Tag Archive for economics

Sheehan-Connor Advocates in Orlando Sentinel for Raising the Gas Tax

Damien Sheehan-Connor

Damien Sheehan-Connor

Assistant Professor of Economics Damien Sheehan-Connor is the author of an oped in the Orlando Sentinel (available to subscribers) arguing that raising the gas tax would not only help the environment, but would save lives on the road.

Sheehan-Connor considers the findings of a new study out by the National Safety Council, which suggested that automobile accidents are on the rise again after years of decline. While many factors could potentially contribute to this reversal, he writes that it’s likely that two seemingly positive developments–lower gas prices and stricter fuel economy standards imposed by the government–have played an important role. How? Lower gas prices have encouraged consumers to buy bigger, less fuel-efficient vehicles, while government regulations require automakers to produce lighter, more fuel-efficient vehicles. The end result: greater divergence in the weights of vehicles on the road.

He writes: “Whether a given two-vehicle accident is fatal depends critically on how well matched are the weights of the vehicles involved. The results of a paper I authored in last month’s Economic Inquiry make the point starkly. It found that in severe accidents between two vehicles of average weight, 25 percent of vehicle drivers are expected to die. But in severe accidents between full-size pickup trucks and compact cars, the death rate is a whopping 40 percent—or 60 percent higher.”

To counter this, Sheehan-Connor suggests turning to higher gas taxes, rather than stricter fuel economy standards.

The politics of gasoline taxes are difficult, but the benefits are compelling. First, the environmental benefits from reduced carbon emissions would exceed the cost of foregone gasoline consumption. Second, the efficiency of the tax system could be improved by implementing the tax in a revenue-neutral fashion. Income tax rates, which do impose some efficiency costs to the economy, could be lowered and the revenue replaced by the gasoline tax, which has efficiency benefits. Third, gasoline taxes are far simpler, and thus less costly to implement, than the 577 pages of regulations that make up the most recent fuel economy standards. And finally, our roadways would be made safer. Other than the word “tax,” what’s not to like?

Keegan ’16 Studies Real Estate in the Quantitative Analysis Center

Phoebe Keegan ’16, an economics major from Palisades, N.Y., has been passionate about real estate since she was a young child. She passed the exam to get her real estate license in New York at age 18, the youngest age allowed. After coming to Wesleyan, she also became a licensed agent at William Raveis in Middletown.

This summer, Keegan worked at the Quantitative Analysis Center with Assistant Professor of Economics Karl Boulware to analyze data from the New York City Housing and Vacancy Survey, specifically looking at conditions before and after the rezoning of downtown Brooklyn. They are studying how rezoning affected occupancies in Brooklyn as well as gentrification issues.

“I am really thankful that I came here because I didn’t know how much of an incredible place it was,” said Keegan. “The community is truly special.”

Schwartz ’17 Founder of Wesleyan Radio Control/ Drone Club

David Schwartz '17, founder and president of the Wesleyan Radio Control/ Drone Club, flies a drone behind South College July 28. He's also on Wesleyan's ski team, rock climbing team and sailing team. (Photo by Olivia Drake)

David Schwartz ’17, founder and president of the Wesleyan Radio Control/ Drone Club, flies a drone behind South College July 28. He’s also on Wesleyan’s ski team, rock climbing team and sailing team. (Photo by Olivia Drake)

In this News @ Wesleyan story, we speak with David Schwartz from the Class of 2017.

Q: David, where are you from and what is your major?

A: I grew up in Amherst, Mass. When I first came to Wesleyan, I walked around wearing my Amherst sweatshirt for awhile before realizing there was a bit of a rivalry. I’m an Economics and Government double major, with a minor in data analysis. I’m particularly interested in applying “big data” techniques to government policymaking.

David Schwartz operates the DJI Phantom 2 Vision+ drone "that was very user-friendly and intuitive to learn," he said.

David Schwartz operates the DJI Phantom 2 Vision+ drone “that was very user-friendly and intuitive to learn,” he said.

