Title: One way or another: modes of transport and International Trade

Title: Comparisons of Signals (with Ben Brooks and Emir Kamenica)

Paper draft here: https://faculty.chicagobooth.edu/-/media/faculty/alexander-p-frankel/pdf/comparisons.pdf

Title: Mitigating the consequences of job loss: Experimental evidence from Ethiopia, with Girum Abebe, Francois Gerard, Lukas Hensel.

Title: Estimating Heterogeneous Event-studies for Policy Evaluation: Application to the Child-penalty (joint with Dmitry Arkhangelsky & Kazuharu Yanagimoto)

Abstract: Staggered adoption designs – situations where units are sequentially exposed to a treatment – are widely used in applied economics. The impact of the treatment tends to vary across units and to summarize this heterogeneity researchers commonly report an average effect, for the sake of ease of estimation and interpretation. At the same time, certain economic questions require us to go beyond the average effects and investigate the underlying unit-level heterogeneity directly. This paper provides a practical toolkit for analyzing unobserved heterogeneity in two-way fixed-effect models. We develop an estimation algorithm and adapt existing econometric results to provide its theoretical justification. We apply these tools to study individual heterogeneity in the child-penalty context in three ways: (1) quantifying the unobserved heterogeneity present within CP, (2) exploring the economic impact of childcare policies on CP and deducing the elasticity inherent in such policies, and (3) using the estimated individual-level CP on the right-hand-side to study the intergenerational transmission of CP.

Title: Job Amenities, Compensating Differentials, and Wage Rigidity: Evidence from Brazil

Abstract: I examine how the provision of a job amenity at the firm level can affect the attraction and retention of workers, generate compensating differentials in wages, and influence wage trajectories and promotions over time. I analyse the impacts of a program that allowed Brazilian firms to extend the length of paid maternity leave offered to their workers from 4 to 6 months. Using a linked employer-employee dataset covering the universe of formal employment in Brazil, I estimate the effects of introducing this amenity by analysing 50,000 firms that adopted the program at different points in time. I find significant impacts on earnings, with an average reduction of female wages of around 3% at the firm level. I also document that the effects of the policy do not manifest immediately and are mainly driven by new hires, indicating some degree of wage rigidity in the market. The proportion of women in high-skill positions shows a significant and persistent decline of almost 10%. This group of workers is 43% more likely to use extended maternity leave in comparison to low-skill workers. My estimates suggest that a worker using extended leave is 12% more likely to be dismissed within two years after birth when compared to co-workers not using the benefit. Finally, I provide causal evidence of within-firm competition effects over earnings and promotions: a female worker who faces a high share of co-workers using extended ML observes an increase in annual earnings of 2.1%. Their probability of promotions is increased by 4.4%. I show that the effects on earnings are mainly driven by lower promotion prospects arising from higher competition and that the promotion effects are driven by male workers being more likely to be promoted.

Title to be advised.

Title: High-Frequency Human Mobility in Three African Countries(with Paul Blanchard, Douglas Gollin)

Title: Justices of the Peace: Legal Foundations of the Industrial Revolution

Title: Inference on common trends in functional time series

The paper and abstract can be found here: https://arxiv.org/abs/2312.00590

Andrea will present a project he has been working on with Gavin Hassall

Title: Embracing the Future: Tense Patterns and Forward-Looking Monetary Policy.

Abstract : This paper explores how the language used in Federal Open Market Committee (FOMC) meeting minutes relates to future monetary policy and impacts financial markets. We construct a measure of future-oriented language using a Structural Topic Model combined with a Large Language Model. Regressing stock market reactions on the share of future-oriented language for each topic shows that increased discussion of GDP and monetary policy in the future tense associates with stock price increases. This suggests forward-looking communication provides valuable signals to investors about central bank intentions. The results demonstrate subtle variations in central bank communications can sway expectations and risk assessments, which highlights the importance of thoughtful transparency practices when conveying policy deliberations to the public. 

Title: An Empirical Model of Bilateral Bargaining with Vertical Information Frictions (with Hugh Molina - INRAE).

