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on Network Economics |
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Issue of 2017‒02‒26
five papers chosen by Pedro CL Souza Pontifícia Universidade Católica do Rio de Janeiro |
| By: | Mert Demirer; Francis X. Diebold; Laura Liu; Kamil Yılmaz |
| Abstract: | We use LASSO methods to shrink, select and estimate the high-dimensional network linking the publicly-traded subset of the world's top 150 banks, 2003-2014. We characterize static network connectedness using full-sample estimation and dynamic network connectedness using rolling-window estimation. Statically, we find that global bank equity connectedness has a strong geographic component, whereas country sovereign bond connectedness does not. Dynamically, we find that equity connectedness increases during crises, with clear peaks during the Great Financial Crisis and each wave of the subsequent European Debt Crisis, and with movements coming mostly from changes in cross-country as opposed to within-country bank linkages. |
| JEL: | C01 C32 G21 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23140&r=net |
| By: | Carlos Ramirez |
| Abstract: | This paper proposes a novel link between the propagation of shocks within production networks and asset prices. It develops a dynamic network model in which the propagation of firm cash-flow shocks via inter-firm relationships affects the economy's equilibrium asset prices. When calibrated to match key features of customer-supplier networks in the United States, the model generates long-run risks, high and volatile risk premia, and a low and stable risk-free rate. Consistent with data from firms in manufacturing and service industries, the model predicts that central firms in the network command lower risk premiums than peripheral firms, and that firm-level return volatilities exhibit a high degree of co-movement. |
| Keywords: | Equilibrium asset prices ; Inter-firm relationships ; Networks ; Shock propagation |
| JEL: | G12 E32 L10 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2017-14&r=net |
| By: | Norris, Jonathan (University of North Carolina at Greensboro, Department of Economics) |
| Abstract: | An adolescent’s family and peers, impart incentives on education through social identity shaping attitudes about school and performance. I model identity related mechanisms from family and peer ideals about education in a network model of adolescent effort in school and link it empirically with spatial econometrics. Both groups influence attitudes and changes in family ideals create spill-overs in attitudes. Attitudes impact performance in school, and changes in attitudes influence performance over the network. us, targeting family and peer ideals and attitudes about school can positively impact an adolescent’s educational traits and outcomes; effects that in turn ripple across a school. |
| Keywords: | Identity Economics; Peer Effects; Spatial Econometrics; Friendship Network |
| JEL: | C21 I21 J13 Z13 |
| Date: | 2017–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:ris:uncgec:2017_001&r=net |
| By: | Gerhards, Leonie; Gravert, Christina |
| Abstract: | Various empirical paper have shown that peers affect productivity and behavior in the workplace. However, the mechanisms through which peers influence each other are still largely unknown. In this laboratory experiment we study a situation in which individuals might look at their peers' behavior to motivate themselves to endure in a task that requires perseverance. We test the impact of unidirectional peer effects under individual monetary incentives, controlling for ability and tactics. We find that peers significantly increase their observers' perseverance, while knowing about being observed does not significantly affect behavior. In a second experiment we investigate the motives to self-select into the role of an observing or an observant subject and what kind of peers individuals deliberately choose. Our findings from this treatment provide first insights on the perception of peer situations by individuals and new empirical evidence on how peer groups emerge. |
| JEL: | C91 M50 J24 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145691&r=net |
| By: | Leshui He (Bates College); Stephen L. Ross (University of Connecticut) |
| Abstract: | This paper examines peer effects in a Chinese middle school where: 1. classes are randomly assigned to teachers, and 2. student quality across classes varies because student assignment is based on a noisy measure of student quality. Peer effects are concentrated primarily on math scores, as opposed to Chinese or English scores. Improvements in peers at the bottom of the distribution of ability leads to improvements in student performance both for the student’s own class and for sibling classes that share the same teachers, but are not connected in any other way. For middle and top tercile peers, improvements in peers appear to reduce student test scores. The positive effects of peers at the bottom of the distribution are primarily associated with the ability of boys in the class and the sibling class, while the negative effect of peers seems to be driven by same gender peers. Finally, the positive own class and sibling class peer effects arise primarily when the head teacher of the class or the sibling class, respectively, teaches math. |
| Keywords: | peer effects, teachers, middle school, Chinese education |
| JEL: | I21 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2017-014&r=net |