relative leave status of workers affecting their relative standing inside the firm—as a new explanation. Exploiting a policy reform that exogenously assigned four-week paid paternity leave to some new fathers, we find evidence consistent with the competition effect: A worker enjoys a better post-child earnings trajectory when a larger share of his colleagues take leave because of the policy. In contrast, we find no direct earnings effect resulting from the worker’s own leave when controlling for their relative leave eligibility status within the firm.
    Keywords: leave of absence, career interruptions, ranking, tournament, promotion, gender gap
    JEL: M51 M52 J16 J22 J24 J31
    Date: 2020–08
  117. By: Iost, Susanne; Geng, Natalia; Schweinle, Jörg; Banse, Martin; Brüning, Simone; Jochem, Dominik; Machmüller, Andrea; Weimar, Holger
    Abstract: The transition of the current economic system from non-renewable and fossil-based towards a more sustainable system using renewable resources is a dedicated objective of the German National Bioeconomy Strategy. In order to provide sound information on the status of the bioeconomy, a monitoring concept that assesses the bio-based resources and sustainability effects associated with German bioeconomy was developed. The general monitoring approach includes a definition of the bioeconomy and its implementation in terms of material flows and economic sectors at a given point in time. Based on this, available data is collected and bio-based material flows and economic sectors are quantified. These quantifications are used in the following sustainability assessment of material flows and economic sectors. This procedure can be repeated, starting again with a definition of bioeconomy that may change over time according to changing policies, market development and public perceptions of bioeconomy. Thus, bioeconomy monitoring considers the dynamics of the bioeconomy transition concerning processes, products, available data and connected sustainability goals. Understanding and quantifying material flows provides the foundation for comprehending the processing of biomass along value chains and final biomass uses. They also provide information for sustainability assessment. For biomass from agriculture, forests and fisheries including aquaculture, relevant material flows are compiled. Material flow data is not available consistently but must be collected from a broad variety of sources. Consequently, inconsistencies regarding reference units and conversion factors arise that need to be addressed further in a future monitoring. Bio-based shares of economic sectors can be quantified using mostly official statistics, but also empirical data. Bio-based shares vary considerably between economic activities. The manufacture of food products, beverages and wooden products has the highest bio-based shares. Bioeconomy target sectors like chemicals, plastics and construction still have rather small bio-based shares. The suggested assessment of sustainability effects foresees two complimentary levels of evaluation: material flows and economic sectors. The latter quantifies total effects of bioeconomy in a country and relates them to the whole economy or parts of it. The presented indicators were selected based on the Sustainability Development Goal Framework, the German Sustainable Development Strategy and the availability of data. The selection of effects and indicators to be measured in a future monitoring is a crucial point of any quantification. With sustainability being a normative concept, societal perceptions of sustainability should be taken into consideration here. In that context, we suggest to follow the approach of LOFASA for indicator selection. Sustainability assessment of material flows is demonstrated on the example of softwood lumber material flow and its core product EPAL 1 pallet using a combination of material flow analysis and life cycle assessment. Major challenges for a future monitoring of the bioeconomy's resource base and sustainability are availability of detailed and aggregated data, identification of bio-based processes and products within the economic classifications, identification and quantification of interfaces between biomass types, selection of indicators for sustainability assessment and the inclusion of bio-based services.
    Keywords: bioeconomy,material flow,sustainability,monitoring,bio-based,assessment,Bioökonomie,Stofffluss,Nachhaltigkeit,biobasiert,Bewertung
    Date: 2020
  118. By: Pratiti Chatterjee (School of Economics, University of New South Wales Business School); Fabio Milani (Department of Economics, University of California-Irvine)
    Abstract: What are the effects of beliefs, sentiment, and uncertainty, over the business cycle? To answer this question, we develop a behavioral New Keynesian macroeconomic model, in which we relax the assumption of rational expectations. Agents are, instead, boundedly rational: they have a finite-planning horizon, and they learn about the economy over time. Moreover, we allow agents to have a potentially asymmetric loss function in forecasting, which creates a direct channel for expected variances to affect the economy. In forming expectations, agents may be subject to shifts in optimism and pessimism (sentiment) and their beliefs may be influenced by their perceptions about future uncertainty. We estimate the behavioral model using Bayesian methods and exploit a large number of subjective expectation series (both point and density forecasts) at different horizons from the Survey of Professional Forecasters. We find that sentiment shocks are the key source of business cycle fluctuations. Shifts in perceived uncertainty can also affect real activity and inflation through a confidence channel, as they play an important role in belief formation. Overall, the results shed light on the importance of behavioral forces over the business cycles, and on the contribution and interaction of first-moment - sentiment - shocks versus second-moment - perceived uncertainty - shocks.
