Best of #econtwitter - Week of February 5, 2023: paper summaries
Welcome readers old and new to this week’s edition of Best of Econtwitter. Please submit suggestions — very much including your own work! — over email or on Twitter @just_economics.
Idiosyncratic favorites
🚨 New *short* working paper w/ @john_voorheis 🚨
Re-examining Regional Income Convergence: A Distributional Approach
Comes with new data for you to play with!
Paper: kevinrinz.github.io/convergence.pdf
Non-technical summary: kevinrinz.github.io/convergence_su…
Data: kevinrinz.github.io/data.html
Prior studies often consider the relationship between mean state income in some base year and income growth over some subsequent period. Extending this approach across the distribution shows top percentiles actually *diverging* while the rest of the distribution converges slowly
🚨 Public-firm profit rates have fallen to *half* their 1980 values 🚨, which explains why financial market rates fell despite rising/steady *aggregate* profit rates.
papers.ssrn.com/sol3/papers.cf…
New draft with @ASollaci & @CarterDavisFin, & outstanding support from @TonBobrov...🧵
Nonfinancial domestic private-firm profit rates have doubled!
So if we have high market power, it's probably in private firms.
In ruins of war, donors rush in with aid. With standard infrastructure destroyed, they often give money direct to communities through CDD. Does it make lives better in the long run? Our evidence suggests it does--real econ differences 11 years on from RCT. Now in @EJ_RES 1/n
Thanks to @luluywang's JMP I now think there is a simple way to fix the broken US credit card industry
Just require, on every transaction, interchange fees to be shown separately from base prices, the same way taxes, tips, hospitality supplements, etc. are shown
Paper summaries
1/N New note with @jac0bmwilliams on measuring industry concentration in Compustat data (i.e., just publicly traded firms). We find Compustat isn't well suited for this particular task, consistent w/ prior literature for on earlier years/fewer industries.
Most C&I lending in the US is floating rate with the reference being LIBOR. LIBOR, however, is being replaced with the risk-free rate, SOFR. Here is why it matters for credit supply and why you should expect even more massive line draws in the next banking crisis. 1/N 🚨🚨🚨
🚨🚨🚨WP Alert🚨🚨🚨
“Criminal court fees, earnings, and expenditures: A multi-state RD analysis of survey and administrative data,” with @carldotac and @ElizLuh. @UM_CJARS.
A thread 1/16
1/ Excited to release our NBER working paper on Amazon's preferencing of its own products in search results. This is a short paper that uses a new tool, a browser extension, to measure real Amazon users' search results and behavior. Joint w/ Chiara Farronato and @_amackay
Another new administrative burdens NBER WP this week!
This time on how they impede take-up of subsidized health insurance, joint with @ProfKMEricson @onceuponA @asacarny
^separate thread on policy implications
There is this paper that I love that is very well-known in Finance but not so much in IO: Hoberg and Phillips (2016).
It estimates time-variant product space boundaries from text descriptions in 10-Ks of publicly traded companies. Neat visualization from Bruno Pellegrino's JMP:
Super interesting to see evidence on diffusion of novel technologies across (i) geographies and (ii) jobs with different skill levels...
... in this paper by @I_Am_NickBloom, Hassan, @AakashKalyani, Lerner, @tahoun100.
🔗nber.org/system/files/w…
1/7 I've made this pt before, but the main takeaway from this paper is not clear at all, & it's certainly NOT "judges listen to what random people write on Wikipedia!!"...
Ethan Mollick @emollick
2/7 Why? The authors had GRADUATE LAW STUDENTS to write the wiki articles about the cases - so it's NOT really USER generated info - it's actually EXPERT generated info...
At which level should one cluster standard errors? What's good empirical practice? Have you ever heard about placebo regressions in this context? Here is a very useful guide that was recently published in the JoE doi.org/10.1016/j.jeco…. 🧵 with a short summary. #EconTwitter 1/9
Synthetic difference-in-differences, in Stata! Check out our article describing the package. Makes nice graphs illustrating time trends and unit weights. Comments welcome! arxiv.org/pdf/2301.11859…
How does dropping units with small estimated propensity scores affect downstream inferences? When is it justified?
