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on Macroeconomics |
| By: | Mahmoud Arbouch |
| Abstract: | L’objectif de ce papier est d’essayer d’examiner si l’implémentation du cadre de ciblage de l’inflation par la banque centrale, permet une réduction de la dette publique dans les pays émergents, à travers l'effet disciplinant du ciblage sur la conduite de la politique budgétaire en général. Pour ce faire, la méthode d’évaluation d’impact utilisée est l’appariement par score de propension ou Propensity Score Matching (PSM), qui permet l’évaluation de l’effet de traitement du ciblage d’inflation sur la discipline budgétaire, en termes de réduction de la dette publique, dans les pays émergents ayant adopté ce cadre de politique monétaire. L’échantillon d’analyse comprend 40 pays émergents, dont 19 sont cibleurs de l’inflation et 21 non-cibleurs. Les résultats empiriques montrent qu’en moyenne, l’adoption du ciblage de l’inflation a eu un effet significatif sur la réduction de la dette publique. |
| Date: | 2022–12 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:rp_13-22 |
| By: | E Philip Davis; Dilruba Karim; Dennison Noel |
| Abstract: | The advent of macroprudential policy alongside monetary policy raises the issue whether macroprudential policy has an additional effect on bank interest rate margins to that of monetary policy, and if so, whether it accentuates or offsets the interest rate effect. In light of this, we estimate combined effects of macroprudential policies and monetary policies on bank interest margins for up to 3, 723 banks from 35 advanced countries over 1990-2018. In the short run, tightening of both types of policy tends to narrow the margin, while in the long run, monetary policy typically widens the margin while effects of macroprudential policies are mostly zero or positive, suggestive of countervailing action by banks. There are also significant interactions between macroprudential and monetary policy for several macroprudential policies; a tighter monetary stance is widely found to offset the negative effect of macroprudential policies on margins while a loose monetary policy leaves the negative effects intact, with potential consequences for financial stability. These results are of considerable relevance to policymakers, regulators and bank managers, not least when monetary policies are tight to reduce inflationary pressures. |
| Keywords: | Macroprudential policy, monetary policy, short-term interest rate, yield curve, bank interest margin |
| JEL: | E44 E52 E58 G21 G28 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nsr:niesrd:560 |
| By: | Elisa Fusco; Giuseppe Arbia; Francesco Vidoli; Vincenzo Nardelli |
| Abstract: | In the literature on stochastic frontier models until the early 2000s, the joint consideration of spatial and temporal dimensions was often inadequately addressed, if not completely neglected. However, from an evolutionary economics perspective, the production process of the decision-making units constantly changes over both dimensions: it is not stable over time due to managerial enhancements and/or internal or external shocks, and is influenced by the nearest territorial neighbours. This paper proposes an extension of the Fusco and Vidoli [2013] SEM-like approach, which globally accounts for spatial and temporal effects in the term of inefficiency. In particular, coherently with the stochastic panel frontier literature, two different versions of the model are proposed: the time-invariant and the time-varying spatial stochastic frontier models. In order to evaluate the inferential properties of the proposed estimators, we first run Monte Carlo experiments and we then present the results of an application to a set of commonly referenced data, demonstrating robustness and stability of estimates across all scenarios. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2410.20915 |
| By: | Garibaldi, Pietro (Collegio Carlo Alberto); Turri, Enrico D. (London School of Economics) |
| Abstract: | The neoclassical growth model assumes fixed labor supply and competitive labor markets. Is it harmless to ignore monopsonistic power in the neoclassical growth model? The paper argues that it is not, especially if a growth model needs to be consistent with the long-run dynamics of the labor share. This paper solves a minimalist growth model with monopsonistic power at the firm level and two production technologies with different degrees of efficiency. The paper shows that monopsonistic power by the representative firm implies either a "level" or a "growth" effect in the determination of the labor share. If the two sectors feature unbalanced growth, the economy converges to a an asymptotic balanced growth in which the labor share asymptotically decline, in line with secular evidence on labor share dynamics. The paper shows also that the monopsonistic equilibrium has sizeable "misallocative" effects, since it implies the use of less efficient technologies that are not used by the optimal growth problem. Finally, the paper shows that the negative welfare effect of monopsony is larger when the model accounts for endogenous labor supply as the redistribution from wages to profits induces a reduction in hours worked. The generalized model is also consistent with recent evidence on balanced growth with declining labor supply. |
| Keywords: | monopsony, growth, unbalanced growth, labor share, misallocation |
| JEL: | O40 O41 J23 J30 J42 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17392 |
| By: | Herbst, Chris M. (Arizona State University) |
| Abstract: | This paper uses the random assignment of poor families to treatment and control conditions in the Comprehensive Child Development Program (CCDP) to isolate the causal effect of center-based child care enrollment on child well-being. Operating throughout the early-1990's, the CCDP demonstration aimed to improve child development and family functioning by offering those in the treatment group five years of high-quality child care along with case management. As a result, treated children were substantially more likely to be enrolled in center-based programs throughout the preschool-age years, and I use this variation to estimate the impact of center care on children's language and social skills as well as health. I uncover mixed results: more time spent in center-based settings improves language skills but reduces social skills in the short-run, and both effects fade-out for most children within one to two years. I also find that early center care use is strongly predictive of later Head Start enrollment, indicating that a more deliberate "family retention strategy" may be effective at lengthening children's exposure to high-quality early education. |
| Keywords: | child care, child development, maternal employment, instrumental variables |
| JEL: | I21 J13 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17430 |
| By: | Bratti, Massimiliano (Università degli Studi di Milano); Granato, Silvia (European Commission, Joint Research Centre); Havari, Enkelejda (IÉSEG School of Management) |
| Abstract: | Exams play a key role in a student's learning process at university, and their organization may affect student performance. A high number of retakes, for instance, could encourage procrastination or reduce effort for each attempt. This article investigates the effects of a policy change at a major Italian university that reduced the number of exam retakes allowed per subject from six to three. Using a difference-in-differences strategy, we find that this policy significantly improved first-year outcomes, including lower dropout rates, higher exam pass rates, and increased credit accumulation. We conduct several robustness checks showing that only a small fraction of these improvements can be attributed to changes in the average quality of students enrolled following the reform. Additionally, the policy contributed to an increase in on-time graduation rates, which was the main objective of the reform, without harming student GPA. This study shows that implementing a cost-effective policy, such as limiting exam retakes, can substantially enhance student progression, reducing age at graduation. |
| Keywords: | student outcomes, exams, retakes, university, Italy |
| JEL: | I21 I23 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17400 |
| By: | Djedjiga KACHENOURA,; David CHETBOUN,; Marine LAGARDE,; Laurent MÉLÈRE,; Damien SERRA |
| Abstract: | En 2015, à l’approche de la COP16 à Paris, le discours de Mark Carney, alors gouverneur de la Banque d’Angleterre et mandaté par le Conseil de stabilité financière du G20, a fait date. Il alertait sur l’importance des risques financiers climatiques pour la stabilité des institutions financières et du système financier dans son ensemble. La charge politique de la transition était laissée aux États, à condition qu’elle soit ordonnée, tandis que la responsabilité de la stabilité incombait aux régulateurs et aux banques centrales. La « finance », informée par des régimes de divulgation d’informations extra-financières, allait orienter la demande en tant que pourvoyeur de capital. Ces régimes de divulgation devaient être initiés par les acteurs privés et soutenus par les régulateurs. M. Carney craignait cependant qu’ils manquent de cohérence, de comparabilité et de clarté. Depuis, ces régimes ont proliféré couvrant à la fois les risques et l’alignement des flux financiers sur l’Accord de Paris. Néanmoins, cette « théorie du changement » et la répartition des responsabilités des acteurs demeurent floues et ambiguës. Les régulateurs financiers doivent collaborer pour rendre ces différents régimes inter-opérants et expliciter leurs objectifs. De plus, les coûts de mise en conformité et la déconnexion de certains cadres des réalités nationales freinent la mobilisation des financements et peuvent mener à l’exclusion des entités les plus vulnérables, un sujet peu abordé. |
| JEL: | Q |
| Date: | 2024–11–05 |
| URL: | https://d.repec.org/n?u=RePEc:avg:wpaper:fr17553 |
| By: | Maria Pia Iocco (Department of Economics, University of Sussex, Falmer, BN1 9SL, UK, Economics & Institute for Policy Research (IPR), University of Bath, Claverton Down, Bath BA2 7AY) |
| Abstract: | : This paper studies the effect of school closures on students’ test scores in the Chilean educational market, which was a relatively easy-to-free and exit market. With a school exit rate varying from 1% to 2%, thousands of students are forced to reallocate at the end of every academic year. I use a nationwide, standardised test applied to the same cohort three times during their primary and middle years to analyse the impact of these closures on their math and reading performance. Using value-added models, the estimations show no effects on average on both subjects for girls and boys. However, there are heterogeneous results by type of closing school, with no impact in public schools but negative in voucher and private ones. In addition, consistent with the previous literature, the results show an immediate negative impact the first year after the closure but null or even positive outcomes in the medium term. Results also suggest that students moving to schools with better performance than the closing one can see a boost in their scores |
| Keywords: | planned school closures, student learning, test scores |
| JEL: | I21 I28 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:sus:susewp:0524 |
| By: | Canavire Bacarreza, Gustavo J. (World Bank); Yanez, Gunnar Poppe (Johns Hopkins University) |
| Abstract: | Developing countries face significant challenges in increasing women's labor force participation and improving job quality, partly due to the substantial presence of the informal sector. This paper examines the case of Bolivia, which has the highest level of informality in Latin America. We empirically investigate whether the expansion of children's access to education in Bolivia provides an additional explanation for the reduction in female participation in the informal sector, as children attending school would require less parental supervision. Using a structural model in which mothers decide to participate in formal markets at a cost inversely related to the likelihood of their children being enrolled in school, we find that the rise in primary school enrollment in Bolivia explains up to 40% of the decline in female workers under age 40 in informal markets. Our findings contribute to the growing body of evidence on the positive impact of children's access to education on women's labor market outcomes in developing countries. |
| Keywords: | Bolivia, female labor force participation, structural estimation |
| JEL: | C62 D13 J12 J13 J16 J21 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17429 |
| By: | Hisham Aidi |
| Abstract: | In recent years, personalist rule has spread around the world. As personalist rule gets upgraded and adopted across regions and regime-type, including in democracies, Africa and the Middle East are looking less exceptional, and mainstream academic theories are being challenged. The 2011 uprisings and their aftermath have destabilized social science thinking about Africa and the Middle East, creating an opportunity for fruitful cross-regional dialogue around concepts like personal rule, regime stability theory, state fragility, and identity politics, a conversation that is more urgent as Middle Eastern states are increasingly involved in the Horn of Africa. |
| Date: | 2023–03 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:pb_12_23 |
| By: | Peter Egger; Reto Foellmi; Ulrich Schetter (Center for International Development at Harvard University); David Torun |
| Abstract: | We introduce incumbency effects into a tractable dynamic model of international trade. The framework nests the canonical Melitz (2003)-Chaney (2008) model as a special case. The key novelty is that fixed costs of market access decrease with tenure. As a consequence, there is less market exit and entry in response to a shock. We derive a gravity equation and show that, ceteris paribus, countries that liberalized their trade relationship earlier trade more today. We provide supporting evidence for the underlying mechanism and derive an augmented ACR formula (Arkolakis et al., 2012) for the gains from trade that accounts for incumbency effects. A quantitative analysis suggests that our mechanism can explain up to 25% of countries’ home shares and that the gains from trade are, on average, 10% larger when accounting for incumbency effects. The analysis further reveals novel distributional effects of trade that benefit real wages but reduce profits. |
| Keywords: | incumbency effects, sunk cost of market access, gravity equation, gains from trade, home bias, path dependence |
| JEL: | F12 F14 F15 F17 |
| Date: | 2023–07 |
| URL: | https://d.repec.org/n?u=RePEc:glh:wpfacu:219 |
| By: | Dierkes, Maik; Fitter, Krischan; Sibbertsen, Philipp |
| Abstract: | We extend the monitoring of structural breaks in classic cointegration proposed by Wagner and Wied (2017) to explicitly allow for fractional cointegration and breaks in these fractional relations with possible deterministic trends. To estimate the parameters we use a fully modified OLS estimator and we estimate the integration order by the exact local whittle. In order to build the test statistic we establish a CUSUM test for a break in parameters or a break in the order of integration and derive the limiting distribution of the cumulative sum of the modified OLS residuals by using representations by Davidson and Hashimzade (2009) and Fox and Taqqu (1987). Using these limiting results we propose a detector and its limiting distribution as a function of fractional Brownian motions and prove the consistency of our procedure against fixed and local alternatives. The critical values for the monitoring are derived by bootstrap. In a Monte-Carlo study we show the finite sample behavior of our test and compare it to the one by Wagner and Wied (2017) in different scenarios of fractional cointegration. To conclude we show the applicability of the test by presenting the results of applying the test in the context of momentum investing. |
| Keywords: | long-memory time series, fractional cointegration, structural change, monitoring |
| JEL: | C32 C12 C52 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:han:dpaper:dp-728 |
| By: | Duc A. Nguyen; Steven Brakman; Harry Garretsen; Tristan Kohl |
| Abstract: | We study the post-war effects of the bombing of German cities during WWII on urban growth and use the synthetic control method (SCM) to construct comparison units for affected West-German cities. The reason to use SCM is that cities might experience structural changes that have nothing to do with the bombing of cities. Ignoring these structural changes could incorrectly attribute the decline of cities to the WWII bombing shock, while other factors are at work. The SCM takes these structural changes onboard. The synthetic units are used as counterfactuals to assess the long-run impact following the WWII bombing on the size distribution of 53 West-German cities. Our main contribution is that we do not only study whether bombed cities are mean-reverting, but also use the counterfactual to determine whether individual cities experienced a positive or negative impact. In general, we find mean reversion for 50-70% of cities, as well as a roughly balanced ratio of positively to negatively impacted cities. |
| Keywords: | urban growth, synthetic control method, WWII shock, city size distribution |
| JEL: | R12 C93 B40 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11423 |