Best of #econtwitter - Week of May 15, 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
We spent the last year figuring out what algorithmic stablecoins are and came up with a dynamic model that might help us understand what’s going on with #Terra_Luna . Here are our main takeaways. THREAD.
Keynes’ “A Tract on Monetary Reform” (1923) contains some insights that are quite interesting and relevant for today’s debate about inflation and the role of corporate “greed” and “profiteering.”
delong.typepad.com/keynes-1923-a-…
/1
Highly relevant for today, he noted that the direction of causality between prices and business profits would be misunderstood.
"To the consumer the business man’s exception profits appear as the cause (instead of the consequence) of the hated rise in prices"
/5
^separate from the above summary of Keynes: (but related, with deflation instead of inflation!)
Excited that this paper (w/ @gyozo_gy) is forthcoming at the JF. We find that household financial distress from foreign currency debt exposure during a currency crisis in Hungary led to a large increase in support for a debtor-friendly far-right populist party. /1
Journal of Finance @JofFinance
Using variation across households and zip codes in exposure to foreign currency debt, we find that FC exposure explains about 1/5 of the rise in support for the far-right during the crisis. Finance mattered for voting outcomes./5
Delighted to see our (@giulia_giupponi @landais_camille) paper for the Journal of Economic Perspectives in print !
We provides a framework to think about the relative welfare benefits and costs of short-time work (STW) and unemployment insurance (UI).
A thread 🧵 1/n
AEA Journals @AEAjournals
Three quarters of the benefits of the Paycheck Protection Program went to the top quintile of households. Wild. https://t.co/vvqndB1XF7
Jonathan W Williams 🇺🇲 @J2dubyas
It's a good day when one's appendix figures show up on one's Twitter feed in fancy color and updated to the present. Emi tells me this was always one of her favorite figures in the paper (even though it ended up in the appendix).
Jason Furman @jasonfurman
^:
But to investigate (3) and (4), they had to dig deep. It turns out that Hazell, Herreño, Nakamura, and Steinsson actually replicated (or at least, approximate) the old method for a recent paper.
So Tim and Aden extended it into 2022.
How important are economic narratives?
Short story: Very important! Narratives affect how people interpret economic news and forecast the future.
Our new WP studies the stories people tell about the rise in inflation.
drive.google.com/file/d/1-2eP--…
w/ @cp_roth @JoWohlfart @Ingar30
🧵
What do we do? Using 🇩🇰 firm micro-data, we first ask how sensitive different firms are to the business cycle. Size and age need to be taken into account TOGETHER: for young firms, cyclicality is decreasing with size but the opposite is true for old firms.
For my international followers I wanted to advertise a new working paper "Monopsony Makes Firms not only Small but also Unproductive: Why East Germany has not Converged" joint with @christianbaye13 Heiko Stueber and Felix Wellschmied. 🧵
Interesting discussions
Friedman's take on why Marshall married Mary Palley (cc @CleoCZ ): "the main reason he ever married her - to keep her from publishing the book under her own name...After the Principles came out under his own name, he suppressed the Marshall and Marshall"
Hey #EconTwitter, I'm teaching my first ever undergraduate course next month (Principles of Macro)! Excited but nervous for the opportunity. Any advice from the other side? Do's and don'ts, things you wish you knew, etc.! Any guidance is welcome.
The secret of coding up data visualizations is that in most systems it's actually easier to learn how to customize your own graphs and do everything by hand rather than desperately hunting for a function that does exactly the thing you want every time you want something new