    Keywords: Uncertainty Shocks; Sentiment; Animal Spirits; Learning; Behavioral New Keynesian Model; Sources of Business Cycle Fluctuations; Observed Survey Expectations; Optimism and Pessimism in Business Cycles; Probability Density Forecasts
    JEL: C32 E32 E50 E52
    Date: 2020–07
  119. By: Jiaxin Fan (Economics Discipline, Business School, University of Western Australia); Bei Li (Economics Discipline, Business School, University of Western Australia); Ishita Chatterjee (Economics Discipline, Business School, University of Western Australia)
    Abstract: This paper aims to examine the intergenerational effect of parental education on children’s educational attainments in China and further explores the patterns of intergenerational education transmission across different dimensions using the 2013 Chinese Health and Retirement Longitudinal Study. We find that, as expected, parental education is positively correlated with the educational attainment of the subsequent generation; however, rural parents generally have greater marginal associations with children’s education as compared to their urban counterparts. Further, though daughter’s educational attainment is more sensitive to their mother’s rather than father’s education, the intergenerational transmission coefficient is higher between child’s schooling and father’s schooling, compared to corresponding mothers. This same pattern emerged for both urban and rural population. Moreover, a closer comparison between sons and daughters also reveal a noticeable gender discrepancy, as girls in general are more sensitive and elastic to family resources. In order to determine the causal impact of parental education, we next use an instrumental variable approach. The Cultural Revolution that occurred between 1966 and 1976 was a large-scale political upheaval that significantly disrupted education for a generation of youth. The school disruption that happened during the Cultural Revolution can thus be treated as an exogenous variation uncorrelated to parental abilities. The restricted sample contains children whose parents either were direct victims of the Cultural Revolution in terms of education disruption or had no direct educational impact yet experienced this political episode. In general, we observe a positively significant educational relationship across all parent-child pairs. Particularly, parents who encountered the Cultural Revolution had adversely impacted the educational attainments of their offspring. Although after controlling for an augmented set of explanatory variables, the significance of parental education effect diminished when estimated with the instrumental variable approach. This potentially implies parental transmission of education is predominantly due to heterogeneity in other alternative environmental factors and little causal educational interpretation can be generated from the yielded results.
    Keywords: Cultural Revolution; intergenerational education transmission; school disruption
    JEL: I25 J13 O12
    Date: 2020
  120. By: Fernando Rios-Avila
    Abstract: This paper presents a description of the quality of match of the statistical matches used in the LIMTCP estimates prepared for Ethiopia and South Africa. For Ethiopia, the statistical match combines the Ethiopian Socio-economic Survey--Wave 3--2015/2016 (ESS) with the Ethiopian Time Use Survey (ETUS) 2013. For South Africa it combines the October Household Survey (OHS) 1998 with the time use data obtained from the SA-Time Use Survey (SATUS) 2000, and the South African Living Conditions Survey (SALCS) 2014/2015 with the SATUS 2010. In all cases, the alignment of the two datasets is examined, after which various aspects of the match quality are described. Despite the differences in the survey years, the quality of match for South Africa is high and the synthetic dataset appropriate for the time poverty analysis. For Ethiopia, due to data quality differences, we restrict the analysis to married couple households with an employed spouse and young children. Conditioning on the restriction and sample reweighting, the Ethiopian synthetic dataset seems appropriate for the time poverty analysis.
