Manchester School最新文献

This paper takes online shopping into consideration, and constructs general equilibrium models to analyze how consumers' dependence on online shopping affects rural-urban skilled-unskilled wage inequality. We find that when consumers' dependence on online shopping increases, wage inequality can be conditionally narrowed down, depending on the unskilled labor intensity in the urban manufacturing sector and the possible elasticity of the contract price.

This paper investigates the relationship between mortgage leverage and consumption around the 2008 financial crisis. Using data from the UK's Family Expenditure Survey and Wealth and Asset Survey, we first show that high-leveraged households made larger cuts to consumption following the financial crisis, and this was largely driven by young households. Second, using a life-cycle framework, we qualitatively evaluate four possible channels that could explain the observed positive relationship between consumption and leverage: income, uncertainty, credit supply and house price channels. Our key finding is that credit supply tightening is the main driver of the empirical co-movement between pre-crisis leverage and consumption growth after 2008.

This study reveals the hidden dynamics of USA-Germany international trade through a revised J-curve hypothesis. It emphasizes the inadequacy of the traditional Bilateral Trade Balance (BTB) ratio based on total exports. To this aim, it introduces two new testing approaches based on adjusted BTB: the GDP-driven-BTB-based J-curve hypothesis (GDPJ) and the Non-GDP-driven-BTB-based J-curve hypothesis (NGDPJ). The empirical findings advocate the necessity of these alternative tests, offering policymakers more informative results than the traditional approach. GDPJ is validated for 13 goods, while NGDPJ and traditional methods are validated for 10 and 8 goods. These results underscore the risks of solely relying on the traditional approach. By embracing the revised J-curve hypothesis and alternative BTBs, policymakers can gain deeper insights into the USA-Germany trade relationship. One interpretation is that, under Brexit, German consumers reduce their purchases of re-exported goods more than domestically produced goods from the US.

We reassess the relationship between robotization and the growth in labor productivity with more recent data. We discover that the effect of robot density in the growth productivity substantially decreased in the post-2008 period. In this period, the lower positive effect of robot density in the growth of labor productivity is less dependent on the increase in value added. The data analysis dismisses any positive effect of robotization on hours worked. Results are confirmed by several robustness checks, cross-sectional (and panel-data) Instrumental Variable and quantile regression analysis. By means of the quantile regression analysis, we learn that the effect of robots on labor productivity is stronger for low productivity sectors and that in the most recent period, the effect of robotization felt significantly throughout the distribution. This highlights one of the possible sources of stagnation in the era of robotization and have implication both for labor market and R&D policies.

This paper contributes to the literature on how firms change their advertising strategies after a corporate scandal by providing both a theoretical model and an empirical evaluation based on the idea that advertising acts as a signal of the product quality that is modulated by the number of competing substitutes in the market. This result is new to the literature and helps to explain cases in which, possibly counter-intuitively, a firm affected by a corporate scandal may optimally decide to reduce its advertising expenditures, rather than increase it, in an attempt to restore its reputation as quickly as possible. We find empirical support for this result in the Volkswagen Group's response to the Dieselgate scandal.

Clusters in the developing world do, to a large extent, attract low-educated individuals, and these clusters are in some cases, characterized by urbanization without industrialization. This contrasts starkly to clusters in advanced economies that attract high-skilled individuals and entrepreneurs. In this paper, we develop a model of agglomeration and spatial sorting that is consistent with these two types of different agglomeration processes in developed and developing countries. We show that a poor country that has an agglomeration with low skilled individuals, may get stuck in this equilibrium, but that free mobility of human capital from the outset nevertheless is superior from the perspective of total social welfare.

We may be living at the dawn of a productivity revolution era brought about by modern science and technological improvements. The six research papers published in this special issue of The Manchester School, titled “Productivity Revolutions: Past and Future,” provide us with lessons on how economies and societies have dealt with the challenges posed by such revolutions.

Human productivity began increasing in the mid-19th century in a group of societies whose institutional structures simultaneously transformed. This paper develops a general way of thinking about institutional structures and identifies how specific institutional changes that occurred in the mid-19th century could have caused an increase in productivity across many of the organizations in a society. External rules enforced by one organization but used by other organizations, are central to the argument, as is the emergence of impersonal rules that apply equally to all citizens. The productivity revolution of the late 19th century occurred in an era when a few societies adopted impersonal rules on a broad scale for the first time in human history.

We compare the effects of price and quantity competition in an industry with complementary inputs, outsourcing and a vertically integrated firm where vertical integration occurs between a final goods producer and a subset of input suppliers. The profit of the integrated firm and the industry profit are higher under Bertrand competition, the profit of the non-integrated firm is higher under Bertrand competition for high product differentiation, and consumer surplus and welfare are higher under Bertrand competition for low product differentiation. Further, no market foreclosure can be the preferred choice of the vertically integrated firm for any degree of product differentiation.

We study the co-evolution of mental health with the most prominent risk factors associated with the COVID-19 pandemic for the Dutch working population. We exploit data from the Longitudinal Internet Studies for the Social Sciences panel from before the pandemic and five questionnaires in its first year. We find mental health decreased sharply with the onset of the first lockdown but recovered quickly, reaching levels comparable to those a year earlier. Labor market uncertainty, perceived infection risk, and loneliness are all associated with worsening mental health. Moreover, parents of children younger than 12 experience a significant drop in mental health.