IDB publication co-authored by Miguel Angel Santos (ITFD ’11, Economics ’12)
After a lengthy review process we are proud to announce that our book “City Design, Planning, Policy Innovations: The Case of Hermosillo” is published and available for download from the Inter-American Development Bank. Cutting edge research on cities featuring my work with Douglas Barrios, my colleague at the Center for International Development’s Growth Lab at the Harvard Kennedy School. Thanks to Andreina Seijas and Diego Arcia for the superb coordination and editing work.
About the book
This publication summarizes the outcomes and lessons learned from the Fall 2017 course titled “Emergent Urbanism: Planning and Design Visions for the City of Hermosillo, Mexico” (ADV-9146). Taught by professors Diane Davis and Felipe Vera, this course asked a group of 12 students to design a set of projects that could lay the groundwork for a sustainable future for the city of Hermosillo—an emerging city located in northwest Mexico and the capital of the state of Sonora. Part of a larger initiative funded by the Inter-American Development Bank and the North-American Development Bank in partnership with Harvard University, ideas developed for this class were the product of collaboration between faculty and students at the Graduate School of Design, the Kennedy School’s Center for International Development and the T.H. Chan School of Public Health.
Speech by Gavin Jackson ’12 (Economics) to the Oxford Economics Society
This June, Gavin Jackson ’12 (Economics) returned to his undergrad alma mater, University of Oxford, and gave a talk to the Oxford Economics Society about the slowdown in productivity in the United Kingdom and where productivity in the UK might be headed.
He listed five contributing factors to the slowdown: “changes in financial regulation, the patent cliff, mismeasurement of telecommunications, attempts to cope with climate change, and the troubles with getting more oil out of the North Sea.”
Looking ahead, he remarked, “I don’t think we can or should go back to the past. We do not want to go back on environmental on financial regulation, as the US is doing right now. But what we can do as a society is try to be open to new opportunities and technologies that are coming along and that means investing in the basics of education, infrastructure and research to make sure that we are able to make the most of things like e-commerce and working out what to do about those who lose out from these transitions.”
Master’s students Analía García ’19 (ITFD) and Lorena Franco ’19 (Economics) organized the seminar to highlight research by female PhD students and professors
This May, BGSE Master’s students Analía García ’19 (ITFD) and Lorena Franco ’19 (Economics) organized the Women in Economics two-day seminar, which meant to highlight female PhD students and faculty members’ research.
Three students and four Barcelona GSE Affiliated Professors presented their work, which varied from family economics to political economics and experimental economics. More information of the speakers and their topics below.
These efforts, nonetheless, started over two months ago when both students, who are from Latin America and the Caribbean, organized an open forum on International Women’s Day. Having prior work experience and noting the clear lack of female representation in economics and academia, they wanted to expand the conversations on the topic and discuss what we could do to potentially “make it better” within their parameters. The Women in Economics seminar was born from the conversations during the first and second open forums, and thanks to the ideas of Marta Morazzoni and Claudia Meza, both PhD students at GPEFM (UPF and Barcelona GSE).
Putting this together was a challenge given this had not been done at BGSE before, but the organizers hope this was insightful for all those who attended.
More female and racial diversity in economics and academia, please!
The speakers and the titles of the work were the following (listed alphabetically):
Marta Morazzoni“Family Dynamics in Macroeconomics: when the representative household does not represent us anymore”
Marta Santamaría“The Gains from Reshaping Infrastructure: Evidence from the Division of Germany”
Alina Velias“When to Tie Odysseus to the Mast: Costly Commitment Under Biased Expactations”
Enriqueta Aragonés“Stability of a Multi-level Government: A Catalonia in Spain”
Rosa Ferrer“Consumers’ Costly Responses to Product-Harm Crises” and “Gender Gaps in Performance: Evidence from Young Lawyers”
Ada Ferrer-i-Carbonell“Relative Deprivation in Tanzania”
Rosemarie Nagel“Regularities in the Lab, Brain, and Field: A Cognitive Reasoning Model”
Publication by Orestis Vravosinos ’18 (Economics) with Kyriakos Konstantinou
A paper by Orestis Vravosinos (Economics ’18, UPF MRes in Economics ’19) and Kyriakos Konstantinou (LSE) has just been published in the Review of Behavioral Economics. Below is an overview of the paper.
The Ultimatum Game
Given that in experiments ultimatum game outcomes are often significantly different from Nash equilibrium predictions under standard assumptions on preferences, many studies have examined the impact of fairness on players’ considerations and how the effect of the sense of fairness on players’ actions may vary, while other factors change. It has been argued that increased stakes (larger sum of money distributed) can reduce sensitivity to fairness of player 2 making it more likely that she accepts lower shares of the total sum, thus, giving player 1 the opportunity to offer a lower share.