    Keywords: Statistical Matching; Time Use; Household Production; Poverty; LIMTCP; Ethiopia; South Africa
    JEL: C14 C40 D31 J22
    Date: 2020–09
  121. By: Rickels, Wilfried; Proelß, Alexander; Geden, Oliver; Burhenne, Julian; Fridahl, Mathias
    Abstract: Under the European Union Emissions Trading System (EU ETS), operators must surrender allowances corresponding to the emissions of greenhouse gases (GHG) from their installations. The supply of allowances in the EU ETS decreases linearly and, all else equal, is expected to end around 2057. An earlier cut-off date is likely to follow from the European Council's recent decision that the EU should reach net-zero GHG emissions by 2050. Scenarios published by the European Commission even anticipate a net-negative cap in the EU ETS from 2045 onwards, generated through carbon dioxide (CO2) removals. Upholding emissions trading, in the long run, therefore entails significant use of credits resulting from atmospheric CO2 removal activities. However, in its current form, the ETS Directive does not contain any legal basis for generating CO2 removal credits. Integrating CO2 removal into the EU ETS would, thus, require fundamental amendments of the ETS Directive, waiving the currently mandatory association binding emitting activities to the adoption of emission abatement technologies. The next policy window for such amendments will open in 2021, following the decision on a more ambitious EU 2030 emission reduction target. This conceptual paper explores various design options for integrating negative emissions technologies (NETs) into the EU ETS. We discuss their potential implications for emissions trading at large and address the specificity of bioenergy with carbon capture and storage (BECCS); repealing the provision that installations exclusively using biomass are not covered by the ETS Directive, BE(CCS) installations could in principle fall within the scope of the ETS Directive. Theoretically, it would be possible to consider free allocation of biogenic credits to BE(CCS) installations. Bioenergy operators could avoid having to surrender these biogenic allowances through the use of CCS and instead sell them on the EU ETS market, having implicitly received credits for the removal of CO2 from the atmosphere.
    Keywords: European Emission Trading,Carbon Dioxide Removal,Negative Emission Technologies
    JEL: K33 Q54 Q58
    Date: 2020
  122. By: Koray Caglayan (American Institutes of Research); Steven M. Sheffrin (Tulane Economics and Murphy Institute)
    Abstract: Some states pay more in federal taxes than they receive in federal spending and have a negative balance of payments. While this uneven pattern of spending and taxation has been known for some time, little attention has been paid to the cyclical effects of these spending–tax differentials. Intuitively, “giver” states, those that pay more in taxes than they receive might have an extra cyclical buffer in the face of an economic downturn, as their balance of payments to the federal government may improve more than for “taker” states, those that receive more than they pay. In this study, we test the hypothesis of whether the giver status itself works as a potential stabilization mechanism during economic fluctuations. We use difference-in-differences methods to estimate the effect of giver status on the response of a state’s balance of payments during and after a recession. The Great Recession in 2008 serves as the exogenous shock in our identification strategy. To estimate the relationship between a state’s balance of payments and its gross domestic product growth, we take an instrumental variables approach. We use the variation in the response of federal fiscal measures to a recession that is attributable to giver status to estimate the effect of a state’s balance of payments on gross state product growth. The results from our difference-in-differences analysis indicate that after the 2008 recession, per capita balance of payments in giver states improved $808 more on average compared to taker states. The point estimates from our instrumental variable specification suggest that a thousand-dollar improvement in balance of payments increases the annual growth in gross domestic product by 2.2 percentage points. We also explore the milder 2001 recession. Although tax receipts of giver states fall more than taker states during the recession, spending also falls in these states relative to the taker states. The increase in defense and international spending after the 9/11 crisis most likely explains these results.
    Keywords: Giver and taker states, Fiscal balances, Stabilization.
