Economics: Research Guide

We study the long-run effect on productivity of labor reallocation during a technology boom. Using French matched employer-employee data, we examine the large cohort of workers who enter the information and communication technology sector during the late 1990s boom. Despite starting with 5% higher wages, these workers experience lower wage growth and end up with 6% lower wages fifteen years out, relative to similar workers who started in other sectors. The long-run wage discount is concentrated on STEM occupations, consistent with a skill obsolescence mechanism. Other moments of the wage distribution are inconsistent with selectioneffects and negative demand shocks.

Property-rights capital stands as a fragile entity, encountering obstacles, regressions, and challenges worldwide. This underscores the necessity to endogenize both property-rights capital accumulation and physical capital accumulation within an integrated dynamic framework. Through this approach, our paper explores the complex interplay between economic variables and institutional capital, with a specific focus on property-rights capital. It emphasizes the necessity of integrating the accumulation of property-rights capital and physical capital within a dynamic framework to fully grasp their interaction. The study reveals that property-rights capital, serving as institutional capital, is de..

This paper reviews the current discussions, methods, and practices surrounding the estimation of reasonable proxies for the underlying fiscal position, a useful anchor for fiscal policy. An empirical application to developing Asian economies is carried out. There is no one-size fits all type of approach and the sensitivity and discernment regarding specific economies are important in various stages. The choice of the filter to decompose trends from cycles matters. The way to adjust revenues and expenditures entering the cyclically adjusted balance also matters—choices regarding economy-specific vs. panel estimations or the use of static vs. time-varying approaches need to be made. To deal ..

This article shows that in highly internationally financially integrated ("globalized") economies, policymakers' ability to implement effective expansionary macroeconomic policies, referred to in the article as "Keynesian policy space, " is influenced by the portfolio decisions of a specific group of investors known as "Global investors." This conclusion arises from a two-country, open-economy model in which Global investors allocate capital internationally based primarily on their perception of the policy credibility of the countries where they invest their managed wealth. In countries that Global investors deem highly credible, expansionary macroeconomic policies prove effective in terms o..

I devise a difference-in-differences design that accounts for the possibility that some treatment effect is split in the reactions to two or more events. At the intersection of settings with a single treatment and with multiple treatments, regression-based methods for this split-treatment design can be subject both to negative weights and contamination bias. I propose a simple solution, a first-difference regression with sample constraints in the spirit of Dube et al.’s (2023) LP-DiD, that allows to identify and estimate sensible causal parameters of interest. This estimator is efficient under random walk errors and unrestricted heterogeneity across groups and events.

The current international landscape is turbulent and unstable, with frequent outbreaks of geopolitical conflicts worldwide. Geopolitical risk has emerged as a significant threat to regional and global peace, stability, and economic prosperity, causing serious disruptions to the global food system and food security. Focusing on the international food market, this paper builds different dimensions of geopolitical risk measures based on the random matrix theory and constructs single- and two-factor GJR-GARCH-MIDAS models with fixed time span and rolling window, respectively, to investigate the impact of geopolitical risk on food market volatility. The findings indicate that modeling based on ro..

In this post, we evaluate how deposits have evolved over the latter portion of the current monetary policy tightening cycle. We find that while deposit betas have continued to rise, they did not accelerate following the bank runs in March 2023. In addition, while overall deposit funding has remained stable, we find that the banks most affected by the March 2023 events are offering higher deposit rates and are growing their deposit funding relative to the broader banking industry.

We study the macroeconomic causes and consequences of bank runs in 184 countries over the period of 1800-2022. A new narrative chronology of bank run events coupled with a newly constructed historical dataset on banking sector deposits allows us to distinguish between systemic bank runs—those associated with substantial declines in aggregate deposits—and non-systemic episodes. We find that bank runs are typically associated with large contractions in deposits, credit, and output, as well as exchange rate crashes and sudden stops. Whether deposits contract during runs, in turn, predicts the severity of output declines, highlighting that bank runs are particularly costly when they are syst..

