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on Macroeconomics |
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Issue of 2024‒06‒24
sixty-four papers chosen by |
| By: | Jaccard, Ivan |
| Abstract: | The evidence suggests that monetary policy transmission is asymmetric over the business cycle. Interacting financing frictions with a preference for liquidity provides an explanation for this fact. Our mechanism generates monetary asymmetries in a model that jointly reproduces a set of asset market and business cycle facts. Accounting for the joint dynamics of asset prices and business cycle fluctuations is key; in a variant of the model that is unable to produce realistic macro-finance implications, monetary asymmetries disappear. Our results suggest that asymmetries in the transmission mechanism critically depend on the macro-finance implications of monetary policy models, and that resorting to nonlinear techniques is not sufficient to detect monetary asymmetries. |
| Keywords: | Money Demand; Nonlinear Solution Methods; Asset Pricing in DSGE Models; Term Premium; Stochastic Discount Factor |
| JEL: | E31 E44 E58 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpm:dynare:081&r= |
| By: | Tomohiro Hirano; Joseph E. Stiglitz |
| Abstract: | This paper analyses the impact of credit expansions arising from increases in collateral values or lower interest rate policies on long-run productivity and economic growth in a two-sector endogenous growth economy with credit frictions, with the driver of growth lying in one sector (manufacturing) but not in the other (real estate). We show that it is not so much aggregate credit expansion that matters for long-run productivity and economic growth but sectoral credit expansions. Credit expansions associated mainly with relaxation of real estate financing (capital investment financing) will be productivity-and growth-retarding (enhancing). Without financial regulations, low interest rates and more expansionary monetary policy may so encourage land speculation using leverage that productive capital investment and economic growth are decreased. Unlike in standard macroeconomic models, in ours, the equilibrium price of land will be finite even if the safe rate of interest is less than the rate of output growth. |
| JEL: | E44 O11 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32479&r= |
| By: | Oliver Pfäuti; Fabian Seyrich; Jonathan Zinman |
| Abstract: | Business cycle models often abstract from persistent household heterogeneity, despite its potentially significant implications for macroeconomic fluctuations and policy. We show empirically that the likelihood of being persistently financially constrained decreases with cognitive skills and increases with overconfidence thereon. Guided by this and other micro evidence, we add persistent heterogeneity in cognitive skills and overconfidence to an otherwise standard HANK model. Overconfidence proves to be the key innovation, driving households to spend instead of precautionary save and producing empirically realistic wealth distributions and hand-to-mouth shares and MPCs across the income distribution. We highlight implications for various fiscal policies. |
| Keywords: | Household heterogeneity, cognitive skills, overconfidence, financial constraints, fiscal policy, HANK |
| JEL: | D91 E21 E62 E71 G51 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp2080&r= |
| By: | Maideu-Morera, Gerard |
| Abstract: | The European Sovereign debt crises (2010-2012) showcased how excessive private leverage can threaten sovereign debt sustainability, making the existing fiscal rules targeting only public debt insufficient. In this paper, I study the optimal joint design of fiscal rules and macroprudential policies with sovereign default risk. I first consider a stylized two-period model of a small open economy where both the local government and a representative household borrow internationally. A central authority internal-izes externalities from sovereign default by the local government and designs fiscal rules and macroprudential policies. The model yields two insights: (i) it provides a novel rationale for macroprudential policies, and (ii) sovereign debt limits that are a function of the quantity of private debt (private-debt-dependent fiscal rules) can im-plement the optimal allocation. Then, I generalize these results to a multiperiod model with heterogeneous households, aggregate risk, and a rich asset structure. Finally, I calibrate a quantitative version of the model to compute the private-debt-dependent fiscal rules and the size of the macroprudential wedges. |
| Keywords: | Fiscal rules; macroprudential policy; sovereign default; endogenous borrowing constraints; economic unions |
| JEL: | F34 F41 F45 E44 G28 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:129336&r= |
| By: | Ida, Daisuke; Okano, Mitsuhiro; Hoshino, Satoshi |
| Abstract: | This note examines the role of stock price stabilization in a small open new Keynesian model. We show that stabilizing stock prices is desirable to attain a unique rational expectations equilibrium and that the open economy effect has a significant impact on the determinacy condition. |
| Keywords: | Stock prices; Monetary policy rules; Terms of trade; Indeterminacy; Taylor principle; |
| JEL: | E52 E58 F41 |
| Date: | 2024–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:121050&r= |
| By: | Tänzer, Alina |
| Abstract: | This paper contributes a multivariate forecasting comparison between structural models and Machine-Learning-based tools. Specifically, a fully connected feed forward nonlinear autoregressive neural network (ANN) is contrasted to a well established dynamic stochastic general equilibrium (DSGE) model, a Bayesian vector autoregression (BVAR) using optimized priors as well as Greenbook and SPF forecasts. Model estimation and forecasting is based on an expanding window scheme using quarterly U.S. real-time data (1964Q2:2020Q3) for 8 macroeconomic time series (GDP, inflation, federal funds rate, spread, consumption, investment, wage, hours worked), allowing for up to 8 quarter ahead forecasts. The results show that the BVAR improves forecasts compared to the DSGE model, however there is evidence for an overall improvement of predictions when relying on ANN, or including them in a weighted average. Especially, ANNbased inflation forecasts improve other predictions by up to 50%. These results indicate that nonlinear data-driven ANNs are a useful method when it comes to macroeconomic forecasting. |
| Keywords: | Artificial Intelligence, Machine Learning, Neural Networks, Forecast Comparison/ Competition, Macroeconomic Forecasting, Crises Forecasting, Inflation Forecasting, Interest Rate Forecasting, Production, Saving, Consumption and Investment Forecasting |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:imfswp:295733&r= |
| By: | Zongxia Liang; Qi Ye |
| Abstract: | This paper delves into financial markets that incorporate a novel form of heterogeneity among investors, specifically in terms of their beliefs regarding the reliability of signals in the business cycle economy model, which may be biased. Unlike most papers in this field, we not only analyze the equilibrium but also examine welfare using objective measures while investors aim to maximize their utility based on subjective measures. Furthermore, we introduce passive investors and use their utility as a benchmark, thereby revealing the phenomenon of double loss sometimes. In the analysis, we examine two effects: the distortion effect on total welfare and the advantage effect of information and highlight their key factors of influence, with a particular emphasis on the proportion of investors. We also demonstrate that manipulating investors' estimation towards the economy can be a way to improve utility and identify an inner connection between welfare and survival. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.08822&r= |
| By: | Ari Kutai (Bank of Israel); Daniel Nathan (Bank of Israel); Milena Wittwer (Boston College) |
| Abstract: | We leverage the unique institutional feature that the Israeli government bond market operates on an exchange rather than over-the-counter to analyze whether and why having an exchange affects market liquidity during a crisis. We document how the liquidity crisis in March 2020 affected the Israeli government bond market, and conduct difference-in-differences analyses, comparing bid-ask spreads in exchange markets (such as the Israeli government bond and U.S. future market) with markets lacking an exchange (like the U.S. government bond market). Our findings support the idea that having an exchange enhances market liquidity. A counterfactual analysis using trade data from the Israeli exchange suggests that this is due to the ability of investors to readily provide liquidity to one another and the efficient netting of trade flows on an exchange. |
| Keywords: | Exchange, OTC market, government bonds, liquidity, crisis |
| JEL: | D4 G1 G12 G14 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:boi:wpaper:2024.03&r= |
| By: | Mr. Kalin I Tintchev; Laura Jaramillo |
| Abstract: | Using a comprehensive drought measure and a panel autoregressive distributed lag model, the paper finds that worsening drought conditions can result in long-term scarring of real GDP per capita growth and affect long-term price stability in Fragile and Conflict-Affected States (FCS), more so than in other countries, leaving them further behind. Lower crop productivity and slower investment are key channels through which drought impacts economic growth in FCS. In a high emissions scenario, drought conditions will cut 0.4 percentage points of FCS’ growth of real GDP per capita every year over the next 40 years and increase average inflation by 2 percentage points. Drought will also increase hunger in FCS, from alreay high levels. The confluence of lower food production and higher prices in a high emissions scenario would push 50 million more people in FCS into hunger. The macroeconomic effects of drought in FCS countries are amplified by their low copying capacity due to high public debt, low social spending, insufficient trade openness, high water insecurity, and weak governance. |
| Keywords: | climate change; long-term growth and inflation; climate policy |
| Date: | 2024–05–24 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/106&r= |
| By: | Tom S\"uhr; Samira Samadi; Chiara Farronato |
