Title: Investments And Innovation With Non-Rival Inputs: Evidence From Chinese Artificial Intelligence Startups

Fields: Innovation And Entrepreneurship

Supervisors: Daniel Sgroi, James Fenske

Title: Worldwide Child Stunting since the Nineteenth Century

Abstract: This paper conducts a meta-analysis of 877 historical child growth studies to reconstruct child stunting rates, the share of children who are too short for their age, for 121 countries from the earliest date possible to the present. This data complements and extends the modern Joint Malnutrition Estimates database of country-level stunting rates, which begins in the 1980s. We find that many European countries had stunting rates similar to current LMICs at the turn of the twenti- eth century, but child stunting fell in the early twentieth century reaching very low levels before World War II. Stunting rates were also very high in Japan and Korea. However, stunting rates were surprisingly low historically in the European settler colonies, Eastern Europe and the Caribbean. Historical comparisons of child stunting add a new dimension to the historical health transition and allow for more direct historical lessons for the fight against stunting today.

Title: Solving the Forecasting Combination Puzzle (with Ryan Zischke, Gael M. Martin and Donald Poskitt)

Abstract: We demonstrate that the so-called forecasting combination puzzle is a consequence of the methodology commonly used to produce forecast combinations. By the combination puzzle, we refer to the empirical finding that predictions formed by combining multiple forecasts in ways that seek to optimize forecast performance often do not out-perform more naive, e.g. equally-weighted, approaches. In particular, we demonstrate that, due to the manner in which such forecasts are typically produced, tests that aim to discriminate between the predictive accuracy of such competing combinations can have low power, and can lack size control, leading to an outcome that favors the simpler approach. In short, we show that this counter-intuitive result can be completely avoided by the adoption of more efficient estimation strategies in the production of the combinations, when feasible. We illustrate these findings both in the context of forecasting a functional of interest and in terms of predictive densities.

Title: When Nation Building Goes South: Draft Evasion, Government Repression, And The Origins Of The Sicilian Mafia

Fields: Economic History, Political Economy

Supervisors: James Fenske, Sharun Mukand

THE ALLOCATION OF INCENTIVES IN MULTI-LAYERED ORGANISATIONS.Link opens in a new window

with Erika Deserranno, Gianmarco Leon-Ciliotta, Philipp Kastrau

Title: School Capital Expenditure Rules, Student Outcomes, and Real Estate Capitalization (joint work with Barbara Biasi and Julien Lafortune)

Abstract: School capital expenditures are a major component of public spending in the US, but there is substantial disagreement among economists and policymakers under what conditions these expenditures are a good use of funds. We use new data on school bond elections from dozens of states to estimate (a) the effects of capital expenditures on student achievement and house prices, (b) how they vary with bond and district characteristics, and (c) how they are shaped by the institutional environment. On average, we find positive effects on test scores and house prices, but with meaningful heterogeneity across bond characteristics, districts, and state institutions. We interpret these findings in a probabilistic voter model with budget-maximizing school districts. The model provides a foundation for quantitative evaluation of counterfactual political and fiscal institutions governing school capital finance.

Title: When Nation Building Goes South: Draft Evasion, Government Repression, And The Origins Of The Sicilian Mafia

Fields: Economic History, Political Economy

Supervisors: James Fenske, Sharun Mukand

Title: Adaptable Economics Education - What, Why and How (joint with Cloda Jenkins, Imperial College)

Abstract: In this presentation, we provide guidance for instructors looking to move to an adaptable learning design for their economics courses, as well as preliminary evidence of its evaluation at UCL. We use the term “adaptable” as it embraces both online and face-to-face elements and is designed to make moving in between the two delivery methods relatively easy. This is of course particularly relevant in light of the pandemic disruption but may also be considered to be a helpful direction of travel in an uncertain world in order to make the higher education system more resilient to shocks. In this context, “adaptable” is not equivalent to hybrid, that is, teaching online and in-person students simultaneously. The two main reasons for this are that we aim to include multiple models of adaptable education here, which could include a hybrid option, and that in general hybrid models are the most difficult to deliver successfully and should be avoided where possible. 

Organised by Subhasish Dey

Title: Dynamic Contracting with Multiple Agents under Limited Commitment

We consider an environment of dynamic contracting with multiple agents and lack of commitment. A principal with no commitment power would like to screen efficient workers over time and assign harder tasks to them. After efficiency is revealed, the principal becomes tempted to change the terms of trade. . Breaches of contracts are observable and, hence, whenever past promises are not honored future information revelation stops. We provide necessary and sufficient conditions under which the principal is able to foster information revelation. Optimal contracts that lead to information revelation entail extreme high-powered incentives after information is revealed, and rewards for information revelation disappear in the long run. Information revelation becomes easier when workers are stochastically replaced by new ones.