Although still a niche within established disciplines, research on urban vacancy has boomed in recent decades, with different research communities investigating different dimensions of vacancy. However, these communities rarely communicate with each other, leading to parallel debates, different conceptual vocabularies and diverging empirical foci. This becomes particularly problematic in the current era, which is best characterized not simply as an ’urban age’, but as one in which city regions find themselves at the heart of economic, ecological and societal crises that are reshaping our world. Vacant spaces can be understood as symptoms of these crises, but also as actually existing and..

This Data Brief updates the figures that appeared in “Urban and Regional Migration Estimates: Will Your City Recover from the Pandemic?” with data for 2023:Q4 for all series. Migration estimates enable us to track which urban neighborhoods and metro areas are returning to their old migration patterns and where the pandemic has permanently shifted migration trends.

La XXXII Asamblea General de MINURVI, Foro de Ministros y Autoridades Máximas de Vivienda y Urbanismo de América Latina y el Caribe, inunda a sus participantes con un profundo sentido de responsabilidad y anticipación. El Foro no se remonta a unos pocos años, sino a décadas de esfuerzo, visión y determinación. Por ello, ONU-Hábitat agradece a esta Asamblea por el enorme apoyo que brinda a nivel mundial y regional. MINURVI, nacida de las aspiraciones compartidas de América Latina y el Caribe, ha sido la portadora de la antorcha del desarrollo urbano sostenible desde su creación en 1992. Este consorcio que representa 33 países es un testimonio del poder de unidad y colaboración. Ju..

Jews in Africa have a long history. Africans have encountered Jewish myths and traditions in different forms and situations, leading to the development of a new Jewish identity linked to that of the Diaspora. Different groups of black Jews from western, central, eastern and southern Africa used and imagined their oral traditions and traditional practices to construct a distinct Jewish identity. The adoption of Judaism by black Africans was a form of liberation from Anglo-Christian authority. Blacks and Jews are the two marginalised and stigmatised minorities in Western culture. Since ancient times they have maintained a complex relationship of identification, cooperation and rivalry. The Igb..

Social policy debates as early as the 1950s have focused on the activation of individuals into employment. This assumes jobs with good work-ing conditions and fair pay; ignores women’s reality of part-time work, unpaid care work and the gender pay gap; and has often resulted in the weakening of traditional social protection. We study the individual poverty risk of women under the adult worker paradigm across the EU using the tax-beneï¬ t model EUROMOD and EU-SILC data. Comparing the individual poverty risk of working-age women to the benchmark of typical male workers, we highlight heterogeneity driven by women’s economic situation and job characteristics and analyse the role ..

Dit document dient als achtergrondinformatie bij het rapport De arbeidsmarkt naar opleiding en beroep tot 2028 (Bakens et al., 2023) waarin de resultaten van het Project Onderwijs-Arbeidsmarkt (POA) staan beschreven. Hier wordt verder ingegaan op de gebruikte databronnen, definities, en de gebruikte prognosemethodiek. Voor een volledige beschrijving en onderbouwing van de prognosemethodiek, en uitgangspunten van het POA, kunnen naast dit document verschillende andere publicaties4 en referenties (zie bijlage A van De arbeidsmarkt naar opleiding en beroep tot 2028 (Bakens et al., 2023)) geraadpleegd worden.

In this paper, I numerically simulate the path of economy in an economic depression. It is not easy to perform a numerical simulation of the path to a steady state if households are assumed to behave by generating rational expectations. It is much easier, however, if households are assumed to behave according to a procedure based on the maximum degree of comfortability (MDC), where MDC indicates the state at which a household feels most comfortable with its combination of income and assets. The results of simulations under the supposition of this alternative procedure indicate that, if households do not strategically consider other households’ behaviors, consumption jumps upwards immediate..