| Abstract: | Machine learning (ML) models are increasingly used in various applications, from recommendation systems in e-commerce to diagnosis prediction in healthcare. In this paper, we present a novel dynamic framework for thinking about the deployment of ML models in a performative, human-ML collaborative system. In our framework, the introduction of ML recommendations changes the data generating process of human decisions, which are only a proxy to the ground truth and which are then used to train future versions of the model. We show that this dynamic process in principle can converge to different stable points, i.e. where the ML model and the Human+ML system have the same performance. Some of these stable points are suboptimal with respect to the actual ground truth. We conduct an empirical user study with 1, 408 participants to showcase this process. In the study, humans solve instances of the knapsack problem with the help of machine learning predictions. This is an ideal setting because we can see how ML models learn to imitate human decisions and how this learning process converges to a stable point. We find that for many levels of ML performance, humans can improve the ML predictions to dynamically reach an equilibrium performance that is around 92% of the maximum knapsack value. We also find that the equilibrium performance could be even higher if humans rationally followed the ML recommendations. Finally, we test whether monetary incentives can increase the quality of human decisions, but we fail to find any positive effect. Our results have practical implications for the deployment of ML models in contexts where human decisions may deviate from the indisputable ground truth. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.13753&r= |
| By: | Valerie R. Boctor; Olivier Coibion; Yuriy Gorodnichenko; Michael Weber |
| Abstract: | Using data from a large survey of American households, we compare density forecasts elicited with bins- and scenarios-based questions. We show that inflation density forecasts are sensitive to the survey question designs used to elicit them. The within-person discrepancy is smaller, but still discernible, for unemployment expectations. The discrepancy in responses is systematically related to sociodemographic characteristics of respondents. The differences shed light on the significance of priming in bins-based inflation density forecasts. |
| JEL: | C83 D84 E31 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32406&r= |
| By: | Chu, Angus C.; Peretto, Pietro; Wang, Xilin |
| Abstract: | The goal of this study is to contribute to the debate on the role of government spending in shaping the growth process. We take the analysis in three new directions. First, we investigate the role of government spending in a scale-invariant Schumpeterian model of endogenous innovation. Second, we allow public spending to be the catalyst that precipitates the takeoff of the economy. Third, we postulate a production structure that violates the conventional condition for endogenous growth, namely, that the economy's reduced-form production function must be linear in the accumulated factor. With non-distortionary taxation, increasing productive government spending causes an earlier industrial takeoff and faster economic growth. With distortionary labor-income tax under elastic labor supply, instead, increasing productive government spending has a U-shaped effect on the timing of the industrial takeoff and an inverted-U effect on economic growth. Using cross-country panel data, we document an inverted-U relationship between productive government spending and economic growth. Calibrating the model to US data, we find that raising productive government spending from its historical value to to its growth-maximizing value causes an earlier industrial takeoff by over six decades and an increase in the long-run level of output by 129%. We also explore the robustness of our results under consumption tax and corporate income tax. |
| Keywords: | Government spending; taxation; industrialization; innovation; economic growth |
| JEL: | E6 O3 O4 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120797&r= |
| By: | Jiahao Weng; Yan Xie |
| Abstract: | In this study, we constructed daily high-frequency sentiment data and used the VAR method to attempt to predict the next day's implied volatility surface. We utilized 630, 000 text data entries from the East Money Stock Forum from 2014 to 2023 and employed deep learning methods such as BERT and LSTM to build daily market sentiment indicators. By applying FFT and EMD methods for sentiment decomposition, we found that high-frequency sentiment had a stronger correlation with at-the-money (ATM) options' implied volatility, while low-frequency sentiment was more strongly correlated with deep out-of-the-money (DOTM) options' implied volatility. Further analysis revealed that the shape of the implied volatility surface contains richer market sentiment information beyond just market panic. We demonstrated that incorporating this sentiment information can improve the accuracy of implied volatility surface predictions. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.11730&r= |
| By: | Mario Bossler; Lars Chittka; Thorsten Schank |
| Abstract: | We present the first empirical evidence on the 22 percent increase in the German minimum wage, implemented in 2022, raising it from Euro 9.82 to 10.45 in July and to Euro 12 in October. Leveraging the German Earnings Survey, a large and novel data source comprising around 8 million employee-level observations reported by employers each month, we apply a difference-in-difference-in-differences approach to analyze the policy's impact on hourly wages, monthly earnings, employment, and working hours. Our findings reveal significant positive effects on wages, affirming the policy's intended benefits for low-wage workers. Interestingly, we identify a negative effect on working hours, mainly driven by minijobbers. The hours effect results in an implied labor demand elasticity w.r.t. the employment volume of -0.17 which only partially offsets the monthly wage gains. We neither observe a negative effect on the individual's employment retention nor the regional employment levels. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.12608&r= |
| By: | Grégory Claeys; Armin Steinbach |
| Abstract: | How to find institutional arrangements for public-good provision, to maximise the benefits of public goods for EU members? |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:bre:wpaper:node_10043&r= |
| By: | Anirban Basu |
| Abstract: | I demonstrate that to achieve dynamic efficiency, the optimal share of total surplus that a social payer should transfer to an innovating industry for a current asset depends on the marginal product of investment and the share of profits invested by the industry on the current asset and not on returns from future innovations. This insight arises from using a dynamic multi-period model of optimal transfers rather than a static two-period model with one optimal transfer, as used in the literature. I delve into the implications for alternative pricing of healthcare innovations - value-based prices using cost-effectiveness analysis, monopoly prices under the social demand curve, and monopoly profit preserving prices under insurance – for surplus appropriation by the innovating industry. I also explore how alternative financing mechanisms used by social payers and the demand uncertainty that innovators face impact this appropriation share. I illustrate these concepts with a substantive example of pricing gene therapy for sickle cell disease in the United States |
| JEL: | I11 I13 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32480&r= |
| By: | Brummund, Peter (University of Alabama); Makowsky, Michael D. (Clemson University) |
| Abstract: | Participation in social groups ties members to local communities. Employers can capture these benefits as rents when geographically-specific club goods raise the cost of labor mobility. We measure ties to local clubs using the shares of households identifying with a minority religion, enrollment of children in Islamic schools, and membership in secular savings clubs. We identify larger wage markdowns where households have stronger ties to local club goods. Complementarity between labor market concentration and club goods offers an explanation of rising wage markdowns absent increasing concentration, while adding to the difficulty in separating monopsony rents from compensating wage differentials. |
| Keywords: | monopsony, imperfect competition, club goods, religion |
| JEL: | J42 J31 J24 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16999&r= |
| By: | Robert Braid (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier) |
| Abstract: | The monetisation of exchanges tends to favour economic development, yet many forms of payment persisted throughout the preindustrial era despite rapid growth. Services in particular were remunerated in a variety of forms which depended on the particular relationship between the employer and the worker. The evolution in the composition of wages impacted social relations and structures as much as standards of living. Through an extensive examination of its account registers as well as local legislation, this paper analyses the variety of ways the Holy Spirit Hospital of Marseille remunerated individuals it employed as doctors, surgeons, scribes, wet-nurses, domestic servants, artisans and casual laborers. Workers who lived separately from the hospital were usually paid only in cash, while employees who were part of the household could receive cloth, shoes, clothing, meals, housing and medical care in addition to a cash salary. Contrary to what historians have observed in other regions, the share of in-kind payments did not increase after the Black Death for casual agricultural workers, who were paid in cash through this period. Only construction workers started to receive meals in addition to wages in the 1360s. Domestic and agricultural servants, however, received fewer in-kind payments after the epidemic. More importantly, this study reveals the numerous services that were provided by individuals for strikingly below-market rates. It is argued that the hospital was able to significantly lower operating costs by offering individuals social currency, intangible benefits instead of cash or in-kind payments, in exchange for numerous and valuable services. After the Black Death, however, the value of social currency decreased relative to other forms of payment. |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04573252&r= |
| By: | Pierenkemper, Sarah; Potthoff, Jennifer; Stettes, Oliver |
| Abstract: | Die Möglichkeit aus dem Ausland zu arbeiten ist Wunsch vieler Beschäftigten. Rund 15 Prozent der deutschen Unternehmen bieten ihren Mitarbeitenden derzeit die Möglichkeit einer Workation an. Gründe für die geringe Verbreitung sind neben den allgemeinen Herausforderungen des mobilen Arbeitens zusätzliche arbeits-, sozial- und steuerrechtliche Hürden. Um Workations rechtssicher zu ermöglichen, bedarf es einer guten Vorbereitung einschließlich der Berücksichtigung rechtlicher Risiken. |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwkkur:295751&r= |
