| 1. |
- Akay, Alpaslan, 1975, et al.
(författare)
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Global terror, well-being and political attitudes
- 2020
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 123
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Tidskriftsartikel (refereegranskat)abstract
- A growing literature examines the impact of terror on subjective well-being, focusing mainly on specific events and their local consequences. In the present paper, we study the effect of global terror intensity on the life satisfaction of Western citizens. We leverage panel datasets for six countries that we combine with daily information on all the terror attacks in the world over 20 years. Terror diminishes individual subjective well-being globally and continually. Using high frequency data over the long-run also allows us to provide a rich heterogeneity analysis on the relevant dimensions of terror. The effect is particularly strong for events broadcasted on Western television, when respondents are physically or genetically close to the victims, or for individuals who feel more exposed (e.g. living in urban areas). For a subset of countries, we also study the impact of terror on political attitudes and find that global terror significantly increases the intention to vote for conservative parties. (C) 2020 Elsevier B.V. All rights reserved.
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| 2. |
- Akay, Alpaslan, 1975, et al.
(författare)
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Purchasing-Power-Parity and the Saving Behavior of Temporary Migrants
- 2021
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 134
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Tidskriftsartikel (refereegranskat)abstract
- How does saving behavior of immigrants respond to changes in purchasing power parity between the source and host countries? We examine this question by building a theoretical model of joint return-migration and saving decisions of temporary migrants and then test its implications by using data from the German Socioeconomic Panel on immigrants from 92 source countries. As implied by our theoretical model, we find that the saving rate increases in the nominal exchange rate but decreases in the source-country price level and that the absolute magnitude of both relationships increases as the time to retirement becomes shorter. At the median level of years to retirement, the absolute values of the elasticity of savings with respect to the nominal exchange rate and with respect to the source-country price level are both close to unity. Moreover, as we gradually restrict the sample to individuals with stronger return intentions, the estimated magnitudes become larger and their statistical significance higher.
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| 3. |
- Berg, Heléne
(författare)
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Politicians' payments in a proportional party system
- 2020
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 128
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Tidskriftsartikel (refereegranskat)abstract
- Are there monetary returns to politics? This question is approached in this paper, as one of few to quantify the monetary returns to holding political office in a country with proportional representation system. I apply a difference-in-difference setting with a carefully chosen control group to rich data on candidates to the Swedish national parliament. Both shortand long-run effects of being elected on different types of income are estimated. Results show that, yes, mostly thanks to relatively high remuneration while still in office, politics can yield positive monetary returns. In the long-run however, the effect is instead compositional in the sense that ex-politicians receive more pension income and work less.
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| 4. |
- Bietenbeck, Jan, et al.
(författare)
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Tuition Fees and Educational Attainment
- 2023
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Ingår i: European Economic Review. - : Elsevier BV. - 1873-572X .- 0014-2921. ; 154
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Tidskriftsartikel (refereegranskat)abstract
- Following a landmark court ruling in 2005, more than half of Germany's universities started charging tuition fees, which were later abolished in a staggered manner. We exploit the fact that even students who were already enrolled had to start paying fees. We show that fees increase study effort and degree completion among these students. However, fees also decrease first-time university enrollment among high school graduates. Combining this enrollment impact with the effect on completion, we find that fees around the zero-price margin have only little effect on overall educational attainment. We conclude by discussing policies targeting the separate effect margins of fees and caution against a general abolition.
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| 5. |
- Braunerhjelm, Pontus, 1953-, et al.
(författare)
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Labour market mobility, knowledge diffusion and innovation
- 2020
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Ingår i: European Economic Review. - : Elsevier B.V.. - 0014-2921 .- 1873-572X. ; 123
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Tidskriftsartikel (refereegranskat)abstract
- Utilising a unique Swedish matched employer–employee dataset, which has been pooled with firm-level patent application data, we provide new evidence that knowledge workers’ mobility has a positive and strongly significant impact on firm innovation output, as measured by firm patent applications. The effect is statistically and economically highly significant for knowledge workers who have previously worked in a patenting firm (the learning-by-hiring effect), whereas only limited impact could be detected for firms losing knowledge workers (the learning-by-diaspora effect). No effects were detected for inexperienced university graduates. Finally, the effect is more pronounced when the joining worker originates from within the same region. © 2020 Elsevier B.V.
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| 6. |
- Buhren, C., et al.
