This paper reconstructs the awarding of the 1961 Soderstrom Gold Medal to Piero Sraffa by The Royal Swedish Academy of Sciences. It explains why the prize was created and highlights Gunnar Myrdal’s nomination of Sraffa for the award overseen by the Academy. Primary historical documents are used to establish the amicable relationship between these two economists and to point out their differences and affinities on issues relating to the history of economic thought, particularly in connection with Ricardo’s economics. In addition, Sraffa's activities in Stockholm are detailed, including his contact with Swedish economists and his attendance at the award ceremony. Contemporary reactions in Sweden and Italy to the awarding of this prize to Sraffa are reviewed. The final remarks offer some reflection on the significance of the 1961 Soderstrom Gold Medal for the history of economics as a field of study.
{"title":"Sraffa, Myrdal, and the 1961 Söderström Gold Medal","authors":"Rogério Arthmar, M. McLure","doi":"10.1111/SJOE.12274","DOIUrl":"https://doi.org/10.1111/SJOE.12274","url":null,"abstract":"This paper reconstructs the awarding of the 1961 Soderstrom Gold Medal to Piero Sraffa by The Royal Swedish Academy of Sciences. It explains why the prize was created and highlights Gunnar Myrdal’s nomination of Sraffa for the award overseen by the Academy. Primary historical documents are used to establish the amicable relationship between these two economists and to point out their differences and affinities on issues relating to the history of economic thought, particularly in connection with Ricardo’s economics. In addition, Sraffa's activities in Stockholm are detailed, including his contact with Swedish economists and his attendance at the award ceremony. Contemporary reactions in Sweden and Italy to the awarding of this prize to Sraffa are reviewed. The final remarks offer some reflection on the significance of the 1961 Soderstrom Gold Medal for the history of economics as a field of study.","PeriodicalId":11754,"journal":{"name":"ERN: Other Macroeconomics: Aggregative Models (Topic)","volume":"134 3 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85515361","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The balance of macro accounting requires that there are economic entities have opposite preferences and take opposite economic activities like mirror copy (Nshi(2017)). This paper provides examples of uses of the symmetry rule for financial markets.
Most important implication of the symmetry rule, financial trades keep total wealth in the economy to be invariant. That is, the nature of financial market is zero-sum game. Of course, the return on the actual financial market is not zero, and the paper shows the return comes from real investment including business investment. Finally, a balance approach to portfolio selection will be discussed using the symmetry rule in the accounting oriented general equilibrium model.
{"title":"Financial Market in a Macro Accounting General Equilibrium Model","authors":"Kimagure Nshi","doi":"10.2139/ssrn.3315331","DOIUrl":"https://doi.org/10.2139/ssrn.3315331","url":null,"abstract":"The balance of macro accounting requires that there are economic entities have opposite preferences and take opposite economic activities like mirror copy (Nshi(2017)). This paper provides examples of uses of the symmetry rule for financial markets.<br><br>Most important implication of the symmetry rule, financial trades keep total wealth in the economy to be invariant. That is, the nature of financial market is zero-sum game. Of course, the return on the actual financial market is not zero, and the paper shows the return comes from real investment including business investment. Finally, a balance approach to portfolio selection will be discussed using the symmetry rule in the accounting oriented general equilibrium model.","PeriodicalId":11754,"journal":{"name":"ERN: Other Macroeconomics: Aggregative Models (Topic)","volume":"35 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-01-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74063165","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
S. Beugelsdijk, Mariko J. Klasing, Petros Milionis
We investigate the link between culture and regional economic development within European countries. Considering a variety of cultural values, we provide evidence that it is the degree of diversity in these values at the regional level that strongly correlates with economic performance, rather than the prevalence of specific values. In particular, we show that greater value diversity is negatively associated with regional economic performance within countries, which also relates to lower institutional quality and poorer public goods provision. These patterns are robust even when diversity is measured on the basis of values expressed by emigrants residing outside their region of origin.
