Lucila Mederos ’11 attends Honoris Causa ceremony for Prof. Andreu Mas-Colell at University of Chicago

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Alum Lucila Mederos ’11 with Barcelona GSE founder Andreu Mas-Colell in Chicago last week

Last week, I had the pleasure of attending the ceremony where Prof. Andreu Mas-Colell was named Doctor Honoris Causa by the University of Chicago. As an alum of the Barcelona GSE, I felt honored to watch the founder of our school receive this recognition and to represent the alumni community here in Chicago.

After the ceremony I got to join Prof. Mas-Colell, his family, the President Emeritus of the University of Chicago and Chairman of the Barcelona GSE Scientific Council Hugo Sonnenschein, and the other recipients for lunch, where I took this photo. Professor Mas-Colell seemed very grateful to receive the Honoris Causa distinction and to have the GSE represented at the event.


Lucila Mederos ’11 (Master Program in International Trade, Finance, and Development) is Project Manager for Euromonitor International’s LATAM Custom Research Team in Chicago, IL (USA). Follow her on Twitter @lucilamederos

The global network of payment flow – Barcelona GSE Data Scientists

Originally posted by Jordi Zamora ’15 on the Barcelona GSE Data Scientists blog.


At the Rényi Hour on November 20th, Samantha Cook presented her recent research on the description and categorisation of the global SWIFT (Society for Worldwide Interbank Financial Telecommunication) interbank network. Samantha is currently the Chief Scientist at Financial Network Analytics in Barcelona. Previously, she was a Quantitative Analyst at Google’s Research Group in New York and a professor at Columbia University in New York and Pompeu Fabra University in Barcelona.
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Samantha Cook ready to give her talk

The study focused on understanding the underlying structure of a network of messages between financial institutions in different countries. It looked at how the network was affected by various recent economic events and evaluated the robustness of the system over time.

The data set underpinning the study contains standard MT103 SWIFT messages from 1 January 2003 and 31 July 2013, a period characterised by extreme economic turmoil. Each message represents a single customer credit transfer from bank to bank. The data is aggregated at the country level.

Samantha showed us different statistical analyses of the data set. The analysis of the data in terms of a complex weighted network was particularly interesting. In the network, each node represented a country and the edges connecting two different nodes were weighted according to the amount of messages those country exchanged in a given time period. The resulting network follows approximately a Core-Peripheral structure, that is, some nodes are fully connected with each other (the so-called core) while some others are mostly connected only to a node of the core: these are the peripheral nodes. Interestingly, events such as the introduction of new regulations or the beginning of the financial crisis was clearly reflected in the links and even more striking this network structure was resilient during the period studied. This work showcases a novel approach to understanding the structure of the complex financial system and the findings may provide a way to help improve the global service.

The discussion also identified some opportunities for further research. For example, we discussed why the degree distribution does not behaves as other related financial networks, and why the number of links decreases while the number of messages has a clearly increasing trend. These questions, and others that emerge, may provide ideas for further research and modelling work in this area.

Useful links:

Breakfast seminars: food for thought

By Marlène Rump ’15, current student in the International Trade, Finance and Development master program at Barcelona GSE. Marlène is on Twitter @marleneleila.

seminars

On Wednesday, October 22, we didn’t have classes, so we decided to explore one of the numerous events on the GSE calendar. For some brain and other food, the breakfast seminar on Labour, Public and Development Economics sounded just right.

The presentations scheduled were held by two of UPF’s PhD students who are in their last year. This means they are finalizing their “job market paper”, which refers to the paper they will use as a demonstration of their skills and interests when they apply for positions.

One important purpose of the seminar is giving the students an opportunity to practice presenting and defending their work, as well as receiving improvement suggestions from fellow PhD students and professors.

Backlash: The Unintended Effects of Language Prohibition in US Schools after World War I

Vicky Fouka started the seminar with her paper on language prohibition in the US Schools after World War I. She compared two states, similar in most social aspects, one of which banned the teaching of German from the primary schools for a few years and the other, her control state, which didn’t.

