Look for the next GCER Newsletter in June. Past Newsletters can be found here.
News Archive - All
Jan 27, 2017
The sixth year of the GCER Distinguished Visitor Series features a number of prominent economists who will spend time in the Department during the 2016-17 academic year. This years Distinguished Visitors include: Jesus Fernandez-Villaverde (UPenn), Douglas Gale (NYU) and Whitney Newey (MIT).
Jesus Fernandez-Villaverde is the Director of Graduate Studies and Professor of Economics at the University of Pennsylvania. Professor Fernandez-Villaverde is a Research Associate for the National Bureau of Economic Research (NBER) and Penn's Population Studies Center, and a Research Affiliate for the Centre for Economic Policy Research. His research agenda is in macroeconomics and econometrics, with a focus on the computation and estimation of dynamic stochastic general equilibrium (DSGE) models.
Douglas Gale is the Silver Professor of Economics at New York University. Professor Gale is a Fellow of the Econometric Society. Professor Gale’s research interests include the foundations of general equilibrium theory; financial economics and banking; experimental economics and decision theory. He has worked closely with Franklin Allen on the theory of banking and financial crises, with special focus on the interaction of banks and markets. Professor Gale will visit the Department during the week of February 27-March 3, 2017 where he will present his latest research in the departmental workshop, and will meet with faculty and students.
Whitney Newey is the Jane Berkowitz Carlton and Dennis William Carlton Professor of Economics at the Massachusetts Institute of Technology. Professor Newey will visit the Georgetown Economics department during the week of February 21-24, 2017, where he will meet with faculty and students.
Dec 12, 2016
Professor Billy Jack recently published an article in Science, which shares the analysis of data collected over a six year period in Kenya that has revealed that the country's mobile money platform, M-PESA, has lifted nearly 200,000 households out of poverty. The effects of this form of digital financial inclusion are particularly strong for female headed households, with an estimated 185,000 women moving from agriculture to business as their primary occupation as a result of the expansion of mobile money. The study, conducted by Tavneet Suri at MIT Sloan with Billy Jack from Georgetown's Department of Economics, appears in the current issue of Science Magazine. For the full article that was posted on Georgetown University's website, please click here.
Oct 27, 2016
Alan Krueger, Bendheim Professor of Economics and Public Affairs at Princeton University will deliver the 2017 Razin Policy Lecture on April 24. The Lecture will take place on Monday, April 24, 2017 from 4:00 to 6:00 on the Georgetown University campus. A reception will follow.
Professor Krueger’s research has included: a study showing that minimum wage hikes can be associated with increased low-skill employment; predictions about who becomes a terrorist; proposals to create national “well-being” accounts to complement measured GDP; a demonstration that graduates of selective colleges (Georgetown?) do not earn higher incomes than similar graduates of less-selective colleges; evidence that computers have contributed to growing income inequality; evidence that economic growth does not necessarily degrade the environment; a paper about the music industry called “Rockonomics”; and much, much more.
While not at Princeton, Professor Krueger has served as Chairman of President Obama’s Council of Economic Advisers, Chief Economist at the U.S. Treasury during the financial crisis, and Chief Economist of the U.S. Department of Labor.
Oct 20, 2016
Featured Research Profile: Fall/Winter 2016-2017
Markets with Search and Matching Frictions: Georgetown economists James Albrecht and Susan Vroman discuss directed search in the housing market. In textbook economics, the market for a good is in equilibrium when its price “equates supply and demand.” The supply-demand approach is a useful tool, but for many important markets, this framework doesn’t do a good job because of frictions that make it hard for buyers to find suitable sellers and vice versa. Take, for example, the labor market. This is a market in which the “good” being sold (labor services) isn’t standardized, so the notion of a “market-clearing price” isn’t useful. Instead, it takes time and effort for workers to find the right job, and, similarly, employers have to expend time and effort to find the right worker. That is, the labor market is characterized by search and matching frictions. Most of the research of Jim Albrecht and Susan Vroman is focused on developing models to better understand how markets with search and matching frictions work. They have applied their models to several markets, in particular, the labor market and the housing market. Their most recent published paper focuses on the housing market. Search theory is a natural tool to use to analyze this market: anyone who has bought or sold a house knows that it takes time and effort to find a suitable counterpart on the other side of the market. When a house is listed for sale, the seller posts an asking price. Sometimes houses sell at a price below the asking price, sometimes above, and often exactly at the asking price. What role does the asking price play in the housing market, and, more generally, how are sale prices determined in this market? In “Directed Search in the Housing Market,” published in the Review of Economic Dynamics earlier this year, Albrecht and Vroman, together with co-author Pieter Gautier, analyze these questions by constructing a model in which they assume that sellers have limited commitment to the posted asking price. Commitment is limited in the sense that if only one buyer makes a bona fide offer at the asking price, the seller is obliged to sell at that price. This commitment is typically written into contracts with sellers’ agents. However, if more than one buyer offers the asking price, the sale price can be bid above the posted level, and, of course, if the only the offers received are below the asking price, the seller is free to accept or reject the highest of these. In addition to helping understand the pricing patterns that we see in the data, the model explains how the asking price can signal seller “motivation,” that is., how eager the seller is to make a deal. Buyers observing a variety of asking prices will direct their search so that their expected benefit is the same regardless of the price. Buyers know that there is a tradeoff: a low asking price is appealing but it appeals to many buyers so that the chance of being the highest bidder is small whereas bidding on a house with a high asking price likely means paying more if the buyer has the winning bid but having a greater chance of winning. In equilibrium, Albrecht, Gautier and Vroman find that asking prices can indeed signal seller motivation and that prices draw more buyers to the more motivated sellers, an efficient outcome. Albrecht and Vroman, together with co-author Bruno Decreuse, are currently working on a search-theoretic model of the labor market in which “phantom” job vacancies affect the rate at which the unemployed find jobs. Phantoms are ads for jobs that have been already filled but not yet removed from online job sites like Craigslist and Monster.com. The unemployed direct their search (decide which listings to pursue) taking the fact that older listings are more likely to be phantoms into account. Albrecht, Decreuse and Vroman show that workers over-apply to relatively new job listings – “over-apply” in the sense that if workers could coordinate their search activity, they would choose to direct more applications towards older listings. The authors also show that phantoms are quantitatively extremely important. In a calibrated version of their model, phantoms account for a substantial fraction of unemployment and an even larger percentage of search frictions.
Oct 11, 2016
GCER Congratulates the Economic Science Nobel Laureates of 2016, Oliver Hart (Harvard), and Bengt Holmström,(MIT). The Royal Swedish Academy of Sciences awarded the Prize for their work in Contract Theory. Their work has profoundly shaped economists' understanding of the role of incentives and property rights. Besides providing essential building blocks for a modern theory of the firm, this year Laureates' writings have found applications that span from Corporate Finance, to Labor Economics, to the Economics of Prisons. GCER is also proud to note that the Nobel Committee in its Scientific Background Paper cited a contribution co-authored by GCER Fellow Luca Anderlini (Anderlini and Felli, Quarterly Journal of Economics, 1994) .
Aug 3, 2016
A recent GU graduate of the Department of Economics, Justin Pierce, has published a paper in the most recent American Economic Review. The paper "The Surprisingly Swift Decline of US Manufacturing Employment" links a `sharp drop in US manufacturing employment after 2000 to a change in US trade policy that eliminated potential tariff increases on Chinese imports.' The paper was jointly authored with Peter K. Schott of the Yale School of Management.
Apr 17, 2016
Professor Austan Goolsbee recently delivered the 2016 Razin Lecture. Professor Goolsbee's talk, "Are We Doomed?", did what dismal scientists often do, answering the question separately for the short and long runs. The short run outlook for the US economy is not rosy and unlikely to be rescued by the usual saviors. The Fed cannot set interest rates lower. Exports depend on healthy economies in other countries. Home construction is unlikely to return to pre-bubble levels. And consumers are unlikely to return to the pre-2008 spending levels that were financed by that bubble. Goolsbee's long-run outlook, however, is less dismal. US productivity and per-capita GDP growth have been steady for decades or centuries, and it's hard to imagine that whatever the 21st century obstacles to growth might be, that they are more imposing than the flu pandemics, depressions, world wars, and oil crises that characterized the 20th century.
Apr 4, 2016
The Brookings blog of David Wessel selected a new paper by GCER Fellow Pedro Gete . The paper concerns the distributional implications of federal mortgage guarantees. It shows that by removing guarantees from the mortgage market,low- and middle-income households are hurt, while high-income households benefit.
Mar 15, 2016
Featured Research Profile: Fall/Winter 2015-16
How (not) to run a bank: Georgetown economist Martin Ravallion examines World Bank successes and failures.
The decade or two after WW2 saw many of the world’s poorest countries gain their independence from Colonial rule, and they were hoping to rapidly become less poor. Economics taught policy makers in those countries that a higher investment rate is crucial to assuring faster economic growth. Being a poor country makes it harder to finance the required investments from domestic savings. Yet rich countries should have ample savings available that might be profitably diverted to this task. In an ideal world, global capital markets could be expected to bridge the gap. But 70 years ago those markets were thin and/or not trusted as a source of finance.
In response, the United Nations Monetary and Financial Conference, held at Bretton Woods in 1944, created the International Bank for Reconstruction and Development (IBRD)—a core component of what came to be known as the World Bank. (The International Monetary Fund was created at the same time.) The essential idea was that the IBRD would borrow money on global markets to lend to developing countries. The Bank’s AAA credit rating (stemming from conservative lending policies relative to its capital) allowed it to lend on favorable terms. An aid-facility (with a large grant component), the International Development Association (IDA), was added in 1960.
Much has changed in the 70 years since the famous Bretton Woods conference. World Bank lending (IBRD+IDA) now represents only about 5% of the aggregate private capital flows to developing countries. In the last 10 years or so there have been prominent calls for radically reforming, or even closing, the institution on the grounds that international capital markets have developed greatly over those 70 years. It is also claimed by some that the Bank’s efforts are wasted due to poor governance in developing countries.
Does the Bank still have an important role? If so, does it fulfill that role, and if not, how might it do better? In a new paper Professor Ravallion argue that the Bank’s development role today overlaps only partially with its original role, as conceived at the Bretton Woods Conference 70 years ago (Ravallion, 2015). Its role today is complementary to (rather than competing with) the private financial sector, other development banks, and academia. Knowledge-generation is central to that role. Development knowledge has properties of a public good, which the Bank can generate in the process of actually doing development on the ground.
Threats to the Bank’s effectiveness: There is still much appeal to the bundling of knowledge with lending that has been the distinctive feature of the Bank’s operations. But there are a number of threats to the efficacy of this model.
There have been some longstanding concerns that the Bank’s “lending culture” rewards operational staff for the volume of their lending, with only weak incentives for assuring that knowledge is both applied and generated in the lending operations. The pressure to lend influences the Bank’s ability to deliver objective policy advice to client countries, even when it is not welcome politically. Too often the Bank’s “country strategy” essentially mirrors that of the government, which may or may not serve broader long-term development goals.
Another threat is the perception that the Bank’s most powerful shareholders have excessive influence on its operations and policy advice. The U.S. has long been identified in this role, though some other countries have also been keen to have their say. Some critics are concerned (rightly or wrongly) about conflicts of interest when the Bank gives advice to developing countries.
These are threats to the Bank’s effectiveness as a knowledge leader in both the public and private sectors. All parties—both clients in developing countries and private investors—must have confidence that the institution is not pushing lending for its own sake or beholden to a few powerful owners. Only then can the Bank be accepted as the source of the objective policy advice and information that is needed.