{"title":"Value Diversity and Regional Economic Development","authors":"S. Beugelsdijk, Mariko J. Klasing, Petros Milionis","doi":"10.1111/sjoe.12253","DOIUrl":"https://doi.org/10.1111/sjoe.12253","url":null,"abstract":"We investigate the link between culture and regional economic development within European countries. Considering a variety of cultural values, we provide evidence that it is the degree of diversity in these values at the regional level that strongly correlates with economic performance, rather than the prevalence of specific values. In particular, we show that greater value diversity is negatively associated with regional economic performance within countries, which also relates to lower institutional quality and poorer public goods provision. These patterns are robust even when diversity is measured on the basis of values expressed by emigrants residing outside their region of origin.","PeriodicalId":11754,"journal":{"name":"ERN: Other Macroeconomics: Aggregative Models (Topic)","volume":"180 2","pages":""},"PeriodicalIF":0.0,"publicationDate":"2018-10-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91461559","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This work develops a set of mathematical tools that allows us to map the topology of an economic network to a probability distribution of possible outcomes for the economy. We can apply these tools to analyze complex economic systems in closed form and to construct error bounds about the paths of aggregated networked economies. To generate this mapping from network topology to probability distribution, we focus on a class of economies that has the following three features: (1) a population of N agents, each with a binary-valued attribute, (2) a network on which these N agents are organized, and (3) decision-making by each networked agent that depends on the local relative frequency of the attribute’s unit value. This class of economies also has an aggregate feature: the global relative frequency of the attribute’s unit value. Given the system’s aggregate feature, underlying network, and population size, we construct in closed form the distribution of possible local relative frequencies of the attribute. The topology of the network determines the extent to which the local relative frequency of the attribute can deviate from its global relative frequency, thereby determining the extent to which the outcome of the economy can deviate from a benchmark outcome. Given this distribution and agents’ decision-making behavior, we then construct the distribution of possible outcomes for the economy. For realistic agent interaction structures featuring a very large population of agents, the distribution of outcomes is meaningfully non-degenerate. We adapt the theoretical framework and mathematical tools developed in this work to study locally formed macroeco- nomic sentiment and how agents’ interaction structure shapes the capacity for there to exist non-fundamental swings in aggregate sentiment, with implications for the outcome of the 2016 U.S. presidential election and for our understanding of animal spirits.
{"title":"The Distribution of Outcomes for a Networked Economy","authors":"Janelle Schlossberger","doi":"10.2139/ssrn.3165257","DOIUrl":"https://doi.org/10.2139/ssrn.3165257","url":null,"abstract":"This work develops a set of mathematical tools that allows us to map the topology of an economic network to a probability distribution of possible outcomes for the economy. We can apply these tools to analyze complex economic systems in closed form and to construct error bounds about the paths of aggregated networked economies. To generate this mapping from network topology to probability distribution, we focus on a class of economies that has the following three features: (1) a population of N agents, each with a binary-valued attribute, (2) a network on which these N agents are organized, and (3) decision-making by each networked agent that depends on the local relative frequency of the attribute’s unit value. This class of economies also has an aggregate feature: the global relative frequency of the attribute’s unit value. Given the system’s aggregate feature, underlying network, and population size, we construct in closed form the distribution of possible local relative frequencies of the attribute. The topology of the network determines the extent to which the local relative frequency of the attribute can deviate from its global relative frequency, thereby determining the extent to which the outcome of the economy can deviate from a benchmark outcome. Given this distribution and agents’ decision-making behavior, we then construct the distribution of possible outcomes for the economy. For realistic agent interaction structures featuring a very large population of agents, the distribution of outcomes is meaningfully non-degenerate. We adapt the theoretical framework and mathematical tools developed in this work to study locally formed macroeco- nomic sentiment and how agents’ interaction structure shapes the capacity for there to exist non-fundamental swings in aggregate sentiment, with implications for the outcome of the 2016 U.S. presidential election and for our understanding of animal spirits.","PeriodicalId":11754,"journal":{"name":"ERN: Other Macroeconomics: Aggregative Models (Topic)","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2018-10-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88570757","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Although economic circumstances have been argued to be a major determining factor of attitudes to redistribution, there is little well identified evidence at the individual level. Utilizing a unique dataset, with detailed individual information,provides new and convincing evidence on the link between economic circumstances and demand for redistribution (in the form of bene ts and support). The Swedish National Election Studies are constructed as a rotating survey panel, which makes it possible to estimate the causal effect of economic changes. The empirical analysis shows that individuals who experience a job loss become considerably more supportive of redistribution. Yet, attitudes to redistribution return to their initial level as economic prospects improve, suggesting that the effect is only temporary. Despite the fact that a job loss also changes attitudes to the political parties, the probability to vote for the left-wing is not affected.