The prohibition, which was implemented by the authorities in early 1920s, originated from a German-hatred which was widespread in the United States after World War I. What was promoted as an integration measure had the exact opposing effects: Vicky finds that the Germans living in the state with language prohibition deepened their cultural segregation. In comparison with the control state, they were more likely to marry a German spouse and give their first child a very German sounding name.

Editor’s note: Vicky Fouka is a graduate of the Barcelona GSE Master in Economics. See more of her research on her website.

Cultural Capital in the Labor Market: Evidence from Two Trade Liberalization Episodes

The second presentation was also about the assimilation of immigrants, however Tetyana Surovtseva conducted her analysis with modern day data. Her assumption was that if the host country of immigrants increased trade with their country of origin, these immigrants had an advantage on the labor market in trade related sectors. Her hypothesis was that if the host country of immigrants increased trade with their country of origin, these immigrants had an advantage on the labor market in trade related sectors. Her underlying premise is that immigrants have a certain “cultural capital”, other than language, which is valuable for corporations involved in trade with their country of origin.

Tetyana examined the labor market demand for Chinese and Mexican immigrants in the US after a punctual improvement of trade agreements. Her findings suggest that labor market returns to the immigrant cultural capital increase as a result of trade with the country of origin.

Editor’s note: Tetyana is also a Barcelona GSE Economics alum. More about her work is available on her job market page.

Attend some seminars! Especially if you’re thinking of doing a PhD.

For both presentations there were numerous questions which gave additional insight especially on the methods of research. We also learned that most PhD students start their final thesis three years before the end of their program.

After this experience, I can highly recommend attending the seminars. You learn about interesting economic questions and see a specific application of your econometrics classes and this in only one hour. In addition, for those who are envisaging doing a PhD, the presentations give a genuine insight of the type of research you could be conducting.

The Credit Channel in Monetary Policy Transmission at the Zero Lower Bound. A FAVAR Approach

Editor’s note: This post is part of a series showcasing Barcelona GSE master projects by students in the Class of 2014. The project is a required component of every master program.


The Credit Channel in Monetary Policy Transmission at the Zero Lower Bound. A FAVAR Approach

Authors:

Alexandru Barbu, Zymantas Budrys, Thomas Walsh

Master Program:

Economics

Paper Abstract:

This paper aims to provide a methodology for identifying the credit channel in US monetary policy transmission, consistent with periods at the zero lower bound. We follow Ciccarelli, Maddaloni and Peydro (2011) in identifying credit shocks through quarterly responses in the Federal Reserve’s Senior Loan Officer Survey, but augment their identification strategy in two key ways. First, we use the credit variables inside a Factor Augmented Vector Autoregression, to summarize the information contained in a set of 110 US macroeconomic and financial series. Second, we adopt the shadow rate developed by Wu & Xia (2013) as an alternative to the effective federal funds rate at the zero lower bound. We present our results through impulse response functions and carefully designed counterfactuals. We find that monetary policy shocks have considerably larger effects through the credit supply side than the credit demand side. Building counterfactual analyses, we find the macroeconomic effects arising from the supply side of the credit channel to be sizable. When focusing on the recent unconventional policies, our counterfactuals show only very modest movements in credit variables, suggesting that the positive effects of unconventional monetary policy during the crisis may not have acted strongly through the credit channels.

Read the full paper

Band-Aids to Major Surgery: Making Healthcare Work in the U.S.

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Editor’s Note: The following post comes from Sergio Gutiérrez. Sergio is a Chicago-based designer and strategist working at the intersection of people, business, and technology. He graduated from BGSE’s MSc Economics of Science and Innovation in 2011.


