Covid-19

The influence of the covid-19 pandemic on safe haven assets

The influence of the COVID-19 pandemic on safe haven assets

The COVID-19 pandemic has severely impacted the financial markets, which includes triggered a flight from risky assets to safe haven assets. This column compares the performance of the safe havens over the world’s ten largest economies during COVID-19 and the 2008 Global FINANCIAL MELTDOWN. The findings claim that the type of safe haven assets has changed because the 2008 crisis. Gold, the original safe haven asset, has lost its glitter. However, the Swiss franc, the united states dollar and US Treasuries retained their safe haven status, and Tether, a cryptocurrency, shows some promise.

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The influence of leaders on criminal decisions

We look at a two-stage model where, in the first stage, every individual decides whether to become criminal and, if she or he chooses to take action, they decides just how much crime to exert in the next stage. We show the way the distance to the criminal leader affects both decision to become criminal (extensive margin) and the amount of crimes thereafter committed (intensive margin).

Data and empirical framework

We test our theoretical predictions using data from the National Longitudinal Study of Adolescent to Adult Health (Add Health) in america, which contains information on all students attending a random sample folks high schools in 1995. This dataset provides unique information on friendship networks by asking students to nominate up to ten friends from a school roster. In addition, it contains detailed information on juvenile delinquency, including 12 types of crime. To recognize criminal leaders in a manner that is exogenous to the network formation process, we define a criminal leader as an adolescent who has a degree of crime a lot more than three standard deviations above the median in the institution. The distance to the first choice is then calculated utilizing the (shortest) distance between any delinquent and the first choice in the social networking to which they belongs. Our identification strategy is founded on the actual fact that students choose their friends, and perhaps the friends of their friends, however, not beyond. The question we study in the empirical analysis is how being (randomly) located at a particular distance to the first choice affects a person’s criminal activities.

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The inflation expectations of italian firms

The analysis is founded on the lender of Italy’s Survey of Inflation and Growth Expectations, which runs on the sample around 1,000 industrial and service firms with at least 50 employees. The Survey has been conducted quarterly since 1999 and specifically collects firms’ point inflation expectations at several time horizons (Bank of Italy 2018).

Evidence on the inflation expectations of firms

In Italy, the inflation expectations formulated by firms have already been broadly consistent with those reported by professional forecasters (Figure 1). Differences are unlikely to reflect too little relevant information on the firms’ side because, because the start of the survey in 1999, respondents were given the newest inflation reading in Italy and in the euro area before these were surveyed. The difference around a half percentage point in the first portion of the period probably reflects different levels of learning about the brand new monetary framework.

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The inertia of monetary policy implications for the fed’s exit strategy

The analytical framework

Since Taylor (1993) macroeconomists have relied on simple interest reaction functions to characterise the endogenous response of monetary policymakers to economic fluctuations. Our very own baseline formula for predicting monetary policymakers’ desired interest can be an extension of the classic “Taylor rule”; it talks about the central bank’s forecast of inflation, the growth rate of output, and the output gap. Our rule departs from the classic Taylor specification for the reason that it permits responses to both output gap and the growth rate of output and in addition in that it permits the central bank to react to the forecast of future macroeconomic variables in keeping with the idea that monetary policy changes remember to affect the economy so policymakers ought to be forward-looking within their policy decisions.

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The industry anatomy of the transatlantic productivity growth slowdown

The industry anatomy of the transatlantic productivity growth slowdown: Similarities outweigh the differences

Since 2005, productivity growth in america and Europe has dipped below 1%. Using new industry-level from the united states and ten EU countries, this column implies that that the industrial composition of the slowdown was similar in Europe and the united states. Falling multifactor productivity growth explains both magnitude and composition of falling productivity growth on both sides of the Atlantic. Decelerating technical change, instead of slowing investment, was the principal driving force in the transatlantic slowdown.

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The indirect fiscal benefits of low-skilled immigration

The indirect fiscal great things about low-skilled immigration

You will find a widespread perception that low-skilled immigration is a fiscal burden for society. This column incorporates indirect fiscal ramifications of immigration that arise generally equilibrium into various models which were emphasised in the empirical immigration literature. It finds that the indirect fiscal effect is actually positive, with one low-skilled immigrant in america adding between $700 to $2,100 to the general public finances through this channel every year.

Covid-19

Mask mandates reduced the spread of covid-19 in the us

Mask mandates and other lockdown policies reduced the spread of COVID-19 in america

Confronted with COVID-19, people rationally and voluntarily react to information on risks, rendering it difficult to distinguish the result of containment policies from that of voluntary behavioural responses. This column examines the result of mandatory mask policies on COVID-19 cases and deaths in america. If the united states had on 1 April 2020 universally mandated that employees of public-facing businesses use masks, there might have already been nearly 40% fewer deaths by the beginning of June. Containment policies had a big impact on the quantity of COVID-19 cases and deaths, directly by reducing transmission rates and indirectly by constraining people’s behaviour, and take into account roughly half the observed change in the growth rates of cases and deaths.

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The industrial revolution as an energy revolution

Smith and Ricardo as growth pessimists

They thought regarding three basic factors of production, i.e. land, labour, and capital. The latter two were with the capacity of indefinite expansion in principle however the first was not. The region of land that could be utilized for production was limited, yet its output was basic – not only to the way to obtain food but of virtually all the recycleables which entered into material production. This is self-evidently true of animal and vegetable recycleables – wool, cotton, leather, timber, etc. Nonetheless it was also true of most mineral production because the smelting of ores required much heat which was obtained from wood and charcoal. Expanding material production meant finding a greater level of produce from the land but that subsequently meant either taking into cultivation land of inferior quality, or using existing land more intensively, or both. This necessarily meant at some time that returns both to capital and labour would fall. In a nutshell, the very procedure for growth ensured that it might not be continued indefinitely. This is a basic characteristic of most “organic” economies, those that were universal prior to the industrial revolution. Adam Smith summarised the problem the following:

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The individual consequences of occupational decline

The individual consequences of occupational decline

The average person consequences of occupational decline

As new technologies replace human labour in an increasing number of tasks, employment in a few occupations invariably falls. This column compares outcomes for similar workers in similar occupations over 28 years to explore the results of large declines in occupational employment for workers’ careers. While mean losses in earnings and employment for all those initially employed in occupations that later declined are relatively moderate, low-earners lose a lot more.

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The independence of the central bank at risk

The independence of the central bank at risk

The authors of the blog are worried that the recent judgement of the German Federal Constitutional Court on the ECB’s monetary policy undermines the constitutional basis of the independence of the central bank and its own price stability mandate.

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The ruling of the German Federal Constitutional Court (GFCC) of May 5 on the ECB’s monetary policy affects not merely the relation of Germany to the ECB and the Court of Justice of europe (ECJ) but also the constitutional foundations of monetary policy. The court departs from the German tradition of entrusting monetary policy to an unbiased central bank that’s only given the duty of pursuing price stability. Based on the court’s reasoning, a lot of what the German Bundesbank i did so wouldn’t normally be permissible beneath the German Basic Law.