Best of #econtwitter - Week of May 1, 2022 [2/3]
Welcome readers old and new to this week’s edition of Best of Econtwitter. Thanks to those sharing suggestions, over email or on Twitter @just_economics.
This is part two of three.
Paper summary threads
Pumped to see this paper in print! Had a blast working on it with and ! Asset-pricing researchers spend a lot of time thinking about risk factors. We develop a survey-based method for figuring out which ones matter to investors. A 🧵…
Forthcoming soon: @AlexChinco @Baruch_Zicklin @SamHartzmark @abbysussman @ChicagoBooth find that participants in survey experiments respond to mean and volatility of returns consistent with standard models, but not to correlation with consumption growth. https://t.co/r5k1kbhrRk
Journal of Finance @JofFinance
Identification in macro from the JPE in 1937 (!!) Norway and Denmark experienced deflation and recessions in 1925-28 because they attempted to return to pre-war gold parities. Sweden and Finland did not and enjoyed a boom throughout the 1920s jstor.org/stable/1824241…
Q: Why are households uncertain about inflation? And does the source of that uncertainty matter? and I have a new working paper on this, using novel survey data from Germany. A: Large heterogeneity in the data ➡️ big amplifier of shocks. drive.google.com/uc?export=down…
How do asset purchases by central banks work? Duration risk extraction is typically considered the key channel, but it is hard to square with the European experience during the Covid outbreak. A short thread🧵:
Why was there was so much trade liberalization in pivotal decade of 1985-95 - creating globalized world of today? Thread on new paper 1/7
Our paper (w/ Tobias Broer, Per Krusell, and ) on rigid wage contracts is forthcoming in AER: Insights! Here comes a thread about the paper, some comments on the new-Keynesian model based on the results in the paper, and some fun history. 1/12
Forthcoming in AER: Insights: "Macroeconomic Dynamics with Rigid Wage Contracts" by Tobias Broer, Karl Harmenberg, Per Krusell, and Erik Öberg. https://t.co/WdBBHb8XGi
AEA Journals @AEAjournals
Here's the definitive study of El Salvador's bitcoin experiment. To measure bitcoin usage, the authors rely on survey data gathered from face-to-face interviews with 1,800 Salvadorean households. davidargente.com/_files/ugd/b05… ht
Really excited to share my new paper with , out today in JOLE, which attempts to answer a relatively straightforward but really policy-relevant question: To what extent is the market sensitive to macroeconomic conditions? journals.uchicago.edu/doi/10.1086/71…
Did the pandemic force many workers into early retirement? Can we expect older workers to return to the labor market when the pandemic is over? New working paper🧵 Labor force participation workers 55 and older:
National accounts pop-up section
Jesus Christ, New York Times. What kind of economic journalism is this?? IMPORTS DO NOT SUBTRACT FROM GDP!!! Imports subtract from exports but they add to consumption!! They're simply neutral for GDP!!
FYI, from a pure accounting perspective, what said in that thread is not correct. Imported intermediate inputs do show up as negative numbers in nominal GDP --- they don't cancel.
I am not quite sure what this discussion was about. But I think we can safely say, in agreement with , that there is no economic transaction that causes a negative number to be added to measured GDP
Jesus Christ, New York Times. What kind of economic journalism is this?? IMPORTS DO NOT SUBTRACT FROM GDP!!! Imports subtract from exports but they add to consumption!! They're simply neutral for GDP!! https://t.co/NOg3VEmOcy
Noah Smith 🐇🇺🇦 @Noahpinion
Answer to below: Exports⬆️, consumption (PCE)⬇️ due to intersectoral net transactions, GDP unchanged. This treatment creates the possibility that PCE could be negative, if U.S. households sold enough cars to foreigners and didn't buy anything else! From bea.gov/resources/meth…:
Apropos of this thread, here is a national accounting quiz. A U.S. resident buys a new car in 2021 and in 2022 sells the car to someone in Canada. Do 2022 U.S. exports go up? Does 2022 U.S. GDP? What if anything else changes? Explain your answer. https://t.co/lepJYhnKtZ
Gabriel Chodorow-Reich @gchodorowreich
"You said you are a doctor? We have someone on board who just collapsed." "Sorry, I'm not that kind of doctor. I'm an economist." "Great, this guy collapsed when he read about how GDP is calculated." "Sorry, I'm not that kind of economist..."
And from the archives: