nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2016‒09‒11
33 papers chosen by
Steve Ross
University of Connecticut

  1. Monetary Policy, Heterogeneity and the Housing Channel By Serdar Ozkan; Kurt Mitman; Fatih Karahan; Aaron Hedlund
  2. The Dispersed Multinational: Does Connectedness Across Spatial Dimensions Lead to Broader Technological Search? By Thomas J. Hannigan; Alessandra Perri; Vittoria Giada Scalera
  3. Sustainable Housing Policy By Deeksha Gupta; Itay Goldstein
  4. Non-Recourse Mortgage and Housing Price Boom, Bust, and Rebound By Bao, T.; Ding, L.
  5. Is there trickle-down from tech? Poverty, employment and the high-technology multiplier in US cities By Neil Lee; Andrés Rodríguez-Pose
  6. Local Government Proliferation, Diversity, and Conflict By Samuel Bazzi; Matthew Gudgeon
  7. Price determinants of newly built dwelling in Serbia By Ivan Nikoliæ
  8. Shrinkage of Value-Added Estimates and Characteristics of Students with Hard-to-Predict Achievement Levels (Journal Article) By Mariesa Herrmann; Elias Walsh; Eric Insenberg
  9. Student and Staff Attitudes and School Performance By Moshe Justman; Brendan Houng
  10. Developers pay developer charges By Cameron K. Murray
  11. Interdependent Hazards, Local Interactions, and the Return Decision of Recent Migrants By Govert Bijwaard; Christian Schluter
  12. Land value uplift from light rail By Cameron K. Murray
  13. Implementation of the Third Wave of Monitoring the Efficiency and Quality of School Education in the Context of the Increase in Wages of Teachers: Main Results By Avraamova, Elena M.; Klyashko, Tatianata; Loginov, Dmitriy; Mareeva, Svetlana
  14. Public Debt and Private Firm Funding: Evidence from Chinese Cities By Huang, Yi; Pagano, Marco; Panizza, Ugo
  15. Denmark; Selected Issues By International Monetary Fund. European Dept.
  16. The Rise and Fall of Local Self-Government: The Case of Petrozavodsk By Mikhail Turchenko
  17. The gradual evolution of buyer-seller networks and their role in aggregate fluctuations By Ryohei Hisano; Tsutomu Watanabe; Takayuki Mizuno; Takaaki Ohnishi; Didier Sornette
  18. Location, quality and choice of hospital: Evidence from England 2002/3 - 2012/13 By Giuseppe Moscelli; Luigi Siciliani; Nils Gutacker; Hugh Gravelle
  19. Knowledge Composition, Jacobs Externalities and Innovation Performance in European Regions By Antonelli, Cristiano; Crespi, Francesco; Mongeau, Christian; Scellato, Giuseppe
  20. The European Concept of 'Smart City' By Sedov, A.V.; Chelyshkov, P.D.; Rujitskaya, S.A.; Solntseva, M.G.
  21. Foreign Real Estate Tax Experience and its Applicability to Differentiate Tax Rates in Russia By Ivankina, Elena Vladimirovna; Boronina, A.; Kupriyanov, S.L.
  22. Labour market turnovers among South African youths By Burger, Rulof; Ito, Seiro
  23. The Role of Fiscal Transfers in Smoothing Regional Shocks; Evidence from Existing Federations By Tigran Poghosyan; Abdelhak S Senhadji; Carlo Cottarelli
  24. Sorting and Wage Inequality By Kory Kantenga
  25. Measuring how the knowledge space shapes the technological progress of European regions By Silvia Rita Sedita; Ivan De Noni; Roberta Apa; Luigi Orsi
  26. Measuring Regional Ethnolinguistic Diversity in Sub-Saharan Africa: Surveys vs. GIS By Boris Gershman; Diego Rivera
  27. Paternal Multipartner Fertility and Child Neighborhood Disorder By Colleen Wynn
  28. When Speculators Meet Constructors: Positive and Negative Feedback in Experimental Housing Markets By Hommes, C.H.; Bao, T.
  29. Model-based variance estimation in non-measurable spatial designs By Roberto Benedetti; Giuseppe Espa; Emanuele Taufer
  30. Agglomeration economies: the heterogeneous contribution of human capital and value chains By Dario Diodato; Frank Neffke,; Neave O’Clery
  31. Wagner's law, fiscal discipline, and intergovernmental transfer: Empirical evidence at the U.S. and German state levels By Funashima, Yoshito; Hiraga, Kazuki
  32. New Regions of the Russian Federation in the Socio-Cultural and Political Processes By Vasilyeva, O. V.; Golubchenko, I. V.; Koroteeva, Oksana
  33. A Comment on "Sequential Spatial Competition in Vertically Related Industries with Different Product Varieties" By Eleftheriou, Konstantinos; Michelacakis, Nickolas

  1. By: Serdar Ozkan (University of Toronto); Kurt Mitman (Stockholm University); Fatih Karahan (Federal Reserve Bank of New York); Aaron Hedlund (University of Missouri)
    Abstract: We investigate the role of housing and mortgage debt in the transmission of monetary policy to household consumption and the aggregate economy. In order to do so, we develop a heterogenous agents model with a frictional housing market, nominal long-term borrowing, default, and price rigidities. The model is able to capture rich heterogeneity in home ownership and leverage. Endogenous cyclical movements in house prices as well as counter-cyclical dynamics in the liquidity of housing allows us to explore the various indirect mechanisms through which monetary policy affects consumption. Nominal long-term mortgage debt implies that changes in monetary policy will result in redistribution between lenders and borrowers. Further, a contractionary monetary policy shock raises the cost of borrowing which reduces liquidity in the housing market, depresses house prices and feeds back into increasing the cost of borrowing. We find that this amplification channel disproportionally affects households with high leverage and high marginal propensities to consume. Finally, we investigate how booms and busts in the housing market asymmetrically affect the efficacy of monetary policy.
    Date: 2016
  2. By: Thomas J. Hannigan (Strategic Management Department, Fox School of Business, Temple University); Alessandra Perri (Dept. of Management, Università Ca' Foscari Venice); Vittoria Giada Scalera (Amsterdam Business School, University of Amsterdam)
    Abstract: The multinational enterprise (MNE) is the superior form of organization to play arbitrageur of country differences, particularly with respect to high knowledge activities. To this end, extant IB literature has devoted significant efforts to the transfer of knowledge across countries via local embeddedness. However, in a modern business environment characterized by dispersed value chain activities and falling spatial transaction costs, collaborative innovation relationships may be far more complex. In this paper, we argue that the connectedness of inventor networks Ð rather than knowledge spillovers - may transcend requirements of local embeddedness and serve as a crucial source of new ideas and exploration into new technologies. Further, we posit that these collaborations stem out of locations at the subnational level, such as cities, and fall along the somewhat orthogonal dimensions of foreign and domestic connections. Finally, we argue that the operational footprint of the firm serves as a positive moderator on the impact of connectedness on technological exploration.
    Keywords: Innovation, Economic Geography, Regional Innovation, Connectedness, Clusters, Multinational Enterprises (MNEs)
    JEL: M16 O32
    Date: 2016–09
  3. By: Deeksha Gupta (Wharton Business School); Itay Goldstein (University of Pennsylvania)
    Abstract: Investment in housing is often thought of as an important tool for household wealth accumulation and for stimulating economic activity. As such, many policies aim to promote investment in housing and support housing prices. However, empirical research on the effect of such policies on wealth accumulation and investment in the economy is mixed. In this paper, we develop a comprehensive framework for studying the effect of housing investment on household wealth accumulation, the value of policies subsidizing investment in housing and the form that such policies should take. We find that when households are financially constrained, the price of housing generates externalities on investment in the economy and subsequently on household wealth accumulation. At times, it can be optimal to decrease the price of housing rather than to support high housing prices. Contrary to standard economic theory, we find that subsidizing the demand-side of the housing market and the supply-side of the market have different effects on welfare. When the return from real estate investment is high, a combination of subsidies for construction companies and taxes on purchases of houses can be optimal.
    Date: 2016
  4. By: Bao, T. (University of Groningen); Ding, L. (University of Groningen)
    Abstract: This paper investigates the impact of non-recourse vs. recourse mortgages on housing price dynamics in major US metropolitan statistical areas for the period from 2000 to 2013. We find evidence that non-recourse states experience faster price growth during the boom period (2000-2006), a sharper price drop during the bust period (2006-2009) and faster price recovery in the rebound period after a crisis (2009-2013). Moreover, the volatility of housing prices is higher in non-recourse states than in recourse states, particularly during the rebound period.
    Date: 2015
  5. By: Neil Lee; Andrés Rodríguez-Pose
    Abstract: High-technology industries are seen as important in helping urban economies thrive, but at the same time they are often considered as potential drivers of relative poverty and social exclusion. However, little research has assessed how high-tech affects urban poverty and the wages of workers at the bottom of the pyramid. This paper addresses this gap in the literature and investigates the relationship between employment in high-tech industries, poverty and the labor market for non-degree educated workers using a panel of 295 Metropolitan Statistical Areas (MSAs) in the United States between 2005 and 2011. The results of the analysis show no real impact of the presence of high-technology industries on poverty and, especially, extreme poverty. Yet there is strong evidence that tech-employment increases wages for non-degree educated workers and, to a lesser extent, employment for those without degrees. These results suggest that while tech employment has some role in improving welfare for non-degree educated workers, tech-employment alone is not enough to reduce poverty.
    Date: 2016–08
  6. By: Samuel Bazzi (Boston University and The Bureau for Research and Economic Analysis of Development (BREAD)); Matthew Gudgeon (Boston University)
    Abstract: The creation of new local governments is a pervasive feature of decentralization in developing countries. This redistricting process often causes substantial changes in two widely debated sources of conflict: diversity and contestable public resources. Using new geospatial data on violence and the plausibly exogenous timing of district creation in Indonesia, we show that allowing for redistricting along group lines can reduce conflict. However, these reductions are undone and even reversed if the newly defined electorates are ethnically polarized, particularly in areas that receive an entirely new seat of government. We highlight changes in the salience of ethnic cleavages as a key mechanism driving the violent contestation of political control. Overall, the findings illustrate the policy tradeoffs associated with redistricting and offer novel insight into the instrumental role of ethnicity in shaping conflict.
    Keywords: Indonesia, Violence, Political Development, Demographic/Socioeconomic
    JEL: D72 D74 H41 H77 O13 Q34
    Date: 2016–09
  7. By: Ivan Nikoliæ (National Bank of Serbia)
    Abstract: This paper analyses the determnants of newly built dwelling prices in Serbia in a panel of 24 cities over the period 2011-2014. Results suggest that dwelling prices primarily tend to rise with populations growth and real total net wages as a proxy of household incomes, while declines in effective interest rate on housing are associated with higher dwelling prices. Additional explanatory variables, such as the level of development of observed cities, geographical distance from the capital, or real GDP dinamics in the country, even though the correct sign, didn't have statisticaly significance influence on the dependant variable.
    Keywords: dwelling, prices, real estate market
    Date: 2015–08
  8. By: Mariesa Herrmann; Elias Walsh; Eric Insenberg
    Abstract: This article investigates how shrinkage affects the value-added estimates of teachers of hard-to-predict students.
    Keywords: Bayesian methods, Education, Measurement error
    JEL: I
  9. By: Moshe Justman (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; and Department of Economics, Ben Gurion University of the Negev); Brendan Houng (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
    Abstract: This report assesses the extent to which student and staff opinions towards school — specifically, Victoria's Attitudes to School Survey (ATSS) administered to students and its School Staff Survey (SSS)—can improve predictions of government school performance reflected in students Australian Tertiary Admissions Ranks (ATARs), beyond predictions based on students' Year-9 reading and numeracy NAPLAN scores, their demographic characteristics and their socioeconomic status (SES). As the number of questions in the two surveys is very large, we first reduce their dimensionality by combining sets of similar questions into broader categories, and calculate average student answers within schools. (We are not able to identify student attitude responses individually.) We then add these variables to our school-level prediction regressions. While the added explanatory power of these variables in predicting school success rates is limited, we find that for all four success indicators, the student survey variables add more explanatory power than the staff survey variables. Statistically significant coefficients appear sporadically for student motivation, connectedness to peers, a stimulating learning environment, class behaviour, and, surprisingly, student distress. However, these do not necessarily indicate causal effects: our results may reflect, wholly or in part, the more positive attitudes to school of successful students and their teachers, collinearity between observed variables, possible confounding factors, and the subjective nature of survey responses. Finally, we emphasize that ATAR values are only one imperfect measure of school performance. About half the students in a cohort do not go on to university, and for such students other measures of school performance are relevant. The predictive power of these surveys is of secondary importance to their intrinsic value in providing information on student and teacher attitudes as direct indicators of what is happening in schools. Engagement and well-being are significant positive outcomes in themselves."