Recent organizational changes have made some effort to put knowledge in the driver’s seat by organizing the Bank around a set of sectorally-defined “practices.” In the end the organogram has changed rather little. However, the threats to the Bank’s effectiveness are unlikely to be solved by changing the Bank’s organogram. The incentives of managers and staff also need to change, to assure a better alignment with development goals. (See Ravallion, 2015, for some examples of specific proposals for reform from past Bank staff.)
Knowledge Bank? There has been much rhetoric about the “Knowledge Bank” over the last 15 years, but Professor Ravallion not alone in believing that the reality has fallen short of the rhetoric. There is a chronic and growing underinvestment in the kind of rigorous research that is needed to identify and address pressing development issues—both the constraints on rapid poverty reduction at country level and the global public bads that threaten us collectively (ranging from climate change to pandemics). Research has been under-valued and under-funded.
Granted we still see some high-quality research at the Bank, though not always on high-priority topics. We see more ex-post evaluations today than 20 years ago. However, much does not get evaluated, and what gets evaluated is a non-random subset of all projects, casting doubt on what we learn about the whole. Too often, methodological preferences drive what gets evaluated rather than the knowledge gaps facing policy makers. Alongside this, we see fewer and less rigorous ex ante evaluations, which make explicit a project’s economic rationale—why the project is expected to have a social value justifying its cost.
Three changes are needed: Echoing the observations of others within and outside the Bank, three things need to change:
• First, the Bank needs to be more ambitious in identifying and addressing the most pressing knowledge gaps we face today. Policy advocacy must give way to well-informed and objective country-specific analysis. This can be accommodated within the Bank’s traditional country-lending model.
• Second, the Bank’s lending operations must be driven by knowledge of the binding constraints on poverty reduction in specific country contexts and its analytic capabilities must be brought more systematically into its operations from the outset. The Bank’s knowledge generation efforts must inform the nature of its lending and be informed by that lending—rather than simply serving lending when called upon. This requires quite fundamental changes in staff and managerial incentives and resource allocation within the current structure.
• Third, the Bank’s present country-based model needs to be supplemented by a model with greater capacity for supporting the provision of global public goods. If one was to sit down today to design a mechanism to support the cross-country coordination needed to address shared threats it is unlikely that one would come up with the Bank’s current country-lending model. A new model, or possibly a new institution, is called for.
Mar 14, 2016
The Ninth Biennial International Research Forum on Monetary Policy (IRFMP) will take place at the European Central Bank on March 18-19, 2016. It purpose is to promote the discussion of innovative research on theoretical and empirical macroeconomic issues relevant for monetary policy. The conference is sponsored by the Georgetown Center for Economic Research (GCER), the Euro Area Business Cycle Network, the European Central Bank, and the Federal Reserve Board. More information about the conference can be found here.
Feb 23, 2016
It is with great pride that the Economics Department announces that Martin Ravallion, the Edmond D.Villani Professor of Economics, has been awarded a BBVA Foundation Frontiers of Knowledge Award for his research on global poverty. Department Chair Frank Vella said "Martin is a remarkable scholar and his dedication to scholarship and research is an inspiration for all those who encounter him or his work. While his work reflects the academic goals of measuring the extent and understanding the causes of poverty, it is motivated by his greater personal commitment to help those who suffer the consequences of such living conditions. This award is further recognition of the importance and impact of Martin's work." More information on the award and Professor Ravallion's contributions can be found here.
Feb 15, 2016
GCER Fellows Billy Jack and James Habyarimana will initiate a project to explore innovations to the M-PESA, a mobile money platform launched in 2007 in Kenya that provides access to basic financial services via individual cell phones. The project, funded by a two year $3.5 million grant from the Bill & Melinda Gates Foundation, will bring together mobile providers, banks, IT developers, and academics to assess and improve the mobile money system in East Africa.
Feb 12, 2016
New research by two recent GU Economics Phd students, Jake Mortenson and Andrew Whitten, is featured in the Wall Street Journal's online edition. The article, entitled "How Some Americans Hit the Maximum Tax-Refund Sweet Spot" discusses research by Mortenson and Whitten, "How Sensitive Are Taxpayers to Marginal Tax Rates? Evidence from Income Bunching in the United States." In the paper, Mortenson and Whitten use tax return data to document how reported incomes on tax returns tend to be bunched at the break points in the federal tax code. Their results quantify the way in which discrete jumps in marginal tax rates alter the behavior of households.
Jan 12, 2016
Austan Goolsbee, the Robert P. Gwinn Professor of Economics at the University of Chicago's Booth School will deliver the 2016 Razin Policy Lecture on April 6. The Lecture will take place on Wednesday, April 6, 2015 from 3:30 to 5:00 in the Lohrfink Auditorium on the GU campus. A reception will follow.
Having received his PhD from MIT in 1995, Professor Goolsbee is well known for his work on the economics of the internet, e-commerce, and the effects of new technologies generally on society. Professor Goolsbee is a Research Associate of the National Bureau of Economic Research. He has served in numerous policy positions including Chairman of the President's Council of Economic Advisors, Chairman of the Policy Committee for the OECD, and Senior Economic Advisor to President Obama's election campaign.
Jan 10, 2016
The Graduate Committee is pleased to announce that Jordan Marcusse is the winner of the nineteenth annual Razin Prize. Jordan received the award for his main dissertation paper entitled "Wage Bargaining and the Beveridge Curve.". Established by the Razin family in 1997 to honor the memory of Ofair Razin (1966 - 1996; PhD, Georgetown University, 1996), the Razin Prize is awarded each year for the best dissertation paper produced by an advanced graduate student in Economics at GU.
Congratulations to Jordan and to his advisers James Albrecht, Axel Anderson, Luca Flabbi, and Susan Vroman.
The Razin Economic Policy Lecture and the award ceremony will take place April 6. Details to follow soon.
Dec 21, 2015
Martin Ravallion, Edmond Villani Chair of Economics, Georgetown University, has written a new book "The Economics of Poverty: History, Measurement and Policy." Professor Ravallion’s main research interests over the last 30 years have concerned poverty and the policies for fighting it. He has advised numerous governments and international agencies on this topic and has written extensively on this and other subjects in economics. His research includes five books and 200 papers in scholarly journals and edited volumes. His new book will be published by Oxford University Press in January 2016. You can learn more about the book here: here.
Nov 10, 2015
We are proud to announce that our own Francis Vella, GCER Co-Director and Edmond Villani Professor of Economics at Georgetown, was recently elected Fellow of the Econometric Society. The election is one the most prestigious awards in all of economics. It places Professor Vella among the very best in the profession. Congratulations, Frank!
Oct 31, 2015
The fourth year of the GCER Distinguished Visitor Series features a number of prominent economists who will spend time in the Department during the 2015-16 academic year. This years Distinguished Visitors include:Marco Del Negro, November 2-5, 2015Marco Del Negro is Assistant Vice President in the Macroeconomics and Monetary Studies Function of the Research and Statistics Group at the Federal Reserve Bank of New York. He has published extensively in international macroeconomics and finance, using general equilibrium models in forecasting and policy analysis. Professor Del Negro will visit the Georgetown economics department during the week of November 2-6 where he will present his latest research in a joint Macro and Econometrics workshop, and will meet with faculty and students.Joseph Altonji, November 30-December 4, 2015Joseph Altonji is the Thomas Dewitt Cuyler Professor of Economics at Yale University. Professor Altonji is a Fellow of the Econometric Society and Research Fellow at the IZA and NBER. He is well known for his studies of discrimination and occupational choice, and for the development of new estimation techniques for dealing with unobserved selection bias. Professor Altonji will visit the Department during the week of November 30-December 4 where he will present his latest research in the Econometrics workshop, and will meet with faculty and students.Debraj Ray, dates to be determined in 2016Debraj Ray holds the position of Silver Professor at New York University. Professor Ray is well known for theoretical innovations in development economics. He has prominent studies of ethnicity and social conflict, informal credit markets, and group formation in developing economies. Times and dates of his visit will be determined shortly.Oct 6, 2015
Congratulations to GCER Fellow Anna Maria Mayda for her recent NSF grant. The grant funds a project that quantifies the effects of highly skilled foreign workers on the economic activity of firms, individuals, and the aggregate US economy.Sep 11, 2015
Georgetown Economics PhD student Jake Mortenson was recently awarded a dissertation grant from the Washington Center for Equitable Growth Jake is currently working for Joint Committee on Taxation. He and his colleagues, Jeff Larrimore of the Federal Reserve Board and David Splinter of the Joint Committee, use federal income tax data to document large intra-generational income mobility. The show that almost half of all workers have their earnings increase or decrease by at least 25 percent every two years.Sep 10, 2015
GU economist and GCER Fellow Laurent Bouton received a prestigious grant from the European Research Council for his project: "Political Economy with Many Parties: Strategic Electorate and Strategic Candidates”. The grant of $1.5 million will be used to study problems arising in multi-candidate elections. Bouton's project will develop new methodological tools to analyze behavior of candidates and voters in multi-candidate elections and then use these tools to improve upon existing political institutions.Aug 24, 2015
The IZA and the Georgetown Center of Economic Research (GCER) of Georgetown University's Economics Department are pleased to announce the speaker schedule for the the fourth IZA@DC Young Scholar Program. The program, a joint effort by GCER and the IZA to bring outstanding PhD students to Washington, DC, is set to take place from September 27 -- October 2, 2015 at Georgetown University in Washington DC. Consult the GCER calendar for dates and times of the seminars during the week of Sept 27-Oct 2.Monday, September 28: Luigi Pistaferri (Stanford University)Luigi Pistaferri is a Professor of Economics at Stanford University, co-editor at the American Economic Review, and research fellow of the NBER, SEPR and IZA. Professor Pistaferri has a number of prominent research articles in the intersection of Labor and Macroeconomics. His research tackles critical topics on consumption and earnings inequality and on insurance-incentive trade offs of social insurance policies. His recent work focuses on the dynamics of intra-family insurance and time allocation.Tuesday, September 29: Peter Arcidiacono (Duke University)Peter Arcidiacono is a Professor of Economics at Duke University. He is known for research that spans a variety of topics in labor economics, including the effects of race on educational success, and the effects of search frictions in the matching and formation of relationships. Recent work explores the strategies for identifying anticipated returns from occupational choices.Wednesday, September 30: Kenneth Wolpin (Rice University)Ken Wolpin is Distinguished Research Professor and Lay Family Professor of Economics at Rice University. His contributions cover topics in labor economics, economic demography, development economics, health economics, and empirical methodology. Professor Wolpin is widely recognized for research that develops and applies of tools for estimating discrete choice dynamic programming models. His approach, combining economic theory, data, and econometrics is used throughout the economics profession.Thursday, October 1: Francine Blau (Cornell University)Francine Blau is the Frances Perkins Professor Industrial and Labor Relations at Cornell University. Professor Blau is also Research Associate of the NBER, a Research Fellow of the Center for Economic Studies/Ifo Institute and the IZA. Professor Blau has published extensively on topics ranging from the Economics of wage inequality and occupational choice to immigration, and gender issues. Her work on the gender pay gap was recently presented to the White House and the Council of Economic Advisors.Friday, October 2: Alexandre Mas (Princeton University)Alexandre Mas is Professor of Economics and Public Affairs at Princeton University. Professor Mas is a labor economist with broad expertise in the economics of unemployment insurance, welfare reform, and labor unions. Many of his contributions focus on the economics of the workplace. His recent work examines the effects of transparency in compensation on wage compression.Jun 11, 2015
New research by GCER economist Laurent Bouton is featured in the June 2015 on-line edition of the Atlantic. The article, entitled "Consumers love rankings, but they may end up doing more harm than good" discusses Bouton's paper with co-author Georg Kirchsteiger on the effect of rankings of products on the welfare of consumers. Bouton and Kirchsteiger identify several situations in which such rankings may be detrimental for consumers.Jun 3, 2015
The Washington area political economy conference took place at the Inter-American Development Bank on May 19-20, 2015. The Washington PECO is an annual political economy conference hosted jointly by Washington area institutions, including Georgetown Center for Economic Research, the Department of Economics, the School of Foreign Service and the Department of Government at Georgetown University, and the Inter-American Development Bank. The conference is held each Spring.May 16, 2015
Jason Albert, winner of the eighteenth annual Razin Prize, is shown being congratulated by George Akerlof, who delivered the Razin Policy Lecture on April 27, 2015. Jason received the prize for his dissertation paper titled "Strategic Dynamics of Antibiotic Use and the Evolution of Antibiotic-Resistant Infections".
The Razin Prize was established by the Razin family in 1997 to honor the memory of Ofair Razin (1966 - 1996; PhD, Georgetown University, 1996). The prize is accompanied by the Razin Lecture on economic policy by a distinguished economist.May 14, 2015
Featured Research Profile: Spring/Summer 2015
Leaning in,... sort of: Georgetown economist Mary Ann Bronson explores reasons why men and women make different post-secondary educational investments.
Women's rise in college graduation rates in the last 40 years is spectacular by historical standards. For much of the twentieth century, rates of college enrollment for women were much lower than those for men. Starting in the 1970s, the differences in enrollment rates declined rapidly, to the extent that enrollment differentials were reversed: women now make up around 57% of graduating college students in the U.S. Around the same time, U.S. women began converging with men along another dimension of educational investment: the choice of college major. In contrast to graduation rates, however, gender convergence in choice of major virtually ceased after the early 1980s. In 1985, women were awarded nearly 80% of education degrees and about 85% of degrees in nursing and health support fields, but less than 30% of hard science and engineering fields. The same is still true today.
The question of why women graduate from college at much higher rates than men, but with very different (and far lower-paying) majors has important implications for both individual and aggregate outcomesin the labor market. In her study, "Degrees are Forever: Marriage, Educational Investment, and Lifecycle Labor Decisions of Men and Women," GCER Fellow Mary Ann Bronson shows that two facts help explain these observed gender differences in educational choices. First, a college degree provides insurance against very low income for women, especially after divorce or household separation. Low-educated women not only draw from a substantially lower wage distribution than men, but are also more likely to have custody and financial responsibility for children. A college degree, regardless of major, allows access to higher paid jobs, providing insurance for women outside a two-earner household. Bronson estimates that the insurance value of a college degree in case of household dissolution is equivalent to about 31% of the overall return to college for women.
Secondly, Bronson shows that college majors differ substantially in the degree of 'work-family flexibility' they offer. Wage penalties for working part time or taking time out of the labor force are up to four times higher in science/business fields, as compared to other fields such as education, nursing, or the humanities. Because college women reduce their labor supply substantially during their prime child-bearing years - at age 35, only around 60% of college-educated women work full-time, compared to around 90% of college-educated men. Such flexibility appears to be particularly important for women. The data indicates that women tend to choose more flexible majors than men and are more likely to utilize the flexibility associated with these majors.
Based on these patterns, Bronson develops and estimates a structural model that simulates men's and women's lifetime choices concerning education, labor supply, marriage, and divorce. Bronson then uses the model to simulate the effects of different work-family flexibility policies on these choices. The results show that the most effective policies for increasing women's participation in business and STEM fields are non-discriminatory part-time work policies, in which employees with children below a certain age are entitled to work part-time. Policies that provide this kind of benefit to employees with children have been passed in a number of countries, including Belgium, France, and the Netherlands. Bronson finds that such policies could increase the share of women choosing a science/business major from 34% to 45%.
On the other hand, Bronson finds that policies such as subsidized child care have relatively little effect, while extended maternity leaves (of more than one year) can in fact reduce the share of women choosing a science or business major, by significantly reducing the amount of experience women accumulate over the lifecycle. Because returns to experience are much higher in science/business fields, policies that allow women to remain in the workforce at temporarily reduced hours are much more effective at shifting women towards science and business fields than extended leave policies.May 8, 2015
For the fourth straight year, The Economic Club of Washington presents its prestigious Vernon E. Jordan Jr Fellowship Award to a GU Economics PhD student. This year's recipients are Caitlin Brown and Andrew Whitten. Caitlin and Andrew are the fifth and sixth GU students to receive the award, joining past recipients Jacob Mortenson, Alison Weingarten, Claire Brunel, and Mauricio Villamizar. As this year's winners, Caitlin and Andrew were presented with their awards by The Economic Club of Washington in the Spring of 2015.Mar 29, 2015
George Akerlof, University Professor and recipient of the Nobel Prize in Economic Sciences in 2001 will deliver the 2015 Razin Policy Lecture on April 27. The Lecture, entitled "Phishing for Phools," will take place on Monday, April 27, 2015 from 3:30 to 5:00 in the McShain Large Lounge on the GU campus. A reception will follow.
Professor Akerlof is a renowned economist whose innovative work on markets with asymmetric information explains why such markets often break down. This work, culminating in his famous paper, “The Market for ‘Lemons'” earned Professor Akerlof the 2001 Nobel Prize in Economics, a prize he shared with Michael Spence.
The Razin Lecture is accompanied by the awarding of the Razin Prize for best research paper by an advanced graduate student. This year's recipient, Jason Albert, will receive the award for his dissertation paper titled "Strategic Dynamics of Antibiotic Use and the Evolution of Antibiotic-Resistant Infections". The event was established by the Razin family in 1997 to honor the memory of Ofair Razin (1966 - 1996; PhD, Georgetown University, 1996). More on the background and history of the Razin Prize and Policy Lecture can be found here.Mar 29, 2015
New research by GCER Fellow Laurent Bouton on voting abstention was recently published in the March 2015 issue of VOX. The article features new research by Bouton and his co-authors Aniol Llorente-Saguer and Frédéric Malherbe on the role of "constructive abstention rules," i.e., rules that treat abstentions as "no" votes if they are sufficient in number.
As distinct from the silent consent of traditional abstention rules, Bouton et. al. show that constructive abstention effectively combines the information aggregation aspects of majority rule while still allowing for veto power. The full VOX article can be found here.Feb 6, 2015
Arik Levinson, GU Economics Professor and GCER Fellow was recently interviewed on Freakonomics Radio, a forum for economic ideas started by best-selling authors Stephen Dubner and Steven Levitt. The podcast of that interview can be found here. In the interview Levinson discusses his recent paper, "How Much Energy Do Building Energy Codes Really Save? Evidence From California."Jan 27, 2015
GCER is proud to be the local host for the IZA conference on entrepreneurship. The conference will take place on September 16-18, 2015 in the Georgetown Conference Center (Leavey Center) in the Salon wing. Click here for details.Nov 21, 2014
GU Econ PhD student Nisha Rai recently posted an article in the World Bank's Development Impact. The article discusses Rai's PhD thesis research on the effect of birth attendants on maternal health in Kenya. The article can be found here.Nov 21, 2014
The United States Agency for International Development (USAID) awarded a $3 million grant to Billy Jack and James Habyarimana, co-founders and co-directors of Georgetown University Initiative on Innovation, Development and Evaluation, or gui2de. The grant from USAID’s Development Innovation Ventures (DIV) supports the third phase of the Initiative's Zusha! study in Kenya, and expands the project to three other countries - Tanzania, Uganda and Rwanda.
Gui2de conducts empirical field-based research to assess the impact and effectiveness of interventions and policies aimed at empowering individuals in developing countries to improve their lives. GCER co-sponsors Gui2de.
Read more about the grant here.Oct 20, 2014
New research by GCER Fellow Mark Huggett and St. Louis Federal Reserve Bank economist (and former GU PhD student) Alejandro Badel is featured in a recent publication of the Texas Advanced Computing Center (TACC) at the University of Texas. Badel and Huggett develop a quantitative model to analyze the effects of taxing top earners in the U.S. They find optimal tax rates that are higher than those that prevail currently but significantly lower than those proposed by a number of prominent economists. Badel and Huggett show that these proposals discourage human capital investment by top earners and generate lower tax revenue overall.
The TACC article emphasizes the role played by the Stampede supercomputer at the University of Texas. Badel and Huggett turned to Extreme Science and Engineering Discovery Environment (XSEDE) at the TACC to calibrate their model.Oct 14, 2014
The Graduate Committee is pleased to announce that Jason Albert is the winner of the eighteenth annual Razin Prize. Jason received the award for his main dissertation paper titled "Strategic Dynamics of Antibiotic Use and the Evolution of Antibiotic-Resistant Infections". Established by the Razin family in 1997 to honor the memory of Ofair Razin (1966 - 1996; PhD, Georgetown University, 1996), the Razin Prize is awarded each year for the best dissertation paper produced by an advanced graduate student in Economics at GU.
Congratulations to Jason and his advisers Luca Anderlini, John Rust, and Roger Lagunoff.
The Razin Economic Policy Lecture and the award ceremony will take place in the Spring 2015. An announcement will follow closer to that time.Oct 10, 2014
Carbon emissions make the global economy tipsy: Harrison and Lagunoff study a "business-as-usual" scenario in a tipping model.
For better or worse, the global economy runs on carbon. Climate change resulting from dramatically increased fossil fuel combustion and carbon emissions over the last half century has alarmed scientists and policy experts alike. There is widespread agreement that without an effective international agreement to limit carbon emissions, the continuation of the current trend can have catastrophic consequences.
The absence of an international carbon agreement is often described as the "business-as-usual" (or "BAU") setting. New research by Rodrigo Harrison and GCER Fellow Roger Lagunoff considers such as scenario. They study the countries’ incentives to reduce their carbon emissions under BAU. While most economic studies of climate change examine the incentives of consumers and firms, Harrison and Lagunoff focus specifically on the strategic interaction among the largest players --- the countries themselves. Are outcomes under BAU sustainable or is economic collapse inevitable? What determines the transition, if any, from sustainability to collapse?
Departing from standard formulations, Harrison and Lagunoff consider a world in which a country's GDP depends on both its carbon usage and on how well it maintains the ecosystem. Each country therefore faces a tradeoff for purely nationalistic reasons between, on the one hand, extracting and emitting carbon, and on the other, maintaining a "stock" of stored or "unextracted" carbon required to preserve a healthy ecosystem. Countries naturally differ in how they evaluate this trade off, and even the same country can make different tradeoffs if circumstances change.
In a BAU environment, Harrison and Lagunoff lay out scenarios in which consumption and economic output may collapse and shrink if the carbon stock sustaining the ecosystem falls below some critical threshold --- a tipping point.
The results characterize threshold levels of carbon stocks that delineate the safe operating space for humanity --- a notion developed by climate scientists (see Rockstrom, et al. (2009)) --- from carbon stocks from which tipping occurs. In one unsettling result, Harrison and Lagunoff show that if a strong enough relationship exists between carbon extraction and economic output (as measured by the output elasticities of carbon extraction), a tipping point will certainly be breached. The silver lining is that even in this case, there remains a small window in which tipping may be averted if the countries can depart from BAU and sign on to an effective international treaty to limit emissions.
