[Cohort39] Fwd: The Latest NBER Research (2019-04-22)

[Payal Hathi]

not sure if you guys already subscribe to this, but check out #1 - crazy!

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From: Payal Hathi <payal.hathi at gmail.com>
Date: Tue, Apr 23, 2019 at 10:47 AM
Subject: Fwd: The Latest NBER Research (2019-04-22)
To: Payal Hathi <phathi at berkeley.edu>




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From: NBER <bulletin at nber.org>
Date: Sun, Apr 21, 2019 at 9:11 PM
Subject: The Latest NBER Research (2019-04-22)
To: <payal.hathi at gmail.com>


[image: NBER HOME] <http://www.nber.org/>
April 22, 2019
<https://www.facebook.com/National-Bureau-of-Economic-Research-115165771829285/>
<https://twitter.com/nberpubs>
New This Week: The Latest NBER Working Papers
The National Bureau of Economic Research circulates research by its
affiliated economists as working papers intended for professional and
public discussion and comment. The papers have not been peer reviewed.
*1.* Is Blinded Review Enough? How Gendered Outcomes Arise Even Under
Anonymous Evaluation
<http://papers.nber.org/papers/w25759?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Julian Kolev, Yuly Fuentes-Medel, and Fiona Murray #25759
*2.* The Production Relocation and Price Effects of U.S. Trade Policy: The
Case of Washing Machines
<http://papers.nber.org/papers/w25767?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Aaron B. Flaaen, Ali Hortaçsu, and Felix Tintelnot #25767
*3.* Beyond Competitive Devaluations: The Monetary Dimensions of
Comparative Advantage
<http://papers.nber.org/papers/w25765?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Paul R. Bergin and Giancarlo Corsetti #25765
*4.* The Local Aggregate Effects of Minimum Wage Increases
<http://papers.nber.org/papers/w25761?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Daniel Cooper, María José Luengo-Prado, and Jonathan A. Parker #25761
*5.* Did the 2017 Tax Reform Discriminate against Blue State Voters?
<http://papers.nber.org/papers/w25770?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
David Altig, Alan J. Auerbach, Patrick C. Higgins, Darryl R. Koehler,
Laurence J. Kotlikoff, Michael Leiseca, Ellyn Terry, and Yifan Ye #25770
*6.* Tax Policy for Innovation
<http://papers.nber.org/papers/w25773?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Bronwyn H. Hall #25773
*7.* Fiscal Space and the Aftermath of Financial Crises: How It Matters and
Why
<http://papers.nber.org/papers/w25768?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Christina D. Romer and David H. Romer #25768
*8.* Welfare State, Inequality, and Globalization: Role of
International-capital-flow Direction
<http://papers.nber.org/papers/w25772?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Assaf Razin and Efraim Sadka #25772
*9.* What Does an Electric Vehicle Replace?
<http://papers.nber.org/papers/w25771?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Jianwei Xing, Benjamin Leard, and Shanjun Li #25771
*10.* Implications of Labor Market Frictions for Risk Aversion and Risk
Premia
<http://papers.nber.org/papers/w25764?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Eric T. Swanson #25764
*11.* The Political Economy of Immigration Enforcement: Conflict and
Cooperation under Federalism
<http://papers.nber.org/papers/w25766?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Alberto Ciancio and Camilo García-Jimeno #25766
*12.* How the Wealth Was Won: Factors Shares as Market Fundamentals
<http://papers.nber.org/papers/w25769?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Daniel L. Greenwald, Martin Lettau, and Sydney C. Ludvigson #25769
*13.* Girls, Boys, and High Achievers
<http://papers.nber.org/papers/w25763?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Angela Cools, Raquel Fernández, and Eleonora Patacchini #25763
*14.* Making Carbon Taxation a Generational Win Win
<http://papers.nber.org/papers/w25760?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Laurence J. Kotlikoff, Felix Kubler, Andrey Polbin, Jeffrey D. Sachs, and
Simon Scheidegger #25760
*15.* Trade Wars: What do they Mean? Why are they Happening Now? What are
the Costs?
<http://papers.nber.org/papers/w25762?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Aaditya Mattoo and Robert W. Staiger #25762
------------------------------
*1.* Is Blinded Review Enough? How Gendered Outcomes Arise Even Under
Anonymous Evaluation
<http://papers.nber.org/papers/w25759?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Julian Kolev, Yuly Fuentes-Medel, and Fiona Murray #25759