    Keywords: Student and staff attitudes, access to higher education, standardized tests, longitudinal analysis, NAPLAN, ATAR, VCE, Victoria, Australia"
    JEL: I21
    Date: 2016–09
  10. By: Cameron K. Murray (School of Economics, The University of Queensland, St Lucia, Brisbane, Australia)
    Abstract: Existing empirical studies of the price and quantity effects on new dwellings from developer charges (DCs), or impact fees, are limited by a lack of naturally occurring variation in the DC size. It is therefore difficult to isolate any behavioural effect from the mechanical relationship of DC and price arising from larger dwellings being levied with higher DCs. To overcome this problem we use data over a period incorporating a surprise policy change in Queensland, Australia, that introduced a cap on DCs which required them to be later changed, both upwards and downwards, for different dwelling types in different local council areas. Our model estimation shows that there are no measurable effects on price or quantity of new dwellings from DCs, supporting the practitioner's view of the charge being economically benign and fully incident on the landowner, even when the landowner is a property developer. When we instead include the baseline DC for each sale prior to the policy change, the problem of capturing only the mechanical effect arises once again, and model estimates using this baseline DC are similar to others studies that have instead claimed large behavioural price effects from DCs. The results are consistent with a real options view of the developer's economic situation.
    Keywords: Impact fees, developer charges, natural experiment
    Date: 2016–08–30
  11. By: Govert Bijwaard (Netherlands Interdisciplinary Demographic Institute); Christian Schluter (Centre de la Vieille Charite)
    Abstract: Consider the duration of stay of migrants in a host country. We propose a statistical model of locally interdependent hazards in order to examine whether interactions at the level of the neighbourhood are present and lead to social multipliers. To this end, we propose and study a new two-stage estimation strategy based on an inverted linear rank test statistic. Using a unique large administrative panel dataset for the population of recent labour immigrants to the Netherlands, we quantify the local social multipliers in several factual and counterfactual experiments, and demonstrate that these can be substantial.
    Keywords: interdependent hazards, local interaction, social multipliers, return migration
    JEL: C41 C10 C31 J61
    Date: 2016–08
  12. By: Cameron K. Murray (School of Economics, The University of Queensland, St Lucia, Brisbane, Australia)
    Abstract: Land value gains attributable to the light rail system on the Gold Coast, Australia, are estimated. Using the full history of statutory land valuations of Gold Coast properties, a model of location-specifi c gains is estimated, allowing for price e ffects at multiple distances from stations across time. Total value gains to nearby landowners are $300 million, or 25% of the capital cost of the project, This estimate is net of automatic property tax increases of $4.8million in 2015-16. Substantial additional scope to fund transport investment from value gains is apparent.
    Keywords: Land value, betterment, light rail
    Date: 2016–08–30
  13. By: Avraamova, Elena M. (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Klyashko, Tatianata (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Loginov, Dmitriy (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Mareeva, Svetlana (National Research University Higher School of Economics)
    Abstract: The character of this study is a monitoring one, and it is devoted to the analysis of the effects obtained as a result of increasing of teachers wage. The information base is a survey of principals, teachers and parents of pupils, since, according to the methodology, each of these groups has its own vision of the effectiveness of the school and the impact on the effectiveness of the reviewed management solutions (growth of the teachers wage).
