nep-mac New Economics Papers
on Macroeconomics
Issue of 2023‒12‒04
28 papers chosen by
Daniela Cialfi, Universita' di Teramo

  1. Demographic aging and the New Keynesian Phillips Curve By Ambrocio, Gene
  2. State-Dependent Effects of Loan-to-Value Shocks By Vivek Sharma
  3. Is high debt constraining monetary policy? Evidence from inflation expectations By Luis Brandao-Marques; Marco Casiraghi; Gaston Gelos; Olamide Harrison; Güneş Kamber
  4. Negative Externalities of Financial Dollarization By Valida Pantsulaia; Ana Jangveladze; Shalva Mkhatrishvili
  5. The contribution of US broadband infrastructure subsidy and investment programs to GDP using input-output modeling By Matthew Sprintson; Edward Oughton
  6. Inside the black box: Neural network-based real-time prediction of US recessions By Seulki Chung
  7. Theory and Empirics of Short-Time Work: A Review By Natalia Bermudez; Muriel Dejemeppe; Giulia Tarullo
  8. On the fiscal sustainability of Swiss Cantons since 1905 By Bury, Yannick; Feld, Lars P.; Köhler, Ekkehard A.
  9. Congestion in Onboarding Workers and Sticky R&D By Justin Bloesch; Jacob P. Weber
  10. The Effect of the Countercyclical Capital Buffer on the Stability of the Housing Market By Julia Braun
  11. The world uncertainty index By Hites Ahir; Nicholas Bloom; Davide Furceri
  12. Measuring growth in consumer welfare with income-dependent preferences By Xavier Jaravel; Danial Lashkari
  13. Bubble Economics By Tomohiro Hirano; Alexis Akira Toda
  14. Liquidity constraints and demand for maturity the case of mortgages By Ferrari, Alessandro; Loseto, Marco
  15. Stress-testing inflation exposure: Systemically significant prices and asymmetric shock propagation in the EU28 By Ipsen, Leonhard; Aminian, Armin; Schulz-Gebhard, Jan
  16. Stage-based identification of policy effects By Alemán, Christian; Busch, Christopher; Ludwig, Alexander; Santaeulàlia-Llopis, Raül
  17. Wissenstransfer als kritische Infrastrukturierung: Vier Thesen zur Gestaltung von Wissenstransfer als Zusammenspiel von Wissenschaft und gesellschaftlicher Innovationsfähigkeit By Rottleb, Tim; Schmidt, Suntje
  18. El impuesto sobre la renta de las personas físicas en América Latina y el Caribe: avances, desafíos y alternativas para su fortalecimiento como instrumento de desarrollo By Cetrángolo, Oscar; Calligaro, Florencia; Fonteñez, María Belén; Morán, Dalmiro
  19. Trading on short-term path forecasts of intraday electricity prices. Part II -- Distributional Deep Neural Networks By Grzegorz Marcjasz; Tomasz Serafin; Rafal Weron
  20. Wirtschafts- und Industriestandort Deutschland in Gefahr? Was zu tun ist und was man unterlassen sollte By Feld, Lars P.; Fuest, Clemens; Haucap, Justus; Schweitzer, Heike; Wieland, Volker; Wigger, Berthold U.
  21. Welfare Migration By Martin Kahanec; Martin Guzi
  22. A Comment on "Vulnerability and Clientelism" (2022) By Ma, Hai; Montpetit, Sébastien; Nordstrom, Ardyn
  23. Responsible sourcing? Theory and evidence from Costa Rica By Alonso Alfaro-Urena; Benjamin Faber; Cecile Gaubert; Isabela Manelici; Jose P Vasquez
  24. Transaction Tax Variation and House Price Change- a study of the UK Housing Market By Qiulin; Bin Chi Ke; Michael White; Bing Zhu
  25. Beyond the Threshold: How Electoral Size-Dependent Uncertainty Affects Majority Determination By Giuseppe Attanasi; Anna Maffioletti; Giulia Papini; Patrizia Sbriglia; Maria Luigia Signore
  26. Book Review of Sergio Cremaschi, "David Ricardo. An Intellectual Biography" By Ghislain Deleplace
  27. The changing geopolitics in the South Caucasus during the war in Ukraine: Chances and risks for the region By Wrobel, Ralph
  28. Get the picture? Using visuals to represent theory By Dina Rasolofoarison; C. A. Russell

  1. By: Ambrocio, Gene
    Abstract: I document a statistical link between old-age dependency ratios and average markups. I propose that a mechanism whereby households develop deep habits in consumption as they age could explain this feature of the data. I show that when this mechanism is embedded in an overlapping generations New Keynesian model, the slope of the New Keynesian Phillips Curve flattens as the population ages. Further, the contractionary effects of monetary policy surprises on output are amplified. These results suggest that the challenges faced by monetary policy may become more pronounced as populations age.