(författare)
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The demand for punishment to promote cooperation among like-minded people
- 2021
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 138
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Tidskriftsartikel (refereegranskat)abstract
- We use an experiment to test the hypothesis that groups consisting of like-minded cooperators are able to cooperate irrespective of punishment and therefore have a lower demand for a costly punishment institution than groups of like-minded free riders, who are unable to cooperate without punishment. We also predict that the difference in the demand for punishment is particularly large when members know about the composition of their group. The experimental results confirm these hypotheses. However, the information about the composition of the group turns out to be even more important than we expected. It helps cooperative groups to avoid wasting resources for an unneeded punishment institution. In uncooperative groups, it helps members to recognize the need for punishment early on and not to follow an uncooperative path that produces a persistently competitive attitude. These findings highlight the role of group composition and information for institution formation.
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| 7. |
- Chen, Daniel L., et al.
(författare)
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Non-confrontational extremists
- 2023
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Ingår i: European Economic Review. - : Elsevier. - 0014-2921 .- 1873-572X. ; 157
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Tidskriftsartikel (refereegranskat)abstract
- In many contexts individuals are subject to norms and decisions they disagree with ideologically. What is the effect of regularly being in an ideological minority on the propensity to confront majority norms and decisions? We study this in an ideologically-salient field setting - US appeals courts - using exogenous predictors of ideology and random assignment of judges. We find that ideological interaction silences extremists: Judges who are ideologically extreme relative to their peers are less confrontational - dissent less often - than other judges, despite shaping case outcomes the least. Considering many mechanisms, we find that a model of peer pressure where agents perceive concave ideological costs can explain the observations.
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| 8. |
- Davidson, Carl, et al.
(författare)
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Globalization, the jobs ladder and economic mobility
- 2020
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Ingår i: European Economic Review. - : Elsevier BV. - 1873-572X .- 0014-2921. ; 127
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Tidskriftsartikel (refereegranskat)abstract
- Globalization affects the mix of jobs available in an economy and the rate at which workers gain skills. We develop a model in which firms differ in terms of productivity and workers differ in skills, and use the model to examine how globalization affects the wage distribution and the career path of workers as they move up the jobs ladder. We calibrate the model using many of the same parameters and targeting the same moments of the US economy as Melitz and Redding (2015) and then investigate the impact of globalization. Our results indicate that although falling trade costs results in greater wage inequality, it also leads to a wider path up the jobs ladder and less time spent in entry level jobs.
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| 9. |
- Deschamps, Pierre, et al.
(författare)
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Labor mobility and racial discrimination
- 2021
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 135
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Tidskriftsartikel (refereegranskat)abstract
- We examine the effect of labor mobility constraints on racial wage discrimination. We show that when monopsony power is low because of relaxed labor mobility constraints, firms cannot act on their prejudice and discrimination disappears. This prediction is taken to the data by using an exogenous mobility shock on the European football labor market. The Bosman ruling lifted restrictions on European player mobility in 1995. Exploiting racial differences in a panel of top English clubs, we compare the pre- and post-Bosman ruling market. We find evidence that wage discrimination disappears only for workers whose mobility constraints have been lifted.
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| 10. |
- Escobar, Sebastian, et al.
(författare)
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Giving to the children or the taxman? : Lessons from a Swedish inheritance tax loophole
- 2023
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Ingår i: European Economic Review. - : Elsevier. - 0014-2921 .- 1873-572X. ; 153
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Tidskriftsartikel (refereegranskat)abstract
- Wealth transfer tax systems based on inheritances and inter vivos gifts, rather than estates, allow donors to shift wealth among potential recipients with the goal of minimizing tax burdens. However, tax minimization often requires the donor to give up control over wealth if the transfers are made as inter vivos. Usually, such behavior is difficult to analyze as many potential heirs and many different tax schedules are involved. In this article, we study a simple setting that allows us to obtain transparent and credible evidence of inheritance tax responses. Swedish heirs could easily lower their inheritance tax bills to zero by giving part of the inheritance to their children. Using detailed administrative data, we show that many heirs tax minimized in a precise fashion. Still, among those inheriting just above the exemption, only about a half avoided the tax. Preferences for holding wealth and information seem to play major roles. Our findings have general policy relevance, because similar (but more complex) tax avoidance strategies can be used to avoid any inheritance tax.
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| 11. |
- Gangadharan, Lata, et al.
(författare)
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Moving on up: The impact of income mobility on antisocial behaviour
- 2021
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 134
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Tidskriftsartikel (refereegranskat)abstract
- While the causes for upward income mobility receive considerable attention, the behavioural impact of the prospect of income mobility has been largely overlooked. We design an experiment and a survey to investigate if the prospect of income mobility influences antisocial behaviour. In the experiment, subjects can, at a cost, reduce others’ payoffs and low-income subjects can move up the income distribution. We find that antisocial behaviour occurs more frequently when mobility is not possible. High-income subjects benefit most from the prospect of upward mobility as they are less likely to encounter antisocial behaviour relative to the immobility setting. Mobility by means of effort has lower rates of antisocial behaviour relative to mobility through luck. This is particularly true for low-income individuals who are less likely to engage in antisocial behaviour when mobility occurs through effort. A large majority of survey respondents believe that mobility will decrease antisocial behaviour, predominantly because an environment where it is possible to move up is considered fairer.
