Tag Archive for economics

Yohe Brings “Rap Guide to Climate Chaos” to Campus

On Feb. 2, the Wesleyan community will be treated to a performance of “The Rap Guide to Climate Chaos,” a one-man show written and performed by Baba Brinkman on the politics, economics and science of global warming.

The performance will begin at 7 p.m. in the Ring Family Performing Arts Hall. The event is free of charge.

Gary Yohe

Gary Yohe

Gary Yohe, the Huffington Foundation Professor of Economics and Environmental Studies, has worked with Brinkman in the past and was responsible for bringing his performance to Wesleyan. In May 2016, Brinkman invited Yohe to serve as the climate expert during an off-Broadway performance of the show at the SoHo Playhouse in New York City. Yohe spent 25 minutes on stage taking questions from the audience, which provided material for the closing raps.

Now, Yohe has sponsored the creation of a new rap, titled “Erosion,” that has been produced by Brinkman on climate change and the election of President Donald Trump. Yohe provided peer review to ensure the scientific accuracy of all climate science statements made in the rap. Watch the new rap online at https://www.youtube.com/watch?v=EEx-F-pSdXA, or below.

During the Wesleyan performance on Feb. 2, Yohe will reprise his role as the climate expert on stage and Baba will offer the world premier performance of “Erosion.”

Yohe also has used “The Rap Guide to Climate Change” in a class he taught in the fall semester, ECON 212/ ENVS 310: The Economics of Sustainable Development, Vulnerability and Resilience.

“I taught my students how to apply IPCC (Intergovernmental Panel on Climate Change) and Department of Defense standards for confidence to statements in the show. Each student was assigned to research and provide literature on two tracks, then assess where the lyrics may have overstated confidence,” Yohe explained. “I shared the students’ work with Baba, and he was very appreciative; only a few sources of concern were detected.”

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Hornstein Presents Papers at American Economic Association Conference

Abigail Hornstein

Abigail Hornstein

Abigail Hornstein, associate professor of economics, presented two papers at the 2017 American Economic Association meeting held Jan. 6-8 in Chicago.

In her working paper, “Words vs. Actions: International Variation in the Propensity to Honor Pledges,” Hornstein used data on contracted and utilized foreign direct investment in China to show that firms fulfill an average of 59 percent of their pledges within two years. “The propensity to fulfill contracts is lower for firms from countries with greater uncertainty avoidance, power distance and egalitarianism; and is higher if the source country is more traditional,” she explained. Prior literature has shown that these cultural characteristics are associated with higher levels of utilized foreign direct investment, while Hornstein shows that these cultural characteristics also affect the likelihood that planned corporate investments are actually made.

Her other working paper, “Board Overlaps in Mutual Fund Families” (co-authored by Elif Sisli Ciamarra of Brandeis University), is based on hand-collected data on directors at 3,948 U.S. equity mutual funds belonging to 328 fund families. Hornstein and Sisli Ciamarra used this data to document the prevalence and effects of a common board structure whereby a set of directors serves simultaneously on the boards of multiple funds within the family. Fifty-nine percent of all funds have unitary board structures where a single board serves all funds within the complex. “We find that overlapping boards generally represent 74 percent of the funds within a family, and that this overlapping board structure provides limited benefits to investors while benefiting the fund family,” she said.

In addition to her paper presentations, Hornstein also was elected to the executive board of the Association for Comparative Economics Studies, for a term ending in 2020.

Grossman Argues Truth Was Lost in the Election

Richard Grossman

Richard Grossman

Professor of Economics Richard Grossman tells his students that getting closer to the truth is what economic research is all about. That’s why he was so dismayed when “my devotion to, and belief in, the truth was battered by the presidential election,” he writes in an op-ed on The Hill.

He writes:

It turns out that polling data and analysis contained very little truth. The news were no better. The mainstream media got many things wrong. And there was no shortage of fake news. Although peddled as the real thing, it really wasn’t even trying to provide truth, only to shape opinion.

But by far the biggest letdown in the truth department was Donald Trump, who proved that telling lie upon lie upon lie need not prevent someone from being elected president.

“What should the truth-loving public do going forward?” Grossman asks.

