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The Heterogeneous Effects of Government Spending: It’s All about Taxes

Axelle Ferriere and Gaston Navarro

Historically, large changes in U.S. government spending induced fiscal efforts that were not all alike, with some using more progressive taxes than others. We develop a heterogeneous-agent New Keynesian model to analyze how the distribution of taxes across households shapes spending multipliers. The model yields empirically realistic distributions in marginal propensities to consume and labor elasticities, which result in lower responsiveness to tax changes for higher-income earners. In turn, multipliers are larger when spending is financed with higher tax progressivity—that is, when the tax burden falls more heavily on higher-income earners.

Dynamic Demand Estimation in Auction Markets

Matthew Backus and Gregory Lewis

We study demand estimation in a large auction market. In our model, a dynamically evolving population of buyers with unit demand and heterogeneous and privately known preferences for a finite set of differentiated products compete in a sequence of auctions that occur in discrete time. We define an empirically tractable equilibrium concept in which bidders behave as though they are competing with the stationary distribution of opposing bids, characterize bidding strategies, and prove existence of equilibrium. Having developed this demand system, we prove that it is non-parametrically identified from panel data.

International Comovement in the Global Production Network

Zhen Huo, Andrei Levchenko, and Nitya Pandalai-Nayar

This paper provides a general framework to study the role of production networks in international GDP comovement. We first derive an additive decomposition of bilateral GDP comovement into components capturing shock transmission and shock correlation. We quantify this decomposition in a parsimonious multi-country, multi-sector dynamic network propagation model, using data for the G7 countries over the period 1978-2007. Our main finding is that while the network transmission of shocks is quantitatively important, it accounts for a minority of observed comovement under the estimated range of structural elasticities.

Transhumant Pastoralism, Climate Change, and Conflict in Africa

Eoin McGuirk and Nathan Nunn

We consider the effects of climate change on seasonally migrant populations that herd livestock—i.e., transhumant pastoralists—in Africa. Traditionally, transhumant pastoralists benefit from a cooperative relationship with sedentary agriculturalists whereby arable land is used for crop farming in the wet season and animal grazing in the dry season. Rainfall scarcity can disrupt this arrangement by inducing pastoral groups to migrate to agricultural lands before the harvest, causing conflict to emerge. We examine this hypothesis by combining ethnographic information on the traditional locations of transhumant pastoralists and sedentary agriculturalists with high-resolution data on the location and timing of rainfall and violent conflict events in Africa from 1989–2018.

Too Domestic To Fail: Liquidity Provision And National Champions

Emmanuel Farhi and Jean Tirole

Authorities’ support policies shape the location and continuation of industrial and banking activity on their soil. Firms’ locus of activity depends on their prospect of receiving financial assistance in distress and therefore on factors such as countries’ relative resilience. We predict that global firms are global in life and national in death; and that they become less global when competition is more intense, times are turbulent, and international risk sharing (say, through swap lines) weak.

Good Politicians: Experimental Evidence on Motivations for Political Candidacy and Government Performance

Saad Gulzar and Muhammad Yasir Khan

How can we motivate good politicians – those that will carry out policy that is responsive to citizens’ preferences – to enter politics? In a field experiment in Pakistan, we vary how political office is portrayed to ordinary citizens. Emphasizing prosocial motives for holding political office instead of personal returns – such as the ability to help others versus enhancing one’s own respect and status – raises the likelihood that individuals run for office and that voters elect them.

Adaptive Estimation and Uniform Confidence Bands for Nonparametric Structural Functions and Elasticities

Xiaohong Chen, Timothy Christensen, and Sid Kankanala

We introduce two data-driven procedures for optimal estimation and inference in nonparametric models using instrumental variables. The first is a data-driven choice of sieve dimension for a popular class of sieve two-stage least squares estimators. When implemented with this choice, estimators of both the structural function h0 and its derivatives (such as elasticities) converge at the fastest possible (i.e., minimax) rates in sup-norm. The second is for constructing uniform confidence bands (UCBs) for h0 and its derivatives.

Private Sector Provision as an Escape Valve: The Mexico Diabetes Experiment

Ari Bronsoler, Jonathan Gruber, and Enrique Seira

Public health systems are dominant in much of the world, but often face fiscal constraints that lead to rationing of care. As a result, private sector healthcare providers could in theory beneficially supplement public systems, but evaluating the benefits of private alternatives has been challenging. We evaluate a private supplement to the free public health system for one of the world’s deadliest health problems, diabetes. We estimate enormous impacts of the private supplement, increasing the share of those treated who are under control by 69%.

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Version 2.0 of the National Elections Database is online!
We now cover presidential and parliamentary elections 1789–2023, extending the post-1945 data of Electoral Turnovers @RevEconStudies (https://academic.oup.com/restud/advance-article/doi/10.1093/restud/rdae108/7899604).
w/ @benjaminmarx and @vincent_rollet

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``Many networks naturally form as people come together to form subgraphs, e.g. as coauthors of a paper, or other teams. This is the basis for a new, computationally tractable method of estimating network formation."

From Chandrasekhar & @JacksonmMatt:

https://www.restud.com/a-network-formation-model-based-on-subgraphs/

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Recently accepted to #REStud, ``Simultaneous Search and Adverse Selection," from Auster, Gottardi and Wolthoff @rpwolthoff:

https://www.restud.com/simultaneous-search-and-adverse-selection/

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Recently accepted to #REStud, ``Affiliated Common Value Auctions with Costly Entry," from Murto & Välimäki:

https://www.restud.com/affiliated-common-value-auctions-with-costly-entry/

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