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| 12. |
- Giagheddu, Marta, et al.
(författare)
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The macroeconomics of age-varying epidemics
- 2023
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 151
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Tidskriftsartikel (refereegranskat)abstract
- We incorporate age-specific socio-economic interactions in a SIR macroeconomic model to study the role of demographic factors for the COVID-19 epidemic evolution, its macroeconomic effects and possible containment measures. We capture the endogenous response of rational individuals who choose to reduce inter- and intra-generational social interactions, consumption- and labor-related personal exposure to the virus, while not internalizing the impact of their actions on others. We find that social distancing measures targeted to the elderly (who face higher mortality risk and are not part of the labor force) are best suited to save lives and mitigate output losses. The optimal economic shutdown generates small gains in terms of lives saved and large output losses, for any given type of social distancing. These results are confirmed by calibrating the model to match real epidemic and economic data in the context of a scenario exercise.
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| 13. |
- Goerg, Sebastian J., et al.
(författare)
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Norm violations and behavioral spillovers : Evidence from the lab and the field
- 2024
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Ingår i: European Economic Review. - : Elsevier. - 0014-2921 .- 1873-572X. ; 166
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Tidskriftsartikel (refereegranskat)abstract
- This paper explores the contagion effects of norm-violating behavior across decision situations. Through a series of laboratory and field experiments, we empirically establish the conditions under which norm-breaking behavior in one decision situation leads individuals who observe this to violate norms in other, distinct decision situations. Our laboratory findings show that these spillover effects are more pronounced when the norms underlying the decision situations are perceived to be similar. However, spillovers can also affect decision situations governed by relatively dissimilar norms if the observers of norm violations have had the opportunity to first violate the same norm as the observed violator themselves. In an accompanying field experiment, we underscore the economic importance of norm similarity for spillover effects. When workers are exposed to information about celebrities evading taxes, they exhibit significantly higher rates of workplace theft than those in the control group, yet this exposure does not negatively affect work morale.
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| 14. |
- Hart, Robert
(författare)
-
Growth, pollution, policy!
- 2020
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 126
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Tidskriftsartikel (refereegranskat)abstract
- We investigate long-run patterns in pollution flows in an optimally regulated, growing economy in which consumption and environmental quality are imperfectly substitutable and pollution is a by-product of production. We show that by-production implies that a scale effect will always drive increasing pollution when productivity is sufficiently low. On the other hand, if a clean technology exists it will always be chosen in the long run (hence emissions will approach zero) because for any strictly positive flow of pollution, willingness to pay to reduce that flow grows without bound as consumption grows without bound, whereas the cost of switching is bounded. We clarify the intuition using a specified model in which pollution arises as a by-product of the use of natural-resource inputs. (C) 2020 Elsevier B.V. All rights reserved.
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| 15. |
- Hart, Robert
(författare)
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The black paradox
- 2022
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 148
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Tidskriftsartikel (refereegranskat)abstract
- We model competition between an oil monopolist and competitive suppliers of coal and renewable energy in a dynamic general equilibrium framework. We show that market power- which disrupts the order of extraction-may lead to higher long-run emissions by encouraging early extraction of dirty fuels such as coal which would otherwise remain in the ground permanently; simply banning coal burning may be better than Pigovian taxation. Market power can of course be corrected by production subsidies to the monopolist, but when distribution affects welfare a better option is to offer subsidies to renewable energy, which force the oil monopolist to reduce her (limit) price but are never actually paid out.
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| 16. |
- Hellström, Jörgen, et al.
(författare)
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Socially Responsible Investments Among Parents and Adult Children
- 2020
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Ingår i: European Economic Review. - : Elsevier. - 0014-2921 .- 1873-572X. ; 121
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Tidskriftsartikel (refereegranskat)abstract
- Novel evidence is provided of a positive correlation between parents’ and their children's socially responsible mutual fund investment behavior. Although captured parent-child correlations reflect contemporary relationships, they reveal potentially important insight into the origin of heterogeneity in individuals’ prosocial behavior. Consistent with research on socialization, the results suggest an influence from both parents, stronger for mothers, and reinforced for parents both investing in socially responsible mutual funds. Parental resources during an individual's adolescence (financial and parental life experience) are further found to significantly explain individuals’ adult prosocial investment behavior. The results are robust to conditioning on a number of alternative explanations.
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| 17. |
- Holm-Hadulla, Fédéric, et al.
