Publications
Central bank communication is becoming a key aspect of monetary policy. How much financial markets listen and, possibly, understand Banco de Mexico’s communication on its monetary policy stance should be a key consideration for the central bank to further modernize its monetary policy toolkit. In this paper, we tackle this issue empirically by using our own index of the tone of communication based on Banco de Mexico’s speeches and statements and find that Mexican money markets do not only listen but they also understand the stance of monetary policy conveyed in the central bank’s words. Regarding the ability to listen we find that both the volatility and volume in the money market rates change right after communication from Banco de Mexico’s governing body. As for the markets’ understanding, we document a statistically significant rise in money market rates the more hawkish communication is. All in all, our results show strong evidence of effective oral and written communication from the Central Bank towards Mexico’s money markets.
The literature on immigration and health has provided mixed evidence on the health differentials between immigrants and citizens, while a growing body of evidence alludes to the unhealthy assimilation of immigrants. Relying on five different health measures, the present paper investigates the heterogeneity in health patterns between immigrants and citizens, and also between immigrants depending on their country of origin. We use panel data on more than 100,000 older adults living in nineteen European countries. Our panel data methodology allows for unobserved heterogeneity. We document the existence of a healthy immigrant effect, of an unhealthy convergence, and of a reversal of the health differentials between citizens and immigrants over time. We are able to estimate the time threshold after which immigrants’ health becomes worse than that of citizens. We further document some heterogeneity in the convergence of health differentials between immigrants and citizens in Europe. Namely, the unhealthy convergence is more pronounced in terms of chronic conditions for immigrants from low-HDI countries, and in terms of self-assessed health and body-mass index for immigrants from medium- and high-HDI countries.
Economists typically view personal income taxes as a tradeoff between distortionary effects on labour supply and desirable effects on the income distribution. However, when wages deviate from marginal product, there is an efficiency rationale for income taxation. In the empirically relevant setting of wage bargaining within hierarchical firms, the efficiency case for taxing the manager at the top of the firm depends on a “job-creation” effect: if wages are too low and increased labour supply allows managers to supervise larger firms and thus collect larger rents, they will work too hard to create jobs at their firm. It may then be efficient to tax the “job creators” because of their job-creation activity. If bargaining compresses the wage distribution for workers, the efficient tax schedule is V-shaped and deviates significantly from zero in a model calibrated to the U.S. income distribution. For a planner with redistributive motives, wage bargaining similarly raises optimal marginal tax rates at the top and bottom of the distribution, while decreasing them in the middle.
This paper develops a simple business-cycle model in which financial shocks have large macroeconomic effects when private agents are gradually learning the uncertain environment. Agents update their beliefs about the reduced-form structure of the economy. Because the persistence of leverage is overestimated by adaptive learners, the responses of output, investment, and other aggregates under adaptive learning are significantly larger than under rational expectations. In our benchmark case calibrated using US data on leverage, debt-to-GDP and land value-to-GDP ratios for 1996Q1–2008Q4, learning amplifies leverage shocks by a factor of about three, relative to rational expectations. When fed with actual leverage innovations observed over that period, the learning model predicts that the persistence of leverage shocks is increasingly overestimated after 2002 and that a sizeable recession occurs in 2008–2010, while its rational expectations counterpart predicts a counter-factual expansion. In addition, we show that procyclical leverage reinforces the amplification due to learning and, accordingly, that macro-prudential policies that enforce countercyclical leverage dampen the effects of leverage shocks. (Copyright: Elsevier)
We identify two counteracting effects of credit access on productivity growth: on the one hand, better access to credit makes it easier for entrepreneurs to innovate; on the other hand, better credit access allows less efficient incumbent firms to remain longer on the market, thereby discouraging entry of new and potentially more efficient innovators. We first develop a simple model of firm dynamics and innovation‐based growth with credit constraints, where the above two counteracting effects generate an inverted‐U relationship between credit access and productivity growth. Then we test our theory on a comprehensive French manufacturing firm‐level dataset. We first show evidence of an inverted‐U relationship between credit constraints and productivity growth when we aggregate our data at the sectoral level. We then move to firm‐level analysis, and show that incumbent firms with easier access to credit experience higher productivity growth, but that they also experience lower exit rates, particularly the least productive firms among them. To support these findings, we exploit the 2012 Eurosystem's Additional Credit Claims programme as a quasi‐experiment that generated an exogenous extra supply of credits for a subset of incumbent firms.