First, pay attention to sources. It is relatively easy to construct a realistic website that has the look and feel of a real news organization or reputable think tank. Do not be fooled. If someone tells you something about the state of employment in the United States, double check facts at Bureau of Labor Statistics’ website. The U.S. government is the best, most reliable source for factual data about the nation’s economy. Obama didn’t fudge the numbers, and Trump is unlikely to be able to do so.

Second, even relatively trusted new sources have their less trustworthy bits. In print media, the division between truth and opinion is usually clear. You can generally trust what you read in the Wall Street Journal, until you get to the opinion pages. Television networks are less clear about separating fact from fiction. CNN’s hiring of Trump campaign employee Corey Lewandowski—while he was on the Trump payroll and still subject to a non-disclosure agreement—should have set off alarm bells among CNN viewers, not to mention the better journalistic instincts of CNN’s management.

Third, be demanding. I encourage my students to challenge the authors that they read in class, including me. Ask questions, check sources and verify the truth for yourself. Just because something has been shared on Facebook a million times does not mean it is true. We should challenge the assertions of politicians of all stripes just as vigorously.

Finally, we need to care more about the truth. One of the most troubling aspects of the election was that so many people voted for Trump despite being fully aware of his many lies because “he shouldn’t be taken literally.” At the risk of sounding naive again, approaching national elections with the attitude that outright lies don’t matter does not bode well for the future of our democracy.

Kuenzel Published in European Economic Review

David Kuenzel

David Kuenzel

David Kuenzel, assistant professor of economics, is the author of a new paper published in the European Economic Review titled “WTO Dispute Determinants.”

In the paper, Kuenzel investigates what factors drive the decisions of World Trade Organization member countries to engage in trade disputes with each other. “Understanding the determinants of the dispute pattern is crucial, since the WTO can only function properly if its dispute settlement mechanism is equally accessible to all member countries,” Kuenzel said.

The paper presents a new theory and empirical evidence to show that trade policy flexibility, which is defined as the difference between the tariff rate a country is legally allowed to set and the tariff rate it actually applies, is the key to understanding the WTO dispute pattern. Less trade policy flexibility constrains WTO members’ legal policy options when responding to adverse shocks in the world economy, and leads more frequently to the application of illegal trade barriers.

Countries with less trade policy flexibility, Kuenzel says, are also more likely to gain from dispute filings, since WTO rulings have to be enforced by countries themselves through the threat of applying higher tariffs rates.

“Importantly, the results in the paper illustrate that the WTO’s current emphasis on providing subsidized legal advice to developing countries is not making the WTO dispute settlement mechanism more accessible,” he says. “While the subsidy helps poorer members to file disputes and increases the likelihood of winning a case, developing countries still lack the power to enforce WTO rulings due to their much greater trade policy flexibility relative to other WTO member groups, which substantially diminishes the economic incentive for low-income members to initiate a dispute.”

Imai Presents Economics Research at Banking Conference, Macroeconomics Research Workshop

Masami Imai

Masami Imai

Masami Imai, chair and professor of economics, professor of East Asian studies, presented a paper at the 19th Annual International Banking Conference held at the Federal Reserve Bank of Chicago on Nov. 4. This year’s theme was Achieving Financial Stability: Challenges to Prudential Regulation, giving Imai the opportunity to speak on “Japan’s Regulatory Response to Banking Problems.”

At the 12th Annual Workshop on Macroeconomics Research at Liberal Arts Colleges, held at Williams College in August, and at the Japanese Economic Association Meeting held at Waseda University College in Tokyo, Japan in September, Imai discussed “The Effects of Ethnic Chinese Minority on Vietnam’s Regional Economic Development in the Post-Vietnam War Period.”

His work examined the impact of the Hoa, an ethnically Chinese, economically dominant minority on regional economic development in Vietnam following the Vietnam War. Imai found that the ethnic group had a positive impact on the development of Vietnam, but the “post-Vietnam War exodus of ethnic Chinese is likely to have had long-term negative economic impacts.”

Imai teaches courses on money, banking and financial markets, economy of Japan, economies of East Asia, and quantitative methods in economics. His research interests include money and banking, political economy, and the economy of Japan.

(Randi Plake contributed to this article).