Reference: Rockstrom, J., W. Steffen, K. Noone, A. Persson, F. Chapin, E. Lambin, T. Lenton, M. Scheffer, C. Folke, H. Schellnhuber, B. Nykvist, C. de Wit, T. Hughes, S. van der Leeuw, H. Rodhe, S. Sorlin, P. Snyder, R. Costanza, U. Svedin, M. Falkenmark, L. Karlberg, R. Corell, V. Fabry, J. Hansen, B. Walker, D. Liverman, K. Richardson, P. Crutzen, and J. Foley ~ (2009), `` A Safe Operating Space for Humanity," Nature, 461: 472-75, DOI: 10.1038/461472aSep 19, 2014
The third year of the GCER Distinguished Visitor Series features a number of prominent economists who will spend time in the Department during the 2014-15 academic year.Simon Gilchrist, October 14-17, 2014Professor Gilchrist teaches at the Department of Economics in Boston University and is Research Associate at the NBER. He has published extensively on monetary policy. Professor Gilchrist will visit the Georgetown economics department during the week of October 14-17 where he will present his latest research in the Macroeconomics workshop, and will meet with faculty and students.Fernando Alvarez, February 23-27, 2015Fernando Alvarez is professor of economics at the University of Chicago and Fellow of the Econometric Society. He is well known for his work in endogenously incomplete markets. Professor Alvarez will visit the Department during the week of March 2-6 where he will present his latest research in the Macroeconomics workshop, and will meet with faculty and students.Steven Callander, February 23-27, 2015Steven Callander is professor of political economy at Stanford's Graduate School of Business. He will visit the Department during the week of March 16--March 20 where he present his latest research in the Microeconomics workshop, and will meet with faculty and students.Aug 9, 2014
The IZA and the Georgetown Center of Economic Research (GCER) of Georgetown University's Economics Department are pleased to announce the speaker schedule for the the third IZA@DC Young Scholar Program. The program, a joint effort by GCER and the IZA to bring outstanding PhD students to Washington, DC, is set to take place from September 22 -- 26, 2014 at Georgetown University in Washington DC. The speaker schedule is as follows; detailed program of the conference can be found here.Monday, September 22: Justin Wolfers (University of Michigan)Justin Wolfers is a Professor of Public Policy at the Ford School and Professor of Economics. at the University of Michigan. His research interests include labor economics, behavioral economics, and social and legal policy. His latest research focuses on subjective well being. A recent paper by Professor Wolfers (with Betsy Stevenson) analyzes multiple datasets and multiple definitions of "basic needs" documenting the relation between subjective well being and income.Tuesday, September, 23: Kevin Lang (Boston University)Professor Lang is Professor of Economics at Boston University, Fellow of the Society of Labor Economists, and Research Associate of the NBER. Over the years, his research has tackled labor topics ranging from discrimination and unemployment to market returns to education. In recent work, Professor Lang examines the relation between high school exit exams of students on graduation and incarceration rates, employment, and wages.Wednesday, September 24: Giuseppe Moscarini (Yale University)Professor Moscarini is Professor of Economics at Yale University, Research Associate at the NBER, and Co-Director of the Macroeconomics Research Program at the Cowles Foundation. His research is wide ranging and includes diverse topics from social learning and and innovation to occupational choice and job mobility. New research by Professor Moscarini analyzes and documents the breakdown of the "job ladder" after the Great Recession.Thursday, September 25: Professor Caroline Hoxby (Stanford University)As the Bommer Professor of Economics at Stanford University, and Director of Economics of Education Program for the NBER, Caroline Hoxby is well known for her empirical studies of labor markets and tax education policy, including prominent work on the effects of school choice on educational quality. Professor Hoxby's recent research focuses on the effects of education on economic growth, and on the market for college educationFriday, September 26: John Kennan (University of Wisconsin)Professor John Kennan is the Richard Meese Professor of Economics at the University of Wisconsin-Madison and a Fellow of both the Econometric Society and the Society of Labor Economists. Long known for his studies of firm level interactions and worker behavior, Professor Kennan's recent work examines the policy implications of higher education subsidies on labor migration decisions and human capital mobility.Jul 22, 2014
Georgetown Department of Economics and Center for Economic Research welcome its newest member, Mary Ann Bronson who joins the department and GCER in the Fall of 2014. Bronson arrives from the University of California, Los Angeles, where she received her PhD. Her most recent work explores the dynamics of gender differences in college attendance and choice of major. She constructs a dynamic structural model of marriage, educational choices, and lifetime labor supply to analyze the contribution of changes in wages and the marriage market to the observed educational investment patterns over time.Jul 2, 2014
GCER Fellow Laurent Bouton's paper guns and votes has been featured in The Economist and FiveThirtyEight. In his paper, Bouton argues that re-election motives can lead politicians to take a pro-gun stance against the interests of an apathetic majority of the electorate, but in line with the interests of an intense minority.May 9, 2014
GCER Fellow Laurent Bouton was recently inducted into the National Bureau of Economic Research as a Faculty Research Fellow. Bouton joins other GCER Fellows Robert Cumby, Martin Evans, Garance Genicot, Arik Levinson, and Martin Ravallion in that select group.Apr 25, 2014
For the third straight year, The Economic Club of Washington presents its prestigious Vernon E. Jordan Jr Fellowship Award to a GU Economics PhD student. In this case, there are two: This year's Jordan Fellowship award was shared by Jacob Mortenson and Alison Weingarten. Jacob and Alison follow past GU Econ recipients, Claire Brunel and Mauricio Villamizar as Jordan Fellowship recipients. As this year's winners, Jacob and Alison will present their research findings to The Economic Club of Washington in the Spring of 2014.Apr 15, 2014
GCER Fellow Laurent Bouton was interviewed by the New York Times and NPR for their feature on the Senate primaries. Bouton is assistant professor of Economics at Georgetown and studies electoral systems and voter behavior. He has also written a column on the 'gun-control paradox' in VoxEU.Apr 10, 2014
Jun Ma will join the People's Bank of China as chief economist in its research bureau. Previously, he was Deutsche Bank AG's chief China economist. Ma holds a PhD in Economics from Georgetown University.Apr 4, 2014
IZA and the Georgetown Center of Economic Research (GCER) of Georgetown University's Economics Department are very pleased to announce the third IZA@DC Young Scholar Program which will take place from September 21 -- 26, 2014 at Georgetown University in Washington DC. The program is a joint effort by GCER and the IZA to bring outstanding PhD students to Washington, DC.
The program encourages interaction between talented PhD students and labor economists located in the Washington, D.C. metropolitan area. On each of the five days of the program a leading labor economist will present his/her frontier research. Students will be given the opportunity to collectively meet with each of the speakers and to discuss their own research. In addition the students will formally present their own research. They will also visit IZA Research Fellows located in Washington, DC at their home institutions. The program is designed for advanced PhD students from outside the US working in the field of labor economics with an interest in joint research projects with local universities or public institutions in the DC area. The number of participants is limited to a maximum of 10 students.
IZA Research Fellows located outside the US can nominate their PhD students by submitting a nomination statement, the student’s CV and research paper by April 20, 2014 using the online nomination form. If a grant for travel expenses is required, please indicate with the nomination and submit a short explanation. Acceptance decisions will be communicated by mid of June.Apr 2, 2014
The Carroll Round Steering Committee cordially invites you to save the dates for the 13th Annual Carroll Round at Georgetown University. This year, the international economics conference will be April 10-13, 2014 with presentation sessions and speakers on that Friday and Saturday.
A formal RSVP invitation will follow in the coming weeks with details.
For more information on Carroll Round events, please visit our website at http://carrollround.georgetown.edu/Apr 1, 2014
The award ceremony will be held on April 7th 2014, and will coincide with the annual Razin Lecture in Economic Policy by Assaf Razin (Cornell).Apr 1, 2014
Assaf Razin is a renowned economist whose work spans a wide range of issues and problems. Professor Razin is father of the late Ofair Razin in whose honor the Lecture is named. The Razin Lecture is to be accompanied by the awarding of the Razin Prize for best research paper by an advanced graduate student. Click here for more on the Razin Prize and Policy Lecture, its background, and history.Mar 24, 2014
The inaugural Washington PECO, a political economy conference hosted jointly by the Georgetown Center for Economic Research (GCER), the Department of Economics, the School of Foreign Service and the Department of Government at Georgetown University was held in Georgetown University on March 21 and 22. See the conference website for more information.Mar 8, 2014
The March 7 conference, co-hosted by Gui2de, was held on the GU campus. See Pro-Poor Conference for more information.Feb 12, 2014
Collateral Damage to Standard Economic Theory... GCER Fellow Dan Cao shows how incorrect beliefs can fuel a crisis.
In the years leading up to the financial crisis of 2008, several financial institutions invested heavily in highly risky mortgage-backed securities. Financial markets allowed these institutions, including prominent banks, to speculate on the future returns of these securities. When home prices crashed in around 2006-2007, mortgage interest rates soared, leading to defaults by homeowners. This drastically reduced the value of those securities. During this time, some hedge funds profited by short-selling these securities.
In his paper "Collateral Shortages, Asset Price and Investment Volatility with Heterogeneous Beliefs", GCER Fellow Dan Cao finds that, contrary to standard economic theory, such speculators with possibly incorrect beliefs survive in the long run and their speculative activities permanently drive up price and volatility.The standard view dating back to Friedman (1953) hypothesizes that agents with incorrect beliefs will eventually be driven out under complete markets and will have no influence in the long run. Under incomplete markets, in contrast, Cao shows that financial institutions speculating with potentially incorrect beliefs survive in the long run drive up asset price and real investment volatility. The financial institutions mentioned above could just walk away from their collateral and get back into the market at a later time, using their current and future endowments, since the penalty for bad bets for these institutions is low. Additionally, Cao introduces a framework to model the effect of agents with heterogeneous (potentially incorrect) beliefs on asset prices. Further, using this framework, he studies the impact of different types of regulations on welfare, asset price volatility and investment.Jan 23, 2014
New research on the role of electronic payment systems in Kenya by GCER Fellow William Jack and MIT's Tavneet Suri made headlines in the MIT News. The article highlights a recent publication by Jack and Suri in the American Economic Review that examines the impact of the new electronic payments system, known as M-PESA. Jack and Suri document the consumption-smoothing benefits to households that use the M-PESA. ( Click here to see the full article. ).Jan 15, 2014
An NBER study on obesity by GCER Fellow Matthew Harding was recently reported in the January 14, 2014 edition of the Huffington Post. Harding, a Visiting Fellow from Stanford University, and co-author Michael Lovenheim of Cornell examine the potential effect of a sugar tax on obesity outcomes in the U.S. Using data on 123 million food purchases made in the U.S. between 2002 and 2007, they find that a 20% tax on sugar would result in an 18% reduction in overall caloric intake Americans. ( Read here for more information ).Dec 19, 2013
Congratulations to Georgetown Economics PhD student Alison Weingarden for her recent merit-based grant by the U.S. Department of Labor. The award is the result of a competition initiated by 2013 Employment and Training Administration (ETA) Research Papers Program, and is intended to provide funds for PhD students for research projects related to employment dynamics and job training programs.
