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- Keyword
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- Confounding; omitted variable bias; sensitivity analysis (2)
- Abor value (1)
- Classical theory of prices (1)
- Conflict inflation (1)
- E31 (1)
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- E64 (1)
- Efficiency wage model (1)
- Effort (1)
- Exploitation (1)
- F41 (1)
- Fiscal policy (1)
- Gender inequality (1)
- Growth cycles (1)
- Harrodian instability (1)
- Income distribution (1)
- Intergenerational mobility (1)
- Market power (1)
- Mexico (1)
- Monetary policy (1)
- Multiple regression; partial regression; Frisch-Waugh-Lovell theorem; instrumental variables estimation. (1)
- O23 (1)
- Price of production (1)
- Pricing behavior (1)
- Profits (1)
- Skill (1)
- Skin tone (1)
- Stratification economics (1)
- Taylor rule (1)
- Uniform rate of profit (1)
Articles 1 - 9 of 9
Full-Text Articles in Social and Behavioral Sciences
Unequal Gradients: Sex, Skin Tone, And Intergenerational Economic Mobility, Luis Monroy-Gómez-Franco, Roberto Vélez-Grajales, Gastón Yalonetzky
Unequal Gradients: Sex, Skin Tone, And Intergenerational Economic Mobility, Luis Monroy-Gómez-Franco, Roberto Vélez-Grajales, Gastón Yalonetzky
Economics Department Working Paper Series
We study how the intersection between skin tone and sex shapes intergenerational mobility of economic resources in Mexico. Using two recent social mobility surveys, we estimate the rank persistence and transition matrices by sex combined with skin tone groups. First, we find no differences in intergenerational mobility patterns between light-skin men and women. Second, the colorist mobility pattern observed in previous literature affects men and women differently. Namely, while women of intermediate and dark-skin tonalities have a lower expected rank than their light-skin peers, only men of the darkest tonalities suffer from the same penalization. Thirdly, women of intermediate and …
Formal Covariate Benchmarking To Bound Omitted Variable Bias, Deepankar Basu
Formal Covariate Benchmarking To Bound Omitted Variable Bias, Deepankar Basu
Economics Department Working Paper Series
Covariate benchmarking is an important part of sensitivity analysis about omitted variable bias and can be used to bound the strength of the unobserved confounder using information and judgments about observed covariates. It is common to carry out formal covariate benchmarking after residualizing the unobserved confounder on the set of observed covariates. In this paper, I explain the rationale and details of this procedure. I clarify some important details of the process of formal covariate benchmarking and highlight some of the difficulties of interpretation that researchers face in reasoning about the residualized part of unobserved confounders. I explain all the …
Sellers’ Inflation, Profits And Conflict: Why Can Large Firms Hike Prices In An Emergency?, Isabella M. Weber, Evan Wasner
Sellers’ Inflation, Profits And Conflict: Why Can Large Firms Hike Prices In An Emergency?, Isabella M. Weber, Evan Wasner
Economics Department Working Paper Series
The dominant view of inflation holds that it is macroeconomic in origin and must always be tackled with macroeconomic tightening. In contrast, we argue that the US COVID-19 inflation is predominantly a sellers’ inflation that derives from microeconomic origins, namely the ability of firms with market power to hike prices. Such firms are price makers, but they only engage in price hikes if they expect their competitors to do the same. This requires an implicit agreement which can be coordinated by sector-wide cost shocks and supply bottlenecks. We review the long-standing literature on price-setting in concentrated markets and survey earnings …
The Yule-Frisch-Waugh-Lovell Theorem For Linear Instrumental Variables Estimation, Deepankar Basu
The Yule-Frisch-Waugh-Lovell Theorem For Linear Instrumental Variables Estimation, Deepankar Basu
Economics Department Working Paper Series
In this paper, I discuss three aspects of the Frisch-Waugh-Lovell theorem. First, I show that the theorem holds for linear instrumental variables estimation of a multiple regression model that is either exactly or overidentified. I show that with linear instrumental variables estimation: (a) coefficients on endogenous variables are identical in full and partial (or residualized) regressions; (b) residual vectors are identical for full and partial regressions; and (c) estimated covariance matrices of the coefficient vectors from full and partial regressions are equal (up to a degree of freedom correction) if the estimator of the error vector is a function only …
