| 1. |
- Benaim, Michel, et al.
(författare)
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Deterministic Approximation of Stochastic Evolution in Games
- 2003
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Ingår i: Econometrica. - : Wiley-Blackwell. - 1468-0262 .- 0012-9682. ; 71:3, s. 873-903
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Tidskriftsartikel (refereegranskat)abstract
- This paper provides deterministic approximation results for stochastic processes that arise when finite populations recurrently play finite games. The processes are Markov chains, and the approximation is defined in continuous time as a system of ordinary differential equations of the type studied in evolutionary game theory. We establish precise connections between the long-run behavior of the discrete stochastic process, for large populations, and its deterministic flow approximation. In particular, we provide probabilistic bounds on exit times from and visitation rates to neighborhoods of attractors to the deterministic flow. We sharpen these results in the special case of ergodic processes. Copyright Econometric Society, 2002.
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| 2. |
- Sargent, TJ, et al.
(författare)
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Two questions about European unemployment
- 2008
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Ingår i: Econometrica. - : Econometric Society: Econometrica. - 1468-0262 .- 0012-9682. ; 76:1, s. 1-29
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Tidskriftsartikel (refereegranskat)
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| 3. |
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| 4. |
- Attanasio, Orazio, et al.
(författare)
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(S)Cars and the Great Recession
- 2022
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Ingår i: Econometrica. - 0012-9682 .- 1468-0262. ; 90:5, s. 2319-2356
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Tidskriftsartikel (refereegranskat)abstract
- United States households' consumption expenditures and car purchases collapsed during the Great Recession and more so than income changes would have predicted. Using CEX data, we show that both the extensive and the intensive car spending margins contracted sharply in the Great Recession. We also document significant cross‐cohort differences in the impact of the Great Recession including a stronger reduction in car spending by younger cohorts. We draw inference on the sources of the Great Recession by investigating which shocks can explain household choices in a 60 period life‐cycle model with idiosyncratic and aggregate shocks fitted to aggregate and life‐cycle moments. We find that the Great Recession was caused by a combination of large aggregate income and wealth shocks, while cross‐cohort adjustment patterns imply a role for life‐cycle income profile shocks. We also find a role for car loan premia shocks in accounting for car spending and car loans.
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| 5. |
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| 6. |
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| 7. |
- Besley, Timothy, et al.
(författare)
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State Capacity, Conflict, and Development
- 2010
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Ingår i: Econometrica. - 0012-9682 .- 1468-0262. ; 78:1, s. 1-34
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Tidskriftsartikel (refereegranskat)abstract
- The absence of state capacities to raise revenue and to support markets is a key factor in explaining the persistence of weak states. This paper reports on an ongoing project to investigate the incentive to invest in such capacities. The paper sets out a simple analytical structure in which state capacities are modeled as forward looking investments by government. The approach highlights some determinants of state building including the risk of external or internal conflict, the degree of political instability, and dependence on natural resources. Throughout, we link these state capacity investments to patterns of development and growth.
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| 8. |
- Boppart, Timo
(författare)
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Structural Change and the Kaldor Facts in a Growth Model With Relative Price Effects and Non-Gorman Preferences
- 2014
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Ingår i: Econometrica. - 0012-9682 .- 1468-0262. ; 82:6, s. 2167-2196
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Tidskriftsartikel (refereegranskat)abstract
- U.S. data reveal three facts: (1) the share of goods in total expenditure declines at a constant rate over time, (2) the price of goods relative to services declines at a constant rate over time, and (3) poor households spend a larger fraction of their budget on goods than do rich households. I provide a macroeconomic model with non-Gorman preferences that rationalizes these facts, along with the aggregate Kaldor facts. The model is parsimonious and admits an analytical solution. Its functional form allows a decomposition of U.S. structural change into an income and substitution effect. Estimates from micro data show each of these effects to be of roughly equal importance.
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| 9. |
- Buhai, I. Sebastian, et al.
(författare)
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RETURNS TO TENURE OR SENIORITY?
- 2014
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Ingår i: Econometrica. - 0012-9682 .- 1468-0262. ; 82:2, s. 705-730
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Tidskriftsartikel (refereegranskat)abstract
- This study documents two empirical facts using matched employer-employee data for Denmark and Portugal. First, workers who are hired last, are the first to leave the firm. Second, workers' wages rise with seniority, where seniority is defined as a worker's tenure relative to the tenure of his colleagues. Controlling for tenure, the probability of a worker leaving the firm decreases with seniority. The increase in expected seniority with tenure explains a large part of the negative duration dependence of the separation hazard. Conditional on ten years of tenure, the wage differential between the 10th and the 90th percentiles of the seniority distribution is 1.1-1.4 percentage points in Denmark and 2.3-3.4 in Portugal.
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| 10. |
- Davila, Julio, et al.