{"title":"Demand for Redistribution: Individuals’ Responses to Economic Setbacks","authors":"L. Martén","doi":"10.1111/sjoe.12276","DOIUrl":"https://doi.org/10.1111/sjoe.12276","url":null,"abstract":"Although economic circumstances have been argued to be a major determining factor of attitudes to redistribution, there is little well identified evidence at the individual level. Utilizing a unique dataset, with detailed individual information,provides new and convincing evidence on the link between economic circumstances and demand for redistribution (in the form of bene ts and support). The Swedish National Election Studies are constructed as a rotating survey panel, which makes it possible to estimate the causal effect of economic changes. The empirical analysis shows that individuals who experience a job loss become considerably more supportive of redistribution. Yet, attitudes to redistribution return to their initial level as economic prospects improve, suggesting that the effect is only temporary. Despite the fact that a job loss also changes attitudes to the political parties, the probability to vote for the left-wing is not affected.","PeriodicalId":11754,"journal":{"name":"ERN: Other Macroeconomics: Aggregative Models (Topic)","volume":"161 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2018-10-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86446974","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We assess the individual willingness to sell personal data in laboratory experiments. Our experiments are novel in that (i) the experiments are incentivized, (ii) the focus on privacy issues is salient, and (iii) the use of the data is transparent and unambiguous. We find considerable heterogeneity in the data: roughly one in six participants refuse to sell personal data at all and a similar fraction sell their data for €2.50 or less—our results contrast with those from hypothetical questionnaires. Those willing to sell request, on average, €15 for their contact details and €19 for their Facebook data. This article is protected by copyright. All rights reserved
{"title":"The Willingness to Sell Personal Data","authors":"V. Benndorf, Hans-Theo Normann","doi":"10.1111/sjoe.12247","DOIUrl":"https://doi.org/10.1111/sjoe.12247","url":null,"abstract":"We assess the individual willingness to sell personal data in laboratory experiments. Our experiments are novel in that (i) the experiments are incentivized, (ii) the focus on privacy issues is salient, and (iii) the use of the data is transparent and unambiguous. We find considerable heterogeneity in the data: roughly one in six participants refuse to sell personal data at all and a similar fraction sell their data for €2.50 or less—our results contrast with those from hypothetical questionnaires. Those willing to sell request, on average, €15 for their contact details and €19 for their Facebook data. \u0000 \u0000This article is protected by copyright. All rights reserved","PeriodicalId":11754,"journal":{"name":"ERN: Other Macroeconomics: Aggregative Models (Topic)","volume":"74 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2018-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74558186","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We document novel facts about the relationship between aggregate growth and firm dynamics using a large set of countries. We argue that firm employment patterns are not necessarily informative about cross‐country differences in aggregate growth because they are induced by changes in the productivity of a firm relative to others. In contrast, aggregate growth is linked to average firm‐level productivity growth and firm age. We formalize this intuition through a tractable model of endogenous aggregate growth and firm dynamics where firms realize positive returns to investment with some probability. We find that cross‐country disparities in this probability can account for two‐thirds of the variation in aggregate growth. (JEL D21, D22, E23, O4)
{"title":"Who Quits Next? Firm Growth in Growing Economies","authors":"J. Caunedo, Emircan Yurdagul","doi":"10.1111/ecin.12722","DOIUrl":"https://doi.org/10.1111/ecin.12722","url":null,"abstract":"We document novel facts about the relationship between aggregate growth and firm dynamics using a large set of countries. We argue that firm employment patterns are not necessarily informative about cross‐country differences in aggregate growth because they are induced by changes in the productivity of a firm relative to others. In contrast, aggregate growth is linked to average firm‐level productivity growth and firm age. We formalize this intuition through a tractable model of endogenous aggregate growth and firm dynamics where firms realize positive returns to investment with some probability. We find that cross‐country disparities in this probability can account for two‐thirds of the variation in aggregate growth. (JEL D21, D22, E23, O4)","PeriodicalId":11754,"journal":{"name":"ERN: Other Macroeconomics: Aggregative Models (Topic)","volume":"66 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2018-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87613786","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper we evaluate the effectiveness of an open-ended Asset Purchase Programme (APP) for the euro area. To this purpose, we build on the large-scale New Keynesian dynamic general equilibrium model calibrated to the euro area and the rest of the world developed in Burlon et al. (2017), but, different from that contribution, we assume that the central bank does not announce the ending date of the programme, while leaving open the possibility of extending it in future periods conditionally on inflation developments. We assume that agents form their expectations about possible additional purchases beyond the horizon of the announcement by the central bank according to a rule linking them to the expected inflation gap. It is showed that the open-ended APP is more effective in immediately stimulating macroeconomic conditions than committing ex ante to an ending date. Importantly, the open-ended dimension provides a hedge against the materialization of negative euro-area aggregate demand shocks that pushes inflation away from its path towards the target. The effectiveness is further reinforced by a forward guidance on monetary policy rates.
