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151. The Development of Geo-Economics A Path Towards an Institutional Liberalism Approach

Author:
Ricardo Vega
Publication Date:
01-2021
Content Type:
Journal Article
Journal:
AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:
Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:
Geo-economics mostly fall into the realist paradigm of International Relations since it is understood as the use of economic means under strategic military logic as principal instruments of statecraft. However, geo-economics is neither caused by states alone nor driven by multipolar rivalry solely. Instead, geo-economics requires a framework of study which considers that there are countless links of interdependence in the global economy that must be taken into consideration to explain state behaviour. Institutional liberalism provides geo-economics theoretical grounds to maintain cooperation and responsibility as central components of geo-economics.
Topic:
Economics, Geopolitics, Institutions, and Liberalism
Political Geography:
Global Focus

152. Low inflation bends the Phillips curve around the world: Extended results

Author:
Jami Forbes, Joseph E. Gagnon, and Christopher G. Collins
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
This paper revises and extends PIIE Working Paper 20-6. It continues to find strong support for a Phillips curve that becomes nonlinear when inflation is "low"—which our baseline model defines as less than 3 percent. The nonlinear curve is steep when output is above potential (slack is negative) but flat when output is below potential (slack is positive) so that further increases in economic slack have little effect on inflation. This finding is consistent with evidence of downward nominal wage and price rigidity. When inflation is high, the Phillips curve is linear and relatively steep. These results are robust to placing the threshold between the high and low inflation regimes at 2, 3, or 4 percent inflation or for a threshold based on country-specific medians of inflation. In this nonlinear model, international factors play a large role in explaining headline inflation (albeit less so for core inflation), a role that has been increasing since the global financial crisis.
Topic:
Economics, Financial Crisis, Inflation, and Philips Curve
Political Geography:
Global Focus

153. Wages, Skills, and Skill-Biased Technical Change: The Canonical Model Revisited

Author:
Audra J. Bowlus, Lance Lochner, Chris Robinson, and Edna Suleymanoglu
Publication Date:
03-2021
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
The canonical supply–demand model of the wage returns to skill has been extremely influential; however, it has faced several important challenges. Several studies show that the standard approach sometimes produces theoretically wrong-signed elasticities of substitution, yields counterintuitive paths for skill-biased technical change (SBTC), and does not account for the observed deviations in college premia for younger vs. older workers. This paper shows that these failings can be explained by mis-measurement of relative skill prices and supplies (based on standard demographic composition-adjustments) and by inadequate ad hoc functional form assumptions about the path for SBTC. Improved estimates of skill prices and supplies that account for variation in skill across cohorts within narrowly defined groups help explain the observed deviation in the college premium for younger vs. older workers, even with perfect substitutability across age. Re-estimating the model with these prices and supplies produces a good fit with better out-of-sample prediction and robustly yields positive elasticities of substitution between high and low skill workers. The estimates suggest greater substitutability across skill and a more modest role for SBTC. We implement two new approaches to modelling SBTC. First, we study the extent to which recessions induce jumps or trend-adjustments in skill bias and find evidence that both features are important (but differ across recessions). Second, we link SBTC to direct measures of information technology investment expenditures and show that these measures explain the evolution of skill bias quite well. Together, these approaches suggest that the ad hoc assumptions for SBTC previously employed in the literature are too crude to fit the data well, leading to the incorrect conclusion that SBTC slowed during the early-1990s and under-estimates of the elasticity of substitution between high and low skill workers.
Topic:
Economics, Human Capital, Supply, Skills, and Wages
Political Geography:
Global Focus

154. Heterogeneous consumer preferences for product quality and uncertainty

Author:
Wolfgang Maennig and Steffen Mueller
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Chair for Economic Policy, University of Hamburg
Abstract:
We provide evidence for heterogeneous consumer preferences for product quality and game outcome uncertainty (GOU) in Major League Baseball. Using attendance data from 2013 to 2019, we explore func-tional data clustering techniques to detect common patterns in predictive margins of team-specific win-ning probability. As a central result, we identify five groups of teams with similar GOU effects. However, only a few teams’ fans show GOU preferences that resemble the typical hump-shape that is postulated by the uncertainty of outcome hypothesis; the largest cluster is comprised of teams with fans whose at-tendance behavior is relatively insensitive to differences in GOU.
Topic:
Economics, Data, Consumer Behavior, and Uncertainty
Political Geography:
Global Focus