    Keywords: population aging, Phillips curve, deep habits, market power, markups
    JEL: D11 E21 E32 E52 J11
    Date: 2023
  2. By: Vivek Sharma
    Abstract: This paper presents a Two-Agent New Keynesian (TANK) model with collateral- constrained borrowers and a time-varying shock to loan-to-value (LTV) ratios. A temporary tightening in lending standards in this model leads to a sizable drop in macroeconomic aggregates and significant macroeconomic fluctuations. The analysis shows that effects of shocks to LTV ratios are highly non-linear and state-dependent in the sense that amplification of shocks depends crucially on steady-state LTV ratios. Shocks when LTV ratios are already high lead to effects which are substantially stronger than when the steady-state LTV ratios are comparatively lower. The results in this paper also show that permanent LTV shocks lead to permanent decline in housing prices – a 10 percentage point decline in steady-state LTV ratio from 0.95 results in more than 0.3% decline in housing prices. A novel finding in this paper is that a permanent tightening in lending standards leads to a permanent decline in wages. Additionally, other shocks such as TFP shocks, housing demand shocks and labor supply shocks also show clear state dependence and have highly persistent effects.
    Keywords: Loan-to-Value (LTV) Shocks, Housing Price, Macroeconomic Fluctuations
    JEL: E32 E44
    Date: 2023–11
  3. By: Luis Brandao-Marques; Marco Casiraghi; Gaston Gelos; Olamide Harrison; Güneş Kamber
    Abstract: This paper examines whether high public debt levels pose a challenge to containing inflation. It does so by assessing the impact of public debt surprises on inflation expectations advanced- and Emerging Market Economies. It finds that debt surprises raise long-term inflation expectations in Emerging Market Economies in a persistent way, but not in advanced economies. The effects are stronger when initial debt levels are already high, when inflation levels are initially high, and when debt dollarization is significant. By contrast, debt surprises have only modest effects in countries with inflation targeting regimes. Increased debt levels may complicate the fight against inflation in Emerging Market Economies with high and dollarized debt levels, and weaker monetary policy frameworks.
    Keywords: inflation expectations, monetary policy, fiscal dominance, debt
    JEL: E31 E41 E52 E62
    Date: 2023–11
  4. By: Valida Pantsulaia (Financial Stability Analysis and Macro-financial Modeling Division, National Bank of Georgia); Ana Jangveladze (Financial Stability Analysis and Macro-financial Modeling Division, National Bank of Georgia); Shalva Mkhatrishvili (Head of Macroeconomics and Statistics Department, National Bank of Georgia)
    Abstract: Dollarization (usage of a foreign currency in place of a domestic one) is a widely observed phenomenon that historically emerged as a result of extended macro-financial instability and extreme price and nominal exchange rate fluctuations. Complete loss of public confidence in a local currency pushed lenders and borrowers to seek more stable foreign currencies like the US dollar and euro. What is more puzzling though is that in many countries dollarization remained at an elevated level even after taking care of its root cause (i.e. after achieving price stability). There have been several explanations of this phenomenon (the so-called dollarization hysteresis). In this short paper, we propose additional explanations in the form of several dollarization-induced negative externalities, including an amplification of credit procyclicality and exchange rate pass-through or a worsening of credit ratings of dollarized economies. We also offer some back-of-the-envelope calculations showing that these externalities could be economically significant (about 1 pp impact on real GDP growth per year) for a small and highly dollarized country like Georgia. This type of market failures underline the importance of prudential policies that internalize negative externalities and, hence, level the playing field for the local currency.