| By: | Hao Zeng; Wei Zhong; Xingbai Xu |
| Abstract: | The spatial autoregressive (SAR) model has been widely applied in various empirical economic studies to characterize the spatial dependence among subjects. However, the precision of estimating the SAR model diminishes when the sample size of the target data is limited. In this paper, we propose a new transfer learning framework for the SAR model to borrow the information from similar source data to improve both estimation and prediction. When the informative source data sets are known, we introduce a two-stage algorithm, including a transferring stage and a debiasing stage, to estimate the unknown parameters and also establish the theoretical convergence rates for the resulting estimators. If we do not know which sources to transfer, a transferable source detection algorithm is proposed to detect informative sources data based on spatial residual bootstrap to retain the necessary spatial dependence. Its detection consistency is also derived. Simulation studies demonstrate that using informative source data, our transfer learning algorithm significantly enhances the performance of the classical two-stage least squares estimator. In the empirical application, we apply our method to the election prediction in swing states in the 2020 U.S. presidential election, utilizing polling data from the 2016 U.S. presidential election along with other demographic and geographical data. The empirical results show that our method outperforms traditional estimation methods. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.15600&r= |
| By: | Chahed, Yasmine; Charnock, Robert; Du Rietz, Sabina; Joseph Lennon, Niels; Palermo, Tommaso; Parisi, Cristiana; Pflueger, Dane; Sundström, Andreas; Toh, Dorothy; Yu, Lichen |
| Abstract: | Purpose The purpose of this essay is to explore the opportunities and challenges that Early-Career Researchers (ECRs) face when they seek to contribute to academic knowledge production through research activities “other than” those directly focused on making progress with their own, to-be-published, research papers in a context associated with the “publish or perish” mentality. Design/methodology/approach Drawing broadly on the notion of technologies of humility (Jasanoff, 2003), this reflective essay develops upon the experiences of the authors in organizing and participating in a series of nine workshops undertaken between June 2013 and April 2021 as well as the arduous process of writing this paper itself. Retrospective accounts, workshop materials, email exchanges, and surveys of workshop participants provide the key data sources for the analysis presented in the paper. Findings The paper shows how the organization of the workshops is intertwined with the building of a small community of ECRs and exploration of how to address the perceived limitations of a “gap-spotting” approach to developing research ideas and questions. The analysis foregrounds how the workshops provide a seemingly valuable research experience that is not without contradictions. Workshop participation reveals tensions between engagement in activities “other than” working on papers for publication and institutionalized pressures to produce publication outputs, between the (weak) perceived status of ECRs in the field and the aspiration to make a scholarly contribution, and between the desire to develop a personally satisfying intellectual journey and the pressure to respond to requirements that allow access to a wider community of scholars. Originality/value Our analysis contributes to debates about the ways in which seemingly valuable outputs are produced in academia despite a pervasive “publish or perish” mentality. The analysis also shows how reflexive writing can help to better understand the opportunities and challenges of pursuing activities that might be considered “unproductive” because they are not directly related to to-be-published papers. |
| Keywords: | interpretive accounting research; technologies of humility; early-career researchers; problematization; gap-spotting; reflexivity |
| JEL: | M40 |
| Date: | 2024–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:121656&r= |
| By: | Seymour, Greg; Heckert, Jessica; Quisumbing, Agnes R.; Meinzen-Dick, Ruth S.; Malapit, Hazel J.; Paz, Florencia; Faas, Simone; Myers, Emily; Doss, Cheryl; Sinharoy, Sheela S.; Cheong, Yuk Fai; Yount, Kathryn M.; Hassan, Md. Zahidul; Hassan, Md. Imrul; Sharma, Sudhindra; Pokhrel, Pankaj; Sagastume, Mónica Dardón; Kanyanda, Shelton S. E.; Vundru, Wilbert D.; Moylan, Heather |
| Abstract: | Monitoring progress toward Sustainable Development Goal (SDG) 5—achieving gender equality and empowering all women and girls—remains challenging unless we incorporate women’s empowerment metrics into nationally representative and multi-topic surveys. To address this data gap, we designed the Women’s Empowerment Metric for National Statistical Systems (WEMNS) as a streamlined empowerment module suitable for the 50x2030 Initiative, a global partnership that aims to build capacity and close the agricultural data gap in 50 countries by 2030, as well as other large multi-topic surveys. WEMNS measures women’s and men’s empowerment and is applicable to urban and rural areas and a variety of livelihood strategies (farming, self-employment, wage labor) across countries in different stages of structural transformation. WEMNS is a counting-based, multidimensional index composed of four domains: intrinsic agency, instrumental agency, collective agency, and agency-enabling resources. Each domain is measured with binary indicators derived from question sets in the WEMNS module. In this paper, we describe the development and testing of WEMNS and its components, including: (1) WEMNS's distinctiveness from other empowerment metrics; (2) the iterative approach used to develop and pilot the WEMNS module in Bangladesh, Guatemala, Malawi, and Nepal, using cognitive interviewing, phone surveys, and face-to-face surveys; (3) analysis of quantitative pilot data; and (4) a summary of the findings from the cognitive interviewing. The paper concludes with a discussion of lessons learned and possibilities for further development of WEMNS and other empowerment metrics. |
| Keywords: | gender equality; women; women's empowerment; data; agricultural development; livelihoods; surveys |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:ifprid:2254&r= |
| By: | Kunimoto, Takashi (School of Economics, Singapore Management University); Zhang, Cuiling (School of Economics, Singapore Management University) |
| Abstract: | Crémer and McLean (1988) show that the seller can extract full surplus almost always by an incentive compatible, individually rational mechanism in a single-unit auction model with a finite type space in which agents' beliefs are correlated and their valuations can be interdependent. We first show that this paradoxically positive result can be extended to a model of bilateral trades. To make it more realistic, we investigate when ex-post efficiency and ex-post budget balance in bilateral trades can also be achieved by an incentive compatible, individually rational mechanism. We identify a necessary condition for the existence of such mechanisms and show that it is also sufficient for a two-type model. We next show that the identified condition is not sufficient in general. Through a series of examples, we show that the imposition of ex post budget balance in a bilateral trade model induces a delicate interaction between interdependent values and correlated beliefs, so that the existence of incentive compatible, individually rational mechanisms becomes a very subtle problem. Finally, focusing on a model with linear valuations, we give the precise sense in which a possibility result under interdependent values is more fragile than that under private values. |
| Keywords: | bilateral trade; interdependence; correlation |
| JEL: | C72 D78 D82 |
| Date: | 2024–03–31 |
| URL: | https://d.repec.org/n?u=RePEc:ris:smuesw:0000_000&r= |
| By: | Holger Strulik; Volker Grossmann |
| Abstract: | In this paper, we examine the effects of the Covid-19 pandemic on individual aging and longevity with special focus on socioeconomic disparities in health outcomes. We also explore the individual-specific effects of Long Covid. We develop and calibrate a health economic model based on principles of the biology of human aging that captures the interaction between infections and chronic health deficits. Our analysis suggests that neglecting this interaction leads to a gross underestimation of the long-term health impact of the pandemic. Our model also explains large socioeconomic health differences that can be attributed to infection protection behavior. |
| Keywords: | Covid-19, Long Covid, health behaviour, health deficits, health inequality, protection aversion, false beliefs, longevity |
| JEL: | D15 I10 I12 J24 J26 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_11104&r= |
| By: | Charlotte Emlinger; Karine Latouche |
| Abstract: | This paper estimates the impact of the inclusion of GIs in bilateral agreements on French exports of foodstuffs. We rely on a unique dataset of firms and products concerned by Geographical Indications (GIs) in the French agri-food industry (excluding wine) for 2012-2019, merged with firm-product-destination level data from French Customs and the French National Institute of Statistics. Controlling for market and firm characteristics, we compare the exports of GI firms with those of non-GI firms before and after the signing of the 13 agreements (25 destination countries) that include a list of GIs to be protected. We show that the protection of GIs in EU RTA helps French firms to reach new markets and to sell their products at higher price, but it depends on the level of protection provided by the agreement. |
| Keywords: | Geographical Indications;Regional Trade Agreements;Trade Margins |
| JEL: | F10 F14 |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2024-05&r= |
| By: | Banerjee, Swapnendu; Chakraborty, Somenath |
| Abstract: | This paper examines the impact of social preferences on the choice between individual production and team production. An inequity-averse principal can hire a single or a team of two agents to work on a single project. The agents are inequity-averse with respect to the principal. In this framework we show that even without ‘team synergy’ a moderately inequity-averse principal can opt for team production. Thus we provide an additional rationale for the empirically observed prevalence of team based production in terms of the possible existence of social preferences. Keeping social preferences fixed, we show that team production is likely in long-term employment relationships compared to short-run relationships when the principal is moderately inequity-averse. For sufficiently inequity-averse principal the incentive for team production remains the same across short-term and long-term relationships. |