Alison's project will examine data on layoff episodes by U.S. companies in order to investigate the timing and size of mass layoff episodes.Oct 13, 2013
# Oh what a tangled web we weave... † Anderson and Smith explore the dilemmas of deception. On the evening of November 14th 1940 the German Luftwaffe raided Coventry. That night, 515 German bombers destroyed one third of all buildings in the city, while only losing one bomber to Coventry's over-matched air defenses. Some have claimed that Winston Churchill had advanced knowledge of the attack, and yet made a calculated decision not to act. While this claim is disputed, consider the dilemma that a fully informed Churchill might have faced. By taking measures to protect Coventry, he could have limited British casualties and made the raid more costly to the Germans. However, if the Germans detected a shift in British air defenses, they might have realized that the allies had cracked the German code used to transmit orders. The Germans would then abandon the compromised code, and the Allies would lose a valuable source of military intelligence. This example highlights a unique quality of information: Merely using it often gives it away. This "use it and lose it" property of information applies in many important environments. A stock trader attempting to exploit inside information about a company sees his market advantage evaporate with every trade he makes. Attempting to extract gold from public land sparks gold rushes, as on the beaches of Nome, Alaska 1899. Using cutting edge technology in new products allows for reverse engineering by competitors, sacrificing the technological advantage. In their paper ["Dynamic Deception"](http://www9.georgetown.edu/faculty/aza/DynamicDeception.pdf) (forthcoming in The American Economic Review), GCER Fellow and Georgetown Professor [Axel Anderson](http://www9.georgetown.edu/faculty/aza/) and co-author Lones Smith of the University of Wisconsin explore the dynamic use of private information in competitive environments. They posit a model in which an agent with an informational advantage competes over time with a rival. The more the advantaged agent aligns his actions with his information the greater his current benefit. But, his rival observes a noisy signal of his actions --- the more intensely the advantaged agent exploits his informational edge the faster he loses it. By solving for the unique equilibrium of this dynamic game, Anderson and Smith are able to offer sharp predictions about both the dynamics of behavior and the rate at which the informed player monetizes his informational advantage. Further, Anderson and Smith determine the value of information gathering efforts by the uninformed rival, and use this value to overturn a standard result on information demand in non-rivalrous settings. Finally, Anderson and Smith investigate a form of deception that occurs often: the costly veiling of action by adding observational noise to the situation. One such example is a diversion to distract the enemy's attention before a military invasion. † Sir Walter Scott in Marmion, Canto vi. Stanza 17Sep 15, 2013
The second in the series of Distinguished Lectures in 2013-14 will be delivered by Preston McAfee, a leading research economist at Google. McAfee's talk is entitled "Digital Advertising: Benefits and Costs." This talk summarizes recent experimental results on the effectiveness of internet display advertising (graphic images on web pages). Three issues are considered: does the length of display time matter? Is it more effective to switch ads during a page view? What is the user cost of obnoxious or annoying ads?
The lecture will be held on October 17th at 4:15-5:45pm in McShain Large Lounge in Kennedy Hall at Georgetown University.
Preston McAfee is Director of Google Strategic Technologies. Previously, he was a Vice President and Research Fellow at Yahoo! Research where he led the Microeconomics and Social Systems group. Before that, he was the J. Stanley Johnson Professor of Business, Economics, and Management at the California Institute of Technology. McAfee has published extensively across a wide spectrum of topics in economics, and is particularly well known for his work on auction theory.
A big advocate of open access to academic publishing, Professor McAfee maintains an online database on the costs of academic journals to university libraries, and has published number of open-access online books and articles. He has served as Editor of the American Economic Review and Economic Inquiry, and is a Fellow of the Econometric Society.Sep 9, 2013
A recent article in GU News reports that Georgetown economist and GCER Fellow Martin Ravallion was elected to lead the Society for the Study of Economic Inequality (ECINEQ). Ravallion will lead the group, which is devoted to human development issues, after serving as its president-elect for two years.
Please click here to see the full GU News article.Sep 5, 2013
The second year of the GCER Distinguished Visitor series features a number of prominent economists who will spend time in the Department during the 2013-14 academic year.
Jose-Victor Rios-Rull, October 7-11, 2013.
Professor Rios-Rull has published extensively on consumption inequality, wealth and income distribution, financial integration, and fiscal policy. His work on general equilibrium models with heterogeneous agents is widely regarded as a major advancement in quantitative macroeconomics. His development of macro models of political economy with Per Krusell is standard reading for PhD students. He is currently the Carlson Professor of Economics at the University of Minnesota and is a Fellow of the Econometric Society. He has held past faculty positions at the University of Pennsylvania and Carnegie Mellon. Professor Rios-Rull will visit the Georgetown Econ department during the week of October 7-11 where he will present his latest research in the Macroeconomics workshop, and will meet with faculty and students.
Nobuhiro Kiyotaki March 17-21, 2014.
Nobuhiro Kiyotaki is Professor of Economics at Princeton University and Fellow of the Econometric Society. He is well known for his work in monetary theory, imperfect competition, and credit markets. His research on the role of fiat money with Randall Wright, and on credit cycles with John Moore has gained wide influence among a generation of monetary economists. Professor Kiyotaki has held previous positions at the Universities of Wisconsin, Minnesota, and the LSE. He will visit the Department during the week of March 17-21 where he will present his latest research in the Macroeconomics workshop, and will meet with faculty and students.
Ellen McGrattan March 31-April 4, 2014.
Ellen McGrattan is a monetary advisor at the Federal Reserve Bank of Minneapolis and an adjunct professor of economics at the University of Minnesota. Long known for her innovative methods in quantitative and computational macroeconomics, Professor McGrattan's research examines the aggregate effects of monetary and fiscal policy on GDP, investment, the allocation of hours, and the stock market. Prior to coming to Minnesota, she taught at Duke University. She will visit the Department during the week of March 31--April 4 where she present her latest research in the Macroeconomics workshop, and will meet with faculty and students.Aug 16, 2013
Second Lecture to be delivered in October by Google's Preston McAfee
The 2013-2014 GCER Distinguished Lecture series resumes in September with Professor Charles Manski as its first speaker. Professor Manski will deliver series of lectures at GU on September 9-10 on his new book, Public Policy in an Uncertain World: Analysis and Decisions (Harvard University Press, 2013) and on some technical articles that form the foundation for the book. In the book, Manski describes the practice of policy analysis and the inferential problems that researchers confront. He argues that credible analysis typically yields interval rather than point predictions of policy outcomes. He examines how governments might reasonably make policy decisions when they only have partial knowledge of policy outcomes.
Schedule for the Manski lectures:
Lecture 1 (September 9, 2:00 - 3:30 PM) Policy Analysis with Incredible Certitude.
Lecture 2 (September 9, 4:00 - 5:30 PM) Predicting Policy Outcomes, Predicting Behavior.
Lecture 3 (September 10, 9:00 - 10:30 AM) Planning with Partial Knowledge, Diversified Treatment.
Lecture 4 (September 10, 11:00 AM - 12:30 PM) Case Studies: Medical Decision Making and Fiscal Policy.
All lectures will be held in the Mortara Center for International Studies, 3600 N Street, NW Washington, DC 20057
Charles Manski is Board of Trustees Professor at Northwestern University. He had made critical contributions in areas of econometrics, decision theory, and social policy. He has served as Director of the Institute for Research on Poverty and editor of the Journal of Human Resources. He is an elected member of the National Academy of Sciences, and a Fellow of the Econometric Society and of the American Academy of Arts and Sciences.Aug 9, 2013
Please click the picture above or here to enlarge.Jun 15, 2013
GCER Fellow Martin Ravallion was recently elected Research Associate of the National Bureau of Economic Research. Professor Ravallion joined the Department and GCER in 2012 as the inaugural Edmond D. Villani Chaired Professor in Economics.
Among his various prizes and awards, in 2012 he was awarded the John Kenneth Galbraith Prize from the American Agricultural and Applied Economics Association. Professor Ravallion has also given recent keynote addresses at the Midwest Development Economics Conference, the Canadian Economics Association, the Society for the Study of Economic Inequality, and the Annual Conference of the Michelsens Institutt in Norway.
As a Research Associate in the NBER's Development Group, Professor Ravallion will attend the NBER's semi-annual program meetings, and in addition participate in the NBER Summer Institute.Jun 4, 2013
Unintended Consequences in the Struggle for Equal Rights: Anderson and Genicot explore the surprising relationship between suicides and female property rights in India.
A woman's right to inherit property is restricted in many developing countries. These restrictions, and the ensuing battles for equal rights, have been a source of great conflict in many traditional societies.
To understand how these conflicts play out, GCER Fellow and Georgetown Professor Garance Genicot explores the little known but significant link between suicides and female property rights in India. In a recent paper entitled "Suicides and Property Rights in India". Professor Genicot and co-author Siwan Anderson of the University of British Columbia document this link and provide a compelling explanation for its cause.
India presents a fascinating case study because, while the original Hindu Succession Act of 1956 mandates equal treatment in inheritance rights between sons and daughters, the Act contained two major loopholes. Both joint property and tenancy land were originally excluded.
Anderson and Genicot exploit the fact that from 1956 until a nationwide amendment in 2005, different states in India independently chose to strengthen women's inheritance rights at different dates. Using these differences across states and time, they find that strengthened property rights for women decreased the ratio of female to male suicide rates, but increased the absolute numbers of both male and female suicides.
Since a large majority of suicide victims in India are married, and since "family problems" constitutes the main reported cause of suicides for both men and women, a natural conjecture is that marital discord is the main channel through which improving female property rights raises suicides. Consistent with this hypothesis, Anderson and Genicot show that improving property rights for women increases the proportion of suicides due to household conflict, and, using individual level data, they show that it increases the prevalence of domestic violence.
The authors root their explanation in a theoretical model of household bargaining under asymmetric information. The model predicts separations (divorce) as well as suicides in a manner consistent with the empirical findings. It shows that, as the share of assets held by women increase, the ratio of female to male suicide rates decreases, and conflict can increase. Periods of conflict are costly and reverting to normalcy takes time, so that either party may choose the "ultimate exit" and commit suicide.
The model shows that when women have nothing, they accept everything and therefore there is little conflict. Ironically, as women' share of assets increases, their outside options improve slightly. They will not accept everything anymore and intra-household conflict will rise. Male suicide would increase, while the effect on female suicide could go either way.May 15, 2013
IZA and the Georgetown Center of Economic Research (GCER) of Georgetown University Economics Department are very pleased to announce the Second IZA@DC Young Scholar Program which will take place from September 23 -- 27, 2013 at Georgetown University in Washington DC. The program is a joint effort by GCER and the IZA to bring outstanding PhD students to Washington, DC.
The program encourages interaction between talented PhD students and labor economists located in the Washington, DC metropolitan area. On each of the five days of the program a leading labor economist will present his/her frontier research. Students will be given the opportunity to collectively meet with each of the speakers and to discuss their own research. In addition the students will formally present their own research. They will also visit IZA Research Fellows located in Washington, DC at their home institutions.
The program is designed for advanced PhD students from outside the US working in the field of labor economics with an interest in joint research projects with local universities or public institutions in the DC area. The number of participants is limited to a maximum of 10 students.
For a complete program of this year's conference, please see GCER-IZA Program .