    Keywords: Financial dollarization; Negative externality
    JEL: E44 E58 F34
    Date: 2023–04
  5. By: Matthew Sprintson; Edward Oughton
    Abstract: More than one-fifth of the US population does not subscribe to a fixed broadband service despite being a recognized merit good. For example, less than 4% of citizens earning more than US \$70k annually do not have broadband, compared to 26% of those earning below US \$20k annually. To address this, the Biden Administration has undertaken one of the largest broadband investment programs ever via The Bipartisan Infrastructure Law, with the aim of addressing this disparity and expanding broadband connectivity to all citizens. Proponents state this will reduce the US digital divide once-and-for-all. However, detractors say the program leads to unprecedented borrowing at a late stage of the economic cycle, leaving little fiscal headroom. Subsequently, in this paper, we examine broadband availability, adoption, and need and then construct an input-output model to explore the macroeconomic impacts of broadband spending in Gross Domestic Product (GDP) terms. Finally, we quantify inter-sectoral macroeconomic supply chain linkages from this investment. The results indicate that federal broadband investment of US \$42 billion has the potential to increase GDP by up to US \$216 billion, equating to 0.2% of annual US GDP over the next five years, with an estimated Keynesian investment multiplier of 2.89. To our knowledge, we contribute the first economic impact assessment of the US Bipartisan Infrastructure Law to the literature.
    Date: 2023–11
  6. By: Seulki Chung
    Abstract: Feedforward neural network (FFN) and two specific types of recurrent neural network, long short-term memory (LSTM) and gated recurrent unit (GRU), are used for modeling US recessions in the period from 1967 to 2021. The estimated models are then employed to conduct real-time predictions of the Great Recession and the Covid-19 recession in US. Their predictive performances are compared to those of the traditional linear models, the logistic regression model both with and without the ridge penalty. The out-of-sample performance suggests the application of LSTM and GRU in the area of recession forecasting, especially for the long-term forecasting tasks. They outperform other types of models across 5 forecasting horizons with respect to different types of statistical performance metrics. Shapley additive explanations (SHAP) method is applied to the fitted GRUs across different forecasting horizons to gain insight into the feature importance. The evaluation of predictor importance differs between the GRU and ridge logistic regression models, as reflected in the variable order determined by SHAP values. When considering the top 5 predictors, key indicators such as the S\&P 500 index, real GDP, and private residential fixed investment consistently appear for short-term forecasts (up to 3 months). In contrast, for longer-term predictions (6 months or more), the term spread and producer price index become more prominent. These findings are supported by both local interpretable model-agnostic explanations (LIME) and marginal effects.
    Date: 2023–10
  7. By: Natalia Bermudez (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Muriel Dejemeppe (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Giulia Tarullo (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: Following massive take-up rates during the COVID-19 period, short-time work (STW) policies have attracted renewed interest. In this paper, we take stock of this policy instrument and provide a critical review of STW systems in Europe. We focus on the objectives of STW programs and their primary characteristics, as well as the inefficiencies associated with these policies, such as excessive use and slower worker reallocation. Additionally, we take a stroll through the main contributions of STW impact evaluations. Finally, we identify relevant directions for the refinement of the main design features of the scheme, key lessons, and avenues for future research.
    Keywords: Short-time work; labor hoarding; employment; firm survival; unemployment insurance
    JEL: E24 J22 J23 J63 J65
    Date: 2023–10–30
  8. By: Bury, Yannick; Feld, Lars P.; Köhler, Ekkehard A.
    Abstract: With an outstandingly long data set of Swiss cantonal public finances we study whether the Swiss subnational level runs sustainable fiscal policies. Going back to the year 1905, we test for stationarity of cantonal public debt, revenue and spending and for cointegration between cantonal revenues and expenditures. Based on time series properties, we estimate individual fiscal reaction functions for each canton and for the panel of cantons as a whole. Using second generation panel-modelling which accounts for heterogeneity in cantonal fiscal policy, structural breaks and cross-sectional dependence among the cantons, our results show that the cantons run sustainable policies. Moreover, our results provide evidence that fiscal institutions can explain part of the heterogeneity in cantonal fiscal reactions to increased debt.
    Keywords: Fiscal Sustainability, Fiscal Institutions, Swiss Cantons
    JEL: H62 H77 H72 C23
    Date: 2023
  9. By: Justin Bloesch; Jacob P. Weber
    Abstract: R&D investment spending exhibits a delayed and hump-shaped response to shocks. We show in a simple partial equilibrium model that rapidly adjusting R&D investment is costly if the probability of converting new hires into productive R&D workers (“onboarding”) is decreasing in the number of new hires (“congestion”). Congestion thus causes R&D-producing firms to slowly hire new workers in response to good shocks and hoard workers in response to bad shocks, providing a microfoundation for convex adjustment costs in R&D investment. Using novel, high-frequency productivity data on individual software developers collected from GitHub, a popular online collaboration platform, we provide quantitative evidence for such congestion. Calibrated to this evidence, a sticky-wage new Keynesian model with heterogeneous investment-producing firms subject to congestion in onboarding and no other frictions yields hump-shaped responses of R&D investment to shocks.