| Keywords: | Other regarding preferences, inequity aversion, team contracts, Synergy |
| JEL: | D21 D86 M52 |
| Date: | 2022–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120996&r= |
| By: | Adam Altmejd |
| Abstract: | University graduates are two to five times as likely to hold a degree in the field that their parents graduated from. To estimate how much of this association is caused by the education choices of parents, I exploit admission thresholds to university programs in a regression discontinuity design. I study individuals who applied to Swedish universities between 1977 and 1992 and evaluate how their enrollment in different fields of study increases the probability that their children later study the same topic. I find strong causal influence. At the aggregate level, children become 73% more likely to graduate from a field that their parent has quasi-randomly enrolled in. The effect is always positive, but varies in size across fields. Engineering, medicine, social science, and business exhibit the largest effects. For these fields, parental enrollment increases child graduation rates with between 6.0 and 9.5 percentage points. I find little evidence for comparative advantage being the key driver of field inheritance. Parental field enrollment does not increase subject-specific skills in primary school, nor do labor market returns differ by access to parents with the same degree. Rather, parents seem to function as role models, making their own field choice salient. This is indicated by the fact that children are more likely to follow parents with the same gender, and that parental enrollment in gender incongruent fields is more impactful. |
| Keywords: | intergenerational transmission, fields of study |
| JEL: | I24 J62 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_11113&r= |
| By: | Wolter, Stefan C. (University of Bern); Zöllner, Thea (University of Bern) |
| Abstract: | Despite numerous measures intended to enhance gender equality, gender-specific study and career choices remain a persistent concern for policymakers and academics globally. We contribute to the literature on gendered career choices by focusing on explicitly stated parental preferences for their children’s occupations, using a large-scale randomized survey experiment with adults (N=5940) in Switzerland. The focus on parents (and hypothetical parents) is motivated by the observation that adolescents consistently mention their parents as the single most important factor influencing their career choices. The surveyed adults are presented with a realistic choice situation, in which their hypothetical daughter or son has been proposed two different training occupations. The pair of occupations presented to the adults is drawn from a random sample of 105 pairs of occupations, and the respondents are not informed about the gender distribution of the two occupations. Results show that adults are gender-neutral when advising a daughter but have a pronounced preference for male-dominated occupations when advising sons. Preferences are almost identical for parents and non-parents and across age cohorts of adults. |
| Keywords: | gender, occupational choice, career advice, vocational education |
| JEL: | J24 J16 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16955&r= |
| By: | Paul Waidelich; Joscha Krug; Bjarne Steffen |
| Abstract: | Policymakers regularly rely on public financial institutions and government offices to provide loans for clean energy projects. However, both the market failures that public loan provision addresses and its role in a policy strategy that also features instruments directly addressing environmental and innovation externalities remain unclear. Here, we develop a model of banks providing loans for clean energy projects that use a novel technology. This early-stage lending builds up banks’ financing experience, which spills over to peers and hence is undersupplied by the market. In addition to this cooperation problem, bankability requirements can result in a coordination failure whereby the banking sector remains stuck in an equilibrium with no loans for the novel technology even when a preferable equilibrium with loans exists. Public provision of early-stage loans is inferior to de-risking instruments in solving this cooperation problem because it crowds out private banks’ loan provision. However, public loan provision—ideally in combination with additional de-risking measures to support banks in internalizing learning spillovers—can more effectively resolve the coordination failure by pushing the banking sector to a better equilibrium. |
| Keywords: | climate policy, credit guarantees, government loans, multiple equilibria, renewable energy, state investment bank |
| JEL: | G21 H81 Q48 Q55 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_11118&r= |
| By: | Lee, King Fuei |
| Abstract: | The momentum effect is postulated to be a consequence of the disposition effect, which in turn, is a result of the interplay between the typically dominant diminishing sensitivity feature of prospect theory and the loss aversion feature. However, studies have shown that older individuals can exhibit a reverse disposition effect due to their heightened loss aversion compared to younger individuals. This paper hypothesises that as the population ages, the disposition effect of the average investor starts to diminish, thereby inducing a corresponding weakening of the momentum effect. We find empirical evidence showing that the long-horizon momentum profits are negatively related to changes in the proportion of the older population. |
| Keywords: | Momentum, demographics, prospect theory, loss aversion, diminishing sensitivity, aging population, disposition effect |
| JEL: | G12 J14 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120931&r= |
| By: | Garcia-Hombrados, Jorge (Universidad Autónoma de Madrid); Jansen, Marcel (Universidad Autónoma de Madrid); Martínez, Ángel (ESADE); Özcan, Berkay (London School of Economics); Rey-Biel, Pedro (ESADE); Roldán-Monés, Antonio (ESADE) |
| Abstract: | The implementation of evidence-based policies hinges on the dissemination of evidence to policymakers, a process influenced by the attributes of the sender. We conduct a country-wide RCT in which two ideologically opposite prominent think tanks, two major newspapers, and a research institution with nonsalient ideology communicate identical information about a low-cost, non-ideological, and effective policy based on published research findings to a large sample of Spanish local policymakers. We measure the impact of information directly on policy adoption and find heterogeneous effects. When the informing institution aligns ideologically with policymakers, communicating research results leads to a more than 65% increase in policy adoption compared to an uninformed control group, while informing from an opposite ideology does not lead to policy adoption. Our design also allows us to compare the impact of knowledge brokers, such as think tanks, and coverage in leading newspapers in adopting public policies. We find that, when ideologically aligned with policymakers, both are equally effective in increasing policy adoption. We propose a three-stage conceptual framework of policy adoption processes - selective exposure to information, belief updating, and policy implementation- and show that ideological alignment does not influence selective exposure to information. However, evidence from a post-intervention online experiment shows that ideological alignment affects belief updating regarding a recommended policy's effectiveness. Finally, we discuss the trade-offs between effectiveness and outreach when using ideologically aligned and nonsalient institutions to disseminate research evidence and comment on the economic impact of ideological alignment for policy implementation. |
| Keywords: | evidence-based, policy adoption, ideological alignment, RCT, policy brief, media |
| JEL: | P0 C93 D72 D78 D83 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp17007&r= |
| By: | Ahmad, Saba |
| Abstract: | Water, essential for all life, is abundantly present in nature and crucial for the environmental health of communities. Pakistan, ranking ninth among countries with limited access to clean water, has 21 million people out of 207 million facing this challenge. The study focuses on analyzing drinking water quality and health impacts in Havelian district. Twenty-one samples from eleven locations were examined for various physical and chemical parameters. Respondents overwhelmingly favored bottled water as safest, while solutions like filters and pipeline upgrades were suggested to address water quality issues. Few health issues were reported due to overall better water quality, with typhoid and diarrhea being most common. The study offers insights valuable for policymakers and researchers, discussed along with recommendations in subsequent sections. |
| Keywords: | Drinking water; quality; chemical properties; consumer health; consumer decisions. |
| JEL: | Q53 |
| Date: | 2024–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120870&r= |
| By: | Okuyama, Suzuka |
| Abstract: | Existing studies on Behaviour-based price discrimination (BBPD) typically show that firms offer discounts to encourage consumers located middle of the line segment to switch in a duopoly model. However, in practice, some firms offer both this discount and a discount to encourage consumers with lower preferences for the product itself to buy at the same time. I introduce heterogeneity of consumer willingness to pay and relax the assumption that the market is fully covered. Then, there are three purchase histories: bought from a firm, bought from another firm, and bought nothing. I assume that the two firms offer three different prices according to the purchase histories under BBPD. In the second period, firms offer discounts not only for rival customers but also for customers who bought nothing. On the other hand, firms offer higher prices for consumers who purchase the same goods over two periods in the second period than in the first period. This paper shows that BBPD does not lower all prices in the second period and does not increase consumer surplus. |
| Keywords: | Behavior-based price discrimination, Hotelling model. |
| JEL: | D43 L13 |
| Date: | 2024–03–16 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:120949&r= |
| By: | Claudio Ferraz; Dirk Foremny; Juan Francisco Santini |
