Category: Data Source
We estimate that over a typical U.S. monetary easing cycle, EME [emerging economy] borrowers experience a 32-percentage-point greater increase in the volume of loans issued by foreign banks than do borrowers from developed markets, followed by a fast credit contraction of a similar magnitude upon reversal of the U.S. monetary policy stance.
This result is robust across different geographies and industries, and holds for U.S. and non-U.S. lenders, including those with little direct exposure to the U.S. economy. EME local lenders do not offset the foreign bank capital flows, and U.S. monetary policy affects credit conditions for EME firms, both at the extensive and intensive margin. Consistent with a risk-driven credit-supply adjustment, we show that the spillover is stronger for riskier EMEs, and, within countries, for higher-risk firms.
That is from a new NBER working paper by Falk Bräuning and Victoria Ivashina.
Icelanders bought 47% fewer books in 2017 than they did in 2010, a very sharp decrease in a matter of only six years. In a recent poll in Iceland, 13.5% of those who responded had not read a single book in 2017, compared to 7% in 2010.
Iceland has a wonderful tradition of giving books as Christmas presents, with people reading into the night on Christmas Eve. However, even this may be under threat: in 2005, an Icelander received an average of 1.4 books as gifts at Christmas; this number is now 1.1, with 42% of Icelanders not receiving a single book for Christmas according to the most recent poll…
Recent research shows an alarming rise in students under 15 struggling to read their own language. And they are picking up English at a much faster pace than before – it is not strange to hear them speaking it in the playground.
Here is the full story.
In his influential 1997 paper, Divergence, Big Time, Lant Pritchett estimated:
…that from 1870 to 1990 the ratio of per capita incomes between the richest and the poorest countries increased by roughly a factor of five and that the difference in income between the richest country and all others has increased by an order of magnitude.
Pritchett was correct but Patel, Sandeful and Subramanian show that just where Pritchett’s study ended, convergence began!
While unconditional convergence was singularly absent in the past, there has been unconditional convergence, beginning (weakly) around 1990 and emphatically for the last two decades.
The figure above plots the coefficient (“beta”) from the plain vanilla unconditional convergence regression (relating average growth of real per capita GDP over the long run to its initial level). A statistically significant negative beta denotes convergence and divergence otherwise. Since we know from Johnson et al. (2013) that growth rates vary widely across datasets, we plot the annual betas for three such sets: the Penn World Tables (PWT), the World Development Indicators, and the Maddison Project (Bolt et al. 2014). While the point estimates vary across datasets, the consistent pattern across them all is a statistically significant negative beta since around 1995 (unconditional convergence) and its lack prior to that (see also Roy, Kessler and Subramanian, 2016).
Our basic point doesn’t require regressions. Looking at the 43 countries the World Bank classified as “low income” in 1990, 65 percent have grown faster than the high-income average since 1990. The same is true for 82 percent of the 62 middle-income countries circa 1990.
Neo-liberalism has been incredibly successful, essentially delivering on all of its promises of economic growth, declines in poverty, and peace. Yet, the ideas behind what Andrei Shleifer called The Age of Milton Friedman are now under attack and in retreat.
This paper provides a quantitative analysis of the effects of the law and economics movement on the U.S. judiciary. Using the universe of published opinions in U.S. Circuit Courts and 1 million District Court criminal sentencing decisions linked to judge identity, we estimate the effect of attendance in the controversial Manne economics training program, an intensive two-week course attended by almost half of federal judges. After attending economics training, participating judges use more economics language, render more conservative verdicts in economics cases, rule against regulatory agencies more often, and render longer criminal sentences. These results are robust to adjusting for a wide variety of covariates that predict the timing of attendance. Comparing non-Manne and Manne judges prior to program start and exploiting variation in instructors further assuage selection concerns. Non-Manne judges randomly exposed to Manne peers on previous cases increase their use of economics language in subsequent opinions, suggesting economic ideas diffused throughout the judiciary. Variation in topic ordering finds that economic ideas were portable from regulatory to criminal cases.
That is from Elliott Ash, Daniel L. Chen, and Suresh Naidu, via Rethinking Economics and also S.
I say yes, though I don’t think it is easy to prove. Here is part of the abstract, from Rui Tang and Shiping Tang:
We contend that the channel of liberty‐to‐innovation is the most critical channel in which democracy holds a unique advantage over autocracy in promoting growth, especially during the stage of growth via innovation. Our theory thus predicts that democracy holds a positive but indirect effect upon growth via the channel of liberty‐to‐innovation, conditioned by the level of economic development. We then present quantitative evidence for our theory.
Via the excellent Kevin Lewis.
Does living in a communist regime make a person more concerned about immigration? This paper argues conceptually and demonstrates empirically that people’s attitudes toward immigration are affected by their country’s politico-economic legacy. Exploiting a quasi-natural experiment arising from the historic division of Germany into East and West, I show that former East Germans, because of their exposure to communism, are notably more likely to be very concerned about immigration than former West Germans. Opposite of what existing literature finds, higher educational attainment in East Germany actually increases concerns. Further, I find that the effect of living in East Germany is driven by former East Germans who were born during, and not before, the communist rule and that differences in attitudes persist even after Germany’s reunification. People’s trust in strangers and contact with foreigners represent two salient channels through which communism affects people’s preferences toward immigration.
