The Impact of Online Competition on Local Newspapers: Evidence from the Introduction of Craigslist 1 May 2024 Milena Djourelova, Ruben Durante, and Gregory J. MartinHow does competition from online platforms affect the organization, performance, and editorial choices of newspapers? What are the implications of these changes for the information voters are exposed to and for their political choices? We study these questions using the staggered introduction of Craigslist—the world’s largest online platform for classified advertising — across US counties between 1995 and 2009. This setting allows us to separate the effect of competition for classified advertising from other changes brought about by the Internet, and to compare newspapers that relied more or less heavily on classified ads ex ante.
Efficient and Convergent Sequential Pseudo-Likelihood Estimation of Dynamic Discrete Games 30 April 2024 Adam Dearing and Jason R. BlevinsWe propose a new sequential Efficient Pseudo-Likelihood (k-EPL) estimator for dynamic discrete choice games of incomplete information. k-EPL considers the joint behavior of multiple players simultaneously, as opposed to individual responses to other agents’ equilibrium play. This, in addition to reframing the problem from conditional choice probability (CCP) space to value function space, yields a computationally tractable, stable, and efficient estimator. We show that each iteration in the k-EPL sequence is consistent and asymptotically efficient, so the first-order asymptotic properties do not vary across iterations.
(Successful) Democracies Breed Their Own Support 30 April 2024 Daron Acemoglu, Nicolás Ajzenman, Cevat Giray Aksoy, Martin Fiszbein, and Carlos MolinaUsing large-scale survey data covering more than 110 countries and exploiting within-country variation across cohorts and surveys, we show that individuals with longer exposure to democracy display stronger support for democratic institutions, and that this effect is almost entirely driven by exposure to democracies with successful performance in terms of economic growth, control of corruption, peace and political stability, and public goods provision.
The Elusive Gains from Nationally Oriented Monetary Policy 13 April 2024 Martin Bodenstein, Giancarlo Corsetti, and Luca GuerrieriThe gains from monetary policy cooperation depend on real and financial distortions in the economy and evolve dynamically with prevailing economic conditions. We show that, with international trade in assets, these gains are driven by asymmetric cross-border developments in productivity and savings, and can reach multiples of the cost of economic fluctuations.
A Theory of Socially Responsible Investment 13 April 2024 Martin Oehmke and Marcus M. OppWe characterize the conditions under which a socially responsible (SR) fund induces firms to reduce externalities, even when profit-seeking capital is in perfectly elastic supply. Such impact requires that the SR fund’s mandate permits the fund to trade off financial performance against reductions in social costs — relative to the counterfactual in which the fund does not invest in a given firm. Based on such an impact mandate, we derive the social profitability index (SPI), an investment criterion that characterizes the optimal ranking of impact investments when SR capital is scarce.
Tapping into Talent: Coupling Education and Innovation Policies for Economic Growth 13 April 2024 Ufuk Akcigit, Jeremy Pearce, and Marta PratoHow do innovation and education policy affect individual career choices and aggregate productivity? This paper analyzes the effect of R&D subsidies and higher education policy on productivity growth through the supply of innovative talent. We put scarce talent, higher education attainment, and career choice at the center of a new endogenous growth framework with individual-level heterogeneity in talent, financial resources, and preferences. We link the model to micro-level data from Denmark on the backgrounds of who obtains a PhD and becomes an inventor and the outcomes of a set of policy interventions.
Congrats to Phillip StrackCongrats to Phillip Strack, REStud Foreign Editor and 2024 John Bates Clark medallist 11 April 2024 Gregory Thwaites
Talent, Geography, and Offshore R&D 8 April 2024 Jingting FanI model and quantify the impact of a new dimension of globalization: offshore R&D. In the model, firms employ researchers across the globe to develop new product blueprints and then engage in offshore production and exporting. Frictions impeding trade and the separation of production from R&D lead to a ‘market-access’ motive for offshore R&D, while cross-country differences in the distributions of firm knowhow and worker ability generate a ‘talent-acquisition’ motive. I discipline the model using empirical facts derived from a new firm-level dataset. Counterfactual experiments show that the two motives can account for a significant portion of the observed offshore R&D.