| Abstract: | This paper investigates how non-tax revenues impact tax collection in Brazilian municipalities, focusing on shifts in intergovernmental transfers due to population updates. Our analysis reveals asymmetric effects of shocks: revenue gains lead to increased spending without tax reductions, while losses in transfers prompt investments in fiscal capacity and boost tax revenues. Enhancing fiscal capacity entails adjusting tax bureaucrat payments, improving property registries, and cracking down on delinquency, with heterogeneous responses based on political competition and the educational levels of local leaders and the bureaucracy. These findings emphasize the importance of rules that reduce the reliance on non-tax revenues and promote effective tax collection. |
| JEL: | H71 H72 H83 P11 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32440&r= |
| By: | Luis Guijarro; Maurizio Naldi; Vicent Pla; Jose-Ramon Vidal |
| Abstract: | In Beyond5G and 6G networks, a common theme is that sensing will play a more significant role than ever before. Over this trend, Integrated Sensing and Communications (ISAC) is focused on unifying the sensing functionalities and the communications ones and to pursue direct tradeoffs between them as well as mutual performance gains. We frame the resource tradeoff between the SAC functionalities within an economic setting. We model a service provision by one operator to the users, the utility of which is derived from both SAC functionalities. The tradeoff between the resources that the operator assigns to the SAC functionalities is analyzed from the point of view of the service prices, quantities and profits. We demonstrate that equilibrium quantities and prices exist. And we provide relevant recommendations for enforcing regulatory limits of both power and bandwidth. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.09963&r= |
| By: | Ludovic A. Julien; Gagnie Pascal Yebarth |
| Abstract: | This paper explores the possibility that a taxation mechanism always implements a Pareto-optimal allocation in bilateral exchange when the market participants behave strategically and noncooperatively. To this end, we reconsider the taxation mechanism, namely the endowment taxation with transfers, implemented in the strategic bilateral exchange models by Gabszewicz and Grazzini (JPET, 1999). In this framework of strategic bilateral exchange, we consider a general class of smooth utility functions, and we determine the conditions under which the taxation mechanism is Pareto-optimal, i.e., whether there exists an equilibrium tax such that endowment taxation with transfers always implements a Pareto-optimal allocation. Furthermore, we explain why this taxation mechanism could implement a Pareto-optimal allocation. |
| Keywords: | Cournot-Nash equilibrium, Pareto-optimality, taxation |
| JEL: | C72 D41 H21 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:drm:wpaper:2024-19&r= |
| By: | Coskun, Sena (Institute for Employment Research (IAB), Nuremberg, Germany); Dauth, Wolfgang (Institute for Employment Research (IAB), Nuremberg, Germany); Gartner, Hermann (Institute for Employment Research (IAB), Nuremberg, Germany); Stops, Michael (Institute for Employment Research (IAB), Nuremberg, Germany); Weber, Enzo (Institute for Employment Research (IAB), Nuremberg, Germany ; Univ. Regensburg) |
| Abstract: | "This paper examines how the shift towards working from home during and after the Covid-19 pandemic shapes the way how labor market and locality choices interact. For our analysis, we combine large administrative data on employment biographies in Germany and a new working from home potential indicator based on comprehensive data on working conditions across occupations. We find that in the wake of the Covid-19 pandemic, the distance between workplace and residence has increased more strongly for workers in occupations that can be done from home: The association of working from home potential and work-home distance increased significantly since 2021 as compared to a stable pattern before. The effect is much larger for new jobs, suggesting that people match to jobs with high working from home potential that are further away than before the pandemic. Most of this effect stems from jobs in big cities, which indicates that working from home alleviates constraints by tight housing markets. We find no significant evidence that commuting patterns changed more strongly for women than for men." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Bundesrepublik Deutschland ; Pandemie ; IAB-Open-Access-Publikation ; Auswirkungen ; Berufsgruppe ; Entwicklung ; geschlechtsspezifische Faktoren ; abhängig Beschäftigte ; Integrierte Erwerbsbiografien ; Integrierte Erwerbsbiografien ; Pendelwanderung ; regionale Verteilung ; regionaler Arbeitsmarkt ; Stadtregion ; Telearbeit ; Wohnsituation ; Arbeitsplatzwechsel ; Arbeitsweg ; 2016-2022 |
| JEL: | J61 R23 |
| Date: | 2024–04–12 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabdpa:202406&r= |
| By: | Hong Yuan; Minda Ma |
| Abstract: | The transportation sector is the third-largest global energy consumer and emitter, making it a focal point in the transition toward the net-zero future. To accelerate the decarbonization of passenger cars, this work is the first to propose a bottom-up charging demand model to estimate the operational electricity use and associated carbon emissions of best-selling battery electric vehicles (BEVs) in various climate zones in China during the 2020s. The findings reveal that (1) the operational energy demand of the top-20 selling BEV models in China, such as Tesla, Wuling Hongguang, and BYD, increased from 601 to 3054 giga-watt hours (GWh) during 2020-2022, with BEVs in South China contributing more than half of the total electricity demand; (2) from 2020 to 2022, the energy and carbon intensities of the best-selling models decreased from 1364 to 1095 kilowatt-hour per vehicle and from 797 to 621 kilograms of carbon dioxide (CO2) per vehicle, respectively, with North China experiencing the highest intensity decline compared to that in other regions; and (3) the operational energy demand of BEV stocks in China increased from 4774 to 12, 048 GWh during 2020-2022, while the carbon emissions of BEV stocks rose to 6.8 mega-tons of CO2 in 2022, reflecting an annual growth rate of ~50%. In summary, this work delves into the examination and contrast of benchmark data on a nation-regional scale, as well as performance metrics related to BEV chargings. The primary aim is to support nationwide efforts in decarbonization, aiming for carbon mitigation and facilitating the swift evolution of passenger cars toward a carbon-neutral future. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.10851&r= |
| By: | Bernardo Modenesi |
| Abstract: | I generalize state-of-the-art approaches that decompose differences in the distribution of a variable of interest between two groups into a portion explained by covariates and a residual portion. The method that I propose relaxes the overlapping supports assumption, allowing the groups being compared to not necessarily share exactly the same covariate support. I illustrate my method revisiting the black-white wealth gap in the U.S. as a function of labor income and other variables. Traditionally used decomposition methods would trim (or assign zero weight to) observations that lie outside the common covariate support region. On the other hand, by allowing all observations to contribute to the existing wealth gap, I find that otherwise trimmed observations contribute from 3% to 19% to the overall wealth gap, at different portions of the wealth distribution. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.05759&r= |
| By: | Bo Cowgill; Jonathan M. V. Davis; B. Pablo Montagnes; Patryk Perkowski |
| Abstract: | A principal often needs to match agents to perform coordinated tasks, but agents can quit or slack off if they dislike their match. We study two prevalent approaches for matching within organizations: Centralized assignment by firm leaders and self-organization through market-like mechanisms. We provide a formal model of the strengths and weaknesses of both methods under different settings, incentives, and production technologies. The model highlights tradeoffs between match-specific productivity and job satisfaction. We then measure these tradeoffs with data from a large organization’s internal talent market. Firm-dictated matches are 33% more valuable than randomly assigned matches within job categories (using the firm’s preferred metric of quality). By contrast, preference-based matches (using deferred acceptance) are only 5% better than random but are ranked (on average) about 38 percentiles higher by the workforce. The self-organized match is positively assortative and helps workers grow new skills; the firm’s preferred match is negatively assortative and harvests existing expertise. |
| Keywords: | internal labor markets, assortative matching, assignment mechanisms, team formation, matching |
| JEL: | M50 D47 J40 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_11120&r= |
| By: | Flörchinger, Daniela; Frondel, Manuel; Sommer, Stephan; Andor, Mark Andreas |
| Abstract: | Using identification with the environmentalist movement Fridays for Future, this paper empirically tests the effect of a novel type of prime on pro-environmental behavior: the reminder of their previously stated attitude towards Fridays for Future. On the basis of a large-scale survey experiment including the incentivized choice between a voucher for a flight or a train ride, we find evidence that respondents who receive such an identity prime are more likely to behave in line with the movement's moral principles in that they take the train. Our results suggest that pro-environmental behavior may be enhanced by reminding individuals of their attitude towards environmental matters. |
| Abstract: | Anhand der Identifikation mit der Umweltbewegung Fridays for Future wird in diesem Beitrag empirisch die Wirkung einer neuen Art von Prime auf umweltfreundliches Verhalten getestet: die Erinnerung an die zuvor geäußerte Einstellung zu Fridays for Future. Auf der Grundlage eines groß angelegten Umfrageexperiments, das die Wahl zwischen einem Gutschein für einen Flug oder eine Zugfahrt vorsieht, finden wir Hinweise darauf, dass die Befragten, die einen solchen Prime erhalten haben, sich mit größerer Wahrscheinlichkeit im Einklang mit den moralischen Prinzipien der Bewegung verhalten, indem sie den Zug wählen. Unsere Ergebnisse deuten darauf hin, dass umweltfreundliches Verhalten durch die Erinnerung an die eigene Einstellung zu Umweltfragen gefördert werden kann. |
| Keywords: | Pro-social behavior, priming, cognitive dissonance |
| JEL: | D81 D91 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:295230&r= |
| By: | Tang, H.; Reiner, D M.; Chen, W. |