This paper proposes a noisy GARCH model with two volatility sequences (an unobserved and an observed one) and a stochastic time-varying conditional kurtosis. The unobserved volatility equation, equipped with random coefficients, is a linear function of the past squared observations and of the past observed volatility. The observed volatility is the conditional mean of the unobserved volatility, thus following the standard GARCH specification, where its coefficients are equal to the means of the random coefficients. The means and the variances of the random coefficients as well as the unobserved volatilities are estimated using a three-stage procedure. First, we estimate the means of the rand..

An extended interval is a range A = [A, A] where A may be bigger than A. This is not really natural, but is what has been used as the definition of an extended interval so far. In the present work we introduce a new, natural, and very intuitive way to see an extended interval. From now on, an extended interval is a subset of the Cartesian product R × Z2, where Z2 = {0, 1} is the set of directions; the direction 0 is for increasing intervals, and the direction 1 for decreasing ones. For instance, [3, 6] × {1} is the decreasing version of [6, 3]. Thereafter, we introduce on the set of extended intervals a family of metrics dγ, depending on a function γ(t), and show that there exists a uniq..

This note introduces a novel weighted local average treatment effect representation for the two-stages least-squares (2SLS) estimand in the continuous instrument with binary treatment case. Under standard conditions, we obtain weights that are nonnegative, integrate to unity, and assign larger values to instrument support points that deviate from their average. Our representation does not require instruments to be discretized nor relies on limiting arguments, such as those used in the definition of the marginal treatment effect (MTE). The pattern of the weights also has a clear interpretation. We believe these features of the representation to be useful for applied researchers when communica..

Why are certain movies more successful in some markets than others? Are the entertainment products we consume reflective of our core values and beliefs? These questions drive our investigation into the relationship between a society’s oral tradition and the financial success of films. We combine a unique catalog of local tales, myths, and legends around the world with data on international movie screenings and revenues. First, we quantify the similarity between movies’ plots and traditional motifs employing machine learning techniques. Comparing the same movie across different markets, we establish that films that resonate more with local folklore systematically accrue higher r..

Background. Building on progress achieved under the previous SMP which ended in May 2023, on June 29, 2023, Management approved a new Staff-Monitored Program (SMP) for a nine-month period spanning from June 30 through March 31, 2024. The 2023 SMP focuses on strengthening governance, fighting corruption, enhance transparency and accountability in the use of public spending, including through data transparency to help ensure public funds are used appropriately—all to support the authorities’ efforts to raise inclusive growth. The SMP, initially, envisaged two reviews with June 2023 as a test date for the First Review and December 2023 as test date for the Second Review. In the original let..

In the aftermath of the COVID-19 pandemic, the U.S. economy experienced a swift recovery accompanied by a sharp rise in inflation. Inflation has been gradually declining since 2022 without a notable slowdown in the labor market. Nonetheless, inflation remains above the Federal Reserve’s 2 percent target and the path of the so-called final mile remains uncertain, as emphasized by Chair Powell during his press conference in January. In this post, we examine the unemployment-inflation trade-off over the past few years through the lens of a New Keynesian Phillips curve, based on our recent paper. We also provide model-based forecasts for 2024 and 2025 under various labor market scenarios.

The financial safety net framework in Botswana is incomplete, while crisis preparedness and management structures must be expanded.2 The Bank of Botswana (BoB) lacks an emergency liquidity support mechanism for commercial banks, bank resolution and liquidation remain under the Companies Act, and there is no deposit insurance system. A 2016 TA mission3 on “Banking Sector Safety Net and Crisis Management” identified many deficiencies. To date, there has been limited progress in achieving the recommendations.

Option-implied risk-neutral densities are widely used for constructing forward-looking risk measures. Meanwhile, investor risk aversion introduces a multiplicative pricing kernel between the risk-neutral and true conditional densities of the underlying asset’s return. This paper proposes a simple local estimator of the pricing kernel based on inverse density weighting, and characterizes its asymptotic bias and variance. The estimator can be used to correct biased density forecasts, and performs well in a simulation study. A local exponential linear variant of the estimator is proposed to include conditioning variables. In an application, we estimate a demand-based model for S&P 500 in..