    JEL: H72 E62
    Date: 2020–05
  123. By: Poggi, Ambra (University of Milan Bicocca); Kalb, Guyonne (Melbourne Institute of Applied Economic and Social Research)
    Abstract: Social bonds and supportive relationships (social support) are widely recognised as being indispensable to healthy psychological functioning and wellbeing. Applying a multilevel approach to the 2001-2016 Household, Income and Labour Dynamics in Australia (HILDA) data, we assess the impact of social support experienced by the parents during an individual's childhood on the individual's capacity to establish adequate social support in adult life. The level of social support experienced by the parents is measured during childhood/adolescence. Our findings show that, in addition to individual characteristics and other parental outcomes, the social support experienced by parents is an important predictor of the level of social support experienced by young adults. In particular, the mother's social support is an important predictor of the level of social support experienced by young female adults, while the father's social support is an important predictor of the level of social support experienced by young male adults. This evidence is further supported in an alternative specification based on sibling observations accounting for family fixed effects, finding that some individuals experience more social support when they are aged in their twenties than other individuals as a result of the family environment in childhood. In particular, social support experienced by parents explains about 16% of the initial family vari-ance experienced by siblings.
    Keywords: social support, intergenerational transmission, multilevel analysis
    JEL: Z13 J13 D3
    Date: 2020–10
  124. By: Rajashri Chakrabarti; Nicole Gorton; Michael Lovenheim
    Abstract: Most public colleges and universities rely heavily on state financial support. As state budgets have tightened in recent decades, appropriations for higher education have declined substantially. Despite concerns expressed by policymakers and scholars that the declines in state support have reduced the return to education investment for public sector students, little evidence exists that can identify the causal effect of these funds on long-run outcomes. We present the first such analysis in the literature using new data that leverages the merger of two rich datasets: consumer credit records from the New York Fed's Consumer Credit Panel (CCP), sourced from Equifax, and administrative college enrollment and attainment data from the National Student Clearinghouse. We overcome identification concerns related to the endogeneity of state appropriation variation using an instrument that interacts the baseline share of total revenue that comes from state appropriations at each public institution with yearly variation in state-level appropriations. Our analysis is conducted separately for two-year and four-year students, and we analyze individuals into their mid-30s. For four-year students, we find that state appropriation increases lead to substantially lower student debt originations. They also react to appropriation increases by shortening their time to degree, but we find little effect on other outcomes. In the two-year sector, state appropriation increases lead to more collegiate and post-collegiate educational attainment, more educational debt consistent with the increased educational attainment, but lower likelihood of delinquency and default. State support also leads to more car and home ownership with lower adverse debt outcomes, and these students experience substantial increases in their credit score and in the affluence of the neighborhood in which they live. Examining mechanisms, we find state appropriations are passed on to students in the form of lower tuition in the four-year sector with no institutional spending response. For community colleges, we find evidence of both price and quality mechanisms, the latter captured in higher educational resources in key spending categories. These results are consistent with the different pattern of effects we document in the four-year and two-year sectors. Our results underscore the importance of state support for higher education in driving student debt outcomes and the long-run returns to postsecondary investments that students experience.
    Keywords: postsecondary education; state appropriations; student loans; returns to education
    JEL: H72 H75 I2
    Date: 2020–09–01
  125. By: An-Hsiang Liu; Ralph Siebert
    Abstract: We focus on the estimation of market entry costs that are declining over time and evaluate their impact on competition and market performance. We employ a dynamic oligopoly model in which firms make entry, exit, and production decisions in the presence of declining entry costs and learning by doing effects. Focusing on the static random access memory industry, we show that entry costs drastically decline by more than 80 percent throughout the life cycle. This corresponds to entry cost reductions of $30 million per quarter. To show the relevance of declining entry cost, we perform three counterfactuals in which a social planner can (a) regulate entry, (b) charge a tax on entry, and (c) provide a subsidy to promote entry. Our simulations show that declining entry costs can lead to excessive entry costs that result from too early entries by firms. Tax and entry regulation policy can reduce the excessive entry problem having a positive effect on total surplus while reducing consumer welfare. In contrast, a subsidy policy intensifies the problem of excessive entry at early periods but it increases consumer welfare.