    Keywords: teachers wage, school education, effectiveness
    Date: 2016–06–07
  14. By: Huang, Yi; Pagano, Marco; Panizza, Ugo
    Abstract: In China, local public debt issuance between 2006 and 2013 crowded out investment by private manufacturing firms by tightening their funding constraints, while it did not affect state-owned and foreign firms. Using novel data for local public debt issuance, we establish this result in three ways. First, local public debt is inversely correlated with the city-level investment ratio of domestic private manufacturing firms. Instrumental variable regressions indicate that this link is causal. Second, local public debt has a larger negative effect on investment by private firms in industries more dependent on external funding. Finally, in cities with high government debt, firm-level investment is more sensitive to internal funding, also when this sensitivity is estimated jointly with the firm's likelihood of being credit-constrained. Altogether, these results suggest that the massive public debt issuance associated with the post-2008 fiscal stimulus curtailed private investment thus weakening China's long-term growth prospects.
    Keywords: China.; credit constraints; Crowding out; investment; Local public debt
    JEL: E22 H63 H74 L60 O16
    Date: 2016–09
  15. By: International Monetary Fund. European Dept.
    Abstract: This paper examines the selected issues related to the economy of Denmark: divergence in house prices, house prices in Denmark's cities, macroprudential policies, and product market reform and firm productivity. Recent house price developments in Denmark have been characterized by a growing divergence between different parts of the country, with big cities experiencing much more rapid price increases than other parts. House price booms and busts in Denmark, like in many other countries, are a big-city phenomenon. Macroprudential policies can help contain risks for households, the financial system, and the broader economy, but they should be carefully calibrated to avoid an undue drag on growth.
    Keywords: Housing;Housing prices;Productivity;Industry;Private sector;Macroprudential Policy;Selected Issues Papers;Denmark;
    Date: 2016–06–27
  16. By: Mikhail Turchenko (National Research University Higher School of Economics)
    Abstract: On September 8, 2013 the mayoral election was held in Petrozavodsk, the capital city of the Republic of Karelia. An independent candidate Galina Shirshina gained success in this contest. On December 25, 2015 Shirshina was dismissed by the Petrozavodsk City Councillors. Her misgovernment of the city’s public sector was the official explanation for her dismissal. An alternative explanation of why she lost her position, was her refusal to conform with the regional power vertical. In accordance with the obtained results, the leading role in Shirshina’s recall was played by the Karelian authorities. They decided to remove Shirshina after their failure to control her actions as mayor. The key step towards the implementation of this decision was elimination of the autonomy of the local political elites, who supported the mayor of Petrozavodsk and controlled the majority of the municipal deputies. The regional authorities replaced popular mayoral elections in the city with the appointment of a city manager to assure their political control in the future. This case study shows that the survival of mayoral governance and the direct mayoral elections in the cities of Russia depend on mayoral loyalty to the regional authorities
    Keywords: local politics, local elites, electoral authoritarianism, Russia
    JEL: D72 D74
    Date: 2016
  17. By: Ryohei Hisano (Social ICT Research Center, Graduate School of Information Science and Technology, The University of Tokyo); Tsutomu Watanabe (Graduate School of Economics, The University of Tokyo); Takayuki Mizuno (Information and Society Research Division, National Institute of Informatics); Takaaki Ohnishi (Social ICT Research Center, Graduate School of Information Science and Technology, The University of Tokyo); Didier Sornette (Department of Management, Technology and Economics, ETH Zurich, Swiss Federal Institute of Technology)
    Abstract: Buyer-seller relationships among firms can be regarded as a longi- tudinal network in which the connectivity pattern evolves as each firm receives productivity shocks. Based on a data set describing the evolu- tion of buyer-seller links among 55,608 firms over a decade and structural equation modeling, we find some evidence that interfirm networks evolve reflecting a firm's local decisions to mitigate adverse effects from neigh- bor firms through interfirm linkage, while enjoying positive effects from them. As a result, link renewal tends to have a positive impact on the growth rates of firms. We also investigate the role of networks in aggregate fluctuations.
    Date: 2016–08
  18. By: Giuseppe Moscelli (Economics of Social and Health Care Research Unit, Centre for Health Economics, University of York, UK.); Luigi Siciliani (Department of Economics and Related Studies, University of York, UK); Nils Gutacker (Economics of Social and Health Care Research Unit, Centre for Health Economics, University of York, UK.); Hugh Gravelle (Economics of Social and Health Care Research Unit, Centre for Health Economics, University of York, UK.)