*Abstract:*
For organizations focused on scientific research and innovation, workforce
diversity is a key driver of success. Blinded review is an increasingly
popular approach to reducing bias and increasing diversity in the selection
of people and projects, yet its effectiveness is not fully understood. We
explore the impact of blinded review on gender inclusion in a unique
setting: innovative research grant proposals submitted to the Gates
Foundation from 2008-2017. Despite blinded review, female applicants
receive significantly lower scores, which cannot be explained by reviewer
characteristics, proposal topics, or ex-ante measures of applicant quality.
By contrast, the gender score gap is no longer significant after
controlling for text-based measures of proposals’ titles and descriptions.
Specifically, we find strong gender differences in the usage of broad and
narrow words, suggesting that differing communication styles are a key
driver of the gender score gap. Importantly, the ! text-based measures that
predict higher reviewer scores do not also predict higher ex-post
innovative performance. Instead, female applicants exhibit a greater
response in follow-on scientific output after an accepted proposal,
relative to male applicants. Our results reveal that gender differences in
writing and communication are a significant contributor to gender
disparities in the evaluation of science and innovation.

*2.* The Production Relocation and Price Effects of U.S. Trade Policy: The
Case of Washing Machines
<http://papers.nber.org/papers/w25767?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Aaron B. Flaaen, Ali Hortaçsu, and Felix Tintelnot #25767

*Abstract:*
We analyze several rounds of U.S. import restrictions against washing
machines. Using retail price data, we estimate the price effect of these
import restrictions by comparing the price changes of washers with those of
other appliances. We find that in response to the 2018 tariffs on nearly
all source countries, the price of washers rose by nearly 12 percent; the
price of dryers—a complementary good not subject to tariffs—increased by an
equivalent amount. Factoring in the effect of dryers and price increases by
domestic brands, our estimates for the 2018 tariffs on washers imply a
tariff elasticity of consumer prices of between 110 and 230 percent. The
2016 antidumping duties against China—which accounted for the overwhelming
majority of U.S. imports—led to minor price movements due to subsequent
production relocation to other export platform countries. Perhaps
surprisingly, the 2012 antidumping duties against Korea led to relocation
of production to China, actual! ly resulting in lower washer prices in the
United States. We find that our measure of the tariff elasticity of
consumer prices may differ in sign and magnitude from conventional
pass-through estimates which are based on a regression of country-specific
import price changes on country-specific tariff changes. Production
relocation effects, price changes by domestic brands, and price changes of
complementary goods all contribute to the differences between these
measures.

*3.* Beyond Competitive Devaluations: The Monetary Dimensions of
Comparative Advantage
<http://papers.nber.org/papers/w25765?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Paul R. Bergin and Giancarlo Corsetti #25765

*Abstract:*
Motivated by the long-standing debate on the pros and cons of competitive
devaluation, we propose a new perspective on how monetary and exchange rate
policies can contribute to a country’s international competitiveness. We
refocus the analysis on the implications of monetary stabilization for a
country’s comparative advantage. We develop a two-country New-Keynesian
model allowing for sectoral differences in the production of tradables in
each economy: while in one sector firms are perfectly competitive, in
another sector firms produce differentiated goods under monopolistic
competition and subject to nominal rigidities, hence their performance is
more sensitive to macroeconomic uncertainty. We show that, by stabilizing
inflation and the output gap, monetary policy can foster the
competitiveness of these firms, encouraging investment and entry in the
differentiated goods sector, and ultimately affecting the composition of
domestic output and exports. Welfare implications ! of alternative monetary
policy rules that shift comparative advantage are found to be substantial
in a calibrated version of the model.

*4.* The Local Aggregate Effects of Minimum Wage Increases
<http://papers.nber.org/papers/w25761?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Daniel Cooper, María José Luengo-Prado, and Jonathan A. Parker #25761

*Abstract:*
Using variation in minimum wages across cities and controlling for
differences in business-cycle factors and long-run local economic trends,
we find that following minimum wage increases, both prices and nominal
spending rise modestly. These gains are larger for certain sub-categories
of goods such as food away from home and in locations where low-wage
workers are a larger share of employment. Further, minimum wage increases
are associated with reduced total debt among households with low credit
scores, higher auto debt, and increased access to credit.