 

Barber Remembered as a Founding Member of the College of Social Studies

William Barber (Photo courtesy of Wesleyan's Special Collections and Archives)

William Barber (Photo courtesy of Wesleyan’s Special Collections and Archives)

William J. Barber, the Andrews Professor of Economics, Emeritus, died Oct. 26 at the age of 91.

Barber arrived at Wesleyan in 1957 after receiving his BA from Harvard University and completing a Rhodes Scholarship and earning a BA, MA and Doctor of Philosophy from Oxford University. He taught at Wesleyan for 37 years before retiring in 1994. Barber was actively engaged in the leadership of the University throughout his time at Wesleyan. He was a founding member of the College of Social Studies, served as chair of the economics department and faculty secretary, and was appointed by the Board of Trustees as Acting President for three months in 1988 until President Chace assumed the office.

Barber was a productive scholar who published widely, including A History of Economic Thought, which after its release in 1967 became a standard in the field of economics for decades and was translated into seven languages, including Chinese, Japanese, Swedish and Farsi (Persian). He published 11 other books as author or editor, and hundreds of articles on economic trends and developments in the United States, Africa, Britain, Europe, India and other areas of Asia. He was the recipient of many honors and awards throughout his distinguished career, including the George Webb-Medley Prize in Economics from Oxford in 1950 and a Ford Foundation Foreign Area Fellowship for study in Africa from 1955-57, and he was twice appointed a research associate of the Brookings Institution. In 2002 he was honored as a Distinguished Fellow of the History of Economics Society and in 2005 received a Honorary Doctor of Letters from Wesleyan. Barber served as the American Secretary for the Rhodes Scholarship Trust from 1970 to 1980; during this tenure he was instrumental in opening the Rhodes Scholarship to women and his service to the Trust was recognized by the British Government through his appointment as an honorary member of the Order of the British Empire.

On Nov. 23, Barber was featured in a Hartford Courant article titledExtraordinary Life: Economist Made A Career At Wesleyan.”

“Bill Barber was an academic who ‘came alive’ in the classroom, and whose major work on the history of economic thought was translated into more than a half dozen languages. He was an economist in the traditional sense: his approach was not quantitative but drew from many disciplines,” wrote author Anne M. Hamilton in the Courant article.

Barber’s friend, Richard Miller, said, “Bill was a valued friend and colleague for over half a century. He provided guidance, counsel, and support to me and to many others. The economics department and the University have been immeasurably stronger for his contributions and his leadership.”

Born a Midwesterner and having survived World War II as an infantry soldier, Barber found in Wesleyan his intellectual and emotional home. He loved the classroom as well as the intellectual freedom that the University offered. He was devoted to his family and is survived by his wife, Sheila, who herself has long been an active member of the Wesleyan community, and his sons, Charles, John, and Tom, their wives, and six grandchildren.

Memorial contributions in Bill Barber’s name may be made to Middlesex Hospital Hospice and Palliative Care at 28 Crescent Street, Middletown, CT 06457. A memorial service is planned for Jan. 28 at Wesleyan.

Khamis Participates in Informality, Development Conference

Melanie Khamis

Melanie Khamis

Melanie Khamis, assistant professor of economics, assistant professor of Latin American studies, attended the Informality and Development Conference in Honor of Elinor Ostrom held at Indiana University on Oct. 22-23.

Khamis, co-authored two papers presented at the conference including “Migration and the Informal Sector,” and “Risk Attitudes, Informal Employment and Wages: Evidence from a Transition Country.”

The conference was organized by faculty from Cornell University and Indiana University. It centered around the study of informality, the part of an economy that is neither taxed not monitored by any form of government—a subject area where Professor Ostrom, the first and only woman to have won the Nobel Prize in Economics in 2009, has had a major influence. The goal of the conference was to honor the memory and the legacy of Ostrom by exploring informality from both economic and interdisciplinary perspectives.

Kuenzel Investigates Whether the Diversity of Countries’ Export Portfolios Affects Economic Growth

David Kuenzel

David Kuenzel

David Kuenzel, assistant professor of economics, is the co-author of a new paper published in the Canadian Journal of Economics titled “The Elusive Effects of Trade on Growth: Export Diversity and Economic Take-off.

In the paper, Kuenzel and his co-author, Theo Eicher from the University of Washington, investigate whether the diversity of countries’ export portfolios affects their economic growth performance.