Social distance has also been found to affect fairness. In the existing literature, social distance commonly varies only from players being close relatives or friends to complete strangers, even though negatively-valenced relationships can be important from an economic point of view. Our study aims to fill this gap by introducing negatively-valenced relationships between the players. We argue that altruistic and empathetic behavior of the proposer towards the responder may not vary (increase) as significantly in the region of negative relationships compared to the region of positive relationships. Similarly, social distance effects stemming from reciprocity may vary less in the region of negative relationships. Thus, we hypothesize that in the ultimatum game social distance effects are asymmetric with their magnitude varying more in the spectrum of positively compared to negatively-valenced relationships.
Our experimental results support this hypothesis; in the region of positively-valenced relationships, the proposers increase the percentage they offer as relationship quality increases more drastically compared to when the relationship is negatively-valenced, in which case they appear more invariant to relationship effects. Also, by eliciting a minimum share which the responder is willing to accept out of the total sum, we provide clearer results on the social distance and stakes effects on the latter’s behavior. Last, we find a negative effect of relationship quality on the minimum acceptable share. This contradicts a strand of the literature which suggests that closer-“in-group” individuals may be punished more severely, so that cooperation in a group is maintained.
Economics ’18 master project turned working paper by alumni Mariel Bedoya, Karen Espinoza, Bruno Gonzaga, and Alejandro Herrera Jiménez
What started out as a Barcelona GSE master project has developed into a full-fledged working paper by four alumni of the Master’s in Economics Class of 2018: Mariel Bedoya, Karen Espinoza, Bruno Gonzaga, and Alejandro Herrera Jiménez.
The paper, “Setting an example? Spillover effects of Peruvian Magnet Schools,” is now part of the Development Research Working Paper Series of the Institute for Advanced Development Studies (INESAD), a research center in La Paz, Bolivia.
Mariel explains that the idea to research this topic occurred to her because before doing the master in BGSE, she worked in the Ministry of Education of Peru, in the Impact Evaluation Division.
“The topic was interesting for us because although there is plenty of literature studying these selective schools’ first order effects (that is, effects on the students who directly benefited from the creation of these schools), we found scarce evidence about second-order effects (effects on students who shared environments with the high achieving student previously). Even more, analyzing externalities seemed of importance for a program such as COAR in Peru since the expenditure per student for the program is relatively high,” Mariel says.
The team has presented their research in three seminars so far, two in Peru and one in Bolivia.
“We aim to continue this research project in the near future. We got the opportunity of presenting findings of our research for public servants within the Ministry of Education last year, including the Director of the Division of Specialized Education Services, who is in charge of the COAR Program. This research complements ongoing efforts of the Ministry of Education of evaluating COAR’s first order effects. They seemed keen on helping us, especially because we do not have yet the necessary data to conclude on the mechanisms that may be driving the results we find, and they would like us to tell them more about this point in particular. We hope to have a new version of this paper by the end of the year.”
A good read for all those interested in understanding the extent to which the relationship between the changing nature of work and income inequality is influenced by national labor market institutions.
Recent work in comparative political economy has found that labour market institutions can mitigate the inequality-enhancing effects of the transition to the knowledge economy (Hope and Martelli 2019). While this work enhances our understanding of the role and importance of labour market institutions in the post-industrial era, it cannot tell us much about the underlying mechanisms. This paper aims to fill that gap in the literature by undertaking a micro-level econometric study on Denmark using a unique longitudinal dataset with linked employer-employee data, the Integrated Database for Labour Market Research (IDA). The central analysis in the paper will explore the influence of union membership and collective bargaining on within and between firm inequality in knowledge-intensive sectors. It will also test competing hypotheses as to why labour market institutions have been able to damp down the effects of the transition to the knowledge economy on income inequality.
A couple of takeaways
The transition to the knowledge economy began in earnest after the crisis of Fordism in the 1970s. Figure 1 (below) shows the employment expansion in knowledge-intensive service sectors, such as finance, insurance, business services, and telecommunications, between 1970 and 2006. Growth of knowledge employment was ubiquitous in the advanced democracies over this period; the average employment expansion was close to nine percentage points. The rise of the knowledge economy is clearly demonstrated by this substantial shift in economic structure away from traditional industries and toward ICT-intensive service sectors.
Figure 2 (below) shows that for the income share of the top 1 percent, an increase in knowledge employment is associated with an increase in inequality when wage coordination and collective bargaining coverage are very weak, but has little or no effect when they’re at their highest levels.
It’s our second roundup of articles by Barcelona GSE Alumni who are now working as research assistants and economists at CaixaBank Research in Barcelona (see Vol. 1).
This roundup includes posts and videos from the second half of 2018 and early 2019, listed in reverse chronological order. Click each author’s name to view all of his or her articles from CaixaBank Research in English, Catalan, and Spanish.