For more information about last year's conference, please see Program 2012 .May 5, 2013
For the second straight year, The Economic Club of Washington presented its prestigious Vernon E. Jordan Jr Fellowship Award to a GU PhD student. This year's Jordan Fellowship recipient is Claire Brunel for her winning essay, "Green Innovation and Green Imports: Links between Regulation, Innovation and Trade." Ms Brunel follows last year's recipient, Mauricio Villamizar, another GU PhD student. As this year's Jordan Fellow, Ms Brunel will present her research results to The Economic Club of Washington in the Spring of 2014.Apr 8, 2013
This year, political economy is at Georgetown University, Monday, April 29th, 2013 at 2:30pm - 5:30pm at Mortara Center for International Studies.
please click here for more detailsApr 7, 2013
GPPI Professors Nada Eissa and James Habyarimana and Georgetown Economics Professor Billy Jack recently launched gui²de, the Georgetown University Initiative on Innovation, Development and Evaluation. gui²de assesses the effectiveness of interventions and policies aimed at empowering individuals in developing countries through field-based research. Read more about gui²de here.Apr 6, 2013
GCER Fellow Pedro Gete will present his work, "Imperfect Information, Lending Standards and Capital Requirements" at the Chicago Fed Banking Conference in May. The research is joint work with Georgetown Phd student Natalie Tiernan. The Conference will feature notable economists and policy makers around the country, including Ben Bernanke, Edward DeMarco (FHFA), and William Isaac (former Chairman, FDIC).
Please click here for detailsApr 5, 2013
The talk is entitled: Female Labour Supply, Human Capital and Tax Reform
The UK together with many other countries have put in place a system of tax credits to subsidize work for low paid individuals. We consider the impact of such tax policies on women over the lifecycle. We focus on the effects of tax credits on education choice, employment, hours and human capital accumulation. By modeling education choices and introducing a channel of impacts through on- the-job human capital accumulation we are able to better understand both the short run incentive effects and the longer run implications for poverty and inequality for tax credits and other aspects of tax and welfare benefits. Moreover, individuals in the model are risk averse and can accumulate financial assets which serve for short run smoothing, retirement and precautionary savings. Within this context we can also assess the insurance value of these major welfare programs and the welfare effects of risk in the presence of public insurance. We find substantial labor supply elasticities. We also find that for lower education individuals the welfare programs have substantial insurance value.Apr 4, 2013
The Carroll Round Steering Committee cordially invites you to save the dates for the 12th Annual Carroll Round at Georgetown University. This year, the international economics conference will be April 18-21, 2013 with presentation sessions and speakers on that Friday and Saturday.
A formal RSVP invitation will follow in the coming weeks with details.
For more information on Carroll Round events, please visit our website at http://carrollround.georgetown.edu/Apr 4, 2013
GCER is pleased to announce that Laurent Bouton will be joining the Economics faculty at Georgetown University and GCER in the Fall of 2013. Professor Bouton received his Ph.D. from ECARES, Université libre de Bruxelles (Brussels) in 2009. After leaving graduate school, he joined the faculty of Boston University where he resided as Assistant Professor until now.
Professor Bouton specializes in Political Economy and Microeconomics. His research focuses on the effects of information imperfections under various electoral systems, including runoff elections, plurality, and approval voting. His work has appeared in a number of prestigious journals including The American Economic Review and Econometrica. According to Frank Vella, the Chair of the Economics Department, "Laurent is an outstanding young scholar and he will provide additional strength in research areas where our Department is already very strong. We are all very excited to welcome him to Georgetown."Apr 3, 2013
The conference will take place on May 23-24; deadline for paper submission is March 31.
We are pleased to invite you to participate in the Georgetown Center for Economic Research's second biennial conference, which is organized jointly by the GU Economics department alumni and faculty, and aims to bring together recent Ph.Ds, faculty and current graduate students as well as other researchers in the greater DC area. The conference will include sessions in different areas of economics; at least one session will be reserved for current graduate students intending to go on the job market.
Papers are invited from all areas of economics. Completed manuscripts or extended abstracts should be emailed (as attachments) to Yamin Ahmad at firstname.lastname@example.org. Please use "GCER 2013 Submission" as the subject line.
All submissions must be received by March 31, 2013.
For more information can be obtained here.
Same information can also be obtained online at https://sites.google.com/site/gcer2013/Apr 1, 2013
Gale and O'Brien sing the blues over Use-or-Lose!
Crowded airports are an unfortunate fact of life. As the demand for air travel grows, regulators must deal with increasingly stringent limits on airport capacity. Many U.S. and European airports use takeoff-and-landing slots to determine which airlines fly at peak times. One concern is that airlines may hoard slots solely in order to reduce competition. In hopes of mitigating this inefficiency, regulators have imposed so-called "use-or-lose" provisions. These provisions require that the airlines utilize a certain minimum percentage of their slots on a monthly or annual basis. (Water rights, mineral leases, and fishing quotas have also been subject to use-or-lose provisions.) GCER Fellow Ian Gale and co-author Dan O´Brien from the Federal Trade Commission have examined the impact of use-or-lose provisions on social welfare.
In a recent paper, "The Welfare Effects of Use-or-Lose Provisions in Markets with Dominant Firms" (forthcoming in the American Economic Journal: Microeconomics), Gale and O´Brien find that use-or-lose provisions may be ineffectual or worse. While the provisions are imposed with the aim of inducing firms to divest themselves of unused capacity, the provisions may actually induce those firms to acquire capacity from competitors. A consequence is that aggregate output and social welfare may both fall. Gale and O´Brien conclude that the welfare effects of use-or-lose provisions are ambiguous overall, and they depend on the particular market in ways that make policy prescriptions difficult.Mar 29, 2013
The innaugural program features three distinguished economists who will spend time in the Department during the 2012-13 academic year.
Professor of Economics at U Penn, has published extensively on issues relating to consumption inequality, redistribution, and social insurance. His work has been prominently cited in top press outlets such as The Economist, the New York Times, and the Wall Street Journal. Professor Krueger visited the department in December of 2012, where he presented his recent work on "Intergenerational Redistribution in the Great Recession" in the Macroeconomics workshop. He returns on February 11-13, and will consult with faculty and students in the department.
Associate Professor of Economics at Northwestern U, is one of the rising stars in the profession. He is known for is research on the macroeconomic implications of credit market frictions. Professor Lorenzoni will visit the department during the week of April 15-19 where he will present his latest research in the Macroeconomics workshop, and will meet with faculty and students.
Professor of Economics at NYU, is well known for his quantitative assessments of the U.S. labor market. His work spans a number of critical policy issues ranging from social security reform to welfare-to-work programs to labor market implications of the fiscal stimulus. Professor Violante will visit the department during the week of March 11-15 where he will present his latest research in the Macroeconomics workshop, and will meet with faculty and students.Mar 13, 2013
The Graduate Committee is pleased to announce that Mauricio Tejada has won the sixteenth annual competition for the Razin Prize, for his paper "Dual Labor Markets and Labor Protection in an Estimated Search and Matching Model." Congratulations to Mauricio and his thesis advisor Luca Flabbi.
The award ceremony will be held on April 3rd 2013, and will coincide with the annual Razin Lecture in Economic Policy by Ronny Razin (LSE). Further details will follow.Mar 12, 2013
Ronny Razin is an internationally recognized political economist whose work spans a wide range of issues and problems. Some of his best known work concerns the critical question of whether democracies aggregate information properly. In most democratic countries, voters are motivated to use the information they have to determine the winning candidate. In one of his more widely acclaimed studies, Professor Razin suggests a second motivation, one no less important: voters are motivated to use their votes to affect the policy choice of the winning candidate by influencing candidates' beliefs. Professor Razin's research shows how and why these two motivations may conflict to produce unsatisfactory electoral results and policy outcomes.
Professor Razin has also published several prominent papers on interest group and party formation, and on political communication. His current work studies the unusual political economics of religion, its role in voting participation, social cooperation, and policy making. This year's Razin Prize Recipient is Mauricio Tejada for his excellent paper on: "Dual Labor Markets and Labor Protection in an Estimated Search and Matching Model", under the guidance of Luca Flabbi.
Professor Razin is brother of the late Ofair Razin in whose honor the Lecture is named. The Razin Lecture is to be accompanied by the awarding of the Razin Prize for best research paper by an advanced graduate student. Click here for more on the Razin Prize and Policy Lecture, its background, and history.Dec 4, 2012
This week marks the arrival of the first of three Distinguished Visiting faculty this academic year. Dirk Krueger, Professor of Economics at the University of Pennsylvania arrives at Georgetown this week to meet with faculty and students in the Department of Economics. Professor Krueger has published extensively on issues relating to consumption inequality, redistribution, and social insurance. His work has been prominently cited in top press outlets such as The Economist, the New York Times, and the Wall Street Journal. During his stay at Georgetown, Professor Krueger will present his work on "Intergenerational Redistribution in the Great Recession" in the Macroeconomics workshop.
Professor Krueger joins Guido Lorenzoni, Associate Professor of Economics, Massachusetts Institute of Technology and Gianluca Violante, Professor of Economics, New York University as the inaugural Distinguished Visiting faculty.Nov 5, 2012
With nearly 300 publications, Professor Ravallion is one of the most prominent development economists in the world. His work has led to new ways of thinking about economic decisions and empirical regularities in development.
Professor Ravallion's research is wide-ranging. His early work on the 1974 famine in Bangladesh explained and documented the various economic and political forces that led to sharply increasing rice prices and later to widespread famine. His work would eventually become a companion to the theory of famines developed around the same time by future Nobel Laureate Amartya Sen. Ravallion would later develop usable indicators of poverty, including the now famous "dollar-a-day" poverty line, and explore the role of limited commitment in the ability of informally organized groups to provide their members with insurance. More recently, Ravallion has written extensively on China and India, assessing the links between growth and poverty reduction in the two countries.
Much of Professor Ravallion's work is now standard reading for students in development economics. Both the empirical measures and the theories he developed form the basis of countless studies over the past two decades.
Martin Ravallion received his PhD from the London School of Economics and Political Science in 1981. He went on to hold positions at Oxford University and the Australian National University, before joining the World Bank in 1988. As current Director of the Development Research Group, he manages and supervises a staff that shapes and executes the Bank's research agenda and provides expertise to policy makers at the highest levels. Professor Ravallion has held visiting positions at numerous institutions including Princeton, Toulouse, Warwick, the Australian National University, the Bangladesh Institute of Development Studies, and Gadja Mada University in Indonesia.Oct 9, 2012
A recent issue of Georgetown College News reports that Associate Professor and GCER Fellow Billy Jack, sent Yun Ling, Lucie Parker, Alec Villec and Cindy Yang(F'12) to Nairobi to work with him on his current field projects. Professor Jack has conducted extensive research in eastern Africa. Over the summer, he showed the students how their economics knowledge could be applied to a range of topics from road safety and maternal health saving to financial literacy for Kenyan teens. They also learned how their economics skills can effect change from this trip.
Please see more here.Sep 20, 2012
During 2012-2013 academic year, there are three distinguished faculty setting to visit GCER and the department of Economics.
Professor of Economics,
University of Pennsylvania
Arrived date: Dec. 6th, 2012
Return date: Feb. 11th - 14th, 2013
Associate Professor of Economics,
Massachusetts Institute of Technology
Arrive date: Apr. 15th - 18th, 2013
Professor of Economics,
New York University
Arrive date: March 11th - 15th, 2013Sep 12, 2012
The Inaugural IZA-GCER Young Scholar Conference is set to take place during the week of October 22-26, 2012. The conference is jointly sponsored by IZA, the GU Department of Economics, and GCER. Its main objective is to expose young scholars to the world's leading labor economists through a week of presentations (for more details on conference objectives, cllck here).
During the one week program, each of five preeminent scholars will present his/her research, and speak to the Y-S participants about academic work in the field of labor economics. The list of speakers includes Josh Angrist (MIT), Raquel Fernandez (NYU), John Ham (University of Maryland), Jean Marc Robin (UCL, Paris), and Petra Todd (U Penn).