Q: You are founder and president of the Wesleyan Radio Control/ Drone Club. How did your interest in aerial photography begin?

A: I’ve always had a passion for flying, but unfortunately I get air-sick in small planes, so I’ve been able to apply my interest by being involved in the radio control community. Last summer, I spent my free time building an aerial photography quad copter and coding a basic auto-pilot system. For example, if the gyroscope was leaning left, the program would simply instruct the servos (motor) controlling the ailerons (parts on the wings that tilt the plane) to counter this movement until the plane was stable again. When I was able to stabilize the aircraft, I noticed that the camera on it was able to take some really clear photographs.

Q: Why did you decide to start the club? How many members do you have?

A: After telling my friends about my project building a drone last summer

Conference Focuses on Teaching Finance at Liberal Arts Colleges

Wesleyan’s Department of Economics hosted a conference titled "Teaching Finance at Liberal Arts Colleges" July 21-23 on campus. The Association to Advance Liberal Arts Colleges (AALAC) provided Wesleyan with a grant to support the event. Faculty from Wesleyan, Bowdoin, Carleton, Denison, Drew, Grinnell, Lafayette, Macalester, Pomona, Smith, Swarthmore, Trinity, Wellesley and Williams attended.

Wesleyan’s Department of Economics hosted a conference titled “Teaching Finance at Liberal Arts Colleges” July 21-23 on campus. The Association to Advance Liberal Arts Colleges (AALAC) provided Wesleyan with a grant to support the event. Pictured, front row, from left: John Caskey, Swarthmore; Tom Bernardin, St. Olaf College; Matt Botsch, Bowdoin; Ben Keefer, Carleton; Liang Ding, Macalaster; Abigail Hornstein, Wesleyan; Michelle Zemel, Pomona; and Caleb Stroup, Davidson. Back row, from left: David Chapman, University of Virginia; Chris Hoag, Trinity; Xiao Jiang, Denison; Ted Burczak, Denison; Karl Boulware, Wesleyan; GianDomenico Sarolli, Drew; Michael Kelly, Lafayette; Martin Gosman, Wesleyan; Bill Gentry, Williams; and Greg Phelan, Williams.

Sheehan-Connor Authors Paper on Effect of Gas Tax on Vehicle Safety

Damien Sheehan-Connor

Damien Sheehan-Connor

Assistant Professor of Economics Damien Sheehan-Connor is the author of “Environmental Policy and Vehicle Safety: The Impact of Gasoline Taxes,” published in the July 2015 issue of Economic Inquiry.

In the paper, Sheehan-Connor considers the impact that policies to reduce carbon emissions by vehicles, such as fuel economy standards and gasoline taxes, have on vehicle weight and, consequently, on safety. The paper develops a model that separately identifies the impact of vehicle weight on mortality and selection effects that impact accident propensity. He found that the safety externalities associated with heavy vehicles are greater than the environmental ones; that under fuel economy standards, vehicle weights have recently decreased with little likely effect on accident deaths; and that similar environmental benefits could be combined with substantial reductions in deaths by implementing higher gasoline taxes.

Read the paper online here.

Holmes ’17 Studies Congressional Tweets in QAC Summer Apprenticeship

Joli Holmes ’17, an economics major, is one of 24 students in the Quantitative Analysis Center's Summer Apprenticeship Program.

Joli Holmes ’17, an economics major, is one of 24 students in the Quantitative Analysis Center’s Summer Apprenticeship Program.

In this News @ Wesleyan story, we speak with Joli Holmes from the Class of 2017. She is one of 24 students in the Quantitative Analysis Center’s Summer Apprenticeship Program.

Q: Joli, what is your major and what’s your specific area of interest?

A: I’m an economics major. I’m particularly interested in studying investment-related practices from an environmental and social perspective.

Q: Have you worked in the Quantitative Analysis Center before this summer?