    Abstract: We investigate (a) how patient choice of hospital for elective hip replacement is influenced by distance, quality and waiting times, (b) differences in choices between patients in urban and rural locations, (c) the relationship between hospitals’ elasticities of demand to quality and the number of local rivals, and how these changed after relaxation of constraints on hospital choice in England in 2006. Using a data set on over 500,000 elective hip replacement patients over the period 2002/3 to 2012/13 we find that patients became more likely to travel to a provider with higher quality or lower waiting times, the proportion of patients bypassing their nearest provider increased from 25% to almost 50%, and hospital elasticity of demand with respect to own quality increased. By 2012/13 average hospital demand elasticity with respect to readmission rates and waiting times were 0.2 and 0.04. Providers facing more rivals had demand that was more elastic with respect to quality and waiting times. Patients from rural areas have smaller disutility from distance.
    Keywords: hospital, choice, quality, waiting times, distance, rurality,
    JEL: I11 I18 L15 R22
    Date: 2016–01
  19. By: Antonelli, Cristiano; Crespi, Francesco; Mongeau, Christian; Scellato, Giuseppe (University of Turin)
    Abstract: This paper analyses the role of the composition of the regional stock of knowledge in explaining innovation performance. The paper provides three main contributions. First, it investigates the relevance of Jacobs knowledge externalities in characterizing the technological capabilities at the regional level. Second, it applies the Hidalgo-Hausmann (HH) methodology to analyze knowledge composition by looking at patent data of 214 regions, located in 27 state members of the European Union (EU) during the years 1994- 2008. Third, it econometrically assesses the role of knowledge base composition in a knowledge generation function. The results of the empirical analysis confirm that the characterization of regional knowledge base through the HH indicators provides interesting information to understanding its composition and to qualify it as a provider of the Jacobs knowledge externalities that account for the dynamics of regional innovative performance.
    Date: 2016–07
  20. By: Sedov, A.V. (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Chelyshkov, P.D. (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Rujitskaya, S.A. (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Solntseva, M.G. (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: Over the past decades in the cities all over the world took the phenomenal changes that have put before the government and local authorities unprecedented challenges. C 2008, for the first time, more than half the world's population lives in urban areas, and, according to current projections, by 2050 this figure will rise to 70 percent. Almost all of this growth will occur in developing countries.
    Keywords: smart city, Europe, Russia
    Date: 2016–05–16
  21. By: Ivankina, Elena Vladimirovna (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Boronina, A. (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Kupriyanov, S.L. (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The work is devoted to analysis of foreign countries the taxation system in order to develop differentiated approaches and rates of taxation of real estate in Russia. In Russia, begins to form on the taxation of property of citizens. The first results of the tax reform will be possible to bring in the end of 2016 - early 2017. Since the reform will be introduced throughout 2016, study foreign experience of taxation is one of the most urgent tasks. Tax Investigation in foreign countries was carried out using both the expert method, and based on the study of existing international information system data.
    Keywords: property tax, land tax, taxation of foreign experience
    Date: 2016–05–16
  22. By: Burger, Rulof; Ito, Seiro
    Abstract: We describe the labour market turnovers of young people using a household survey data collected from Cape Town industrial area. We measure the correlates of first unemployment duration out of school and find that matriculation and late cohort (leaving school after 2007) are related with reduced initial unemployment, yet matriculation impacts are reduced among late cohort relative to early cohort. Our estimation reveals that initial unemployment is not related with subsequent employment duration nor wage rates, but related with number of turnovers which suggests that a shorter spell is associated with more stable job tenure.
    Keywords: Youth unemployment, School-to-work transition, Scarring effect, Labor market, Youth, Unemployment
    JEL: J13 J63 J64
    Date: 2016–05
  23. By: Tigran Poghosyan; Abdelhak S Senhadji; Carlo Cottarelli
    Abstract: We assess the extent to which fiscal transfers smooth regional shocks in three large federations: the U.S., Canada, and Australia. We find that fiscal transfers offset 4-11 percent of idiosyncratic shocks (risk-sharing) and 13-24 percent of permanent shocks (redistribution). This fiscal insurance largely operates through automatic stabilizers embedded in a central budget primarily through federal taxes and transfers to individuals, rather than transfers from the central government to state budgets. These results have implications for the design of fiscal risk-sharing mechanisms in the euro area.