The morning talks will take place in the Edward B. Bunn, S.J. Intercultural Center (ICC), 37th and O St., N.W., Room ICC550. Afternoon seminars will take place in various locations around campus - please check the Conference Program schedule below.Jun 3, 2012
"What a piece of work is a man! How noble in Reason! How infinite in faculties!" † ... But how much is he worth? Huggett and Kaplan provide an answer.
While markets exist that determine the value of houses, cars and IBM stock, many assets are not marketed. Thus, their value is not precisely known. For example, toll bridges are valuable but their value is not determined on a centralized exchange. GCER Fellow Mark Huggett and co-author Greg Kaplan from the University of Pennsylvania have new research that determines the monetary value of by far the most valuable asset that most people own: themselves.
Their new paper "The Money Value of a Man" proposes a method for evaluating the monetary value of an individual. Far from being an esoteric exercise, knowing one's monetary value is, in fact, quite useful. The most obvious application deals with how one should divide one's financial wealth between stock and bond holding. If one's monetary value can be determined then the return on human wealth is simply the future value plus future earnings divided by the current value. If this human wealth return looks like the return to low-risk bonds, then one should invest heavily in stock since the overall portfolio is already heavily weighted towards bonds. If, however, one's human wealth return looks like the return to stock, then one would be wise not to invest at all in stock. A key part of portfolio allocation advice therefore boils down to answering the question: what is the monetary value of a man?
To answer this question sensibly, Huggett and Kaplan face two main tasks. First, they determine how male earnings move with the return to stock and bonds. Second, given such a statistical model summarizing how earnings and asset returns move, they measure the value of these future earnings in terms of current dollars.
Huggett and Kaplan find that the average return on human wealth for high school or college educated U.S. males is several times the mean return to stock early in the working lifetime and that this return declines as males approach retirement. This is driven by the large amount of idiosyncratic earnings risk faced by young males together with the limited ability to share this risk. The authors also find that the stock component of human wealth is smaller on average than the bond component throughout the working lifetime.
† Shakespeare's Hamlet, Act II, scene IIMay 20, 2012
The Economic Club of Washington presented its prestigious Vernon E. Jordan Jr Fellowship Award this year to GU PhD student Mauricio Villamizar. The award was given to Mr. Villamizar in recognition for his essay "Identifying the Effects of Monetary Policy Shocks: Evidence from Colombia." Mr. Villamizar, a fourth year student in the GU PhD program, completed his paper under the guidance of advisor and GCER Fellow Guido Kuersteiner. The award ceremony took place at an Economic Club luncheon on May 16 at the Grand Hyatt featuring Robert Zoellick, President of the World Bank.Apr 15, 2012
Happiness is in the air! Levinson uses happiness surveys to put a dollar value on air quality.
The U.S. Environmental Protection Agency (EPA) was responsible for 32 of the 105 major rules issued by U.S. federal agencies in 2010. How do economists put a dollar value on the environmental benefits of such rules? This is one of the greatest challenges facing environmental economics, and a new paper by GCER Faculty Fellow Arik Levinson proposes and tests a new approach.
There are three existing and often-used methods of valuing the environment. The first is the "travel cost" approach which originated in a letter by famed economist Harold Hotelling. Hotelling wrote to the National Park Service in 1947, suggesting that the Park Service examine how much people spend traveling to unpolluted recreational sites. A second method, the hedonic regression approach, regresses housing prices on neighborhood characteristics including air quality. Finally, the contingent valuation approach directly asks people their willingness to pay for environmental improvements.
In recent work, Levinson proposes and estimates an alternative based on "happiness" surveys. The fundamental idea combines data from two sources. The General Social Survey asks respondents how happy they are, on a three-point scale, along with their incomes and other demographic information. And the EPA collects daily air pollution data from thousands of monitors all over the U.S. Combining these two sources, it is possible to estimate respondents' happiness as a function of their incomes and the air quality in the place and on the day they were asked the happiness question.
The approach is summarized in two equations. The first is a regression equation with each individual's response to the happiness survey as the left hand side variable. On the right hand side are the individual's income and demographic data and the local air quality conditions. From this equation, Levinson derives a second equation that describes the individual's marginal willingness to trade income for pollution reduction. From this second equation, Levinson estimates how much more income people would have to earn in order to feel at least as happy as they would with an improvement in air quality.
Levinson applies this approach to airborne particulates smaller than 10 microns (PM10), a common measure of air pollution. He finds that, on average, people appear to be willing to forgo about $40 of annual income for a one-standard-deviation reduction in particulate pollution for one day. How large is this change? A one-standard-deviation change represents a 50 percent increase (or decrease) in pollution! This corresponds to a move by an individual from an average county in the United States to one of the most polluted counties, for instance to Riverside or San Bernardino, CA. It also corresponds approximately to the improvement in air quality attributed to the 1970 and 1977 Clean Air Acts.Apr 4, 2012
The 2012 Razin Policy Lecture will be delivered by David Card, the Class of 1950 Professor of Economics at UC Berkeley. This year's Razin Lecture is entitled "Social Interactions" and takes place on Tuesday, April 17, 2012, at 4:00 pm in the BSB 490 Fisher Colloquium at Georgetown University.
Professor Card was honored by the American Economic Association in 1995 with the John Bates Clark Medal. More he received the Frisch Medal in 2007 for the outstanding research paper (with D. Hyslop) published in Econometrica in 2005, and the IZA Prize in Labor Economics in 2006, from Germany's Institute for the Study of Labor, the leading award for labor economists. David Card's research spans a wide range of issues and problems in labor economics. He research topics include the effect of minimum wage, the impacts of immigration, the consequences of racial segregation, and the effects policy changes on health insurance utilization and on health. Card's most recent work studies peer effects and inequality in the workplace.
The Razin Lecture is accompanied by the awarding of the Razin Prize for best research paper by an advanced graduate student. This year's prize goes to David Phillips (pictured at right) for his essay, "Getting to Work: Experimental Evidence on Job Search and Transportation Costs," produced under the guidance of Prof. William Jack. Click here for more on the Razin Prize and Policy Lecture, its background and history.Mar 26, 2012
Organizers: Steffen Kunn (IZA), Francis Vella (Georgetown University, GCER, and IZA) Place: Georgetown University, Washington, DC, USA Date: October 22 - October 26, 2012
The GU Economics Department and GCER join with IZA to host the inaugural IZA@DC Young Scholar Program. Its the main objective is to expose young scholars to the world's leading labor economists through a week of presentations and to give them the opportunity to collaborate on research projects with IZA Research Fellows in the DC area.For more details and for procedures to apply see IZA Call for Nominations.Mar 24, 2012
Prof. Axel AndersonMar 10, 2012Jan 26, 2012
The memorandum extends the existing collaborative efforts between the Econ Department and IZA and initiates a number of new programs that include formal exchanges of faculty and graduate students and jointly sponsored workshops and conferences. These initiatives will largely work through GCER in coordination with IZA.Jan 20, 2012
Professors Habyarimana and JackJan 5, 2012
Two recent articles highlight research by GCER Fellow Luca Flabbi on wage inequality between men and women in the workplace.
A December article in Georgetown College News, and a January article in Georgetown University headline news discuss much of Flabbi's recent research on hiring practices, job and wage inequality, and the effects of job search and bargaining in the U.S. labor market.Nov 29, 2011
Junior, the Risky Investment, Grandma, the Insurance Contract, and other bedtime stories as told by Gete and Porchia.
Children are sources of costs and benefits, both monetary and non-monetary. For these reasons economists have studied children as "assets" since the path-breaking work of Nobel Prize winner Gary Becker. However, GCER Faculty Fellow Pedro Gete and co-author Paolo Porchia claim in their recent paper "Fertility and Consumption when Having a Child is a Risky Investment" that the fertility literature is missing an important element: children are risky assets.
The risk comes from a variety of sources. A would-be parent cannot precisely forecast the cost of raising a child (presumably such costs would include opportunity cost of the parents' time and the effects on their career paths) or the benefits that a child will provide. A parent cannot predict, for example, how often her children will get sick, how much money and time it will cost to treat an illness, whether the child will need extra support at school or instead gets a full scholarship to go to Harvard, or whether her child becomes a successful actor who brings in millions of dollars to the family. Moreover, insure markets for many of the aforementioned contingencies, especially those related to the time costs for the parents, do not exist. As risky assets, children are at most partially insurable. Consequently, childbearing adds another source of risk to households.
Gete and Porchia study the consequences for fertility and consumption, taking into account that children are a source of risk that interacts with other risks borne by the parents. They develop a model in which the decision to have a child is comparable to the decision to exercise a financial option. In the model a household has an initial wealth and every period receives some stochastic income (assumed exogenous for simplicity). The household gets utility from consumption and can save at a risk free rate. Moreover, she can decide to have a child or to postpone the decision. If the household has a child then she is acquiring an irreversible, durable and non-tradable asset that gives her non-stochastic utility, but implies some stochastic exogenous costs. These uncertain costs can be correlated with income and are not insured by financial markets.
Gete and Porchia establish several new theoretical results: i) Higher cost volatility diminishes fertility and consumption. Intuitively, risk averse households are less willing to invest in riskier assets. Higher risk results in higher precautionary savings. ii) Risk aversion speeds up fertility and lowers consumption. This happens because a child is a safe source of utility (for example, parents know that they will enjoy playing with their children). This safe utility flow is an important characteristic of children when we think of them as an asset class. It pushes the household for early fertility to enjoy the children as an insurance mechanism against fluctuations in consumption. iii) Fertility is increasing in the correlation between income and child cost shocks. The household is reluctant to have children when positive cost shocks come together with bad income shocks (for example, households for whom child illnesses imply to reduce hours of work and this have negative consequences for the parents' careers). A pro-natalist government may encourage fertility by altering this correlation with policies of State-paid leaves when the child is ill, or by supporting childcare. iv) The sign of the correlation determines whether higher income volatility speeds up or delays fertility, although the effect decays with risk aversion. Households with volatile earnings will have more children if children hedge income shocks (for example, having a child increases the likelihood of receiving a subsidy when the parent is unemployed).
Finally, to motivate the empirical appeal of the theory, Gete and Porchia identify a variable that can serve as a proxy for child cost risk: the distance of the grandparents to the parents. They assume that households whose parents live close by face less uncertainty from the time costs shocks associated with raising a child. They show that this variable is a highly significant predictor of the likelihood of childbearing. The higher the distance to the parents the smaller the likelihood of childbearing. Distance is significant also when controlling for variables commonly associated with the fertility decision, such as income, wealth, income over wealth, age of the householder, race, religion and education. Hence, when financial markets do not insure the risks associated with child rearing, an available grandparent turns out to be excellent insurance contract.Nov 8, 2011
GCER is pleased to announce that David Card, the Class of 1950 Professor of Economics at UC Berkeley, will present the 2012 Razin Policy Lecture at Georgetown University.
This year's Razin Lecture is entitled "Social Interactions" and takes place on Tuesday, April 17, 2012, at 4:00 pm in the BSB 490 Fisher Colloquium.
Professor Card was honored by the American Economic Association in 1995 with the John Bates Clark Medal. More he received the Frisch Medal in 2007 for the outstanding research paper (with D. Hyslop) published in Econometrica in 2005, and the IZA Prize in Labor Economics in 2006, from Germany's Institute for the Study of Labor, the leading award for labor economists.