Title: Interactions: Teacher Behaviors and Child Development in Elementary School (with Campos, Cruz-Aguayo, Echeverri and Schady)

Title: Class Experiments - F2F, Online, Synchronous? A Case Study Comparison 

Class experiments have been shown to aid student learning. Traditionally, these were conducted with paper and pen. However, platforms have subsequently been developed to enable them to be run online. Among other advantages, this allows the possibility of conducting class experiment in a remote, asynchronous format with potential benefits for students and instructors. However, there is little evidence on how this asynchronous approach compares to other delivery formats. To address this, our paper provides novel case-study evidence on the effectiveness of delivery format for class experiments. As part of our presentation, we will also offer provide practical, step-by-step guidance of how to adapt a classroom experiment for asynchronous, remote delivery.

Title: Weathering the Energy Crisis: Can Tailored Information to Local Government Spur Climate Action? (With Menna Bishop, Thiemo Fetzer, and Ludovica Gazze)

Abstract: The United Kingdom ranks among the worst European countries in terms of residential energy efficiency and fuel poverty. Although local governments have the tools to influence building upgrades, lack of coordination across levels of government and a systemic under-funding have hindered councils' ability to foster energy efficiency investments. We implement a randomised controlled trial to test whether a bottom-up approach for disseminating academic and policy findings can influence adoption of local policies that deliver energy savings. Leveraging granular energy performance certificates (EPCs), local energy use, census, and property price data, we produced briefs containing rigorous, just-in-time analyses of the projected effects of the energy crisis on residents of districts in England and Wales and of the estimated local benefits of energy efficiency investments. We distributed these briefs to council officers and members, as well as to local media outlets for 165 randomly selected districts. We will estimate the effects of our targeted outreach on public discourse and on the policy-making process.

Title: Market segmentation through information.

Title: Urban-Biased Growth: A Macroeconomic Analysis (with Sharat Ganapati and Conor Walsh)

Abstract: Since 1980, US wage growth has been fastest in large cities. Empirically, we show that most of this urban-biased growth reflects wage growth at large Business Services firms, which are also the most intensive users of ICT capital in the US economy. We provide an explicit economic mechanism whereby ICT is more complementary with labor at larger firms. Quantitatively, we find that with such a complementarity, the observed decline in ICT prices alone can account for most of the urban-biased growth, since Business Services firms in big cities tend to be large.

Title: Shareholder Democracy under Autocracy: Voting Rights and Corporate Performance in Imperial Russia, co-authored with Amy Dayton (Strider Technologies) and Steven Nafziger (Williams College)

Abstract: This paper investigates how the rules that corporations wrote for themselves related to their financing and performance in an environment characterized by poor investor protections, Imperial Russia. We present new data on detailed governance provisions from Imperial Russian corporate charters, which we connect to a comprehensive panel database of corporate balance sheets from 1899 to 1914. We document how variation in votes per share and other shareholder rights provisions were related to corporate choices of using debt vs. equity and whether these governance provisions correlated systematically with performance measures on the balance sheet and in terms of the market-to-book ratio. This investigation reveals the tradeoffs weighed by Imperial Russian corporations and demonstrates the surprising flexibility that Russian corporations enjoyed, conditional on obtaining a corporate charter.

Title: Social Networks with Misclassified Links (joint w Arthur Lewbel and Xi Qu).

Abstract. We propose an adjusted 2SLS estimator for social network models when the links reported in samples are subject to two-sided misclassification errors (due, e.g., to recall errors by survey respondents, or lapses in data input). In a feasible structural form, misclassified links make all covariates endogenous and add a new source of correlation between the structural errors and endogenous peer outcomes (in addition to simultaneity), thus invalidating conventional estimators used in the literature. We resolve these issues by adjusting endogenous peer outcomes with estimates of the misclassification rates and constructing new instruments that exploit properties of the noisy network measures. We apply our method to study peer effects in household decisions to participate in a microfinance program in Indian villages. We find that ignoring the issue of link specification and applying conventional instruments would result in an upward bias in peer effect estimates.