Title: Worker Sorting And The Gender Wage Gap

Fields: Labour

Supervisors: Roland Rathelot, Manuel Bagues

Title: Belief-Driven Fluctuations, Global Imbalances And Equilibrium Dynamics

Fields: Macro, Theory

Supervisors: Roger Farmer, Herakles Polemarchakis, Pablo Beker

Title: The Revolution Suffocates Its Children - The Short- and Long-Term Effects of Air Pollution in Socialist East Germany

Abstract: Measuring the detrimental effects of air pollution on individuals is difficult. In this paper, we overcome this challenge by leveraging a natural experiment occurring in socialist East Germany in the 1980s. Suddenly and unexpectedly, the Soviet Union reduced and capped East Germany’s access to imported fossil fuels, leading the socialist party dictatorship to rapidly substitute Soviet oil with domestic brown coal at the cost of increased ambient air pollution. Comparing regions within East Germany with and without natural brown coal deposits, we find that the switch to brown coal led to an immediate and permanent increase in mortality (?), infant mortality and a reduction in birth weights. We use administrative social security data after German reunification to show that, in the next 40 years, individuals that lived in areas within the GDR exposed to the shift to brown coal spent less time in employment, earned lower wages and retired earlier. The authoritarian nature of the East German government makes this natural experiment particularly insightful by ruling out spatial sorting behaviour, competitive housing markets, and labour market adjustments as channels through which the estimated effects of air pollution could have been confounded.

Title: Can An Ai Agent Hit A Moving Target

Fields: Macro, Theory

Supervisors: Roger Farmer, Herakles Polemarchakis

Taxation and migration by the super-richLink opens in a new window

A. Advani, D. Burgherr, and A. Summers (2022)

Using administrative data on the globally connected super-rich in the UK, we study the effect of a large tax reform on migration behaviour. Prior to 2017, offshore investment returns for ‘non-doms’ – individuals tax resident in the UK but with connections to other countries – were untaxed. Average offshore investment returns for these individuals exceeded £420,000; even without considering other types of income, this puts them in the top 0.2% of the population. A reform in 2017 brought long-stayers and UK-born non-doms into the standard tax system, reducing their effective net of average tax rate by between 8.8% and 13.0%. We find that migration responses were limited: our central estimate of the migration elasticity is 0.02, and across a range of specifications we can rule out elasticities larger than 0.5. Using reforms for the UK-born super-rich who were living abroad, we find that migration elasticities are limited even for recent arrivals, for whom our central estimate is 0.18. Assuming similar elasticities for all non-doms, abolition of the preferential regime would increase tax revenue collected from non-doms by £3.2bn (84%).

Title: Heterogeneous Local Projections: An Application To Firm Investment

Fields: Macro, Econometrics

Supervisors: Giovanni Ricco, Ana Galvao (Wbs)

Title: Predicting Long-term Unemployment Risk - Andreas Mueller (UT Austin) & Johannes Spinnewijn (LSE)

Abstract: This paper uses rich administrative and survey data from Sweden to study the predictability and determinants of long-term unemployment (LTU) over the period 1992-2016. We use standard machine learning techniques to predict job seekers' LTU risk and find substantial predictable heterogeneity. Compared to a model using standard socio-demographic variables, a comprehensive model that uses data on income, employment and benefit histories more than doubles the predictive power. The estimated heterogeneity in LTU risk implies that at least two thirds of the observed duration dependence in job finding is driven by dynamic selection. We apply our prediction algorithm over the business cycle and find significant heterogeneity underlying the cyclicality in average LTU risk, while the role of composition effects is limited. We evaluate the implied value of targeting unemployment policies and how this changes over the business cycle.

Title: The Fertility Impact Of Mass Return Migration

Fields: Economic History, Labour

Supervisors: James Fenske, Manuel Bagues

Title: How informed do you want your principal to be? (joint with Rahul Deb and Mallesh Pay)

Title: Optimal Political Career Dynamics

Title: Avoiding Dissonant Information

Fields: Behavioural Economics, Experimental Economics

Supervisors:

Title: Price Changes And Welfare Analysis: Measurement Under Individual Heterogeniety

Fields: Theory, Public, Labour

Supervisors: Herakles Polemarchakis, Robert Akerlof, Costas Cavounidis

Title: Eigenvalue tests for the number of latent factorsin short panels

Alain-Philippe Fortin, Patrick Gagliardini, Olivier Scaillet
This paper studies new tests for the number of latent factors in a large cross-sectionalfactor model with small time dimension. These tests are based on the eigenvalues ofvariance-covariance matrices. We establish the asymptotic distributional results usingexpansion theorems based on perturbation theory for symmetric matrices. Our frame-work accommodates semi-strong factors in the systematic components. We propose anovel statistical test for weak factors against strong or semi-strong factors. We providean empirical application to US equity data. Evidence for a dierent number of latentfactors according to market downturns and market upturns, is statistically ambiguous.In particular, our results contradicts the common wisdom of a single factor model inbear markets

Title: Firming up price inflation

Title to be advised.

This workshop is hybrid, here is a Teams link . https://teams.microsoft.com/l/meetup-join/19%3ameeting_OWE3ZDAyNWYtYTgzMS00NTUxLWI2ZDktMWYxZjFkYjQyZTUy%40thread.v2/0?context=%7b%22Tid%22%3a%2209bacfbd-47ef-4465-9265-3546f2eaf6bc%22%2c%22Oid%22%3a%22d235acba-bb89-4eff-a07c-515e0b711c79%22%7d

Title: The Education-Innovation Gap.

Title: Classicism and Modern Growth: The Shadow of the Sages

Abstract: This paper examines how intellectual culture has affected economic modernization in China, where the learned class embraced classical wisdom for millennia but encountered the shock of Western industrial influence in the mid-19th century. I use the number of sage temples to measure the strength of classical worship in 269 prefectures, and instrument for the distribution of sage temples using the distribution of sages’ birthplaces. I find that classical worship discouraged intellectuals from appreciating modern learning and thus inhibited the growth of industrial firms between 1858 and 1927. By contrast, industrialization grew faster in regions less constrained by classicism.