(författare)
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Heterogeneity in corporate debt structures and the transmission of monetary policy
- 2021
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 136
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Tidskriftsartikel (refereegranskat)abstract
- We study how differences in the aggregate structure of corporate debt affect the transmission of monetary policy in a panel of euro area countries. We find that standard policy tightening shocks raise the cost of loans relative to corporate bonds. In economies with a high share of bond finance, the resultant rise in the overall cost of credit is less pronounced as a smaller portion of corporate debt is remunerated at the loan rate and firms further expand their reliance on bonds. In economies with a low share of bond finance, the rise in the cost of credit is reinforced by a shift in the composition of debt towards bank loans. As a consequence, a higher bond share goes along with a weaker transmission of short-term policy rate shocks to real activity. By contrast, the real effects of monetary policy shocks to longer-term yields strengthen with the share of bond finance in the economy.
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| 18. |
- Kessel, Dany, et al.
(författare)
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Can simple advice eliminate the gender gap in willingness to compete?
- 2021
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 138
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Tidskriftsartikel (refereegranskat)abstract
- As a recent literature has demonstrated, men and women differ in their willingness to sort into competitive environments. In particular, men are more willing than women to compete. We investigate whether it is possible to reduce the gender gap in willingness to compete through an information intervention that informs participants of the gap and advises them about the potential earnings implications. We find that this simple information intervention reduced the gender gap, both in a laboratory study at a German university and in a field study with Swedish high school students. Whereas some participants (primarily high-performing women) benefited from the intervention, others lost out. We discuss the implications for efficiency and policy.
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| 19. |
- Lepage, Louis-Pierre, 1989-
(författare)
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Discrimination and sorting in the real estate market : Evidence from terrorist attacks and mosques
- 2023
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 153
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Tidskriftsartikel (refereegranskat)abstract
- I evaluate the impact of Islamist terrorist attacks, taken as exogenous shocks which may change individual perceptions towards Middle Easterners and Muslims, on the real-estate market. Using detailed property-level transactions data, I find that US property prices immediately near mosques fell by 5% in the two years following 9/11. I find little evidence of changes in the number of transactions, but an increase of up to 30% in the fraction of Middle Eastern and North African households locating near mosques, indicating increased ethnic and religious sorting from 9/11. Additional evidence suggests that price decreases across areas are in line with increased prejudice.
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| 20. |
- Lindbeck, Assar, et al.
(författare)
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Delegation of investment decisions, and optimal remuneration of agents
- 2020
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 129
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Tidskriftsartikel (refereegranskat)abstract
- We analyze an investor who delegates information acquisition and investment decisions to an agent. The investor cannot monitor the agent's effort or information. Optimal pay schemes contain bonuses that increase with the net return rate of the investment, but, unlike conventional contracts, at a decreasing rate. Moreover, investments with low return rates are penalized, again unlike conventional contracts. Nevertheless, it may be optimal for the investor to reward the agent above the agent's reservation utility. We examine the role of the agent's risk attitude for the shape of the pay scheme, and whether firing after bad investments is a more effective threat than reduced pay. We also analyze how the nature of the contract changes if the agent is given bargaining power.
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| 21. |
- Liss, Erik, 1991-, et al.
(författare)
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Absolute income mobility and the effect of parent generation inequality : An extended decomposition approach
- 2023
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 152
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Tidskriftsartikel (refereegranskat)abstract
- We use full-population data to study trends in intergenerational absolute income mobility, measured as the ratio of children earning more than their parents, for 11 Swedish cohorts born 1972–1983. Absolute mobility during this period increases from 72% to 84% for men and from 76% to 86% for women—higher figures than in most other countries studied. To explain these results, we outline a novel decomposition strategy that accounts for cohort variation in parent-generation income inequality. All else equal, if income inequality is higher in the parent generation, more economic growth is required to achieve any given level of absolute mobility. We discuss implications for comparative research in intergenerational income mobility.
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| 22. |
- Pitschner, Stefan
(författare)
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How do firms set prices? : Narrative evidence from corporate filings
- 2020
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Ingår i: European Economic Review. - : ELSEVIER. - 0014-2921 .- 1873-572X. ; 124
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Tidskriftsartikel (refereegranskat)abstract
- We quantify narrative evidence from archived corporate filings to construct a novel dataset on the price-setting behavior of public companies. Our approach is closely related to that of survey-based studies on price setting, but we collect data from twenty-five years instead of one specific point in time. This allows us to investigate variation over time and to establish that qualitative information provided directly by firms is informative about the aggregate variables macroeconomists are fundamentally interested in. Our findings suggest that (i) price setting is asymmetric and has a strong state-dependent component, (ii) real rigidities in the form of strategic pricing complementarities are very common, and (iii) an increase in the number of price changes does not necessarily reflect a decrease in price rigidity. We discuss to what extent our results can be explained by strategic reporting behavior and consider their implications in the context of widely-used price-setting models.
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