Best of #econtwitter - Week of September 18, 2022 [1/3]

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.

This is part one of three.

Paper summaries

Galo Nuño @NunoGalo

Who are the winners and losers from inflation? This may seem a well-established issue in Economics, but surprisingly, there is still some confusion among pundits, central bankers, and academics. A short-🧵that I hope clarifies certain issues

Hanno Lustig @HannoLustig

📣The secular decline in rates may not have boosted U.S. fiscal capacity as much as you think, but it definitely has exposed the U.S. Treasury to more interest rate risk. 🧵 based on #BPEA piece brookings.edu/bpea-articles/… @SVNieuwerburgh @ProfJiang @MindyXiaolan

brookings.eduMeasuring US fiscal capacity using discounted cash flow analysisThe U.S. government’s capacity to continue running large budget deficits could be threatened if interest rates remain even modestly higher than currently expected according to new BPEA research.

PILoSSopher @pilossopher

We finally finished this draft, which can be found on my webpage drive.google.com/file/d/1U_MJHt…

Tim Willems @timwillems85

Thrilled to see this paper with @ramz_53 accepted at @EJ_RES. We find a striking reversal of fortune: countries borrowing at spreads that are *low* given fundamentals are *more* likely to develop economic difficulties (growth slowdowns & debt crises) 1/9

academic.oup.comInvestor Sentiment, Sovereign Debt Mispricing, and Economic Outcomes*Abstract. We find that countries able to borrow at spreads that seem low given fundamentals (e.g., because investors are bullish regarding the country’s future)

Sergio Ocampo Díaz @socampdi

🚨New Paper🚨 Computing Longitudinal Moments for Het. Agent Models w/@Baxter_VHR 🔗ir.lib.uwo.ca/economicsresrp… 🔹Computing moments with large MonteCarlo simulations is costly 🔹Alternative: Use model's distribution and its evolution 🔹Follow population instead of individuals 🧵👇

Nikolai Roussanov @NickRoussanov

nber.org/digest/202209/… @fang_leon Many thanks to @nberpubs for featuring our work on inflation hedging properties of major asset classes. We show that separating energy from core inflation is crucial. Yesterday's market reaction to the surprise CPI print is case in point. 1/n

nber.orgWhich Asset Classes Provide Inflation Hedges?

Interesting discussions

João B. Duarte @JoaoBDuart3

Today I want to talk about a comparison of two statistics that, as a young macroeconomist, scares me quite a bit: Fraction of papers in the AER related to Macro and Monetary: 7.4% (average of 2020 and 2021) Fraction of JM candidates working in macro monetary (EJM): 24.5%

^without (as always) intending to endorse any views, relatedly this week:

Ivan Werning @IvanWerning

NBER email list without a single macro paper. 👎 (Many interesting papers though)

Kurt MIT-shock-man @SorryToBeKurt

Interesting facts! A couple of points, related to my research on inequality within/across countries 1) disposable income need not necessarily reflect standard of living, since we know that expenditure rates (consumption/disposable income) vary a lot across the distribution 1/n

John Burn-Murdoch @jburnmurdoch

NEW: income inequality in US & UK is so wide that while the richest are very well off, the poorest have a worse standard of living than the poorest in countries like Slovenia https://t.co/gtHvhNsnuT Essentially, US & UK are poor societies with some very rich people. A thread: https://t.co/fXFsULsrQ3

Florin Bilbiie 🇪🇺 🇺🇦 @FlorinBilbiie

Oldie-goldie 2007 Berkeley graduation speech by Tom Sargent, the best concise summary of econ I read (12 points) "Economics is organized common sense. Here is a short list of valuable lessons that our beautiful subject teaches. 1. Many things that are desirable are not feasible.

B @BrettMatsumoto

Seeing a lot of criticism of housing in CPI. Rents in CPI lag market measures. There are 2 sources of this lag. One is arguably desirable, and the other is undesirable. In terms of the first source, market measures are the rents for new leases, which does not reflect prices

Theo Clifford @Theo_Clifford

Official data series are incredibly important, government stats agencies are incredibly opaque black boxes, and a lot of weird arbitrary stuff goes on inside — so "deep dive into how the sausage is made" is an extremely underrated genre of tweet. (below is about rents in CPI)

B @BrettMatsumoto

increases the rent sample by only sampling units every 6 months. Additionally, the price changes are smoothed over the 6 months between sampling. To see the impact of this mechanical sampling lag, say rents increase by 10% (and everyone signs a new lease). Only 1/6 of the

Seema Jayachandran @seema_econ

What's the best development economics paper written in the past ~5 years? (Was just having this conversation with someone, and am now curious to hear other views)

Alex Tabarrok @ATabarrok

I have never once had cause to use JEL codes. Search rendered them obsolete long ago.

John Horton 🇺🇦 @johnjhorton

@ATabarrok I have a paper that quotes Groucho Marx and uses him for an example—so we gave the paper the “Marxian Economics” JEL code

Connor O’Brien 🏗🇺🇦 @cojobrien

How did substacks so quickly converge on a price of ~$100-120/year?

^market clearing is the only right answer of course; this newsletter, meanwhile, will always be competitively priced at p = 0 \approx MC