    Keywords: intangibles; monetary policy; R&D; innovation; team specific capital; labor adjustment costs
    JEL: E22 O36
    Date: 2023–11–01
  10. By: Julia Braun
    Abstract: After the great turmoil of the latest financial crisis, the criticism of the regulatory frameworks became increasingly stronger. The rules that banks needed to comply with are presumed to be procyclical and unable to prevent and mitigate the extent of strong financial and economic cycles. As a result, Basel III introduced a set of macroprudential tools to overcome these regulatory shortfalls. One tool that strives to counteract the issue of procyclicality is the countercyclical capital buffer (CCyB). This paper introduces a heterogeneous agent-based model that investigates the implication of the new regulatory measure. We develop a housing and a financial market where economic agents trade residential property that is financed by financial institutions. To examine the macroeconomic performance of the CCyB, we evaluate the dynamics of key stability indicators of the housing and the financial market under four different market conditions: in an undisturbed market and in times of three different structural shocks. Computational experiments reveal that the CCyB is effective in stabilizing the housing and the financial market in all market settings. But the extent of the stabilizing effect varies according to market conditions. In the shock scenarios, the CCyB performs better in dampening market fluctuations and increasing banking soundness. Although the new macroprudential tool helps to mitigate economic fluctuations and to stabilize market conditions in the aftermath of a crisis, it is not able to prevent any of the crises tested.
    Keywords: Agent-Based Model; Basel III; Countercyclical capital buffer; Housing market stability
    JEL: R3
    Date: 2023–01–01
  11. By: Hites Ahir; Nicholas Bloom; Davide Furceri
    Abstract: We construct the World Uncertainty Index (WUI) for an unbalanced panel of 143 individual countries on a quarterly basis from 1952. This is the frequency of the word "uncertainty" in the quarterly Economist Intelligence Unit country reports. Globally, the Index spikes around major events like the Gulf War, the Euro debt crisis, the Brexit vote and the COVID pandemic. The level of uncertainty is higher in developing countries but is more synchronized across advanced economies with their tighter trade and financial linkages. In a panel vector autoregressive setting we find that innovations in the WUI foreshadow significant declines in output. This effect is larger and more persistent in countries with lower institutional quality, and in sectors with greater financial constraints.
    Date: 2022–03–31
  12. By: Xavier Jaravel; Danial Lashkari
    Abstract: How should we measure changes in consumer welfare given observed data on prices and expenditures? This paper proposes a nonparametric approach that holds under arbitrary preferences that may depend on observable consumer characteristics, e.g., when expenditure shares vary with income. Using total expenditures under a constant set of prices as our money-metric for real consumption (welfare), we derive a principled measure of real consumption growth featuring a correction term relative to conventional measures. We show that the correction can be nonparametrically estimated with an algorithm leveraging the observed, cross-sectional relationship between household-level price indices and household characteristics such as income. We demonstrate the accuracy of our algorithm in simulations. Applying our approach to data from the United States, we find that the magnitude of the correction can be large due to the combination of fast growth and lower inflation for income-elastic products. Setting reference prices in 2019, we find that (i) aggregate real consumption per household in 1955 is underestimated by 11.5% by the uncorrected measure, and (ii) the correction reduces the annual growth rate from 1955 to 2019 by 18 basis points, which is larger than the well-known "expenditure switching bias" over the same time horizon.
    Keywords: growth, consumer welfare, nonparametric methods, United States
    Date: 2022–11–30
  13. By: Tomohiro Hirano (Royal Holloway, University of London; Centre for Macroeconomics (CFM); Canon Institute for Global Studies); Alexis Akira Toda (University of California San Diego)
    Abstract: This article provides a self-contained overview of the theory of rational asset price bubbles. We cover topics from basic definitions, properties, and classical results to frontier research, with an emphasis on bubbles attached to real assets such as stocks, housing, and land. The main message is that bubbles attached to real assets are fundamentally nonstationary phenomena related to unbalanced growth. We present a bare-bones model and draw three new insights: (i) the emergence of asset price bubbles is a necessity, instead of a possibility; (ii) asset pricing implications are markedly different between balanced growth of stationary nature and unbalanced growth of nonstationary nature; and (iii) asset price bubbles occur within larger historical trends involving shifts in industrial structure driven by technological innovation, including the transition from the Malthusian economy to the modern economy.
