Sowing the Seeds of Financial Crises: Endogenous Asset Creation and Adverse Selection 10 September 2024 Nicolas Caramp, UC DavisWhat sows the seeds of financial crises, and what policies can help avoid them? I model the interaction between the ex-ante production of assets and ex-post adverse selection in financial markets. Positive shocks that increase market prices exacerbate the production of low quality assets and can increase the likelihood of a financial market collapse. The interest rate and the liquidity premium are endogenous and depend on the functioning of financial markets as well as the total supply of assets (private and public).
The Causes of Ukrainian Famine Mortality, 1932-33 8 September 2024 Andrei Markevich, Natalya Naumenko, and Nancy QianWe construct a novel panel dataset for interwar Soviet Union to study the causes of Ukrainian famine mortality (Holodomor) during 1932-33 and document several facts: i) Ukraine produced enough food in 1932 to avoid famine in Ukraine; ii) 1933 mortality in the Soviet Union was increasing in the pre-famine ethnic Ukrainian population share and iii) was unrelated to food productivity across regions; iv) this pattern exists even outside of Ukraine; v) migration restrictions exacerbated mortality; vi) actual and planned grain procurement were increasing and actual and planned grain retention (production minus procurement) were decreasing in the ethnic Ukrainian population share across regions.
No Free Lunch? Welfare Analysis of Firms Selling Through Expert Intermediaries 8 September 2024 Matthew Grennan, Kyle R. Myers, Ashley Swanson, and Aaron ChatterjiWe study how firms target and influence expert intermediaries. In our context, pharmaceutical manufacturers provide payments to physicians during promotional interactions. We develop an identification strategy based on plausibly exogenous variation in payments driven by differential exposure to spillovers from academic medical centers’ conflict-of-interest policies. Using a case study of an important class of cardiovascular drugs, we estimate heterogeneous effects of payments on prescribing, with firms targeting highly responsive physicians.
Regulating Carry Trades: Evidence from Foreign Currency Borrowing of Corporations in India 30 August 2024 Viral V. Acharya and Siddharth VijWe establish that macroprudential controls limiting capital flows can curb risks arising from foreign currency borrowing by corporates in emerging markets. Firm-level data show that Indian firms tend to issue more foreign currency debt when the interest rate differential between India and the United States is higher. This “carry trade” relationship, however, breaks down once regulators institute more stringent interest rate caps on borrowing; in response, riskier borrowers cut issuance most.
Identifying Network Ties from Panel Data: Theory and an Application to Tax Competition 23 August 2024 Áureo de Paula, Imran Rasul, and Pedro SouzaSocial interactions determine many economic behaviors, but information on social ties does not exist in most publicly available and widely used datasets. We present results on the identification of social networks from observational panel data that contains no information on social ties between agents. In the context of a canonical social interactions model, we provide sufficient conditions under which the social interactions matrix, endogenous and exogenous social effect parameters are globally identified if networks are constant over time. We also provide an extension of the method for time-varying networks.
What Drives Demand for State-Run Lotteries? Evidence and Welfare Implications 13 August 2024 Benjamin B. Lockwood, Hunt Allcott, Dmitry Taubinsky, and Afras SialWe use natural experiments embedded in state-run lotteries and a new nationally representative survey to provide reduced-form and structural estimates of risk preferences and behavioral biases in lottery demand, and to explore the implications for optimal lottery design. We find that sales respond more to the expected value of the jackpot than to price but are unresponsive to variation in the second prize—a pattern that is consistent with probability weighting but is inconsistent with standard parameterizations.
Gender Preferences in Job Vacancies and Workplace Gender Diversity 13 August 2024 David Card, Fabrizio Colella, and Rafael LaliveIn spring 2005, the Ombud for Equal Treatment in Austria launched a campaign notifying employers and newspapers that gender preferences in job ads were illegal. At the time over 40% of vacancies on the nation’s largest job board stated a gender preference; within a year the rate fell below 5%. We merge job board vacancies and employer records to study how the campaign affected hiring choices and the gender diversity of occupations and workplaces. Using pre-campaign data, we predict the use of gender preferences, then conduct a difference-in-differences analysis of hiring outcomes for vacancies with predicted male or female preferences, relative to those with no predicted preferences.
On the Economic Origins of Concerns over Women’s Chastity 13 August 2024 Anke BeckerThis paper studies the origins and function of customs and norms that intend to keep women from being promiscuous. Using large-scale survey data from more than 100 countries, I test the anthropological theory that a particular form of preindustrial subsistence – pastoralism – favored the adoption of such customs and norms. Pastoralism was characterized by frequent and often extended periods of male absence from the settlement, implying difficulties in monitoring women’s behavior and larger incentives to imposing restrictions on women’s promiscuity. The paper shows that women from historically more pastoral societies (i) are subject to stronger anti-abortion attitudes; (ii) are more likely to have undergone infibulation, the most invasive form of female genital cutting; (iii) are more restricted in their freedom of mobility; and (iv) adhere to more restrictive norms about women’s promiscuity.