 

So, as it seems, healthcare in the U.S. seems to be in of trouble and, all the voices say, design can do a lot to solve the problem. For this reason, many design and innovation consulting firms are making healthcare a strong focus area. For any designer —or any person trained to solve problems for that matter— this type of problem, because of its complexity, potential impact, and evident “higher purpose” is also very attractive.

However, regardless all the hype around this topic, thinking of design as the main driver for structural change may prove a bit unrealistic — as much as I would like to think that design can save the world. In reality, given the magnitude of the problem in the U.S., this needs to be attacked from different angles, with various strategies and tools and, probably, the most critical ones will have to come from outside the design field.

The system that is supposed to take care of us is very sick.

To help you gauge the magnitude of the U.S. healthcare problem, let me start with some background info — it won’t hurt, I promise: This is what we pay for our healthcare in the U.S…

  • The U.S. 2010 healthcare expenditure was 18% of the GDP, up to $2.6 trillion. That is roughly double the OECD average and this figure is projected to grow up to 26% of GDP by 2037 (scary).
  • The U.S. has the highest healthcare administration costs in the World at triple the OECD average.
  • Cost of healthcare per capita is above $8,200. That is more than double the OECD average of $3,200. Second, but not even close, is Switzerland with $5,200.

This is what we get…

  • There are fewer physicians and hospital beds per person than in most other OECD countries.
  • Life expectancy has increased over the last few decades but less than compared to other economies. Between 1960 and 2010, 9 years compared in the U.S. to 11 years on average on OECD countries.
  • 33% Americans were obese as of 2009 compared to an average 16% in the OECD countries.
  • The cost of certain procedures is much higher in the U.S. and the industry seems to favor more expensive diagnosis procedures.
  • In 2012, 46% of the U.S. population were underinsured or uninsured at some point, if not all year.
  • The system is terribly complex, especially for users: a new study to be released in September shows how only 14% of all insured Americans “can explain all four key health insurance concepts: deductible, co-pay, co-insurance, out-of-pocket maximum”. Can you?
  • And finally, healthcare bills is the number one reason for family bankruptcy in the U.S.

 A vicious circle

Continue reading “Band-Aids to Major Surgery: Making Healthcare Work in the U.S.”

Meeting Chomsky

(Editor’s Note: The following post was written by alumnus Miguel Ángel Santos (ITFD ’11 and Economics ’12). Follow him on Twitter @miguelsantos12 or at his blog)

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The first time I heard of Noam Chomsky was in the early nineties. During my senior year in college I was assigned to read a small book, “The true thinkers of our time(1989), a gallery of interviews with a select group of scientists from a wide array of disciplines. The author, a French journalist named Guy Sorman, had chosen them using three simple criteria: 1) once they showed up in their corresponding disciplines it became impossible to keep on thinking about it in the same way; 2) they had to be alive; and 3) they were willing to talk to him.

The book covered a wide spectrum, from the origins of the universe all the way to modern economic thinking. Each section presented two or three opposing views on the same topic, which were fiercely discussed and smartly presented, allowing amateurs to grasp the frontiers of human knowledge.

Chomsky had made his way into the group deservedly. He had revolutionized the field of linguistics, posing a theory that conceived language as a biological capacity. He identified common patterns to all languages (i.e. all made up plurals by adding characters in the end, none at the beginning) and hypothesized that while the environment allows our linguistic capacity to develop, it falls short of explaining its extraordinary complexity.

I mention this to highlight the thinker, the man working alone and facing the problems and puzzles of his time through a sheer exercise of athletic thought and intelligence. The fame and scientific status he earned by making his most relevant contributions early in his life (all date from around his thirties) would be applied later to bring the world’s attention on a set of political causes, most of them left-winged, all rooted in the United States plethora of foreign policy wreckages. He became an outcast, a role he obviously feels very comfortable with, always pointing towards the elephant in the room.

This latter version of Chomsky is the one most people are familiar with. Continue reading “Meeting Chomsky”

28th Barcelona GSE Lecture

by Professor Joel Slemrod

(Stephen M. Ross School of Business, University of Michigan) on MONDAY, October 21, 2013 at 18:45 pm.