The Great Recessions was essentially a “mancession” in countries like Spain, the UK, or the USA, i.e., it hist men harder than women for they were disproportionately represented in heavily affected sectors. We investigate how the mancession, and more generally women’s relative opportunities on the labor market, translates into within-household redistribution. Precisely, we estimate the spouses’ resource shares in a collective model of consumption, using Spanish data over 2006–2011. We exploit the gender-oriented evolution of the economic environment to test two original distribution factors: first the regional-time variation in spouses’ relative unemployment risks, and then the gender-differentiated shock in the construction sector (having a construction sector husband after the outburst of the crisis). Both approaches conclude that the resource share accruing to Spanish wives increased by around 7–9% on average, following the improvement of their relative labor market positions. Among childless couples, we document a 5–11% decline in individual consumption inequality following the crisis, which is essentially due to intrahousehold redistribution.
The stability of Nash equilibria has often been studied by examining the asymptotic behavior of the best-response dynamics. This is generally done in games where interactions are global and equilibria are isolated. In this paper, we analyze stability in contexts where interactions are local and where there are continua of equilibria. We focus on the public good game played on a network, where the set of equilibria is known to depend on the network structure (Bramoullé and Kranton, 2007), and where, as we show, continua of equilibria often appear. We provide necessary and sufficient conditions for a component of Nash equilibria to be asymptotically stable vis-à-vis the best-response dynamics. Interestingly, we demonstrate that these conditions relate to the structure of the network in a simple way. We also provide corresponding results for several dynamical systems related to the best response.
Background:
Measuring the quality and performance of health care is a major challenge in improving the efficiency of a health system. Patient experience is one important measure of the quality of health care, and the use of patient-reported experience measures (PREMs) is recommended. The aims of this project are 1) to develop item banks of PREMs that assess the quality of health care for adult patients with psychiatric disorders (schizophrenia, bipolar disorder, and depression) and to validate computerized adaptive testing (CAT) to support the routine use of PREMs; and 2) to analyze the implementation and acceptability of the CAT among patients, professionals, and health authorities.
Methods:
This multicenter and cross-sectional study is based on a mixed method approach, integrating qualitative and quantitative methodologies in two main phases: 1) item bank and CAT development based on a standardized procedure, including conceptual work and definition of the domain mapping, item selection, calibration of the item bank and CAT simulations to elaborate the administration algorithm, and CAT validation; and 2) a qualitative study exploring the implementation and acceptability of the CAT among patients, professionals, and health authorities.
Discussion:
The development of a set of PREMs on quality of care in mental health that overcomes the limitations of previous works (ie, allowing national comparisons regardless of the characteristics of patients and care and based on modern testing using item banks and CAT) could help health care professionals and health system policymakers to identify strategies to improve the quality and efficiency of mental health care.
Oath taking for senior executives has been promoted as a means to enhance honesty within and toward organizations. Herein we explore whether people who voluntarily sign a solemn truth-telling oath are more committed to sincere behavior when offered the chance to lie. We design an experiment to test how the oath affects truth telling in two contexts: a neutral context replicating the typical experiment in the literature, and a “loaded” context in which we remind subjects that “a lie is a lie.” We consider four payoff configurations, with differential monetary incentives to lie, implemented as within-subjects treatment variables. The results are reinforced by robustness investigations in which each subject made only one lying decision. Our results show that the oath reduces lying, especially in the loaded environment—falsehoods are reduced by 50%. The oath, however, has a weaker effect on lying in the neutral environment. The oath did affect decision times in all instances: the average person takes significantly more time deciding whether to lie under oath.
