The Effect of the Spanish Civil War on City Shares

This paper examines the effect of the Spanish Civil War (1936–1939) shock on city shares of population applying the methodology proposed by Davis, D. R., and D. E. Weinstein. 2002. “Bones, Bombs, and Break Points: The Geography of Economic Activity.” The American Economic Review 92 (5): 1269–89. We make use of an unexploited long-term, historical dataset of populations disaggregated at the city level. Our instruments, a key methodological issue, are based on dead and wounded data collected by historians. We show that the effect of the Spanish Civil War on capital cities was temporary, and argue that the locational fundamentals theory is the principal explanation.

Estimating the FOMC’s interest rate rule with variable selection and partial regime switching

When studying the Federal Open Market Committee’s (FOMC’s) interest rate rule, some authors, such as Gonzalez-Astudillo [(2018) Journal of Monetary, Credit, and Banking 50(1), 115–154.], find evidence for changes in inflation and output gap responses. Others, such as Sims and Zha [(2006) American Economic Review 96(1), 54–81.], only find evidence for a change in the variance of the interest rate rule. In this paper, I develop a new two-regime Markov-switching model that probabilistically performs variable selection and identification of parameter change for each variable in the model. I find substantial evidence that there have been changes in the FOMC’s response to the unemployment gap and in the volatility of the rule. When the FOMC responds strongly to the unemployment gap, I find a bimodal density for the inflation response coefficient. Despite the bimodal density, there is a low probability that there have been changes in the FOMC’s response to inflation.

ENSAIOS FILOSÓFICOS E EPISTEMOLÓGICOS DE UM LABORATÓRIO DE FORMAÇÃO DE CAPITAL HUMANO: RELATO DE EXPERIÊNCIA

Introdução: Um laboratório pode ser definido como atividade que envolve observação, experimentação ou produção num campo de estudo, sendo um ambiente didático propício para o trabalho em grupo. Por se tratar de um local que oportuniza a discussão, o laboratório aumenta a interação entre os alunos e potencializa o confronto de seus conhecimentos prévios com outras possibilidades e explicações, bem como relaciona a teoria à prática. Já o termo “capital humano” é oriundo das proposições do economista Theodore W. Schultz, após a criação de uma disciplina chamada “Economia da educação”, em meados da década de 1950. Essa disciplina, juntamente com os resultados de suas análises, rendeu ao educador o Prêmio Nobel de Economia, em 1979, pelo trabalho intitulado “Investment in human capital”, publicado na American Economic Review. Objetivo: relatar as vivências de um grupo de pesquisa em laboratório de formação de capital humano em um curso stricto sensu. Método: trata-se de um relato de experiência, de pesquisadores inseridos no Grupo de Pesquisa Cidadania e Gerência em Enfermagem, com vistas a dar continuidade das atividades acadêmicas com foco na formação de capital humano. O grupo de pesquisa faz parte do Programa Acadêmico em Ciências do Cuidado em Saúde da Universidade Federal Fluminense, em Niterói (RJ). Resultados: os diversos referenciais teóricos e metodológicos culminaram em diversas estratégias de formação, culminando no então denominado “laboratório de formação de capital humano”. Conclusão: as diversidades e a pluralidade existentes no laboratório como estratégias constituíram importante meio de formação e qualificação do capital humano, uma vez que as atividades conjuntas permitiram compartilhar saberes em prol dos avanços da coletividade, bem como, na formação de novos doutores no grupo de pesquisa.

The non-linear effects of the Fed asset purchases

The Federal Reserve responded to the great financial crisis deploying new monetary policy tools, the most notable of which being the expansion of its balance sheet. In a recent paper, Weale, M., and T. Wieladek. 2016. “What Are the Macroeconomic Effects of Asset Purchases?” Journal of Monetary Economics 79 (C): 81–93 show that the asset purchases were effective in stimulating economic activity as well as inflation and asset prices. Here I show that their results are state dependent: large scale asset purchase are effective only when financial markets are impaired. Financial markets are under stress when the effective risk-bearing capacity of the financial sector is drastically reduced, i.e. when the excess bond premium (EBP) of Gilchrist, S., and E. Zakrajšek. 2012. “Credit Spreads and Business Cycle Fluctuations.” The American Economic Review 102 (4): 1692–72 exceed a certain threshold. Using an estimated threshold vector autoregressive model conditional on the EBP regime, I show that an increase in the balance sheet has expansionary effects on GDP and inflation when EBP is high, but not when it is low (as its effects become mostly insignificant). I argue that the high EBP can be interpreted as a proxy of market dis-functioning so that only when this channel of transmission is on, the unconventional policy is particularly effective. This suggests that models of transmission of unconventional policies, based on asset purchases, should focus also on the market functioning channel and not only on the portfolio balance one.

How Much Does the Cardinal Treatment of Ordinal Variables Matter? An Empirical Investigation

Many researchers use an ordinal scale to quantitatively measure and analyze concepts. Theoretically valid empirical estimates are robust in sign to any monotonic increasing transformation of the ordinal scale. This presents challenges for the point-identification of important parameters of interest. I develop a partial identification method for testing the robustness of empirical estimates to a range of plausible monotonic increasing transformations of the ordinal scale. This method allows for the calculation of plausible bounds around effect estimates. I illustrate this method by revisiting analysis by Nunn and Wantchekon (2011, American Economic Review, 101, 3221–3252) on the slave trade and trust in sub-Saharan Africa. Supplemental illustrations examine results from (i) Aghion et al. (2016, American Economic Review, 106, 3869–3897) on creative destruction and subjective well-being and (ii) Bond and Lang (2013, The Review of Economics and Statistics, 95, 1468–1479) on the fragility of the black–white test score gap.

Rethinking how risk aversion and impatience are linked with cognitive ability: Experimental findings from agricultural students and farmers

Dohmen et al. (2010) describe in their paper, which has been published in the American Economic Review, that risk aversion and impatience are negatively related to cognitive ability. This topic is important because controlling for cognitive ability might be necessary if someone is interested in the link of risk preferences or time preferences to real-world outcomes. We re-examine their key results by conducting an experimental study using two subject pools (agricultural students and farmers) and three levels of monetary incentives. Similar to Dohmen et al. (2010), our study finds the above-described negative correlations. However, the strength of the association is smaller and the p-values are quite large.

Mindern bessere Aufstiegschancen den Wunsch nach mehr Umverteilung?

ZusammenfassungZu starke Ungleichheit gefährdet den Zusammenhalt in der Gesellschaft. Die Politik soll möglichst allen eine angemessene Teilhabe am gemeinsamen Wohlstand sichern. Aber Ungleichheit unterliegt einem steten Wandel. Wer in jungen Jahren aus knappen Verhältnissen startet, mag nach erfolgreicher Karriere zu den Spitzenverdienern gehören. Und wer daran glaubt, bald selbst zu den Reichen zu gehören, hat womöglich weniger Verlangen danach, den eigenen Aufstieg mit progressiven Steuern und mehr Umverteilung zu erschweren. Wie weit klaffen Wahrnehmung und Wirklichkeit der Aufstiegschancen auseinander, und wie bestimmen die wahrgenommenen Aufstiegschancen die politische Unterstützung für mehr oder weniger Umverteilung?Alesina, Alberto, Stantcheva, Stefanie and Edoardo Teso (2018), Intergenerational Mobility and Preferences for Redistribution, American Economic Review 108(2), 521–554.