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Taxes and Growth: New Narrative Evidence from Interwar Britain

James Cloyne, Nicholas Dimsdale, and Natacha Postel-Vinay

The impact of fiscal policy on economic activity is still a matter of great debate. And, ever since Keynes first commented on it, interwar Britain, 1918-1939, has remained a particularly interesting and contentious case — not least because of its high debt environment and turbulent business cycle. This debate has often focused on the effects of government spending, but little is known about the effects of tax changes.

Strategic Exploration: Preemption and Prioritization

Qingmin Liu and Yu Fu Wong

This paper analyzes a model of strategic exploration in which competing players independently explore a set of alternatives. The model features a multiple-player multiple-armed bandit problem and captures a strategic trade-off between preemption—covert exploration of alternatives that the opponent will explore in the future—and prioritization—exploration of the most promising alternatives. Our results explain how the strategic trade-off shapes equilibrium behaviors and outcomes, e.g., in technology races between superpowers and R&D competitions between firms.

On the Use of Outcome Tests for Detecting Bias in Decision Making

Ivan A. Canay, Magne Mogstad, and Jack Mountjoy

The decisions of judges, lenders, journal editors, and other gatekeepers often lead to significant disparities across affected groups. An important question is whether, and to what extent, these group-level disparities are driven by relevant differences in underlying individual characteristics, or by biased decision makers. Becker (1957, 1993) proposed an outcome test of bias based on differences in post-decision outcomes across groups, inspiring a large and growing empirical literature.

The Transmission of Commodity Price Super-Cycles

Felipe Benguria, Felipe Saffie, and Sergio Urzua

We examine two key channels through which commodity price super-cycles affect the economy: a wealth channel, through which higher commodity prices increase domestic demand, and a cost channel, through which they induce wage increases. By exploiting regional variation in exposure to commodity price shocks and administrative firm-level data from Brazil, we empirically disentangle these transmission channels.

Sources and Transmission of Country Risk

Tarek A. Hassan, Jesse Schreger, Markus Schwedeler, and Ahmed Tahoun

We use textual analysis of earnings conference calls held by listed firms around the world to measure the amount of risk managers and investors at each firm associate with each country at each point in time. Flexibly aggregating this firm-country-quarter-level data allows us to systematically identify spikes in perceived country risk (“crises”) and document their source and pattern of transmission to foreign firms.

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Our paper on Amazon deforestation is out! Grateful to everyone who helped along the way. I'd like to highlight one thing that made a huge difference: clear and thoughtful guidance from the editor.

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Using frailty as the measure of health, a new paper by @roozbeh52, @KopeckyEcon and Zhao, recently accepted to #REStud, finds that health inequality accounts for 28 percent of lifetime earnings inequality.

https://www.restud.com/how-important-is-health-inequality-for-lifetime-earnings-inequality/

#EconSky #health #frailty #disability

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"This study estimates the carbon-efficient forest cover in the Brazilian Amazon. A $10/ton carbon tax could preserve 95% of the efficient carbon stock, avoiding 42B tons of CO2 & yielding $1.6T in welfare gains."

New paper from @AraujoCRRafael, @_FranciscoCosta
& Sant'Anna:

👇

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Recently accepted to #REStud, "Barriers to Entry and Regional Economic Growth in China," from Brandt, Kambourov, and Storesletten:

https://www.restud.com/barriers-to-entry-and-regional-economic-growth-in-china/

#econtwitter #China #SOE

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