{"title":"Macroeconomic Effects of an Open-ended Asset Purchase Programme","authors":"Lorenzo Burlon, A. Notarpietro, M. Pisani","doi":"10.2139/ssrn.3210756","DOIUrl":"https://doi.org/10.2139/ssrn.3210756","url":null,"abstract":"In this paper we evaluate the effectiveness of an open-ended Asset Purchase Programme (APP) for the euro area. To this purpose, we build on the large-scale New Keynesian dynamic general equilibrium model calibrated to the euro area and the rest of the world developed in Burlon et al. (2017), but, different from that contribution, we assume that the central bank does not announce the ending date of the programme, while leaving open the possibility of extending it in future periods conditionally on inflation developments. We assume that agents form their expectations about possible additional purchases beyond the horizon of the announcement by the central bank according to a rule linking them to the expected inflation gap. It is showed that the open-ended APP is more effective in immediately stimulating macroeconomic conditions than committing ex ante to an ending date. Importantly, the open-ended dimension provides a hedge against the materialization of negative euro-area aggregate demand shocks that pushes inflation away from its path towards the target. The effectiveness is further reinforced by a forward guidance on monetary policy rates.","PeriodicalId":11754,"journal":{"name":"ERN: Other Macroeconomics: Aggregative Models (Topic)","volume":"13 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2018-07-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81752058","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper presents results from an experiment on the effects of recommended retail prices on consumer and retailer behaviour. We present evidence that recommended retail prices, despite their non†binding nature, influence consumers’ willingness to pay by setting a reference point. At a given price, consumers buy more the higher the recommended retail price is, and their demand drops at prices above the recommended retail price, even when it is entirely uninformative about the value of the product. Retailers in this study are subject to similar anchoring effects, but they do not anticipate consumers’ behaviour well and are thus not able to exploit their behavioural biases.
{"title":"The Effects of Recommended Retail Prices on Consumer and Retailer Behaviour","authors":"Lisa V. Bruttel","doi":"10.1111/ecca.12218","DOIUrl":"https://doi.org/10.1111/ecca.12218","url":null,"abstract":"This paper presents results from an experiment on the effects of recommended retail prices on consumer and retailer behaviour. We present evidence that recommended retail prices, despite their non†binding nature, influence consumers’ willingness to pay by setting a reference point. At a given price, consumers buy more the higher the recommended retail price is, and their demand drops at prices above the recommended retail price, even when it is entirely uninformative about the value of the product. Retailers in this study are subject to similar anchoring effects, but they do not anticipate consumers’ behaviour well and are thus not able to exploit their behavioural biases.","PeriodicalId":11754,"journal":{"name":"ERN: Other Macroeconomics: Aggregative Models (Topic)","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2018-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82920531","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-06-01DOI: 10.5089/9781484363027.001
Sebastian Acevedo Mejia, Mićo Mrkaić, Natalija Novta, E. Pugacheva, P. Topalova
Global temperatures have increased at an unprecedented pace in the past 40 years. This paper finds that increases in temperature have uneven macroeconomic effects, with adverse consequences concentrated in countries with hot climates, such as most low-income countries. In these countries, a rise in temperature lowers per capita output, in both the short and medium term, through a wide array of channels: reduced agricultural output, suppressed productivity of workers exposed to heat, slower investment, and poorer health. In an unmitigated climate change scenario, and under very conservative assumptions, model simulations suggest the projected rise in temperature would imply a loss of around 9 percent of output for a representative low-income country by 2100.
{"title":"The Effects of Weather Shocks on Economic Activity: What are the Channels of Impact?","authors":"Sebastian Acevedo Mejia, Mićo Mrkaić, Natalija Novta, E. Pugacheva, P. Topalova","doi":"10.5089/9781484363027.001","DOIUrl":"https://doi.org/10.5089/9781484363027.001","url":null,"abstract":"Global temperatures have increased at an unprecedented pace in the past 40 years. This paper finds that increases in temperature have uneven macroeconomic effects, with adverse consequences concentrated in countries with hot climates, such as most low-income countries. In these countries, a rise in temperature lowers per capita output, in both the short and medium term, through a wide array of channels: reduced agricultural output, suppressed productivity of workers exposed to heat, slower investment, and poorer health. In an unmitigated climate change scenario, and under very conservative assumptions, model simulations suggest the projected rise in temperature would imply a loss of around 9 percent of output for a representative low-income country by 2100.","PeriodicalId":11754,"journal":{"name":"ERN: Other Macroeconomics: Aggregative Models (Topic)","volume":"31 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2018-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80133495","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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