Skill Differences And Wage-Effort Relationship: Who Are More Exploited, High-Skilled Or Low-Skilled Workers?, Hyun Woong Park, Dong–Min Rieu
Skill Differences And Wage-Effort Relationship: Who Are More Exploited, High-Skilled Or Low-Skilled Workers?, Hyun Woong Park, Dong–Min Rieu
Economics Department Working Paper Series
Who are more exploited, high-skilled or low-skilled workers? We address this question using the efficiency wage model with skill differentials incorporated. We perform simulations to find the Nash equilibrium numerically, and our central results are the following. First, higher-skilled workers are offered higher wages but exert less effort, and in particular the skill-wage relationship matches the observed data on wage inequality of the U.S. Second, we employ two measures of the degree of exploitation. On the one hand, the ratio between effort and wage the higher-skilled workers experience is lower than that of lower-skilled workers. This is due to their …
Alternative Approaches To Labor Values And Prices Of Production: Theory And Evidence, Deepankar Basu, Athanasios Moraitis
Alternative Approaches To Labor Values And Prices Of Production: Theory And Evidence, Deepankar Basu, Athanasios Moraitis
Economics Department Working Paper Series
In this paper, we discuss three approaches to estimating classical prices of production(long run equilibrium prices) in both a circulating capital model and a model that includes capital stock: the Standard Interpretation of Marx’s value theory, the New Interpretation of Marx’s value theory, and the Sraffian approach to prices of production. We add two refinements to both models: (a) allowing for differential wages rates across industries; and(b) taking account of unproductive industries in labor value calculations. We implement(a) the circulating capital models using harmonized input-output data from the World Input Output Database for 37 countries for the period 2000–2014, and …
Conflict Fuels Inflation But The Tinder Lies Elsewhere: Eclectic Structuralist Thoughts In A Developing Economy Context, Arslan Razmi
Conflict Fuels Inflation But The Tinder Lies Elsewhere: Eclectic Structuralist Thoughts In A Developing Economy Context, Arslan Razmi
Economics Department Working Paper Series
Developing country inflation is in the headlines again. Mainstream macroeconomics typically ignores the role of conflict while non-mainstream work tends to ignore macroeconomic constraints. This paper revisits the issue employing a dependent economy framework with eclectic characteristics. Specifically, I explore the mechanisms that propagate both real and monetary sources of inflation in the presence of real wage resistance and distributional conflict. The analysis shows that the inability to pay for subsidies with taxes or bond issuance in a stylized developing economy could create a situation where a relatively small shock leads to sustained and accelerating inflation and a wage-price spiral, …
Endogenous Business Cycles And Economic Policy, Peter Skott
Endogenous Business Cycles And Economic Policy, Peter Skott
Economics Department Working Paper Series
This paper examines the dynamics of Keynesian models that incorporate feedback effects from the labor market to income distribution, in- vestment, aggregate demand and output. A baseline version of the model can generate endogenous growth cycles, but cumulative divergence and economic collapse also become possible for plausible parameter values. Extensions of the model that include monetary and Öscal policy show greater robustness: the local instability of the stationary point leads to limit cycles (rather than complete collapse), even when large, destabilizing changes are made to parameters describing the private sector. The robustness of the general approach is reinforced by the …
Covariate Benchmarking For Sensitivity Analysis When The Confounder Is Correlated With Observed Covariates, Deepankar Basu
Covariate Benchmarking For Sensitivity Analysis When The Confounder Is Correlated With Observed Covariates, Deepankar Basu
Economics Department Working Paper Series
Covariate benchmarking is an important part of sensitivity analysis about omitted variable bias and can be used to bound the strength of the unobserved confounder using information and judgments about observed covariates. It is common to carry out formal covariate benchmarking under the assumption that the unobserved confounder is orthogonal to the observed covariates. This assumption is restrictive and will be difficult to defended in most empirical analyses. In this paper I show that relaxing the orthogo- nality assumption leads to a breakdown of a recently proposed innovative formal covariate benchmarking methodology.