155. Consumer and employer discrimination in professional sports markets – New evidence from Major League Baseball

Author:
Wolfgang Maennig and Steffen Mueller
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Chair for Economic Policy, University of Hamburg
Abstract:
We investigate the relationship between consumer discrimination, racial matching strategies, and employer discrimination in Major League Baseball (MLB) from 1985 to 2016. To this end, we assess the extent to which both fan attendance and team performance respond to changes in teams’ and their local market areas’ racial compositions. We innovate by using a significantly enhanced data basis with individual player data that we derive from combining web scraping and using facial recognition techniques to identify player race and using County-level Census data instead of Metropolitan Statistical Area data. We find that fans in both MLB Leagues developed a taste for racial diversity in the late 1980s; since the 2000s, discrimination starts to increase again. However, this discrimination is not fully rationalizing the performance gap across athletes of different race and ethnicity; employer discrimination is not primarily driven by fans’ racial preferences.
Topic:
Economics, Race, Employment, Sports, Ethnicity, Discrimination, Consumer Behavior, Facial Recognition, and Baseball
Political Geography:
Global Focus

156. Food for Thought: Investing in a sustainable food system

Author:
Marta Piazza
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
The focus on profit maximization at the expense of workers, farmers, and women have helped companies reap huge profit margins in the short-term, but as COVID-19 has revealed, it has come at the cost of rights violations. Such costs are no longer considered an acceptable business risk. As human rights gains prominence in investor-company engagement, this briefing note provides information to investors about the risks of ignoring human rights impacts, evidence about the rights violations that persist in the food sector despite company action and charts a way for investors to build a resilient food system given their outsized influence.
Topic:
Economics, Business, Profit, and COVID-19
Political Geography:
Global Focus

157. An Alternative Theoretical Framework for Economics

Author:
Meir Kohn
Publication Date:
10-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
As a profession, economics is thriving. The number of economists is large and growing. The volume of their output is exploding—more articles are published each year in a growing number of journals. As a science, however, economics is not doing so well. The questions addressed by all those articles seem to be getting smaller and smaller. And there seems to be little or no progress on the big questions of economics such as economic development and growth, economic fluctuations, and the proper role of government in the economy. Most of the articles published are econometric, and the results of many are of questionable quality.
Topic:
Economics, Research, Economic Theory, and Commerce
Political Geography:
Global Focus

158. The Economic Policies of Lord Liverpool

Author:
Martin Hutchinson and Kevin Dowd
Publication Date:
10-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Robert Banks Jenkinson, 2nd Earl of Liverpool (“Liverpool,” 1770–1828) was UK prime minister over the period 1812–1827. His achievements were remarkable. He designed the financial attrition strategy that defeated Napoleon; led the United Kingdom through the turbulence of the takeoff stage of the industrial revolution; inherited a daunting fiscal situation that included a debt/​GDP ratio of well over 200 percent, and implanted the austerity measures needed to put this ratio onto the path that led to later Victorian levels; reformed the currency; pushed through the return to the gold standard; promoted both the Corn Laws and free trade; successfully managed the 1825 financial crisis, the worst in over a century; and pushed through subsequent reforms that put the UK banking system onto a stable trajectory that lasted into the late 20th century.
Topic:
Agriculture, Economics, Fiscal Policy, and Trade
Political Geography:
Global Focus

159. The Economic Mentality of Nations

Author:
Pál Czeglédi, Brad Lips, and Carlos Newland
Publication Date:
10-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Two hundred forty‐​five years after the publication of Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations, economists continue to debate the causes of disparities in wealth among the countries of the world. Some scholars focus on the role of climate, natural resources, proximity to markets, or access to technology. Others study human capital, capital accumulation, the use of comparative advantages and economies of scale, and institutional and legal frameworks. We believe that another factor must be considered as well: the economic attitudes and causal beliefs (henceforth, “mentality”) of the population. While a growing body of research shows a clear association between economic growth and the institutions of economic freedom, those institutions can be quite fragile if the population does not have a clear understanding of what makes a country prosperous. To measure popular attitudes toward economic values, we have created the Global Index of Economic Mentality (GIEM).
Topic:
Economics, Markets, Capitalism, Youth, and Free Market
Political Geography:
Global Focus

160. The War on Cash: Institutional Hostility and Covid‐​19

Author:
Edoardo Beretta and Doris Neuberger
Publication Date:
10-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
There is significant economic literature investigating the hostility to cash or “war on cash” (Beretta 2005, 2007; Deutsche Bundesbank 2017; Jain 2017; Scott 2013; White 2018) by which financial institutions supported by governments discourage individuals from using (publicly issued) physical means of payments and convince them to move to digital (privately issued) ones.
Topic:
Economics, COVID-19, Digitization, and Cash
Political Geography:
Global Focus