    Keywords: bubbles attached to real assets, necessity versus possibility, nonstationarity, technological progress, unbalanced growth
    JEL: D53 E44 G12 O16
    Date: 2023–11
  14. By: Ferrari, Alessandro; Loseto, Marco
    Abstract: Using administrative data on mortgages issued in Italy between 2018 and 2019, this paper estimates loan demand elasticities to maturity and interest rate. We findthat households are responsive to both contract terms: a 1% decrease in interestrate increases the average loan size by 0.22% whereas a commensurable increasein maturity increases loan demand by 0.30%. This evidence suggests that creditconstraints are relevant in this market. Things change substantially when movingalong the distribution of contract maturities: short term borrowers are unresponsive to their contract lengthwhile maturity elasticities are higher for long term borrowers. JEL Classification: D12, D14, D15, G11, G51
    Keywords: credit demand, household finance, maturity, mortgage
    Date: 2023–10
  15. By: Ipsen, Leonhard; Aminian, Armin; Schulz-Gebhard, Jan
    Abstract: Building on the seminal paper of Weber et al. (2022), we provide a stress-test framework of inflation exposure and apply it to the EU28. This adds a yet unrecognised dimension to the latest calls for supply chain stress-tests. We address both the ex- and internal dimensions of inflation exposure for the former EU28 countries within global production networks via a Leontief price model. Using data from the World Input Output Database, we confirm the existence of systemically significant sectors for the overall price level in the EU28, EU periphery and core, respectively. We show that while the direct price effects of various sectors on the respective consumption shares are significant, about two-thirds of the overall effects are indirect and thus a result of higher-order propagation within the production network. It crystallizes that two properties (size and centrality) may render a sector systemically significant. Breaking down the geographical component, we show that the indirect effect is even larger for peripheral countries, which points to a higher exposure to world market prices. By tracing individual shock trajectories, we confirm this hypothesis: price volatility originating from the core countries impacts the peripheral countries more than vice versa. In addition to this, our method to recover consumption substitution effects shows that substitution is much more limited in the European periphery. Overall, we show consumers in peripheral countries are relatively more exposed to price volatility.
    Keywords: inflation, stress-test, input-output analysis, Europe
    Date: 2023
  16. By: Alemán, Christian; Busch, Christopher; Ludwig, Alexander; Santaeulàlia-Llopis, Raül
    Abstract: We develop a method that identifies the effects of nationwide policy, i.e., policy implemented across all regions at the same time. The core idea is to track outcome paths in terms of stages rather than time, where a stage of a regional outcome at time t is its location on the support of a reference path. The method proceeds in two steps. First, a normalization maps the time paths of regional outcomes onto the reference path-using only pre-policy data. This uncovers cross-regional heterogeneity of the stage at which policy is implemented. Second, this stage variation identifies policy effects inside a window of stages where a stage-leading region provides the no-policy counterfactual path for non-leading regions that are subject to policy inside that window. We assess our method's performance with Monte-Carlo experiments, illustrate it with empirical applications, and show that it captures heterogeneous policy effects across stages.
    Keywords: Stages, Identification, Policy Effects, Nationwide Policy, Macroeconomics
    JEL: C01 E00
    Date: 2023
  17. By: Rottleb, Tim; Schmidt, Suntje
    Abstract: Dieses Dialogpapier adressiert die Rolle und Aufgaben von Hochschulen und öffentlich geförderten Forschungseinrichtungen im gesellschaftlichen Wissenstransfer. Das Papier richtet sich an Entscheidungsträger*innen und Fachleute in Politik und Verwaltung sowie in Hochschulen und in weiteren Wissenschaftsorganisationen, an Expert*innen und zivilgesellschaftlich engagierte Bürger*innen, die sich mit konkreten regionalen Problemlagen und deren Bewältigung auseinandersetzen und hierbei neue Wege der gemeinsamen Wissensgenerierung und des Wissenstransfers einsetzen. Ausgehend von den Forschungsergebnissen im Rahmen des Projekts "Innovation Hub13", gefördert durch das BMBF in der Förderlinie "Innovative Hochschule", kommen wir zu dem Schluss, dass etablierte Verständnisse von Wissenstransfer dem eigentlichen Potential von Wissenschaft in der Gesellschaft nicht gerecht werden und dass Wissenstransfer in kooperierende Prozesse der Wissensgenerierung eingebettet werden muss. Daher schlagen wir vor, Wissenstransfer nicht als etwas zu verstehen, das erst auf die Erkenntnisgewinnung folgt, sondern als integralen Bestandteil dieser zu verstehen ist. Dazu rufen wir auf, Wissenstransfer als kritische Infrastrukturierung zu begreifen. "Infrastrukturieren" unterstreicht dabei, dass Wissenstransferprozesse interaktiv und agil sind und immer wieder unter Beteiligung gesellschaftlicher Akteure an neue Bedarfe, Herausforderungen und Ziele angepasst werden müssen.