*5.* Did the 2017 Tax Reform Discriminate against Blue State Voters?
<http://papers.nber.org/papers/w25770?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
David Altig, Alan J. Auerbach, Patrick C. Higgins, Darryl R. Koehler,
Laurence J. Kotlikoff, Michael Leiseca, Ellyn Terry, and Yifan Ye #25770

*Abstract:*
The Tax Cut and Jobs Act of 2017 (TCJA) made significant changes to
corporate and personal federal income taxation, including limiting the SALT
(state and local property, income and sales taxes) deductibility to
$10,000. States with high SALT tend to vote Democratic. This paper
estimates the differential effect of the TCJA on red- and blue-state
taxpayers and investigates the importance of the SALT limitation to this
differential. We calculate the effect of permanent implementation of the
TCJA on households using The Fiscal Analyzer: a life-cycle,
consumption-smoothing program incorporating all major federal and state
fiscal policies. We find that the average percentage increase in remaining
lifetime spending under the TCJA is 1.6 percent in red states versus 1.3
percent in blue states. Among the richest 10 percent of households, this
differential is larger. Rich households in red states enjoyed a 2.0 percent
increase compared to a 1.2 percent increase among the rich in blue! -state
households. This gap is driven almost entirely by the limitation on the
SALT deduction. Excluding the SALT limitation from the TCJA results in a
spending gain of 2.6 percent for rich red-state households compared to 2.7
percent for rich blue-state households.

*6.* Tax Policy for Innovation
<http://papers.nber.org/papers/w25773?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Bronwyn H. Hall #25773

*Abstract:*
A large number of countries around the world now provide some kind of tax
incentive to encourage firms to undertake innovative activity. This paper
presents the policy rationale for these incentives, discusses their design
and potential effectiveness, and reviews the empirical evidence on their
actual effectiveness. The focus is on the two most important and most
studied incentives: R&D tax credits and super deductions, and IP boxes
(reduced corporate taxes in income from patents and other intellectual
property).

*7.* Fiscal Space and the Aftermath of Financial Crises: How It Matters and
Why
<http://papers.nber.org/papers/w25768?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Christina D. Romer and David H. Romer #25768

*Abstract:*
In OECD countries over the period 1980–2017, countries with lower
debt-to-GDP ratios responded to financial distress with much more
expansionary fiscal policy and suffered much less severe aftermaths. Two
lines of evidence together suggest that the relationship between the debt
ratio and the policy response is driven partly by problems with sovereign
market access, but even more so by the choices of domestic and
international policymakers. First, although there is some relationship
between more direct measures of market access and the fiscal response to
distress, incorporating the direct measures attenuates the link between the
debt ratio and the policy response only slightly. Second, contemporaneous
accounts of the policymaking process in episodes of major financial
distress show a number of cases where shifts to austerity were driven by
problems with market access, but at least as many where the shifts resulted
from policymakers’ choices despite an absence of difficult! ies with market
access. These results may have implications for the conduct of policy both
in normal times and in the wake of a financial crisis.

*8.* Welfare State, Inequality, and Globalization: Role of
International-capital-flow Direction
<http://papers.nber.org/papers/w25772?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Assaf Razin and Efraim Sadka #25772

*Abstract:*
Globalization, in the form of financial flows, which is always advantageous
on an aggregative level, typically creates winners and losers, if left
exclusively to market forces. The effects of financial globalization on
income inequality depends on whether the country exports its capital to the
rest of the world or imports capital from abroad. In the capital-exporting
case, financial globalization drives up return to savings and drives down
wages. In the capital-importing case, financial globalization tends to
raise wages but lower return on savings. Therefore, the distributive
policies of the welfare state in its role of spreading the gains from
financial globalization to various income groups varies, depending on
whether the country exports, or imports capital. The paper demonstrates
that typical welfare-state redistribution policies, governed by a majority
of the population, spreads the globalization’s gains from trade to all
income groups, even those who are low ski! lled and have small capital
endowments. Therefore, financial globalization of a welfare- state economy
generates a Pareto improvement. At the same time, globalization, through
enhanced capital mobility and high-skill emigration diminishes the
generosity of the welfare state.