David Card's research spans a wide range of issues and problems in labor economics. He research topics include the effect of minimum wage, the impacts of immigration, the consequences of racial segregation, and the effects policy changes on health insurance utilization and on health. Card's most recent work studies peer effects and inequality in the workplace.Sep 10, 2011
The Georgetown Department of Economics and Center for Economic Research is very pleased to announce that John Rust will be joining the department in the Fall of 2012 as Professor and GCER Faculty Fellow. Rust will be moving over to Georgetown from the University of Maryland where he has resided as Professor of Economics since 2001.
Rust's research is internationally renowned, and spans both the technical frontier and the practical side of economics. He is best known for his research on the development of computationally tractable methods for solving and estimating models of dynamic decision making under uncertainty.In a series of widely acclaimed publications Rust demonstrated that these discrete dynamic programming models provide accurate predictions of actual human decision making in a variety of contexts. Along the way, he pioneered new algorithms for solving these problems, attracting the attention of leading computer scientists and mathematicians working in the field of computational complexity as well as the economists working in this field.
Rust has received numerous awards for his research. He was awarded an Alfred Sloan Fellowship in 1988 and a fellowship at the Hoover Institution in Stanford in 1991. He was elected as a Fellow of the Econometric Society in 1993 and became a fellow of the TIAA-CREF Institute (the largest retirement fund for college professors) in 2003. In 1997, Rust received the Ragnar Frisch Medal from The Econometric Society for his first empirical application of the method in the paper, "Optimal Replacement of GMC Bus Engines: An Empirical Model of Harold Zurcher."
Rust has been on the editorial board of numerous journals including serving as an Associate Editor at Econometrica and co-editor of the Journal of Applied Econometrics. He has been a consultant to the U.S. Social Security Administration and a member of the Long Term Modeling Advisory Panel at the Congressional Budget Office. He has served as a member of the Economics Panel of the National Science Foundation and the Committee on National Statistics of the National Academy of Science, as a member of the Panel on Retirement Income Modeling, and served as an advisor to the Steering Committee that advised on the design of the Health and Retirement Survey (HRS).
Most recently Rust has served as a member of the Technical Advisory Panel to the Social Security Advisory Board, and a consultant to the Social Security Administration on long term policy modeling via a research contract between SSA and the Urban Institute.
Rust received his PhD from MIT in 1983, specializing in applied econometrics. He held previous faculty positions, first at the University of Wisconsin from 1983 to 1995, and then at Yale from 1996 to 2001. In all his faculty appointments, he has been Professor of Economics since 1990.Aug 15, 2011
Georgetown Department of Economics and Center for Economic Research welcomes its newest member, Pedro Carneiro who now joins the Department and GCER in the Fall of 2011. Carneiro arrives from University College London where he currently holds the rank of Reader, and will hold the rank of Associate Professor at Georgetown.
Carneiro comes to GCER with an outstanding record of scholarship and expertise in the areas of labor economics and applied microeconometrics. His research focuses on human capital development, that is, the ways in which individuals acquire the skills that determine their earnings potential. These include early childhood development, education, and on-the-job training.
Carneiro has much-cited publications in Econometrica and The American Economic Review among other highly respected outlets. His work figured prominently in a number of areas. One paper, in particular, that has received much attention was co-written with James Heckman and concerns heterogeneous treatment effects. A policy designed to increase college attendance, for example, can have a strong effect on some parts of the target population but weak (or even negative) effects on other parts of that population. For many purposes, it is important to be able to estimate the distribution of treatment effects. Carneiro and Heckman use a ``latent factors" approach to estimate the heterogeneous treatment effects, and this approach is now considered to be a major methodological innovation in the field.
Carneiro received his PhD at the University of Chicago in 2003. After completing his PhD, he joined the faculty of University College London.Aug 5, 2011
GCER Economist and former Fed Monetary Affairs Director Brian Madigan was interviewed by The Wall Street Journal in an August 2 article on Federal Reserve Bank policy. Madigan, along with other recent Monetary Affairs directors Donald Kohn and Vincent Reinhart, signaled support for a new Fed bond purchase program if inflation slows and the economy continues its recent slowdown.Jun 23, 2011
Ludema, Mayda, and Mishra show that when firms talk, governments listen.
How do firms obtain favors from the government? The usual answer is, by spending money, though debate rages in the literature about what kind of spending, lobbying expenditures or campaign contributions, is more important. GCER faculty fellows Rodney Ludema and Anna Maria Mayda, along with IMF economist, Prachi Mishra, challenge this spending-centered view in their recent paper, "Protection for Free? The Political Economy of U.S. Tariff Suspensions." They study the political influence of individual firms on Congressional decisions to suspend tariffs on U.S. imports of intermediate goods.
Ludema, Mayda, and Mishra develop a model in which firms influence the government by transmitting information about the value of protection, using verbal messages and political spending. They estimate this model using firm-level data on tariff suspension bills and political spending from 1999-2006 and find that indeed verbal opposition by import-competing firms, even without spending, significantly reduces the probability of a suspension being granted. They further find that spending by proponent and opponent firms sway this probability in opposite directions. The effect of verbal opposition is substantially larger than that of both opponent and proponent spending. This is explained by a combination of two factors: verbal opposition conveys more information than opponent spending does, and the government values the harm to opponents more than the gain to proponents.
The table below is taken from the paper and shows how the success rates of bills depend on the actions of the firms. The overall success rate is of suspension bills is 79%. If the proponent of the bill is an "organized" firm (defined as one that makes positive lobbying expenditures), the success rate is 80%, whereas if it is unorganized, it is only 75%. If the definition of organization is expanded to include positive PAC contributions in addition to lobbying, the success rates are 81% and 72%, respectively. If a bill is unopposed the success rate is 90% on average. The success rate drops to a mere 29% if the bill is opposed by an unorganized domestic firm (27% under the PAC definition) and only 11% if the opponent is organized (16% with PAC). Thus, while the presence of a political organization effect is in line with expectations, this effect appears to be much smaller than the effect of verbal opposition.Jun 10, 2011
Professor Reinhart at the Alumni Conference
Keynote Speaker Carmen Reinhart Presents Data on "Financial Repression"
The Inaugural GCER Alumni Conference was held on June 2-3 at Georgetown University. The conference, organized largely by former PhD students from Georgetown, featured research presented by many prominent economists including former Georgetown students who now hold faculty and scholarly positions at universities and research institutions world-wide.
The conference's Keynote speech was delivered by Professor Carmen M. Reinhart,Dennis Weatherstone Senior Fellow at Peterson Institute for International Economics. Professor Reinhart spoke about her latest paper on financial repression which evaluates the consequences of restrictive interest rate policies by governments.Apr 13, 2011
Professors Pande and Wantchekon
The Annual Mini-Conference on Political Economy will take place on Wednesday, April 27 from 2:30pm – 5:30pm in the Mortara Center for International Studies, 3600 N Street. This year's talks are:
"Do Informed Voters Make Better Choices? Experimental Evidence from India," by Rohini Pande, Mohammed Kamal Professor of Public Policy, Harvard Kennedy School of Government.
"Deliberative Electoral Campaigns and Transition from Clientelism: Evidence from Benin," by Leonard Wantchekon, Professor of Politics and Economics, New York University.
The event is jontly sponsored by GCER, the Departments of Economics and Government, and the School of Foreign Policy. For further details, see GCER's Monthly Calendar.Mar 27, 2011
Esther Duflo, a development economist at MIT and one of the leading experts in the field of program evaluation will speak about her new book Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty on April 26.
The Lecture, Reception, and Book Signing takes place on Tuesday, April 26, 12 noon - 2:00 p.m. in the Rafik B. Hariri Building (Business School)Mar 26, 2011
In a panel hosted by GCER's Matthew Canzoneri, European Central Bank Executive Board member Jose Manuel Gonzalez-Paramo defended the Euro at a recent conference on Spanish economy held at Georgetown University. The event was picked up by many in the financial press, including Reuters , The Wall Street Journal, and Bloomberg.Mar 5, 2011
Last year's Carroll Round participants
The Carroll Round, the only undergraduate conference for International Economics, is hosted annually at Georgetown University and will be held Thursday, April 14 through Sunday, April 17 this year. The conference provides top undergraduate students from around the world the unique opportunity to present and discuss their research with other students, professors, and policy-makers. This year's featured speakers are Prof. Jeffrey Sachs, Nobel Laureate Joseph Stiglitz, and Prof. Jagdish Bhagwati. For further information about the conference, please visit: Carroll RoundFeb 15, 2011
A new paper by GCER Fellow William Jack and co-author Tavneet Suri of MIT examining mobile banking in Kenya was recently featured in the NY Times Freakonomics Blog. This is the second time that Jack's research on Kenya was picked up by the popular NY Times blog. The first reported last year on a field experiment by Jack and co-author James Habyarimana of Georgetown GPPI, examining the effect of informative posters on Kenyan traffic fatalities.Jan 20, 2011
Exchange-Rate Dynamics by Martin Evans, GCER Research Fellow and Professor of Economics at Georgetown University. Published by Princeton University Press & forthcoming in 2011.
From the Princeton U. Press web site: ``Variations in the foreign exchange market influence all aspects of the world economy, and understanding these dynamics is one of the great challenges of international economics. This book provides a new, comprehensive, and in-depth examination of the standard theories and latest research in exchange-rate economics. Covering a vast swath of theoretical and empirical work, the book explores established theories of exchange-rate determination using macroeconomic fundamentals, and presents unique microbased approaches that combine the insights of microstructure models with the macroeconomic forces driving currency trading." (Read more from the PUP site ).Jan 6, 2011
Bachmann and Bai examine the effects of wealth bias in the policy process.
In their paper, "Government Purchases Over the Business Cycle: the Role of Economic and Political Inequality (GCER Working Paper, 2010)," Ruediger Bachmann and Jinhui H. Bai explore the implications of economic and political inequality for the business cycle comovement of government purchases in the U.S. They conduct theirquantitative experiments in a standard model of economic growth in which public expenditures financed by income taxes are determined by the political process. A key feature of their study is a wealth bias in the political process that disproportionately weights the clout of upper income groups. Increases in income inequality therefore lead to increased political inequality. The analysis shows a negative correlation between wealth bias and the degree of business cycle comovement of government purchases.The estimated wealth bias that matches the observed mild procyclicality of government purchases in the data, is also consistent with cross-sectional survey data on political participation.
This effect is illustrated in the graph below where increases in the wealth bias of the policy-making process can be seen to dampen the correlation between income and purchases.Dec 26, 2010
James Albrecht, Axel Anderson, Mark Huggett, and Susan Vroman.
Congratulations to the four GCER Fellows cited in this year's Nobel summary, MARKETS WITH SEARCH FRICTIONS . James Albrecht, Axel Anderson, Susan Vroman, and Mark Huggett were all cited for work related to this year's Nobel recipients, Peter Diamond, Dale Mortensen, and Christopher Pissarides. Albrecht and Vroman were invited to attend the Nobel ceremony in Sweden in December. At right they are pictured at the ceremony with Peter Diamond and past Nobel recipient Daniel McFadden.Sep 20, 2010
How should the vulnerability of different securities to "systemic risk" be assessed? GCER's Luca Anderlini (right) and LSE's Leonardo Felli propose a simple measure in a recent article in Vox.Sep 10, 2010
Greetings from the Chair. Welcome to the Georgetown Center for Economic Research (GCER), the newly established research institute housed within the Department of Economics at Georgetown University. GCER is set up to support the Department in its efforts to fulfill its core research and instructional mission for the University. Its primary goal is to foster an environment of open and rigorous scientific inquiry into current economic policy issues and problems. We think you'll find our programs and research interesting and innovative. More about GCER's mission can be found on About GCER , or scan our activities from the menus.