(författare)
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Constrained Efficiency in the Neoclassical Growth Model With Uninsurable Idiosyncratic Shocks
- 2012
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Ingår i: Econometrica. - 0012-9682 .- 1468-0262. ; 80:6, s. 2431-2467
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Tidskriftsartikel (refereegranskat)abstract
- We investigate the welfare properties of the one-sector neoclassical growth model with uninsurable idiosyncratic shocks. We focus on the notion of constrained efficiency used in the general equilibrium literature. Our characterization of constrained efficiency uses the first-order condition of a constrained planner's problem. This condition highlights the margins of relevance for whether capital is too high or too low: the factor composition of income of the (consumption-)poor. Using three calibrations commonly considered in the literature, we illustrate that there can be either over- or underaccumulation of capital in steady state and that the constrained optimum may or may not be consistent with a nondegenerate long-run distribution of wealth. For the calibration that roughly matches the income and wealth distribution, the constrained inefficiency of the market outcome is rather striking: it has much too low a steady-state capital stock.
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| 11. |
- Egger, Dennis, et al.
(författare)
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General Equilibrium Effects of Cash Transfers : Experimental Evidence From Kenya
- 2022
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Ingår i: Econometrica. - 0012-9682 .- 1468-0262. ; 90:6, s. 2603-2643
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Tidskriftsartikel (refereegranskat)abstract
- How large economic stimuli generate individual and aggregate responses is a central question in economics, but has not been studied experimentally. We provided one-time cash transfers of about USD 1000 to over 10,500 poor households across 653 randomized villages in rural Kenya. The implied fiscal shock was over 15 percent of local GDP. We find large impacts on consumption and assets for recipients. Importantly, we document large positive spillovers on non-recipient households and firms, and minimal price inflation. We estimate a local transfer multiplier of 2.5. We interpret welfare implications through the lens of a simple household optimization framework.
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| 12. |
- Ellingsen, Tore, et al.
(författare)
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Rational Bubbles in UK Housing Markets: Comment on "No-Bubble Condition: Model-Free Tests in Housing Markets"
- 2020
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Ingår i: Econometrica. - : Econometric Society: Econometrica. - 1468-0262 .- 0012-9682. ; 88:4, s. 1755-1766
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Tidskriftsartikel (refereegranskat)abstract
- Giglio, Maggiori, and Stroebel (2016) show that there is no significant price difference between freeholds and ultra-long leaseholds in the UK housing market. They claim that this finding precludes the presence of large rational bubbles, as these can only attach to the price of freeholds. But the conclusion presumes that leaseholders cannot acquire bubbles through enfranchisement at favorable prices. We find that the presumption is violated. Enfranchisement rights are comprehensive and cheap to exercise. We also dispute the counter-argument that cheap enfranchisement proves that market participants, if they have rational expectations, must have explicitly concluded that freehold prices are bubbleless.
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| 13. |
- Fos, Vyacheslav, et al.
(författare)
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Activism, Strategic Trading, and Liquidity
- 2018
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Ingår i: Econometrica. - : Econometric Society: Econometrica. - 1468-0262 .- 0012-9682. ; 86:4, s. 1431-1463
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Tidskriftsartikel (refereegranskat)abstract
- We analyze dynamic trading by an activist investor who can expend costly effort to affect firm value. We obtain the equilibrium in closed form for a general activism technology, including both binary and continuous outcomes. Variation in parameters can produce either positive or negative relations between market liquidity and economic efficiency, depending on the activism technology and model parameters. Two results that contrast with the previous literature are that (a) the relationship between market liquidity and economic efficiency is independent of the activist's initial stake for a broad set of activism technologies, and (b) an increase in noise trading can reduce market liquidity because it increases uncertainty about the activist's trades (the activist trades in the opposite direction of noise traders) and thereby increases information asymmetry about the activist's intentions.
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| 14. |
- Golosov, Mikhail, et al.
(författare)
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Optimal Taxes on Fossil Fuel in General Equilibrium
- 2014
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Ingår i: Econometrica. - 0012-9682 .- 1468-0262. ; 82:1, s. 41-88
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Tidskriftsartikel (refereegranskat)abstract
- We analyze a dynamic stochastic general-equilibrium (DSGE) model with an externality—through climate change—from using fossil energy. Our central result is a simple formula for the marginal externality damage of emissions (or, equivalently, for the optimal carbon tax). This formula, which holds under quite plausible assumptions, reveals that the damage is proportional to current GDP, with the proportion depending only on three factors: (i) discounting, (ii) the expected damage elasticity (how many percent of the output flow is lost from an extra unit of carbon in the atmosphere), and (iii) the structure of carbon depreciation in the atmosphere. Thus, the stochastic values of future output, consumption, and the atmospheric CO2 concentration, as well as the paths of technology (whether endogenous or exogenous) and population, and so on, all disappear from the formula. We find that the optimal tax should be a bit higher than the median, or most well-known, estimates in the literature. We also formulate a parsimonious yet comprehensive and easily solved model allowing us to compute the optimal and market paths for the use of different sources of energy and the corresponding climate change. We find coal—rather than oil—to be the main threat to economic welfare, largely due to its abundance. We also find that the costs of inaction are particularly sensitive to the assumptions regarding the substitutability of different energy sources and technological progress.