*9.* What Does an Electric Vehicle Replace?
<http://papers.nber.org/papers/w25771?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Jianwei Xing, Benjamin Leard, and Shanjun Li #25771

*Abstract:*
The emissions reductions from the adoption of a new transportation
technology depend on the emissions from the new technology relative to
those from the displaced technology. We evaluate the emissions reductions
from electric vehicles (EVs) by identifying which vehicles would have been
purchased had EVs not been available. We do so by estimating a random
coefficients discrete choice model of new vehicle demand and simulating
counterfactual sales with EVs no longer subsidized or removed from the new
vehicle market. Our results suggest that vehicles that EVs replace are
relatively fuel-efficient: EVs replace gasoline vehicles with an average
fuel economy of 4.2 mpg above the fleet-wide average and 12 percent of them
replace hybrid vehicles. Federal income tax credits resulted in a 29
percent increase in EV sales, but 70 percent of the credits were obtained
by households that would have bought an EV without the credits. By
simulating alternative subsidy designs, we demonstrate ! the distributional
and efficiency outcomes across different policy alternatives.

*10.* Implications of Labor Market Frictions for Risk Aversion and Risk
Premia
<http://papers.nber.org/papers/w25764?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Eric T. Swanson #25764

*Abstract:*
A flexible labor margin allows households to absorb shocks to asset values
with changes in hours worked as well as changes in consumption. This
ability to partially offset wealth shocks by varying hours of work can
significantly alter the household’s attitudes toward risk, as shown in
Swanson (2012). In this paper, I analyze how frictional labor markets
affect that analysis. Household risk aversion (as measured by willingness
to pay to avoid a wealth shock) is higher: 1) in countries with more
frictional labor markets, 2) in recessions, and 3) for households that have
more difficulty finding a job. These predictions are consistent with
empirical evidence from a variety of sources. Quantitatively, I show that
labor market frictions in Europe are large enough to play a substantial
contributing role to risk aversion in those countries. Nevertheless, labor
markets in the U.S. and Europe are sufficiently flexible that risk aversion
is much closer to the frictionless benchmark i! n Swanson (2012) than to
traditional measures that assume labor is fixed.

*11.* The Political Economy of Immigration Enforcement: Conflict and
Cooperation under Federalism
<http://papers.nber.org/papers/w25766?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Alberto Ciancio and Camilo García-Jimeno #25766

*Abstract:*
We study how the shared responsibilities over immigration enforcement by
local and federal levels in the US shape immigration enforcement outcomes,
using detailed data on the Secure Communities program (2008-2014). Tracking
the movement of arrested unlawfully present immigrants along the several
steps of the immigration enforcement pipeline, and exploiting a large shift
in federal enforcement priorities in mid 2011, we disentangle the three key
components of the variation in deportation rates: federal enforcement
efforts, local enforcement efforts, and the composition of the pool of
arrestees. This decomposition allows us to recover the local (county) level
response to changes in federal enforcement intensity. Among urban counties,
80 percent, mostly Democratic but with small shares of Hispanics, exhibit
strategic substitutabilities. The inverse relationship between federal and
local efforts allowed most counties to reduce opposition to the policy, and
was accompanied by an ! increased alignment of local and federal
preferences. The federal level was very effective in directing its
enforcement efforts towards counties where it expected local collaboration,
but conflict was mostly driven by a change in the types of unlawfully
present immigrants it prioritized for removal.

*12.* How the Wealth Was Won: Factors Shares as Market Fundamentals
<http://papers.nber.org/papers/w25769?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Daniel L. Greenwald, Martin Lettau, and Sydney C. Ludvigson #25769

*Abstract:*
We provide novel evidence on the driving forces behind the sharp increase
in equity values over the post-war era. From the beginning of 1989 to the
end of 2017, 23 trillion dollars of real equity wealth was created by the
nonfinancial corporate sector. We estimate that 54% of this increase was
attributable to a reallocation of rents to shareholders in a decelerating
economy. Economic growth accounts for just 24%, followed by lower interest
rates (11%) and a lower risk premium (11%). From 1952 to 1988 less than
half as much wealth was created, but economic growth accounted for 92% of
it.