    Date: 2023
  18. By: Cetrángolo, Oscar; Calligaro, Florencia; Fonteñez, María Belén; Morán, Dalmiro
    Abstract: Una de las principales debilidades estructurales de los sistemas tributarios de América Latina y el Caribe es el escaso peso relativo del impuesto sobre la renta de las personas físicas. Esto priva a los países de un instrumento impositivo esencial que contribuye a la solvencia de las finanzas públicas, refuerza la necesaria redistribución del ingreso y fortalece la política contracíclica. A lo largo de las últimas décadas se han registrado importantes avances —aunque insuficientes— en el diseño y el rendimiento de este impuesto. En este documento se analiza su situación a nivel regional, incluidas sus interrelaciones con otros instrumentos, como los impuestos patrimoniales y las contribuciones para el financiamiento de la seguridad social. El análisis permite ver claramente los principales desafíos pendientes. Se propone un marco de referencia con lineamientos prioritarios para lograr el fortalecimiento integral del impuesto sobre la renta de las personas físicas en los países de la región. Con esto se apunta a colocar a este impuesto nuevamente en el centro de los debates regionales en materia de política fiscal.
    Date: 2023–10–24
  19. By: Grzegorz Marcjasz; Tomasz Serafin; Rafal Weron
    Abstract: We propose a novel electricity price forecasting model tailored to intraday markets with continuous trading. It is based on distributional deep neural networks with Johnson SU distributed outputs. To demonstrate its usefulness, we introduce a realistic trading strategy for the economic evaluation of ensemble forecasts. Our approach takes into account forecast errors in wind generation for four German TSOs and uses the intraday market to resolve imbalances remaining after day-ahead bidding. We argue that the economic evaluation is crucial and provide evidence that the better performing methods in terms of statistical error metrics do not necessarily lead to higher trading profits.
    Keywords: Intraday electricity market; Probabilistic forecast; Path forecast; Prediction bands; Trading strategy; Neural networks
    JEL: C22 C32 C45 C51 C53 Q41 Q47
    Date: 2023
  20. By: Feld, Lars P.; Fuest, Clemens; Haucap, Justus; Schweitzer, Heike; Wieland, Volker; Wigger, Berthold U.
    Abstract: In Deutschland wird intensiv über die Gefahr einer Deindustrialisierung diskutiert. Steigende Energie- und Arbeitskosten auf international höchstem Niveau, hohe Steuerbelastungen, eine überbordende Regulierung sowie Defizite bei analoger und digitaler Infrastruktur lassen befürchten, dass der Wirtschaftsstandort Deutschland ins Hintertreffen gerät. Viele Unternehmen, insbesondere der energieintensiven Industrie, warnen vor einem Verlust an internationaler Wettbewerbsfähigkeit und erwägen oder vollziehen bereits Produktionsverlagerungen an günstigere Standorte im Ausland. Vor diesem Hintergrund untersucht der Kronberger Kreis, wissenschaftlicher Beirat der Stiftung Marktwirtschaft, was zu tun und was zu unterlassen ist, um die wirtschaftlichen Standortbedingungen in Deutschland wieder zu verbessern. Dabei werden aktuell in der Diskussion stehende wirtschaftspolitische Konzepte wie die "Transformative Angebotspolitik", der "Industriestrompreis", das "Wachstumschancengesetz" oder die Subventionierungen von Chip- und Halbleiterfabriken analysiert. Darüber hinaus unterbreitet der Kronberger Kreis eigene Reformempfehlungen für eine angebotsorientierte Wirtschaftspolitik, mit denen die Bundesregierung bestehende und neue Herausforderungen besser bewältigen könnte.