The importance of education for people’s well-being throughout all stages of their lives is beyond any doubt. At the economic level, individuals with higher levels of education tend to enjoy higher employment rates and income levels. What is more, all the indicators suggest that in the years to come, the role of education will be even more important. The challenges posed by technological change and globalisation have a profound effect on the educational model.
Faced with the major transformation of the productive system brought about by technological change and globalisation, as well as the challenges posed by an ageing population, it is important to take action to strengthen social cohesion – an indispensable element if we are to carry out reforms that foster an inclusive and sustained form of growth.
The US and the euro area are at different stages of their financial cycles: while the Fed’s monetary policy is close to becoming neutral or even restrictive, the ECB remains in clearly accommodative territory. However, to some extent, both are facing a common risk: the decoupling between their monetary policy and the financial conditions. The two institutions will try to manage their tools carefully, in order to facilitate a gradual adjustment of the financial conditions in the US and, in the case of the euro area, to keep them in accommodative territory.
Gerard Arqué ’09 (Macroeconomic Policy and Financial Markets)
Thanks to the implementation of the measures introduced following the financial crisis, today the financial sector is more robust than before. This will help to minimise the impact to the economy and financial stability in periods of upheaval, since countries with better-capitalised banking systems tend to experience shorter recessions and less contraction in the supply of credit. However, the outstanding tasks we have mentioned should be properly addressed sooner rather than later.
Central banks are facing the challenge of removing the extraordinary measures imposed during the financial crisis of 2007-2008 and the subsequent economic recession. In normal times, central banks would simply raise interest rates up to the desired level. However, monetary policy is currently in a rather unconventional cycle.
IND+I Science award for research by Kinga Tchorzewska ’15 (Economics)
I am honoured and overjoyed to have received the IND+I Science award in the category of “Green Industry for Sustainable Growth.” Big thank you to Magdalena Dominguez ’17 and Rodrigo Martinez ’17 for representing me at the award ceremony! So delighted and motivated even more to work hard towards research on public policies and green innovation!
About the paper
This paper investigates the effectiveness of environmental taxation at stimulating adoption of energy efficient and pollution abating technologies across manufacturing firms.
To that aim, we use the fact that Spain does not have a consolidated environmental taxation policy at the national level, instead there exist significant differences between regions in implementation of the environmental taxes e.g. air pollution taxes, waste taxes and others. We use categorical treatment matching to study the heterogenous effects of different levels of taxation on adoption of green technologies. We assess the effects between firms forced to pay environmental taxation (treated) and those that did not have to pay such taxes (controls) as well as between different levels of environmental taxation (small, medium, large). We control for time and firm fixed effects thanks to the use of a panel data set of 2,562 Spanish firms between 2008 and 2014.
We find that environmental taxation is ineffective at stimulating green technologies adoption at low levels of environmental taxation. As we increase the level of taxation the effect increases. Additionally, we find that even low levels of environmental taxation can be effective if combined with public financing. In that case the effect is stronger than from providing public financing alone.
The research leading to these results has received funding from RecerCaixa (RecerCaixa project 2016: The climate change challenge: policies for energy transition) and it is supervised by my advisor Prof. José Garcia-Quevedo.
A poster by Carlo Borella ’17 (Economics) has won the Festival Prize at the 2019 LSE Research Festival.
A poster created byCarlo Alessandro Borella ’17 has won the Festival Prize at the 2019 LSE Research Festival. This prize was awarded to the shortlisted submission that best engaged with the LSE Festival theme “New World (Dis)Orders” as judged by LSE Director Minouche Shafik.
Carlo’s poster is based on a paper of that same title that he wrote with fellow Barcelona GSE alum, Diego Rossinelli ’17 (Economics). That paper was published in SocioEconomic Challenges a few months after they graduated from the Barcelona GSE Master’s.
About the paper
Nowadays, it is hard to venture online without coming across a heated discussion over “Fake News”; as a result, people are finding hard times moving through an entirely new distorted era of misinformation. In this paper, we investigate the effect of fake news on people’s opinion polarisation.
About the authors
Carlo Borella is a research assistant and Master’s student at the London School of Economics and Political Science.
Diego Rossinelli is a specialist in social policy evaluation at the Ministry of Development and Social Inclusion of Peru.
This paper studies the differential persistent effects of initial economic conditions for labor market entrants in the United States from 1976 to 2015 by education, gender, and race using labor force survey data. We find persistent earnings and wage reductions, especially for less advantaged entrants, that increases in government support only partly offset. We confirm that the results are unaffected by selective migration and labor market entry by also using a double-weighted average unemployment rate at labor market entry for each birth cohort and state-of-birth cell based on average state migration rates and average cohort education rates from census data.
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