*13.* Girls, Boys, and High Achievers
<http://papers.nber.org/papers/w25763?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Angela Cools, Raquel Fernández, and Eleonora Patacchini #25763

*Abstract:*
This paper studies the effect of exposure to female and male
“high-achievers” in high school on the long-run educational outcomes of
their peers. Using data from a recent cohort of students in the United
States, we identify a causal effect by exploiting quasi-random variation in
the exposure of students to peers with highly educated parents across
cohorts within a school. We find that greater exposure to “high-achieving”
boys, as proxied by their parents' education, decreases the likelihood that
girls go on to complete a bachelor's degree, substituting the latter with
junior college degrees. It also affects negatively their math and science
grades and, in the long term, decreases labor force participation and
increases fertility. We explore possible mechanisms and find that greater
exposure leads to lower self-confidence and aspirations and to more risky
behavior (including having a child before age 18). The girls most strongly
affected are those in the bottom half o! f the ability distribution (as
measured by the Peabody Picture Vocabulary Test), those with at least one
college-educated parent, and those attending a school in the upper half of
the socioeconomic distribution. The effects are quantitatively important:
an increase of one standard deviation in the percent of “high-achieving”
boys decreases the probability of obtaining a bachelor's degree from
2.2-4.5 percentage points, depending on the group. Greater exposure to
“high-achieving” girls, on the other hand, increases bachelor's degree
attainment for girls in the lower half of the ability distribution, those
without a college-educated parent, and those attending a school in the
upper half of the socio-economic distribution. The effect of
“high-achievers” on male outcomes is markedly different: boys are
unaffected by “high-achievers” of either gender.

*14.* Making Carbon Taxation a Generational Win Win
<http://papers.nber.org/papers/w25760?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Laurence J. Kotlikoff, Felix Kubler, Andrey Polbin, Jeffrey D. Sachs, and
Simon Scheidegger #25760

*Abstract:*
Carbon taxation has been studied primarily in social planner or infinitely
lived agent models, which trade off the welfare of future and current
generations. Such frameworks obscure the potential for carbon taxation to
produce a generational win-win. This paper develops a large-scale, dynamic
55-period, OLG model to calculate the carbon tax policy delivering the
highest uniform welfare gain to all generations. The OLG framework, with
its selfish generations, seems far more natural for studying climate
damage. Our model features coal, oil, and gas, each extracted subject to
increasing costs, a clean energy sector, technical and demographic change,
and Nordhaus (2017)’s temperature/damage functions. Our model’s optimal
uniform welfare increasing (UWI) carbon tax starts at $30 tax, rises
annually at 1.5 percent and raises the welfare of all current and future
generations by 0.73 percent on a consumption-equivalent basis. Sharing
efficiency gains evenly requires, however, ta! xing future generations by
as much as 8.1 percent and subsidizing early generations by as much as 1.2
percent of lifetime consumption. Without such redistribution (the Nordhaus
“optimum”), the carbon tax constitutes a win-lose policy with current
generations experiencing an up to 0.84 percent welfare loss and future
generations experiencing an up to 7.54 percent welfare gain. With a
six-times larger damage function, the optimal UWI initial carbon tax is
$70, again rising annually at 1.5 percent. This policy raises all
generations’ welfare by almost 5 percent. However, doing so requires
levying taxes on and giving transfers to future and current generations
ranging up to 50.1 percent and 10.3 percent of their lifetime consumption.
Delaying carbon policy, for 20 years, reduces efficiency gains roughly in
half.

*15.* Trade Wars: What do they Mean? Why are they Happening Now? What are
the Costs?
<http://papers.nber.org/papers/w25762?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg22>
Aaditya Mattoo and Robert W. Staiger #25762

*Abstract:*
How should economists interpret current trade wars and the recent U.S.
trade actions that have initiated them? In this paper we offer an
interpretation of current U.S. trade actions that is at once more
charitable and less forgiving than that typically offered by economic
commentators. More charitable, because we argue that it is possible to see
a logic to these actions: the United States is initiating a change from
“rules-based” to “power-based” tariff bargaining and is selecting countries
with which it runs bilateral trade deficits as the most suitable targets of
its bargaining tariffs. Less forgiving, because the main costs of these
trade tactics cannot be avoided even if they happen to “work” and deliver
lower tariffs. Rather, we show that the main costs will arise from the use
of the tactics themselves, and from the damage done by those tactics to the
rules-based multilateral trading system and the longer-term interests of
the United States and the rest of t! he world.

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