Title: Government Debt Management with Real and Nominal Bonds

Title: Coordinated Testing for Identification Failure and Correct Model Specification

Title: How Poverty Fell

Abstract: The share of the global population living in extreme poverty fell dramatically from an estimated 44% in 1981 to 9% in 2019. We describe how this happened: the extent to which changes within as opposed to between cohorts contributed to poverty declines, and the key changes in the lives of households as they transitioned out of (and into) poverty. We do so using cross-sectional and panel sources that are representative or near-representative of countries that collectively accounted for 70\% of global poverty decline since 1990. The repeated cross-sections show that the decline of poverty over time can be viewed as shared in parallel by all birth cohorts, such that poverty decline was primarily a within-cohort phenomenon. The panels show substantial within-cohort churn: gross transitions out of poverty were much larger than net changes, as many households also lapsed back into poverty. The overall picture is of a "slippery slope'' rather than a long-term trap. The role of sectoral transitions varied across countries, though progress within a given sector (most often agriculture) and a given occupation generally played a larger role than transitions between sectors or occupations.

Title: Branching for Caution: Banks in England and Wales during the 1878 Financial Panic

 Abstract: Using a bank-level dataset on joint-stock banks in England and Wales in the 1870s and 1880s, I show that exposure to an unexpected financial panic resulting from the failure of the City of Glasgow Bank in 1878 led to the geographical expansion of banks affected. My baseline estimation includes bank and year fixed effects. I also construct an instrumental variable based on the number of newspapers in the towns of bank headquarters before the panic. Banks with smaller initial branch networks expanded their branch networks to diversify geographic risks in response to the loss of liquid assets resulting from the drainage of deposits. Banks with larger initial branch networks expanded less than small banks but they collected more deposits.

Title: Decomposable stochastic choice with Fedor Sandomirskiy

Abstract: We investigate inherent stochasticity in individual choice behavior across diverse decisions. Each decision is modeled as a menu of actions with outcomes, and a stochastic choice rule assigns probabilities to actions based on the outcome profile. Outcomes can be monetary values, lotteries, or elements of an abstract outcome space. We characterize decomposable rules: those that predict independent choices across decisions not affecting each other. For monetary outcomes, such rules form the one-parametric family of multinomial logit rules. For general outcomes, there exists a universal utility function on the set of outcomes, such that choice follows multinomial logit with respect to this utility. The conclusions are robust to replacing strict decomposability with an approximate version or allowing minor dependencies on the actions’ labels. Applications include choice over time, under risk, and with ambiguity.

Title: HBANK: Monetary Policy with Heterogeneous Banks

Abstract: We study monetary, liquidity, and macroprudential policy transmission in a Heterogeneous Bank New Keynesian (HBANK) model that is solved in sequence space. Using a sufficient-statistic approach, we show that the combination of incomplete markets and costly bank insolvency breaks the “as-if” result, generating substantial amplification of policy shocks relative to the representative-bank benchmark. There is a trade-off between macroeconomic and financial stabilization: contractionary monetary policy worsens financial stability by raising the likelihood of bank insolvency in the lower tail of the bank size distribution. We enrich our baseline framework with departures from perfect deposit and credit market competition and apply it to the study of monetary, forward guidance, macroprudential, and reserve requirement policies. We validate our model empirically with novel cross-sectional and time-series facts on U.S. commercial banks.

Hosted by Herakles Polemarchakis

Title (provisional): An Oracle Inequality for Multivariate Dynamic Quantile Forecasting

Abstract: I derive an oracle inequality for a family of possibly misspecified multivariate conditional autoregressive quantile models. The family includes standard specifications for (nonlinear) quantile prediction proposed in the literature. This inequality is used to establish that the predictor that minimizes the in-sample average check loss achieves the best out-of-sample performance within its class at a near optimal rate, even when the model is fully misspecified. An empirical application to backtesting global Growth-at-Risk shows that a combination of the generalized autoregressive conditionally heteroscedastic model and the vector autoregression for Value-at-Risk performs best out-of-sample in terms of the check loss.

Link: An Oracle Inequality for Multivariate Dynamic Quantile Forecasting by Jordi Llorens-Terrazas :: SSRN

Title to be advised.

Title to be advised.