    Keywords: Angebotspolitik, Wettbewerbsfähigkeit, Energie- und Klimapolitik, Infrastruktur
    Date: 2023
  21. By: Martin Kahanec; Martin Guzi
    Abstract: The welfare magnet hypothesis, also referred to as welfare shopping or welfare tourism, that migrants make location choices based on the provision of welfare benefits in alternative destinations, has resonated in the academic as well as public discourse on migration. This chapter summarizes theoretical models behind the welfare magnet hypothesis and reviews the empirical evidence on welfare-induced migration. The literature is inconclusive on the matter. Whereas there are theoretical arguments why welfare might matter for migration flows and several studies find a small positive association between welfare and migration, other studies find no such effects. In particular, some studies show that controlling for the endogeneity of welfare in the welfare-migration nexus reduces or eliminates the effect of welfare generosity on immigration. On the other hand, recent quasi-experimental studies demonstrate some effects of welfare on the location choices of asylees and refugees. Exploring a unique European dataset, this chapter contributes to this literature by providing some evidence that better accessibility of social assistance for immigrants is associated with larger immigrant inflows. Overall, the consensus in the literature is that the effects of welfare on migration are relatively small compared to other drivers of migration. The chapter concludes with highlighting the broader implications of the welfare magnet hypothesis and provides guidance for future research about it.
    JEL: H53 J15 J61 J68
    Date: 2023–11–21
  22. By: Ma, Hai; Montpetit, Sébastien; Nordstrom, Ardyn
    Abstract: The paper estimates the effect that changes in household vulnerability have on citizens' participation in clientelist relationships. The authors exploit two sources of variation in household vulnerability: rainfall shocks, and a randomized intervention that provided cisterns in drought-prone areas. We reproduce all the findings presented in the four main results tables presented in the paper. The results of our robustness replication show that the results in the original paper are robust to variations in the rainfall period used as a baseline to assess changes in household vulnerability, and to exclusions that eliminate individuals in the sample who may have been substituted with others at different survey points. However, some of the original results that explain the underlying mechanisms are sensitive to how "clientelist relationships" are defined. When more frequent interactions with politicians are used as the defining characteristic of households in clientelist relationships, we find that the original results suggesting clientelism as a significant mechanism are no longer statistically significant at any standard significance level. We note, however, that the authors, in a reply to questions we sent them after the Replication Games, convincingly show that their results are robust to changing the definition of the clientelist marker.
    Date: 2023
  23. By: Alonso Alfaro-Urena; Benjamin Faber; Cecile Gaubert; Isabela Manelici; Jose P Vasquez
    Abstract: Multinational enterprises (MNEs) increasingly impose 'Responsible Sourcing' (RS) standards on their suppliers worldwide, including requirements on worker compensation, benefits and working conditions. Are these policies just 'hot air' or do they impact exposed suppliers and their workers? What is the welfare incidence of RS in sourcing countries? To answer these questions, we develop a quantitative general equilibrium (GE) model of RS and combine it with a unique new database. In the theory, we show that the welfare implications of RS are ambiguous, depending on an interplay between what is akin to an export tax (+) and a labor market distortion (-). Empirically, we combine the near-universe of RS rollouts by MNE subsidiaries in Costa Rica since 2009 with firm-to-firm transactions and matched employer-employee microdata. We find that RS rollouts lead to significant reductions in firm sales and employment at exposed suppliers, an increase in their salaries to initially low-wage workers and a reduction in their low-wage employment share. We then use the estimated effects and the microdata to calibrate the model and quantify GE counterfactuals. We find that while MNE RS policies have led to significant gains among the roughly one third of low-wage workers employed at exposed suppliers ex ante, the majority of low-wage workers lose due to adverse indirect effects on their wages and the domestic price index.
    Keywords: multinational enterprises, supply chains, low-wage workers, Costa Rica
    Date: 2022–11–16
  24. By: Qiulin; Bin Chi Ke; Michael White; Bing Zhu
    Abstract: During the pandemic time, the UK government introduced Stamp Duty Land Tax (SDLT) rate reduction to stimulate the housing market. Reduced Stamp Duty Land Tax (SDLT) rates would apply for residential properties purchased from 8 July 2020 to 30 September 2021 inclusive. According to the policy, the temporary nil rate band of £500, 000 would be in place until 30 June 2021, then extended to 30 September 2021. Thereafter, the nil rate band would return to the standard amount of £125, 000 on 1 October 2021. The purpose of SDLT reduction was to support the housing market and the jobs and businesses which relied on it. At the same time, it would lower the transaction costs of moving home to maintain the liquidity of the housing market. Evidence suggests the stamp duty holiday made a positive impact on the property market. In this research, we investigate how the tax temporary reduction affects housing prices in the UK, using all housing transactions in the UK from March 2020 to December 2021inclusive, three months pre and post-SDLT cut with quasi-experimental variation from reduction. We also examine whether the effect was consistent across all price bands.