So humanity in aggregate has spent about ten times as long worshiping the Greek gods as we’ve spent watching Netflix.
We’ve spent another ten times as long having sex as we’ve spent worshiping the Greek gods.
And we’ve spent ten times as long drinking coffee as we’ve spent having sex.
It turns out that if you add up all these years, 50% of human experience has happened after 1309 AD. 15% of all experience has been experienced by people who are alive right now.
This should cheer you all up, yes indeed there is no great stagnation no wonder the rate of productivity growth has been so high:
FHI reports that 90% of PhDs that have ever lived are alive right now.
Monopsony models generally imply they should, and that is part of the argument why minimum wage hikes might be good for workers, wages, and yes even employment. But the data don’t seem to support the claim of more search behavior:
Labor market search-and-matching models posit supply-side responses to minimum wage increases that may lead to improved matches and lessen or even reverse negative employment effects. Yet there is no empirical evidence on this crucial assumption. Using event study analysis of recent minimum wage increases, we find that increases to minimum wage do not increase the likelihood of searching, but do lead to large yet very transitory spikes in search effort by individuals already looking for work. The results are not driven by changes in the composition of searchers.
That is from a new NBER Working Paper by Camilla Adams, Jonathan Meer, and Carly Will Sloan.
Here is part of the abstract from Noah Carl, Lindsay Richards, and Anthony Heath:
Controlling for a range of personal characteristics, we found that respondents who preferred all four realistic paintings were 15–20 percentage points more likely to support Leave than those who preferred zero or one realistic paintings. This effect was comparable to the difference in support between those with a degree and those with no education, and was robust to controlling for the respondent’s party identity.
Via the excellent Kevin Lewis.
…taking not averages but just the fastest building built every year (again taking out Pyongyang and Broad Group), regardless of country. This seems to indicate that with the exception of The Belcher’s tower(s) in HK and 60 Wall St, in general construction speed has remained stagnant for almost a century, and has actually declined since its peak in the Great Depression.
The early 1930s look pretty amazing. The data on meters built per year, and the fastest built buildings by that standard are interesting too:
There is much, much more in this post, which I consider to be one of the best things written this year. Here is Artir’s conclusion:
…the Empire State Building was an impressive achievement compared to the present, but it’s not true that the past has been better than the present; rather, the skyscrapers built during the Great Depression were.
Using data from U.S. corporate tax returns, which provide a sample representative of the universe of U.S. corporations, we investigate the differential investment propensities of public and private firms. Re-weighting the data to generate observationally comparable sets of public and private firms, we find robust evidence that public firms invest more overall, particularly in R&D. Exploiting within-firm variation in public status, we find that firms dedicate more of their investment to R&D following IPO, and reduce these investments upon going private. Our findings suggest that public stock markets facilitate greater investment, on average, particularly in risky, uncollateralized investments.
Many scholars argue that people who attribute human characteristics to genetic causes also tend to hold politically and socially problematic attitudes. More specifically, public acceptance of genetic influences is believed to be associated with intolerance, prejudice, and the legitimation of social inequities and laissez-faire policies. We test these expectations with original data from two nationally representative samples that allow us to identify the American public’s attributional patterns across 18 diverse traits. Key findings are (1) genetic attributions are actually more likely to be made by liberals, not conservatives; (2) genetic attributions are associated with higher, not lower, levels of tolerance of vulnerable individuals; and (3) genetic attributions do not correlate with unseemly racial attitudes.
That is from Stephen P. Schneider, Kevin B. Smith, and John R. Hibbing in the Journal of Politics. For the pointer I thank K.
Here is a new Lancet paper by Stephen S. Lim, et.al., via the excellent Charles Klingman. Finland is first, the United States is #27, and China and Russia are #44 and #49 respectively. There is plenty of “rigor” in the paper, but I say this is a good example of what is wrong with the social sciences and more specifically the publication process. The correct answer is a weighted average of the median, the average, the high peaks, and a country’s ability to innovate, part of which depends upon the market size a person has in his or her sights. So in reality the United States is number one, and China and Russia should both rank much higher (Cuba and Brunei beat them out, for instance, Cuba at #41, Brunei at #29). And does it really make sense to put North Korea (#113) between Ecuador and Egypt? I’m fine with Finland being in the top fifteen, but I am not even sure it beats Sweden. Overall the paper would do better by simply measuring non-natural resource-based per capita gdp, though of course that could be improved upon too.
Now, I did zero work on that one, and came up with a better result than the authors. What does that tell you?
Addendum: You will note the first sentence of the paper’s background claims: human capital refers to “the level of education and health in a population”. The first two sentences of the actual paper immediately contradict this: “Human capital refers to the attributes of a population that, along with physical capital such as buildings, equipment, and other tangible assets, contribute to economic productivity. Human capital is characterised as the aggregate levels of education, training, skills, and health in a population, affecting the rate at which technologies can be developed, adopted, and employed to increase productivity.” The paper does an OK job of measuring the former, but absolutely fails on the latter.