This document delves into the Command-and-Control framework, specifically examining the timing of environmental policymaking within the context of regulating oligopolistic firms to reduce emissions. The regulator faces a crucial decision of implementing technological standards before (ex-ante timing) or after (ex-post timing) firms make production decisions. Geographical considerations also play a role, with regions adopting asymmetric anti-pollution technology standards. An innovative aspect is the inclusion of green trade unions, advocating for environmental conservation during negotiations with firms. The document conducts a comparative analysis of two games employing ex-ante and ex-post ..

We propose a novel framework to gauge the credibility of a central bank’s commitment to inflation targeting. Our framework combines survey data on macroeconomic forecasts with financial market data to estimate how market-perceived responsiveness of the central bank to inflation evolves with the adoption of inflation targeting. This approach is especially suitable for emerging economies, many of which have adopted an inflation targeting framework but lack data on long-run inflation expectations. We apply our framework to study the adoption of inflation targeting in India. We find that the Reserve Bank of India’s commitment to inflation targeting is viewed as credible.

This brief explores how shared micromobility (bikesharing and scooter sharing) has evolved since the pandemic. Primary data for this report were collected through four surveys: An Operator Survey (n=25) and an Agency Survey (n=52) distributed between January 2022 and May 2022 to all known shared micromobility operators and agencies and included questions about the attributes of shared micromobility systems1 operating within those agency jurisdictions and operator markets; and a similar Operator Survey (n=29) and an Agency Survey (n=52) distributed between January 2023 and June 2023 to all known shared micromobility operators and agencies.

Using a New Keynesian Phillips curve, we document the rapid and persistent increase in the natural rate of unemployment, ut*, in the aftermath of the pandemic and characterize its implications for inflation dynamics. While the bulk of the inflation surge is attributed to temporary supply factors, we also find an important role for current and expected negative unemployment gaps. Through the lens of the model, the 2022-23 disinflation was driven by the expectation that the unemployment gap will close through a progressive decline in ut* and a rise in the unemployment rate. This implies that convergence to long-run price stability depends critically on expectations about labor market tightness..

The Spanish encomienda, a colonial forced-labour institution that lasted three centuries, killed many indigenous people and caused others to flee into nomadism. What were its long-term effects? We digitize a great deal of historical data from the mid-1500s onwards and reconstruct the Spanish conquerors’ route through Colombia using detailed topographical features to calculate their least-cost path. We show that Colombian municipalities with encomiendas in 1560 enjoy better outcomes today across multiple dimensions of development than those without: higher municipal GDP per capita, tax receipts, and educational attainment; lower infant mortality, poverty, and unsatisfied basic needs; larger..

We study international monetary policy spillovers and spillbacks in a tractable two-country Heterogeneous Agent New Keynesian model. Relative to Representative Agent (RANK) models, our framework introduces a precautionary-savings channel, as households in both countries face uninsurable income risk, and a real-income channel, as households have heterogeneous marginal propensities to consume (MPC). While both channels amplify the size of spillovers/spillbacks, only precautionary savings can change their sign relative to RANK. Spillovers are likely to be larger in economies with higher fractions of high MPC households and more countercyclical income risk. Quantitatively, both channels amplify ..

We study the optimal monetary policy problem in a New Keynesian economy with a zero lower bound (ZLB) on the nominal interest rate, when the steady state natural rate (r*) becomes permanently negative. We show that the optimal policy aims to approach gradually a new steady state with positive average inflation. Around that steady state, the optimal policy implies well defined (second-best) paths for inflation and output in response to shocks to the natural rate. Under plausible calibrations, the optimal policy implies that the nominal rate remains at its ZLB most of the time. Despite the latter feature, the central bank can implement the optimal outcome as a unique equilibrium by means of an..