    Keywords: Fiscal stabilization;United States;Canada;Australia;Fiscal risk;Regional shocks;Stabilization measures;Fiscal policy;public debt cycles, credit cycles, asset price cycles, duration analysis
    Date: 2016–07–21
  24. By: Kory Kantenga (University of Pennsylvania)
    Abstract: We measure the roles of the permanent component of worker and firm produc- tivities, complementarities between them, search frictions, and equilibrium sorting in driving German wage dispersion. We do this using a standard assortative matching model with on-the-job search. The model is identified and estimated using matched employer-employee data on wages and labor market transitions without imposing para- metric restrictions on the production technology. The model’s fit to the wage data is comparable to prominent wage regressions with additive worker and firm fixed effects that use many more degrees of freedom. Moreover, we propose a direct test that rejects the restrictions underlying the additive specification. We use the model to decompose the rise in German wage dispersion between the 1990s and the 2000s. We find that changes in the production function and the induced changes in equilibrium sorting pat- terns account for virtually all the rise in the observed wage dispersion. Search frictions are an important determinant of the level of wage dispersion but have had little impact on its rise over time.
    Date: 2016
  25. By: Silvia Rita Sedita; Ivan De Noni; Roberta Apa; Luigi Orsi
    Abstract: This work aims to investigate the features of the regional knowledge space that are more likely to be conducive to technological progress (TP), either in terms of dimension and relevance. We acknowledge the importance of knowledge assets for new knowledge production and we identify more or less path dependent processes that allow a region to be more competitive in terms of innovation potential. In particular, adopting an evolutionary view of regional development, we consider a regional knowledge space as composed of a knowledge base (KB) and a selection environment (SE), which differently affect the technological progress of the region. Empirical evidence come from a quantitative analysis of 269 European regions, whose data are included in the RegPat database. Results show that the variety of KB impacts positively on the technological progress at large. The variety of SE impacts positively only on the technological progress in terms of relevance, while the size of the SE impacts positively only on the quantitative side of the technological progress. Unrelated variety of KB and SE affects technological progress more widely than their correspondent related variety indicators.
    Date: 2016–08
  26. By: Boris Gershman; Diego Rivera
    Abstract: This paper compares two approaches to measuring subnational ethnolinguistic diversity in Sub-Saharan Africa, one based on censuses and large-scale population surveys and the other relying on the use of geographic information systems (GIS). The two approaches yield sets of regional fractionalization indices that are moderately positively correlated, with a stronger association across rural areas. These differences matter for empirical analysis: in a common sample of regions, survey-based indices of deep-rooted diversity are much more strongly negatively associated with a range of development indicators relative to their highest-quality GIS-based counterparts.
    Keywords: African development, ethnolinguistic diversity, GIS, subnational analysis
    JEL: O10 O15 Z13
    Date: 2016
  27. By: Colleen Wynn (University at Albany, SUNY)
    Abstract: Multipartner fertility (MPF) and neighborhoods have been separate recent areas of investigation in the social sciences. This study attempts to understand the association between paternal multipartner fertility and child neighborhood disorder as measured by physical neighborhood disorder. These analyses use the most recent wave of the Fragile Families and Child Well-Being Study. I find that even after controlling for formal child support agreements and paternal sociodemographic characteristics, children whose fathers have children with multiple women live in neighborhoods with greater physical disorder than their peers whose fathers do not have MPF. I discuss the relationship between paternal MPF and child neighborhood disorder as well as potential future avenues of research in this area.
    Keywords: Multipartner Fertility, Neighborhood Disorder, Fragile Families, Family Structure, Locational Attainment, Fathers
    JEL: J12 J13
    Date: 2016–08
  28. By: Hommes, C.H. (University of Amsterdam); Bao, T. (University of Groningen)
    Abstract: Asset markets are characterized by positive feedback through speculative demand. But housing markets distinguish themselves from other asset markets in that the supply of housing is endogenous, and adds negative feedback to the market. We design an experimental housing market and study how the strength of the negative feedback, i.e., the supply elasticity, a ects market stability. In the absence of endogenous housing supply, the experimental markets exhibit large bubbles and crashes because speculators coordinate on trend-following expectations. When the positive feedback through speculative demand is o set by the negative feedback of elastic housing supply the market stabilizes and prices converge to fundamental value. Individual expectations and aggregate market outcome is well described by a behavioral forecasting heuristics model. Our results suggest that negative feedback policies may stabilize speculative asset bubbles.
    Date: 2015
  29. By: Roberto Benedetti; Giuseppe Espa; Emanuele Taufer
    Abstract: -
    Keywords: spatial survey, two-dimensional systematic sampling, two-dimensional maximal stratification, semi-variogram, Gaussian random field
    Date: 2016
  30. By: Dario Diodato; Frank Neffke,; Neave O’Clery
    Abstract: We document the heterogeneity across sectors in the impact labor and input-output links have on industry agglomeration. Exploiting the available degrees of freedom in coagglomeration patterns, we estimate the industry-specific benefits of sharing labor needs and supply links with local firms. On aggregate, coagglomeration patterns of services are at least as strongly driven by input-output linkages as those of manufacturing, whereas labor linkages are much more potent drivers of coagglomeration in services than in manufacturing. Moreover, the degree to which labor and input-output linkages are reflected in an industry’s coagglomeration patterns is relevant for predicting patterns of city-industry employment growth.
    Date: 2016–08
  31. By: Funashima, Yoshito; Hiraga, Kazuki
    Abstract: Does fiscal discipline restrain government from increasing its budget size? To answer this question, this paper investigates whether Wagner's law is satisfied for two types of states: U.S. states, in which fiscal sovereignty is established, and German states, in which fiscal transfer dependence is high and budget constraints are softened. In U.S. states, we demonstrate that Wagner's law is validated, while some of the balanced budget requirements weaken the validity of the law. In German states, we find an “inverse” law, especially after the bailouts of Bremen and Saarland. The “inverse” law is a new channel of growth in government size, and means that soft budget constraints cause significant negative correlation between government size and output. These results are robust regardless of whether intergovernmental fiscal transfers are taken into account, while they quantitatively change the validity of the law. Our findings imply that the characteristics of fiscal discipline are prime determinants of the channel and degree of growth in government size.
    Keywords: Wagner's law, Fiscal discipline, State government, Balanced budget requirements, Soft budget constraints
    JEL: C23 H72
    Date: 2016–09
  32. By: Vasilyeva, O. V. (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Golubchenko, I. V. (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Koroteeva, Oksana (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The paper provides an assessment of the state of the integration process of new subjects of the RF in a single socio-cultural space of the Russian Federation in the context of the urgent tasks of social development of the Russian Federation. Particular attention is paid to the identification of the main problems of socio-cultural development and integration processes of new subjects of the RF in the socio-cultural sphere, the definition of effectiveness used in the areas of forms of actualization of cultural heritage and scientific and educational potential in the formation and development of the regional innovation system (RIS). In connection with the social and cultural integration of the regularities of the dynamics of the placement of settlements of new regions and ways of their optimization recommendations on solving urgent problems of integration and development of the new Russian Federation.
    Keywords: integration process, Russian Federation, socio-cultural space
    Date: 2016–06–07
  33. By: Eleftheriou, Konstantinos; Michelacakis, Nickolas
    Abstract: The aim of this paper is to revise and correct the results obtained in Beladi et al. [Beladi, H., Chakrabarti, A., Marjit, S., 2010. Sequential spatial competition in vertically related industries with different product varieties. Economics Letters 106, 112-114]. Specifically, we prove that following a vertical merger, the downstream firms will locate away from the social optimum in the following manner: to the direction of the un-integrated follower or to a direction determined by the wholesale price charged to the un-integrated leader.
    Keywords: Product differentiation; Spatial price discrimination; Sequential competition; Merger
    JEL: D43 L13 L42 R32
    Date: 2016–09–02

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