See our new work with @jugander that revisits the foundations of sample trimming:
arxiv.org/abs/2210.10171 (1/9)
Our paper on game theory and how professional tennis players serve is now forthcoming at Quantitative Economics!
We find that tennis players are really good at playing mixed Nash equilibrium strategies on their serves, but not perfect. 🧵
We compared statistical inconsistencies in 2 journals that implemented #statcheck in peer review and 2 matched controls, before and after statcheck implementation:
- Psych Science (🤖) vs. Journal of Exp Psych: General
- Journal of Exp Soc Psych (🤖) vs. JPSP
Preregistered multilevel logistic regression analyses found a significant interaction effect of journal_type*time in the expected direction: a steeper decline in (decision) inconsistencies in statcheck journals than matched controls.
Black taxpayers are 3-5 times more likely to be audited than non-Black taxpayers. The disparity isn't explained by gaps in dollars of underreporting. What's happening here?
(with @hselzayn, Tom Hertz, @arunramesh_, Robin Fisher, @DanHo1, & @jacobsgoldin)
siepr.stanford.edu/publications/m…
In anticipation of the FOMC meeting tomorrow, @ksangani8 and I have an interesting result to share!
Market volatility is 3x higher during Chair Powell’s conferences compared to his predecessors. This difference set in at the advent of the Covid-19 pandemic. #EconTwitter
How will markets react to the FOMC conference tmrw? While the Chair’s press conference typically reinforces the market’s read of the FOMC statement, @nummoose and I find a break in the pattern recently: Chair Powell’s latest conferences tend to go the other way. 1/ #econtwitter
What is the velocity of money?
In our new 🚨working paper🚨 @CarolinaMttssn, @franktakes, and I use new large-scale network data to find out. We find that money changes hands at different speeds for different people.
🧵 Thread on how we did it below. (1/11)
1/
Inflation is declining. Economic activity is strong
Smooth landing looks plausible
Fed's Covid policy response looks "better"—if not ideal
Seems like a good time to revisit our paper where we analyze OPTIMAL policy with temporary supply shocks
Link: dropbox.com/s/x2i8a1o26ql6…
2/N We show that historically central banks expanded their balance sheets to cushion fiscal pressures during wars. Over time, lender of last resort (LOLR) operations during financial crises became the main driver and are used pretty much systematically during crises today
🧵🚨1/ I'm very excited to share a new working paper on the geography of telework titled "Working from Density," joint with Leah Brooks (@gwtrachtenberg) and @stanveuger (@AEIecon). (cc: @UCSDEcon)
More papers
Our new article (open access) shows that extremely rich people are not extremely smart. It plateaus around the 90th percentile, and wage differences at the top do not represent differences in cognitive ability.
(cc @elonmusk)
academic.oup.com/esr/advance-ar…
Marc Keuschnigg @MarcKeuschnigg
🚨 Updated working paper 🚨
The Sequential Search Model: A Framework for Empirical Research (with Ella Honka & @ralucamursu).
tinyurl.com/ycx8sxur
By popular demand, the paper now comes with an accompanying code base: tinyurl.com/hhpjxeeh
Out of the darkness of Q4 shines a bright question: Can crypto actually *improve* online trust via MEV auctions?
I believe crypto is the only way to implement credible auctions (unlike the DoJ's accusations against Google), but trust proofs not my word
eprint.iacr.org/2023/114
New paper alert🚨 🧵
@malleshpai, @eljhfx, and I investigate "Censorship Resistance in On-Chain Auctions"
A new @IMFNews paper by @B_Eichengreen et al looks at recent trends in central bank purchases of gold and reports several interesting findings, including how geopolitical risk, sanctions,
and economic fundamentals influence demand for gold reserves
Link: imf.org/en/Publication…
