Sponsored by The Casey Lecture Fund for Economics.ÌýÌý

Sponsored by The Casey Lecture Fund for Economics.Ìý

Talk Topic:
> Do financial market participants hedge interest rate risk by taking long or short positions in financial instruments of different maturities?

Abstract:

Paper co-authored by Ralph Chami (Institute for Capacity Development, International Monetary Fund), Celine Rochon (Strategy, Policy and Review Department, International Monetary Fund) and Julieta Yung (Federal Reserve Bank of Dallas, Research Department and Department of Economics, ÀÖ²¥´«Ã½ College).

We study the impact of monetary policy tightening on the discount rate through the term structureÌýof interest rates. Investors maximize expected utility over a terminal wealth by investing in variousÌýTreasury securities, and the expected excess returns satisfies the no arbitrage condition. ThisÌýbehavior leads to a non-linear stochastic discount factor, so that the impact of monetary policyÌýon the discount rate varies with changes in the yield curve factors. In addition, tightening ofÌýmonetary policy leads to a larger (smaller) capital loss by more (less) risk averse investors so that their absolute risk aversion becomes larger (smaller).

Sponsored by The Casey Lecture Fund

Talk Topics:
> Modern Trade Theory: Lowering trade barriers help exporters, at the expense of non-explorers.
> Challenge Question: Do lower trade barriers provides non-exporters with incentives to invest to grow and eventually become exporters, increasing their present value?

Sponsored by The Casey Lecture Fund for Economics

Talk Topics:
> Does the substitution effect of the digital products outweigh the discovery effect from aggregation of information?

> Do the mechanisms behind these effects depend on product attributes?

Abstract: Paper co-authored with Abhishek Nagaraj (UC Berkeley)
Despite the promise of digitization to deliver a centralized, digital repository of all books ever published, copyright challenges have prevented the realization of this vision. Copyright holders are concerned that digitization might cannibalize demand for printed works by lowering readership and sales, although this claim lacks empirical evidence. We shed light on this topic using newly-collected data on the digitization of books from Harvard’s Widener Library by the Google Books project between 2005 and 2009. We exploit the quasi-random timing of the digitization process across books to estimate the causal impact of digitization on readership and sales and evaluate the results in light of a simple theoretical framework. We find that digitization reduces readership within Harvard by 38\%, but, contrary to some predictions, it increases sales of digitized titles by about 36\%. In keeping with our theory, this overall sales effect can be explained by increased discovery for less popular titles; sales for a small set of popular titles decrease following digitization, but sales for less popular titles increase considerably. Overall, our evidence suggests that rather than losing revenue from digital distribution, copyright holders might benefit from digitization through increased discovery for less popular works.

Sponsored by The Casey Lecture Fund for Economics

Paper Topic:
> Do grading practices affect students’ persistence in Science Technology Engineering and Math (STEM) fields?

Abstract:Ìý Paper by Talia Bar and Stephen Ross
We examine how grading practices affect students’ persistence in Science Technology Engineering and Math (STEM) fields, using a larger dataset from a mid-sized, northeast public university. We employ a novel, quasi-experimental empirical strategy – students in the fall of their freshmen year are exposed to instructors with varying grading practices in the same course. We find that students are likely to take more courses and graduate with degrees in the same STEM field when their instructor assigns on average higher grades, but no support to the common belief that female students are more discourage by low grades than male students.

Sponsored by The Casey Lecture Fund for Economics

Talk Topics:
> Does the nature of the long-run relationship between the labor share and the relative price of investment co-integrate?

> Did investment-specific technological progress play an important role in the growth/decline of the secular trend of the labor share?

Abstract:
Using data from the United States, I perform an empirical analysis to assess the nature of theÌýlong-run relationship between the labor share and the relative price of investment. Results fromÌýco-integration tests reveals that the share and the relative price of investment are most likely notÌýco-integrated. However, co-variation tests indicate that both time series share a common stochasticÌý component, and additional tests of structural breaks point at the presence of a common change in the mean or trend of both series. These results have important implication as they suggest that investment-specific technological progress – which is considered as the driving force of the long-run behavior of the relative price of investment – may have played an important role in the decline ofÌýthe secular trend of the labor share.

Sponsored by The Casey Lecture Fund for Economics

Talk Topics:
> Does quantitative easing and forward guidance alter public perceptions of the implicit policy rule that the Fed would follow after liftoff from the zero lower bond?

> How much economic stimulus was provided by the estimated changes in the perceived policy rule and QE-related term premium effects?

Abstract:
This paper examines two questions about the efficacy of the Fed’s unconventional policy actions.Ìý First, did quantitative easing and forward guidance alterÌýpublic perceptions ofÌýthe implicit policy rule that the Fed would follow after liftoff from the zero lower bound?Ìý Based on estimates obtained from Blue Chip forecasts, the answer would appear to be yes.Ìý Second, how much economic stimulus was provided by the estimated changes in the perceived policy rule and QE-related term premium effects?Ìý Based on simulations of the FRB/US model, the Fed’s unconventional policy actions appear to have quickened the pace of recovery noticeably and modestly offset disinflationary pressures.

Sponsored by The Casey Lecture Fund for Economics

Sponsored by The Casey Lecture Fund for Economics

On March 7, 2018 atÌý4:15 pm in Pettengill G21,Ìý“A Breath of Fresh Air: The Effect of Smoking Bans on Indigenous Youth in Canada” was presented by Angela Daley, Assistant Professor of Economics at the School of Economics, The University of Maine.

Talk Description:ÌýÌýProf. Daley’s study estimates the effect of public-place bans on smoking and exposure to second-hand smoke among Canadian Youth.Ìý She considered how these bans affect subjective well-being.Ìý She differentiate between Indigenous and non-Indigenous youth since they are very different in terms of health and the determinants thereof.

Sponsored by The Casey Lecture Fund for Economics