A: I’ve taken a lot of classes through the QAC, including “Working with R,” “Excel with Visual Basic for Applications,” and “Python.” These are all classes on how to use statistical software, which also cover some statistical analysis topics.

Q: What does an average day look like in the QAC Apprenticeship Program?

A: We start our days at 8:30, and have class for an hour and a half. The classes are taught by Emmanuel “Manolis” Kaparakis, [director of Centers for Advanced Computing], Pavel Oleinikov, [associate director of the Quantitative Analysis Center, visiting assistant professor of quantitative analysis], and Jen Rose, [research professor of psychology]. The topics of these classes really vary. We cover everything from basic statistics – like how to do a simple linear regression and looking at correlations – to different types of clustering and factor analysis. In the future we might do some latent variable analysis. They make sure all the students have a good foundation, and then cover advanced topics. In these lessons, we work with statistical software and example data sets. For the rest of the day, we work on our individual research projects.

Yohe Reappointed to NYC Climate Change Panel

Gary Yohe has been reappointed to the New York City Panel on Climate Change.

Gary Yohe has been reappointed to the New York City Panel on Climate Change.

Gary Yohe, the Huffington Foundation Professor of Economics and Environmental Studies, was reappointed by Mayor Bill DeBlasio to the third New York City Panel on Climate Change on June 30.

Yohe and 18 other experts are tasked with ensuring that the best available climate science continues to inform the city’s resiliency planning. The panel will build on reports by previous panels, and will “look at climate risks through the lens of inequality at a neighborhood scale, as well as focus on ways to enhance coordination of mitigation and resiliency across the entire New York metropolitan region,” according to a press release from the Mayor’s Office.

The panel is an independent body that advises the city on climate risks and resiliency using the best available data. The panel’s report, to be released in 2016, will look at topics including regional climate projections focused on extreme events; community-based assessment of adaptation and equity; critical infrastructure systems, with a focus on interdependent transportation and energy systems in the greater New York City region; expanded climate resiliency indicators and monitoring system; and enhanced mapping protocols. The panel’s second report, released in Feb. 2015, can be read here.

Yohe also is professor of economics, professor of environmental studies.

Grossman Presents Papers in Switzerland, Norway

The economic crisis that led to the recent recession is only one of the reasons Grossman decided to write Unsettled Account. (Photos by Olivia Drake)

Richard Grossman

Richard Grossman, professor of economics, recently presented a talk titled, “An historical perspective on regulatory competition versus cooperation: the view from economics” at the third annual Conference of the University Research Priority Program. The conference, held June 1-2 at the University of Zurich Institute of Law, was titled, “International Aspects of Financial Regulation: Competition vs. Coordination.”

Grossman’s talk focused on cross-border cooperation between international bank regulators in the wake of the U.S. subprime and European debt crises—an effort to enhance banking stability. Examples include the Basel capital accords and European Stability Mechanism. Grossman put these into historical context by looking at episodes of cooperation—and competition—between federal and state regulators in the U.S. during the 19th and early 20th centuries. He presented evidence on several episodes in which state and federal regulators loosened regulations to help banks under their supervision gain a competitive advantage over banks in neighboring jurisdictions. Although cooperation is feasible in some areas of regulation, Grossman argued that regulators will always be inclined to compete—that is, favor their own banks at the expense of others.

On June 20, Grossman presented a paper at the Third CERP Economic History Symposium, held at Norges Bank, Norway’s central bank, in Oslo.

The paper, co-authored by Grossman and Masami Imai, professor of economics, professor of East Asian studies, is titled “Taking the Lord’s Name in Vain: The Impact of Connected Directors on 19th Century British Banks.

The paper utilizes data on the presence of prominent individuals—that is, those with political (e.g., Members of Parliament) and aristocratic titles (e.g., lords) — on the boards of directors of English and Welsh banks from 1879-1909 to investigate whether the appointment of well-connected directors enhanced equity value for bank shareholders.