    Keywords: Housing Price; stamp duty; Transaction tax; UK
    JEL: R3
    Date: 2023–01–01
  25. By: Giuseppe Attanasi (Sapienza University of Rome, Italy; BETA, University of Strasbourg, France; Université Côte d'Azur, CNRS, GREDEG, France); Anna Maffioletti (Università degli Studi di Torino); Giulia Papini (Università degli Studi di Torino); Patrizia Sbriglia (Università degli Studi della Campania "Luigi Vanvitelli"); Maria Luigia Signore (Sapienza University of Rome, Italy)
    Abstract: The determination of a majority threshold in any voting system can be influenced by voters' attitudes towards uncertainty. Traditionally, a higher majority threshold is associated with a risk-averse attitude, serving as a means to protect against the tyranny of the majority. Moreover, the absence of ex-ante information regarding the likelihood of the voting outcome introduces a further layer of uncertainty, that of ambiguity, which motivates decision-makers to seek increased protection. In this study, we first provide a thorough formalization of this theoretical prediction, relying on a second-order expected utility model with both risk and ambiguity aversion of the voter toward the voting lottery. Second, we experimentally test its predictions by integrating the majority threshold implication into traditional experiments for risk and ambiguity elicitation. Through a series of classroom experiments run on 2020-2023 (about 1, 100 subjects in Italy & France), we analyze how individuals, placed under varying conditions of uncertainty, react to the determination of a barrier threshold. We find a strong correlation between the number of voters and the chosen quorum for a majority: as each subject is only aware of her own voting preference, expanding the electoral base results in a more ambiguous probability about the outcome. This favors more conservative behavior and results in an upward adjustment of the majority threshold.
    Keywords: voting lottery, majority threshold, risk and ambiguity attitude, theory-driven experiment
    JEL: D72 D81 C91
    Date: 2023–06
  26. By: Ghislain Deleplace (LED - Laboratoire d'Economie Dionysien - UP8 - Université Paris 8 Vincennes-Saint-Denis)
    Abstract: The paper is a book review of Sergio Cremaschi's David Ricardo. An Intellectual Biography, published in 2022. It argues that Cremaschi's book testifies to the difficulty of applying intellectual history to the biographical genre, which is concerned with the portrait of an individual rather than the picture of a milieu. The paper nevertheless concludes that the book will be read with pleasure by all those who admire in Ricardo the fascinating economist that was also a gracious person.
    Keywords: Ricardo David, Biography, Intellectual history, economic epistemology
    Date: 2023
  27. By: Wrobel, Ralph
    Abstract: Since February 2022 - when Russia invaded the Ukraine - the geopolitical situation in the South Caucasus changed dramatically. On the one hand, EU sanctions on Russia made the "Middle Corridor" of the Chinese Belt and Road Initiative through the South Caucasus more attractive for China and Europe, on the other hand the "protective power" Russia is weakened by the war and the Western sanctions leaving a vacuum of power in the South Caucasus. As a result, Azerbaijan was able to reconquer the region Nagorno-Karabakh in September 2023 within a few days, only. Therefore, the region is still not more an unassailable Russian "backyard" or "sphere of interest" but place of a new "great game" of the main powers in the world. Beside Russia losing power - a slight rise of China can be observed while the West - U.S. and the EU - is still neglecting the region. Only Türkiye became a new active geopolitical player in the region. This may - beside all tragedy for the people of Nagorno-Karabakh - bring some "never ending conflicts" in the region to an end and may open up new opportunities for Armenia, Georgia and Azerbaijan to develop better economically in the near future.
    Keywords: Geopolitics, South Caucasus, Georgia, Armenia, Azerbaijan, EU, Belt & Road Initiative
    Date: 2023
  28. By: Dina Rasolofoarison (DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); C. A. Russell (Pepperdine University - Partenaires INRAE)
    Abstract: Visualization can assist the process of narrating theory. Although most researchers realize the benefit of figures to efficiently and effectively convey the essence of a theory, many lack the visual grammar and tools to create those figures. This editorial presents a five-step iterative process, NETSA, to assist the process of theory visualization.
    Date: 2023

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