| Abstract: | The deep decarbonization of China’s hard-to-abate industries requires urgent expansion of clean hydrogen deployment, which is still in its infancy ascribed to its weak cost-competitiveness compared with the fossil-based counterparts and uncertain diffusion prospects. To address this problem, this study evaluates the supply potential and levelized cost of hydrogen production from onshore wind and solar PV on a 1 km-grid level, which collaborates with the established bottom-up plant-level hydrogen demand inventory to reveal the spatial heterogeneity and sectoral disparity of the hydrogen layouts for the first time. A total maximum hydrogen demand potential of 108.9 Mt H2/yr is identified considering industrial layouts nowadays, which can be fed by 313 hydrogen hubs with the weighted-average levelized cost of 1.26 – 4.53 USD/kg H2 in 2060. Furthermore, a top-level strategy for scaling up shared hydrogen infrastructure networks is envisaged built upon the multi-criteria and multi-scale comparison of these hydrogen hubs, which may provide insights into the design of policy instruments tailored to specific hydrogen hubs. |
| Keywords: | Green hydrogen, hard-to-abate industries, supply, end-use |
| JEL: | D24 Q21 Q41 Q42 |
| Date: | 2024–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2426&r= |
| By: | Hallman, Alice; Johannesson, Magnus; Kujansuu, Essi |
| Abstract: | Alan et al. (2023) carry out a field experiment where they randomly allocate 20 corporations in Turkey to a treatment group or a control group. White-collar employees at the headquarters of the corporations are invited to participate in a training program to improve the workplace environment. They report that the program reduces separation (workers quitting) and improves prosocial behavior, workplace quality and support networks. We test the robustness reproducibility of these results, focusing on the results reported in Table 8 of the original paper. We first successfully reproduce the results in Table 8 computationally based on the posted code and data, and we then carry out five robustness tests. We do not find robust support for an effect of the treatment on any of the four primary outcome variables (separation, prosocial behavior, workplace quality and support networks). The relative effect size of the robustness tests averaged across the primary hypotheses is 0.62, suggesting some inflation in the original effect sizes. The effects reported in the paper are driven by the additional employees added to the sample about one year after the initial baseline data collection and after the randomization of firms to treatment and control (and this sample is not balanced on observables across the treatment and control group). Not having access to the raw data limited the possible robustness tests. |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:i4rdps:118&r= |
| By: | David E. Bloom; Klaus Prettner; Jamel Saadaoui; Mario Veruete |
| Abstract: | How will the emergence of ChatGPT and other forms of artificial intelligence (AI) affect the skill premium? To address this question, we propose a nested constant elasticity of substitution production function that distinguishes among three types of capital: traditional physical capital (machines, assembly lines), industrial robots, and AI. Following the literature, we assume that industrial robots predominantly substitute for low-skill workers, whereas AI mainly helps to perform the tasks of high-skill workers. We show that AI reduces the skill premium as long as it is more substitutable for high-skill workers than low-skill workers are for high-skill workers. |
| JEL: | J30 O14 O15 O33 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32430&r= |
| By: | Monika Kurian; Pawel Swianiewicz; Filipe Teles |
| Abstract: | Inter-municipal co-operation (IMC) has proved to be a constructive and efficient instrument in many EU and OECD countries for solving several issues at the local government level, including the lack of resources, administrative fragmentation, the investment burden of individual municipalities or better and more efficient organisation of public service provision. Although IMC is still often thought of as an alternative to the politically sensitive merging of small municipalities, nowadays its use has raised the interest of public administrations whose local governments are medium- and large-sized and that see this instrument as a way to empower local governments, provide them with more responsibilities, ensure sustainability of public services and fuel planning capacities and strategic thinking at the local and regional level. This paper summarises examples from EU and OECD countries where IMC either has a long-standing history or has recently received increased support and attention. It also provides an analysis of the legislative basis, support and incentives and practical data of IMC in the Western Balkan administrations. The paper offers several recommendations specific to the Western Balkan administrations for how to benefit from IMC. |
| Keywords: | cross-border co-operation, economies of scale, inter-municipal co-operation, local government autonomy, local government financing, local governments, multi-level governance, public administration, subnational governments, territorial fragmentation, Western Balkan administrations, Western Balkan local governments |
| Date: | 2024–06–06 |
| URL: | https://d.repec.org/n?u=RePEc:oec:govaac:70-en&r= |
| By: | Maynou, Laia; McGuire, Alistair; Serra-Sastre, Victoria |
| Abstract: | This paper examines the effect of new medical technology (robotic surgery) on efficiency gains and productivity changes for surgical treatment in patients with prostate cancer from the perspective of a public health sector organization. In particular, we consider three interrelated surgical technologies within the English National Health System: robotic, laparoscopic and open radical prostatectomy. Robotic and laparoscopic techniques are minimally invasive procedures with similar clinical benefits. While the clinical benefits in adopting robotic surgery over laparoscopic intervention are unproven, it requires a high initial investment cost and carries high on-going maintenance costs. Using data from Hospital Episode Statistics for the period 2000–2018, we observe growing volumes of prostatectomies over time, mostly driven by an increase in robotic-assisted surgeries, and further analyze whether hospital providers that adopted a robot see improved measures of throughput. We then quantify changes in total factor and labor productivity arising from the use of this technology. We examine the impact of robotic adoption on efficiency gains employing a staggered difference-in-difference estimator and find evidence of a 50% reduction in length of stay (LoS), 49% decrease in post-LoS and 44% and 46% decrease in postoperative visits after 1 year and 2 years, respectively. Productivity analysis shows the growth in radical prostatectomy volume is sustained with a relatively stable number of urology surgeons. The robotic technique increases total production at the hospital level between 21% and 26%, coupled with a 29% improvement in labor productivity. These benefits lend some, but not overwhelming support for the large-scale hospital investments in such costly technology. |
| Keywords: | efficiency gains; labor productivity; robotic surgery; staggered difference-in-differences; total factor productivity |
| JEL: | J1 |
| Date: | 2024–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:123635&r= |
| By: | Alexandra de Gendre; Krzysztof Karbownik; Nicolás Salamanca; Yves Zenou |
| Abstract: | We develop a multi-agent model of the education production function where investments of students, parents, and teachers are linked to the presence of minorities in the classroom. We then test the key implications of this model using rich survey data and a mandate to randomly assign students to classrooms. Consistent with our model, we show that exposure to minority peers decreases student effort, parental investments, and teacher engagement and it results in lower student test scores. Observables correlated with minority status explain less than a third of the reduced-form test score effect while over a third can be descriptively attributed to endogenous responses of the agents. |
| JEL: | D13 I23 I26 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32429&r= |
| By: | Ahmadzadeh, Amirreza; Waizmann, Stephan |
| Abstract: | This paper studies how to combine screening menus and inspection in mechanism design. A Principal procures a good from an Agent whose cost is his private information. The Principal has three instruments: screening menus —i.e., quantities and transfers — and (ex-ante) inspection. Inspection is costly but reveals the Agent’s cost. The combination of inspection and screening menus mitigates inefficiencies: the optimal mechanism procures an efficient quantity from all Agents whose cost of production is sufficiently low, regardless of whether inspection has taken place. However, quantity distortions still necessarily occur in optimal regulation; the quantity procured from Agents with higher production costs is inefficiently low. Both results are true regardless of the magnitude of inspection costs. In contrast to settings without inspection, incentive compatibility con-straints do not bind locally. This paper provides a method to address this challenge, characterizing which constraints bind. |
| Keywords: | Mechanism Design; Verification; Principal-Agent; Inspection, Procurement |
| JEL: | D82 D86 L51 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:129335&r= |
| By: | Gibson Mudiriza; Ariane De Lannoy; Anda David |
| Abstract: | With one of the highest youth unemployment rates in the world, South Africa’s planning for a just transition needs to take into account the vulnerabilities of its youth cohorts, especially those that can be qualified as not in education, employment or training. This paper provides a profile of young people not in education, employment, or training (NEET) in Mpumalanga province, the region with the highest exposure to the coal exit. Using data from the Quarterly Labour Force Survey (QLFS), the Census and the General Household Survey (GHS), our findings show that Mpumalanga has had a NEET youth rate of over 37% for the past decade – representing over 638 947 young people between the ages of 15 to 35, with almost three-quarters of them living in income-poor households. Contrary to popular belief, our findings dispel the misconceptions that young NEETs are disinterested or unwilling to work, as more than 640.000 of these youth expressed wanting to work. However, our analysis also reveals that a significant portion of unemployed young NEETs are new entrants to the labour market – meaning they have never worked before - who have been persistently searching for employment for extended periods of more than five years. Additionally, the study identifies key factors associated with being NEET, such as gender, household income and household adult employment. Notably, being female and living in income-poor households emerged as the factors most influential on the likelihood of being NEET among Black youths in Mpumalanga. The results also highlighted a pronounced gender dimension; being married and having children under the age of seven significantly elevated the probability of being NEET among Black female youths. Our findings underscore the need for a nuanced approach in developing targeted policies and interventions that align with NEET youth aspirations, considering the evolving landscape of the energy sector. In a country where access to the labour market explains the highest share of inequality, not giving enough focus to one of the most vulnerable populations such as the NEET youth in the process of a structural transformation will only increase socioeconomic inequalities. |