Their analysis of panel data shows that the appointment of connected directors did not increase equity returns (as measured by the capital gain plus dividend yield on bank shares), but rather that the appointment of MPs to directorships had negative effects on bank equity returns.

Yohe: Pope’s Encyclical on Climate Change ‘Quite Likely a Game-Changer’

Gary Yohe, the Huffington Foundation Professor of Economics and Environmental Studies, wrote in The Hartford Courant about Pope Francis’ encyclical on climate change–“a very valuable and much needed injection of morality into the scientific and economic discussions on climate change — it is quite likely a game-changer.”

While scientists, economists and other professionals have long made a case for taking action to reduce emissions and mitigate the effects of climate change, Yohe writes, “The pope’s encyclical adds a moral dimension to this case with nearly 200 pages of inspiring text about man’s pollution and the immorality of emissions. He notes that the Bible tells humans, as early as the first chapter of Genesis, that they have a stewardship obligation to the planet. The Bible also commands us to protect the least among us — the poorest who lack the means to provide for themselves. These are the people, the world over, who will be most heavily impacted by climate change — the poor, the very young, the elderly and infirm — especially if they live near a coastline. Working from there, as the leader of a billion Catholics, the pope provides theological justification that we are behaving immorally by continuing to avoid reducing emissions.”

Yohe concludes:

I must admit, at this point, that declaring something a sin is way above my pay grade. What I can say from my scientific and faith perspective is this: Putting human beings, their societies and communities, and aspects of nature unnecessarily at risk by ignoring science on the basis of ideology, business interest, or ill-informed and unyielding denial is morally irresponsible — especially for elected officials.

I believe that the pope’s encyclical confirms this perspective not only for more than 1 billion Catholics around the world and across this country, but also for the billions of others from multiple faiths who take seriously their stewardship obligations to the planet and its inhabitants.

Yohe is also professor and chair of economics, professor of environmental studies.

Grossman Speaks to MarketWatch on Reforms to the Fed

Richard Grossman

Richard Grossman

MarketWatch columnist Howard Gold turned to Professor of Economics Richard Grossman for his take on reforming the Fed. Gold took issue with calls from presidential candidate Sen. Rand Paul and others to “audit the Fed,” but instead advocated for term limits for Fed chair-persons and changes in the pivotal Federal Reserve Bank of New York.

On the matter of term limits for the Fed chair, Grossman spoke of former chairman Alan Greenspan, who stuck around nearly 19 years.

Grossman Presents Keynote at Austrian National Bank Conference

Richard Grossman

Richard Grossman

Professor of Economics Richard Grossman recently presented the keynote address at a conference held at the Austrian National Bank.

The presentation, made on March 11, was titled, “Interest rate cycles and implications for the financial sector: a long-term view.” A summary is available here.

The conference was jointly sponsored by Austria’s central bank (the Oesterreichische Nationalbank), SUERF (the European Money and Finance Forum), and BWG (the Austrian Society for Bank Research).

Grossman Talks about Quantitative Easing Policy on Share Radio

Richard Grossman

Richard Grossman

Richard Grossman, professor of economics, is featured in a radio interview with Share Radio in London Feb. 19.

In the interview, Grossman talks about the consequences of the European Central Bank’s new quantitative easing (QE) policy, which may stimulate an economy when a standard monetary policy has become ineffective.

The ECB’s action follows in the footsteps of the central banks of Japan, the United Kingdom, and the United States, which also have used quantitative easing in the 2000s.

A concern that has been raised about the introduction of QE is that persistent low interest rates will lead to another boom-bust macroeconomic cycle similar to the one that ended  in the US subprime crisis. Grossman, who conducts research on historical episodes of financial crises, argues that the European economy is so weak at the moment that the risk of QE causing a crisis is low, and certainly outweighed by the benefits.

Grossman said implementation of the QE may not be noticed right away.

“Over time, this will put a consistent downward pressure on the euro,” which Grossman argues will help European exporters.

Listen to the program here.