In the paper, Kuenzel and Eicher propose a structured approach to trade and growth determinants based on recent advances in international trade. The results show that export diversity serves as a crucial growth determinant for low-income countries, and the effect weakens with a country’s level of development.

 

Bonin, Louie ’15 Co-Author Paper in Journal of Comparative Economics

John Bonin, the Chester D. Hubbard Professor of Economics and Social Science, and his former student Dana Louie ’15, are authors of a new paper published in Journal of Comparative Economics titled, “Did foreign banks stay committed to emerging Europe during recent financial crises?”

In the paper, Bonin and Louie investigate the behavior of foreign banks with respect to real loan growth during times of financial crisis for a set of countries where foreign banks dominate the banking sectors. The paper focuses on eight countries that are the most developed in emerging Europe and the behavior of two types of banks: The Big 6 European multinational banks (MNBs) and all other-foreign controlled banks. The results show that bank lending was impacted adversely during recent financial crises, but the two types of banks behaved differently. The Big 6 banks’ lending behavior was similar to domestic banks supporting the notion that these countries are treated as a “second home market” by these European MNBs. However, the other foreign banks in the region were involved in fueling the credit boom, but then decreased their lending aggressively during the crisis periods. The results suggest that both innovations matter for studying bank behavior during crisis periods in the region and, by extension, to other small countries in which banking sectors are dominated by foreign financial institutions having different business models.

“I am particularly proud of this collaborative publication because it does not stem from a student’s honors thesis, but rather from work that began with the Quantitative Analysis Center summer program and that Dana and I continued throughout her senior year in addition to her regular coursework,” Bonin said.

The paper is available online and will appear in a forthcoming hardcopy issue of the journal.

Hornstein, Hounsell ’11 Co-Author Paper in Journal of Economics and Business

Abigail Hornstein

Abigail Hornstein

Associate Professor of Economics Abigail Hornstein and James Hounsell ’11 are the authors of a new paper published in The Journal of Economics and Business titled “Managerial investment in mutual funds: Determinants and performance implications.”

In the paper, Hornstein and Hounsell examine what determines managerial investments in mutual funds, and the impacts of these investments on fund performance. By using panel data they show that investment levels fluctuate within funds over time, contrary to the common assumption that cross-sectional data are representative. Managerial investments reflect personal portfolio considerations while also signaling incentive alignment with investors. The impact of managerial investment on performance varies by whether the fund is solo- or team-managed. Fund performance is higher for solo-managed funds and lower for team-managed funds when managers invest more. These results are consistent with the higher visibility of solo managers, and less extreme investment returns of team-managed funds. The results suggest investors may not benefit from all managerial signals of incentive alignment as managerial investments also reflect personal portfolio considerations.

Read the full paper here.

Yohe Speaks at the ‘Rap Guide to Climate Chaos’

Gary Yohe answered audience questions about climate change during the off-Broadway production, "Rap Guide to Climate Change" on May 29.

Gary Yohe answered audience questions about climate change during the off-Broadway production, “Rap Guide to Climate Change” on May 29.

Gary Yohe, the Huffington Foundation Professor of Economics and Environmental Studies, made his off-Broadway debut in the TED-talk segment of “Rap Guide to Climate Change,” written and performed by Baba Brinkman and directed by Darren Lee Cole, at the SoHo Playhouse in New York City on May 29. In this one-man show, running from February through July, Brinkman breaks down the politics, economics, and science of global warming, following its surprising twists from the carbon cycle to the global energy economy.

Yohe was invited to be the climate expert for the TED-talk segment in the middle of the show. He spent 25 minutes on stage with Brinkman taking questions from the audience, which provided material for the closing raps.

Boulware Presents Research at Symposium of the Society of Nonlinear Dynamics and Econometrics

Assistant Professor of Economics Karl Boulware recently presented research at the 24th Symposium of the Society of Nonlinear Dynamics and Econometrics, held March 10-11 at the University of Alabama.

Boulware presented a paper titled, “Monetary Policy Surprises and the Shadow Bank Lending Channel: Evidence from the Fed Funds Futures Market” during a session on Monetary and Government Policy. The project is a refinement of research started by Kota Uno ’16 during a QAC Summer Apprenticeship with Boulware.