Prof. Slemrod will speak on: Policy Insights from a Tax-Systems Perspective

Joel Slemrod is the Paul W. McCracken Collegiate Professor of Business Economics and Public Policy at the Stephen M. Ross School of Business at the University of Michigan, and Professor of Economics in the Department of Economics. He also serves as Director of the Office of Tax Policy Research, an interdisciplinary research center housed at the Ross School of Business. A leading expert on tax policy, professor Slemrod received the B.A. degree from Princeton University in 1973 and the Ph.D. in economics from Harvard University in 1980. Professor Slemrod has been a consultant to the U.S. Department of the Treasury, the Canadian Department of Finance, the New Zealand Department of Treasury, the South Africa Ministry of Finance, the World Bank, and the OECD. Besides numerous articles in top economics journal, professor Slemrod also produced highly acclaimed books on taxation. He is the co-author with Jon Bakija of Taxing Ourselves: A Citizen’s Guide to the Debate over Taxes, whose 5th edition will be published in 2013, and with Len Burman of Taxes in America: What Everyone Needs to Know, published in 2012. From 1992 to 1998 Professor Slemrod was editor of the National Tax Journal. In 2012 he received from the National Tax Association its most prestigious award, the Daniel M. Holland Medal for distinguished lifetime contributions to the study and practice of public finance.

Continue reading “28th Barcelona GSE Lecture”

Healthcare: Are we demanding bad goods?

Details is a trendy American style magazine showcasing movie stars and the latest in everything fashionable and chic. So when they name a health economist as one of the 50 most influential men under 45 it should raise a well-groomed eyebrow (or two).

Submitted by Scott Robertson, Master Program in Health Economics and Policy

Details is a trendy American style magazine showcasing movie stars and the latest in everything fashionable and chic.  So when they name a health economist as one of the 50 most influential men under 45 it should raise a well-groomed eyebrow (or two).

As if that doesn’t give him enough credibility, David Cutler is one of the most-cited minds in modern health economics with a persistent focus on driving the discussion of quality.  Modern Healthcare recently said he is one of the 30 people likely to have a significant impact on the future of healthcare.  Plus he’s a professor at MIT and was an advisor to U.S. Presidents Clinton and Obama.

In short: Cutler is a big deal.  If the UPF, and ostensibly the Barcelona GSE want to prove the profile of their economics program, attracting this star to inaugurate the academic year could be an indicator of success.  The auditorium filled to standing-room only shows the opportunity was not lost on students either.

UPF Economics Department
David Cutler delivers the UPF Economics Department opening lecture in October 2012. Photo credit: UPF

Continue reading “Healthcare: Are we demanding bad goods?”

A Wave of Changes (of more or lesser importance)

Another one bites the dust. Could it be much more than a lost election for the Republicans?

Every lost election sets off a wave of debates, blaming and eventually new strategy-setting. This wave is now hitting the Republican Party – and hard. How much in its path will be wiped off and the extent of the ensuing change is still uncertain but potentially big.

If they are driven to change, it is, to most accounts, because the American electorate has a new face. The Latino and Afro-American communities who usually do not make use of their electoral rights have in bigger shares wielded their power and gone to the polls. The Republican’s inability to relate and appeal to these minorities is thus by now commonly identified as the reason for their loss.

As said, this could have far-reaching impacts; the first one being the opportunity for professors to update that Political Economy problem set they have been handing out for years. These elections mark indeed the era of a new Median Voter Theorem case study. If analysts are right, what we are observing in the United States is indeed nothing else than a shift of the electorate. Naturally, this accounts for a shift of the Median Voter.  Our theorem tells us to expect the political actors to accordingly change their ideology and adopt that of the new median voter. And this is what we see unraveling – and at an amazing pace.

Continue reading “A Wave of Changes (of more or lesser importance)”