| Keywords: | Afrique du Sud |
| JEL: | Q |
| Date: | 2024–05–16 |
| URL: | https://d.repec.org/n?u=RePEc:avg:wpaper:en16790&r= |
| By: | Aleksei Smirnov; Egor Starkov |
| Abstract: | This paper studies strategic communication in the context of social learning. Product reviews are used by consumers to learn product quality, but in order to write a review, a consumer must be convinced to purchase the item first. When reviewers care about welfare of future consumers, this leads to a conflict: a reviewer today wants the future consumers to purchase the item even when this comes at a loss to them, so that more information is revealed for the consumers that come after. We show that due to this conflict, communication via reviews is inevitably noisy, regardless of whether reviewers can commit to a communication strategy or have to resort to cheap talk. The optimal communication mechanism involves truthful communication of extreme experiences and pools the moderate experiences together. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.05744&r= |
| By: | Fabian Gouret (CY Cergy Paris Université, THEMA) |
| Abstract: | To enhance the realism of the spatial model of voting, several authors have added a valence parameter into a Downsian utility function. However, when doing so, they rarely discuss the value that the exponent on the distance between voters and candidates should take. For some values of the exponent and the valence- advantage of one candidate over another one, the single-crossing property cannot be assumed. This paper underscores the importance of this consideration by providing first a necessary and sufficient condition for this property not being satisfied. I then discuss the identification of the key parameters in two econometric frameworks to realize various hypothesis tests related to the single-crossing property. I use data from pre-election surveys of the American National Election Studies. I mainly focus on the 2008 Presidential election, and find some evidence against the single-crossing hypothesis. I also discuss the results with more recent US Presidential elections, but it is more difficult to find evidence against this hypothesis. |
| Keywords: | spatial models of voting, valence, single-crossing property, survey |
| JEL: | D72 C81 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ema:worpap:2024-05&r= |
| By: | Francisca M. Antman; Kirk B. Doran; Xuechao Qian; Bruce A. Weinberg |
| Abstract: | Using the EconLit dissertation database and large-scale algorithmic methods that identify author demographics from names, we investigate the connection between the gender of economics dissertators and dissertation topics. Despite stagnation in the share of women among economics Ph.D.s in recent years, there has been a remarkable rise in gender-related dissertations in economics over time and in many sub-fields. Women economists are significantly more likely to write gender-related dissertations and bring gender-related topics into a wide range of fields within economics. Men in economics have also substantially increased their interest in gender-related topics. |
| JEL: | A23 I23 J16 O30 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32442&r= |
| By: | Méndez, Nathalie (Universidad de los andes- Escuela de Gobierno Alberto Lleras Camargo); Ramírez, Luisa (Universidad de los andes- Escuela de Gobierno Alberto Lleras Camargo) |
| Abstract: | La “incubadora” de liderazgo de la Escuela de Gobierno Alberto Lleras Camargo de la Universidad de los Andes, cumplió una década de formar líderes que contribuyen a una transformación positiva de la ciudad. Liderazgo por Bogotá (LxB) es uno de los programas estrella de Educación Continua y un espacio de encuentro para que personas de diferentes ideologías, profesiones e intereses, puedan unirse a pensar los problemas de la ciudad y proponer soluciones desde un enfoque de liderazgo colaborativo y humano. En conmemoración de los 10 años del programa, la Escuela de Gobierno Alberto Lleras Camargo, desarrolló en el año 2023 un ciclo de conversatorios orientados a poner en el centro del debate temas importantes para la ciudad como son: sostenibilidad ambiental, finanzas públicas, salud pública y seguridad. Este documento presenta la compilación de las relatorías de los cuatro conversatorios desarrollados y sintetiza las principales reflexiones y recomendaciones que surgieron de un ejercicio dialógico entre la academia, el sector público y demás actores. |
| Keywords: | Liderazgo público; sostenibilidad ambiental; finanzas públicas; salud pública; seguridad |
| Date: | 2024–05–04 |
| URL: | https://d.repec.org/n?u=RePEc:col:000547:000016&r= |
| By: | Cécile Couharde; Carl Grekou; Valérie Mignon; Florian Morvillier |
| Abstract: | This paper provides an in-depth analysis of the link between exchange rate misalignments and economic growth for a large sample of 170 countries over the 1973-2019 period. We rely on new cross-country data on multilateral currency misalignments and cross-quantile regressions to demonstrate that the seemingly divergent views of the Washington Consensus and the export-led growth theory on the role of currency undervaluations in promoting economic growth can be reconciled. Although any significant departures from the equilibrium exchange rate levels are found undesirable, we show that undervaluations are more likely to stimulate economic growth in developing countries. However, this positive impact is observed only up to certain thresholds of development level and currency undervaluation. Consequently, strategies in the poorest countries that systematically undervalue currencies in real terms to foster growth should be carefully tailored, as they raise the risk for these economies of switching from a positive to a less favorable growth regime, depending on both their specific wealth level and the extent of their currency undervaluation. |
| Keywords: | Cross-quantile Regressions;Economic Growth;Multilateral Currency Misalignments;Undervaluations |
| JEL: | F31 O47 C32 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2024-06&r= |
| By: | Aluykov, Maxim (King's College London); Gilev, Aleksei; Vyrskaia, Marina; Rumiantseva, Aleksandra; Zavadskaya, Margarita (University of Helsinki) |
| Abstract: | The first wave of the Panel Study of Russian Public Opinion and Attitudes (PROPA), conducted between March 13 and March 21, 2024, offers a comprehensive insight into the political and economic sentiment among Russian citizens. Run via an online survey involving 4, 757 participants, the study presents nuanced perspectives on the economic conditions, electoral integrity, and political landscape of Russia. The participants, all Russian residents 18 years old and older, completed the survey in 22 minutes on average, with incentives such as gift certificates. The demographic is slightly skewed towards younger women. Respondents with higher education were over-represented in the sample due to the nature of the online survey method. Responses indicate generally positive perceptions of the state of the economy. Al- though responses suggest a somewhat critical view of personal economic situations in the context of the war, with a significant number of respondents unable to afford expensive goods like cars, they manage day-to-day expenses successfully. This sentiment is crucial, as it underscores the prevailing economic discontent that is strongly correlated with voting strategies. Political support remains strong for President Vladimir Putin, with 71% expressing approval. However, this support does not indicate a unanimous support for the ongoing war in Ukraine, with only 43% of respondents claiming to support the war in response to a direct question. Our findings do not suggest noticeable presence of any preference falsification among the respondents recruited through online marketing panels when it comes questions about the war. The tension reveals a complex interplay of support and dissent, which is particularly pronounced between gender lines. The perceived legitimacy of election presents a dichotomy: while a significant majority consider the electoral processes fair, there is also a noticeable skepticism towards electoral malpractice, suggesting a reluctant acceptance of the status quo by many. Despite the high official records for Putin in the elections, the survey results suggest a disparity, with only 54.8% of the respondents supporting Putin. This difference points to the potential dissatisfaction not reflected in the official figures. Moreover, the acceptance of workplace mobilization and other electoral malpractice suggests a decline in citizens’ standards of free and fair elections. At the same time, respondents express balanced view on media where they get the news. Finally, most of the respondents answering the questions regarding Russia’s future expect their country to be strong and prosperous, while economic prosperity tend to be relatively more demanded than any kind of geopolitical greatness. Pessimists as well tend to focus more on future economic hardships. |
| Date: | 2024–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:ek8wy&r= |
| By: | Lee, King Fuei |
| Abstract: | This paper introduces a catering hypothesis of ESG disclosure, where managers adjust their disclosure policies based on investor valuation of high-disclosure companies. The study examines 2, 207 US-listed firms from 2005-2022, and finds a significant positive relationship between the ESG disclosure premium and firm ESG reporting. Managers respond to prevailing investor demand for ESG data by disclosing more when investors place a stock price premium on companies with high disclosure levels and disclosing less when investors prefer companies with low disclosure levels. This research enriches sustainability accounting literature by exploring the impact of managerial decision-making and investor demand on ESG disclosure, providing insights for stakeholders and policy development. It also expands understanding of the connection between corporate policy, sustainability, and catering considerations, benefiting stakeholders, directors, and investors interested in improving ESG practices and capital allocation for sustainable development. |