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| 15. |
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| 16. |
- Krusell, Per, et al.
(författare)
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Temptation and Taxation
- 2010
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Ingår i: Econometrica. - : Econometric Society. - 0012-9682 .- 1468-0262. ; 78:6, s. 2063-2084
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Tidskriftsartikel (refereegranskat)
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| 17. |
- Myerson, Roger, et al.
(författare)
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Tenable Strategy Blocks and Settled Equilibria
- 2015
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Ingår i: Econometrica. - : Econometric Society: Econometrica. - 0012-9682 .- 1468-0262. ; 83:3, s. 943-976
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Tidskriftsartikel (refereegranskat)abstract
- When people interact in familiar settings, social conventions usually develop so that people tend to disregard alternatives outside the convention. For rational players to usually restrict attention to a block of conventional strategies, no player should prefer to deviate from the block when others are likely to act conventionally and rationally inside the block. We explore two set-valued concepts, coarsely and finely tenable blocks, that formalize this notion for finite normal-form games. We then identify settled equilibria, which are Nash equilibria with support in minimal tenable blocks. For a generic class of normal-form games, our coarse and fine concepts are equivalent, and yet they differ from standard solution concepts on open sets of games. We demonstrate the nature and power of the solutions by way of examples. Settled equilibria are closely related to persistent equilibria but are strictly more selective on an open set of games. With fine tenability, we obtain invariance under the insertion of a subgame with a unique totally mixed payoff-equivalent equilibrium, a property that other related concepts have not satisfied.
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| 18. |
- Szeidl, Adam, et al.
(författare)
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MEDIA CAPTURE THROUGH FAVOR EXCHANGE
- 2021
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Ingår i: Econometrica. - 0012-9682 .- 1468-0262. ; 89:1, s. 281-310
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Tidskriftsartikel (refereegranskat)abstract
- We use data from Hungary to establish two results about the relationship between the government and the media. (i) We document large advertising favors from the government to connected media, and large corruption coverage favors from connected media to the government. Our empirical strategy exploits sharp reallocations around changes in media ownership and other events to rule out market-based explanations. (ii) Under the assumptions of a structural model, we distinguish between owner ideology and favor exchange as the mechanism driving favors. We estimate our model exploiting within-owner changes in coverage for identification and find that both mechanisms are important. These results imply that targeted government advertising can meaningfully influence content. Counterfactuals show that targeted advertising can also influence owner ideology, by making media ownership more profitable to pro-government connected investors. Our results are consistent with qualitative evidence from many democracies and suggest that government advertising affects media content worldwide.
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| 19. |
- Tyrefors Hinnerich, Björn, et al.
(författare)
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DEMOCRACY, REDISTRIBUTION, AND POLITICAL PARTICIPATION : EVIDENCE FROM SWEDEN 1919-1938
- 2014
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Ingår i: Econometrica. - 0012-9682 .- 1468-0262. ; 82:3, s. 961-993
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Tidskriftsartikel (refereegranskat)abstract
- In this paper, we compare how two different types of political regimes-direct versus representative democracy-redistribute income toward the relatively poor segments of society after the introduction of universal and equal suffrage. Swedish local governments are used as a testing ground since this setting offers a number of attractive features for a credible impact evaluation. Most importantly, we exploit the existence of a population threshold, which partly determined a local government's choice of democracy to implement a regression-discontinuity design. The results indicate that direct democracies spend 40-60 percent less on public welfare. Our interpretation is that direct democracy may be more prone to elite capture than representative democracy since the elite's potential to exercise de facto power is likely to be greater in direct democracy after democratization.
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| 20. |
- van den Berg, Gerard J., et al.
(författare)
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Long-Run Effects of Dynamically Assigned Treatments : A New Methodology and an Evaluation of Training Effects on Earnings
- 2022
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Ingår i: Econometrica. - : The Econometric Society. - 0012-9682 .- 1468-0262. ; 90:3, s. 1337-1354
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Tidskriftsartikel (refereegranskat)abstract
- We propose and implement a new method to estimate treatment effects in settings where individuals need to be in a certain state (e.g., unemployment) to be eligible for a treatment, treatments may commence at different points in time, and the outcome of interest is realized after the individual left the initial state. An example concerns the effect of training on earnings in subsequent employment. Any evaluation needs to take into account that some of those who are not trained at a certain time in unemployment will leave unemployment before training while others will be trained later. We are interested in effects of the treatment at a certain elapsed duration compared to "no treatment at any subsequent duration." We prove identification under unconfoundedness and propose inverse probability weighting estimators. A key feature is that weights given to outcome observations of nontreated depend on the remaining time in the initial state. We study effects of a training program for unemployed workers in Sweden. Estimates are positive and sizeable, exceeding those obtained with common static methods. This calls for a reappraisal of training as a tool to bring unemployed back to work.
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