    Keywords: dynamic efficiency gains, entry costs, entry protection, entry regulation, market entry, market structure, semiconductor industry, social planner, subsidies, taxes
    JEL: C10 L10 L60 O30
    Date: 2020
  126. By: Giulio Cornelli; Jon Frost; Leonardo Gambacorta; Raghavendra Rau; Robert Wardrop; Tania Ziegler
    Abstract: Fintech and big tech platforms have expanded their lending around the world. We estimate that the flow of these new forms of credit reached USD 223 billion and USD 572 billion in 2019, respectively. China, the United States and the United Kingdom are the largest markets for fintech credit. Big tech credit is growing fast in China, Japan, Korea, Southeast Asia and some countries in Africa and Latin America. Cross-country panel regressions show that such lending is more developed in countries with higher GDP per capita (at a declining rate), where banking sector mark-ups are higher and where banking regulation is less stringent. Fintech credit is larger where there are fewer bank branches per capita. We also find that fintech and big tech credit are more developed where the ease of doing business is greater, and investor protection disclosure and the efficiency of the judicial system are more advanced, the bank creditto- deposit ratio is lower and where bond and equity markets are more developed. Overall, alternative credit seems to complement other forms of credit, rather than substitute for them.
    Keywords: fintech, big tech, credit, data, technology, digital innovation
    Date: 2020–09
  127. By: Ma, Wanglin
    Abstract: Relatively little is known about the association between Internet use and agricultural innovation adoption. To fill this void, this study examines the impact of Internet use on the adoption of sustainable agricultural practices (SAPs) and their heterogeneous effects on farm income and household income. Unlike previous studies that analyse the dichotomous decision of agricultural innovation adoption, this study captures the number of SAPs adopted. We apply both endogenous-treatment Poisson regression model and unconditional quantile regression model to analyse unique farm-level data collected from China. The empirical results show that Internet use exerts a positive and statistically significant impact on the number of SAPs adopted, and the joint effects of Internet use and SAP adoption on farm income and household income are heterogeneous. In particular, we show that households with lower farm income tend to benefit more from SAP adoption, while those with higher household income appear to benefit more from Internet use.
    Keywords: Research and Development/Tech Change/Emerging Technologies
    Date: 2020–09–16
  128. By: Anisha Sharma (Ashoka University); Garima Rastogi (Independent)
    Abstract: We study whether legal restrictions on prenatal discrimination against females leads to a shift by parents towards postnatal discrimination. We exploit the staggered introduction of a ban on sex-selective abortions across states in India to find that a legal restriction on abortions in India led to an increase in the number of females born, as well as a widening in the gender gap in educational attainment. Females born in states affected by the ban are 2.3, 3.5 and 3.2 percentage points less likely to complete Grade 10, complete Grade 12 and enter university relative to males. These effects are concentrated among non-wealthy households that lacked the resources to evade the ban. Investigating mechanisms, we find that the relative reduction in investments in female education were not driven by family size but because surviving females were now relatively unwanted. Discrimination is amplified among higher order births and among females with relatively few sisters. Finally, these negative effects exist despite the existence of a marriage market channel through which parents increase investments in their daughters' education to increase the probability that they make a high-quality match.
    Keywords: sex ratio, education, fertility, economics of gender, discrimination, abor- tion, India
    Date: 2020–09
  129. By: Anping Chen (School of Economics, Jinan University); Nicolaas Groenewold (Economics Discipline, Business School, University of Western Australia)
    Abstract: Since 2007 China’s real GDP growth rate has slowed from a level of over 10% per annum to below 7%. Given China’s regional diversity, an important aspect of the slowdown is the possible spatial variation in its experience. This is the issue we consider in this paper and we analyse this question in the context of the regional economic resilience framework. We proceed in two stages. In the first we analyse a measure of provincial slowdown (a sensitivity index) and of the variability of the slowdown based just on growth rates and examine the correlation of these measure with a number of commonly-used provincial characteristics. In the second stage we decompose regional growth rates into national and province-specific components using a VAR model and argue that since resilience concerns the response of provinces to a national shock, it is properly analysed using just the national component of the growth rate rather than the growth rate as such. We therefore analyse a sensitivity index and a variability index based just on the national component of growth and find that this extension is important both for ranking provinces according to resilience and for correlations of resilience with determinants capturing provincial characteristics. Generally we find that provinces close to the coast with new- rather than old-industry structures are less resilient and tended to suffered greater variability in growth during the slowdown.
    Keywords: China, growth, provincial growth, provincial response, regional resilience
    JEL: E37 O47 O53 R12 R15
    Date: 2020

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