| Keywords: | ESG disclosure, ESG reporting, sustainability reporting, catering incentives, catering effects, disclosure premium |
| JEL: | M41 Q5 Q56 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120930&r= |
| By: | Daniele Nosenzo (Aarhus Univeristy, Denmark); Erte Xiao (Monash University, Australia); Nina Xue (Monash University, Australia) |
| Abstract: | The literature on punishment and prosocial behavior has presented conflicting findings. In some settings, punishment crowds out prosocial behavior and backfires; in others, however, it promotes prosociality. We examine whether the punisher’s motives can help reconcile these results through a novel experiment in which the agent’s outcomes are identical in two environments, but in one the pre-emptive punishment scheme is self-serving (i.e., potentially benefits the punisher), while in the other it is other-regarding (i.e., potentially benefits a third party). We find that self-serving punishment reduces the social stigma of selfish behavior, while other-regarding punishment does not. Self-serving punishment is thus less effective at encouraging compliance and is more likely to backfire. We further show that the normative message is somewhat weaker when punishment is less costly for the punisher. Our findings have implications for the design of punishment mechanisms and highlight the importance of the punisher’s motives in expressing norms. |
| Keywords: | punishment, norms, stigma, crowd out, expressive function of punishment |
| JEL: | C91 C72 D02 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:mos:moswps:2024-09&r= |
| By: | Mohamed Coulibaly; Yu-Chin Hsu; Ismael Mourifi\'e; Yuanyuan Wan |
| Abstract: | We propose a new specification test to assess the validity of the judge leniency design. We characterize a set of sharp testable implications, which exploit all the relevant information in the observed data distribution to detect violations of the judge leniency design assumptions. The proposed sharp test is asymptotically valid and consistent and will not make discordant recommendations. When the judge's leniency design assumptions are rejected, we propose a way to salvage the model using partial monotonicity and exclusion assumptions, under which a variant of the Local Instrumental Variable (LIV) estimand can recover the Marginal Treatment Effect. Simulation studies show our test outperforms existing non-sharp tests by significant margins. We apply our test to assess the validity of the judge leniency design using data from Stevenson (2018), and it rejects the validity for three crime categories: robbery, drug selling, and drug possession. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.06156&r= |
| By: | Thibaut Mastrolia; Tianrui Xu |
| Abstract: | Flaws of a continuous limit order book mechanism raise the question of whether a continuous trading session and a periodic auction session would bring better efficiency. This paper wants to go further in designing a periodic auction when both a continuous market and a periodic auction market are available to traders. In a periodic auction, we discover that a strategic trader could take advantage of the accumulated information available along the auction duration by arriving at the latest moment before the auction closes, increasing the price impact on the market. Such price impact moves the clearing price away from the efficient price and may disturb the efficiency of a periodic auction market. We thus propose and quantify the effect of two remedies to mitigate these flaws: randomizing the auction's closing time and optimally designing a transaction fees policy. Our results show that these policies encourage a strategic trader to send their orders earlier to enhance the efficiency of the auction market, illustrated by data extracted from Alphabet and Apple stocks. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.09764&r= |
| By: | Tobón-Cuenca, Juan Pablo; De La Fuente Solari, Jacinta; Rojas, Mariana González; Ayala, Renata Cavazos; Sotelo, Saragoza Nieves Ccarhuas; Palencia-Sánchez, Francisco (Pontificia Universidad Javeriana) |
| Abstract: | Food insecurity is defined as the “impossibility of not being able to buy enough food or nutritious food for general health and well-being”. According to PAHO, this problem has evidenced an increase in the regions of Latin America and the Caribbean, which led to the fact that between 2019 and 2021 the number of hungry people in the region has increased by 13.2 million, reaching a total of 56.5 million hungry people in 2021. This situation has affected the population in general, including school children. Faced with this problem, the implementation of a single isolated public policy would not allow a definitive solution, so it must be approached from multiple aspects in order to mitigate the impact of this on society. A clear example is the measure carried out in Colombia, which consisted of a Protocol for urban and peri-urban agroecological agriculture in public spaces. In this way, a single public health measure was obtained with an environmental, population and economic impact, which can be developed to mitigate food insecurity in schoolchildren. |
| Date: | 2024–05–14 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:ftjvz&r= |
| By: | Tobias Koenig; Thomas Brenner; ; |
| Abstract: | The evolution of industrial clusters has received much attention in the recent literature on evolutionary economic geography (EEG) and regional science. However, scientific results on the influence of different factors on the decline or renewal of mature industrial clusters are scarce. Therefore, this study identifies different factors: preconditions, triggering events and self-augmenting processes, and examines their influence on declining or renewing industrial clusters. In order to obtain transferable results, this meta-analysis is based on 69 individual empirical case studies from different countries and industries. The empirical results show, firstly, that the decline and renewal of industrial clusters is driven by different preconditions, triggering events and self-augmenting processes. Secondly, these factors change over time and may have both positive and negative dimensions. Finally, the decline of industrial clusters is more often associated with unfavorable preconditions and triggering events, while self- augmenting processes are more often found in the context of cluster renewal. |
| Keywords: | Cluster; Evolution; Decline; Renewal; Meta-analysis |
| JEL: | O33 R10 R11 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2418&r= |
| By: | Hjalmarsson, Linn; Schmid, Christian P.R.; Schreiner, Nicolas (University of Basel) |
| Abstract: | Markets require informed participants to function efficiently. This paper examines the impact of providing targeted information directly to patients on their purchasing-decisions regarding pharmaceutical drugs. We analyze the effect of informational letters sent by a Swiss health insurer to clients who had recently purchased a brand-name drug, informing them of available generic alternatives and potential savings. Utilizing the quasi-randomized timing of the letter dispatch, we employ an event study design with staggered treatment adoption to estimate the causal effect of patient information on generic substitution probability. Based on 540, 000 drug purchases by 60, 000 patients we find that the probability of switching to a generic alternative increases by almost 30 percentage points immediately after receiving the informational letter, representing nearly a fourfold rise in the substitution likelihood among previous brand-name drug buyers. Furthermore, the effect does not substantially depend on whether patients face a copayment for their drug purchase and thus personally financially benefit from switching. Our results highlight the limits of healthcare policies that rely solely on financial incentives, particularly if patients lack sufficient information in their decision-making. |
| Keywords: | Generic substitution, Pharmaceuticals, Patient information |
| JEL: | D12 D83 D90 I11 I12 I18 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:bsl:wpaper:2024/05&r= |
| By: | Kruse, Tobias; Mohnen, Myra; Sato, Misato |
| Abstract: | This study investigates whether financial markets respond to firms’ climate actions. We exploit the signing of the Paris Agreement, which required governments to commit to ambitious climate action, as a quasi-natural experiment. Using a proprietary green revenue database, we find that firms deriving a significant fraction of their revenues from green goods and services experience on average a 10% increase in cumulative abnormal returns following the agreement. The empirical evidence indicates that financial markets are responding to opportunities associated with new green markets, and strengthening climate policies can reallocate capital to support green private sector investment. |
| Keywords: | green revenues; Paris Agreement; event study; corporate financial performance; green finance; H2020-MSCA-RISE project GEMCLIME-2020 (GA number 681228; Future Research Leaders (ES/N016971/1); Centre for Climate Change Economics and Policy (CCCEP) (ES/R009708/1); and PRINZ (ES/W010356/1 |
| JEL: | D20 G14 G18 Q50 Q58 |
| Date: | 2024–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:121969&r= |
| By: | Shawn Berry |
| Abstract: | The persistence of lying by some consumers in their online posts of experiences with businesses is problematic, and taints the global pool of information that is used for decision making by people that assume they are true accounts of experiences. This study is based on data from my dissertation about fake online Google reviews of restaurants (Berry, 2024), and leverages an instrument that quantifies the trust of people. The findings are based on a sample of n=351, and provide a general proxy for lying in online reviews, and sketch out the characteristics of a typical person that has the propensity to be untruthful. A predictive model of posting untrue online reviews is constructed. The findings have wider implications for the study and monitoring of deceptive behavior, including the propagation of misinformation, and a means of quantifying the potential for antisocial behavior as measured by the trust of people instrument in Berry (2024). Directions for future research and limitations are also discussed. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.12743&r= |