Pub Date : 2025-12-08DOI: 10.1016/j.euroecorev.2025.105217
Seppo Honkapohja , Nigel McClung
This paper considers average inflation targeting (AIT) policy in a New Keynesian model with adaptive learning agents. There are stability concerns regarding AIT when agents have imperfect knowledge and the averaging window length is not public knowledge. These stability risks near the inflation target steady state would likely be avoided under inflation targeting (IT) or price level targeting (PLT). Near the zero interest rate steady state, AIT under-performs PLT and does not necessarily outperform IT. Communicating the averaging window length or adopting an asymmetric average inflation target that judges below-target average inflation more negatively avoids these pitfalls.
{"title":"On robustness of average inflation targeting","authors":"Seppo Honkapohja , Nigel McClung","doi":"10.1016/j.euroecorev.2025.105217","DOIUrl":"10.1016/j.euroecorev.2025.105217","url":null,"abstract":"<div><div>This paper considers average inflation targeting (AIT) policy in a New Keynesian model with adaptive learning agents. There are stability concerns regarding AIT when agents have imperfect knowledge and the averaging window length is not public knowledge. These stability risks near the inflation target steady state would likely be avoided under inflation targeting (IT) or price level targeting (PLT). Near the zero interest rate steady state, AIT under-performs PLT and does not necessarily outperform IT. Communicating the averaging window length or adopting an asymmetric average inflation target that judges below-target average inflation more negatively avoids these pitfalls.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"183 ","pages":"Article 105217"},"PeriodicalIF":2.4,"publicationDate":"2025-12-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145840692","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-05DOI: 10.1016/j.euroecorev.2025.105231
João V. Ferreira , Stratos Ramoglou , Foivos Savva , Michael Vlassopoulos
This paper investigates preferences for imposing maximum limits on top incomes and wealth through a survey-based experiment with a large sample of US and German participants (N = 3,954). We first find that a significant majority favor the introduction of limits to both the income of top executives and the wealth of entrepreneurs (have limitarian preferences). Raising awareness of possible efficiency costs has only a small effect on reducing support for limits, while allowing firms rather than governments to set limits has a larger significant positive impact in the support for income caps. Limitarian preferences are consistent across countries and predict actual voting behavior in a petition that required effort to sign. Then, using a revealed preferences approach, we show that many participants with limitarian preferences are motivated by inequality aversion (weak limitarians), consistent with social preference models. However, a sizable minority of participants support limits even when within-firm income (or within-country wealth) inequality is minimized (strong limitarians). We find that motives that do not usually feature in traditional models, such as the potential negative externalities created by income and wealth accumulation, may partly explain strong limitarian preferences. Interestingly, preferences for wealth caps are more polarized than for income limits, with a higher share of both strong limitarians and those who oppose limits in the wealth domain. Our findings provide new evidence on the structure and motivations behind public attitudes toward executive pay regulation and wealth taxation.
{"title":"Preferences for income and wealth limits: Evidence from a survey experiment","authors":"João V. Ferreira , Stratos Ramoglou , Foivos Savva , Michael Vlassopoulos","doi":"10.1016/j.euroecorev.2025.105231","DOIUrl":"10.1016/j.euroecorev.2025.105231","url":null,"abstract":"<div><div>This paper investigates preferences for imposing maximum limits on top incomes and wealth through a survey-based experiment with a large sample of US and German participants (N = 3,954). We first find that a significant majority favor the introduction of limits to both the income of top executives and the wealth of entrepreneurs (have <em>limitarian preferences</em>). Raising awareness of possible efficiency costs has only a small effect on reducing support for limits, while allowing firms rather than governments to set limits has a larger significant positive impact in the support for income caps. Limitarian preferences are consistent across countries and predict actual voting behavior in a petition that required effort to sign. Then, using a revealed preferences approach, we show that many participants with limitarian preferences are motivated by inequality aversion (<em>weak limitarians</em>), consistent with social preference models. However, a sizable minority of participants support limits even when within-firm income (or within-country wealth) inequality is minimized (<em>strong limitarians</em>). We find that motives that do not usually feature in traditional models, such as the potential negative externalities created by income and wealth accumulation, may partly explain strong limitarian preferences. Interestingly, preferences for wealth caps are more polarized than for income limits, with a higher share of both strong limitarians and those who oppose limits in the wealth domain. Our findings provide new evidence on the structure and motivations behind public attitudes toward executive pay regulation and wealth taxation.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"183 ","pages":"Article 105231"},"PeriodicalIF":2.4,"publicationDate":"2025-12-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145840239","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-05DOI: 10.1016/j.euroecorev.2025.105213
André K. Anundsen , Plamen Nenov , Erling Røed Larsen , Dag Einar Sommervoll
We study the housing market effects of a mark-down in the listing of a unit. We define a mark-down as an ask price below a publicly observed estimate of a housing unit’s market value. Using a unique bid-log dataset as well as transaction-level data, we demonstrate that, empirically, a mark-down implies more bidders, but lower opening bids. The net effect is a lower spread between the sell price and the estimated market value. Therefore, our empirical findings point to a relatively important direct effect of ask price changes on the expected sell price and a more limited role of the indirect effect arising from ask price changes directing the flow of buyers. We argue that our empirical findings are consistent with a simple directed search model of ask price determination in the presence of a conflict of interest between the seller and real estate agent over how to trade-off a higher sell price against a longer time-on-market.
{"title":"Pricing and incentives in the housing market","authors":"André K. Anundsen , Plamen Nenov , Erling Røed Larsen , Dag Einar Sommervoll","doi":"10.1016/j.euroecorev.2025.105213","DOIUrl":"10.1016/j.euroecorev.2025.105213","url":null,"abstract":"<div><div>We study the housing market effects of a mark-down in the listing of a unit. We define a mark-down as an ask price below a publicly observed estimate of a housing unit’s market value. Using a unique bid-log dataset as well as transaction-level data, we demonstrate that, empirically, a mark-down implies more bidders, but lower opening bids. The net effect is a lower spread between the sell price and the estimated market value. Therefore, our empirical findings point to a relatively important direct effect of ask price changes on the expected sell price and a more limited role of the indirect effect arising from ask price changes directing the flow of buyers. We argue that our empirical findings are consistent with a simple directed search model of ask price determination in the presence of a conflict of interest between the seller and real estate agent over how to trade-off a higher sell price against a longer time-on-market.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"183 ","pages":"Article 105213"},"PeriodicalIF":2.4,"publicationDate":"2025-12-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145748825","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using a difference-in-differences design, we demonstrate that a policy reducing the number of exam retakes per year at one Italian university significantly improved students’ first-year outcomes, resulting in lower dropout rates, increased exam pass rates, and enhanced credit accumulation. Only a small share of these improvements can be explained by changes in the average quality of students enrolling after the reform. The policy also raised on-time graduation rates – the reform’s main objective – without adversely affecting students’ grade point average. Overall, our findings suggest that a cost-effective intervention, such as limiting exam retakes, can substantially enhance student progression and reduce the age at graduation.
{"title":"Another chance: Number of exam retakes and university students’ outcomes","authors":"Massimiliano Bratti , Silvia Granato , Enkelejda Havari","doi":"10.1016/j.euroecorev.2025.105222","DOIUrl":"10.1016/j.euroecorev.2025.105222","url":null,"abstract":"<div><div>Using a difference-in-differences design, we demonstrate that a policy reducing the number of exam retakes per year at one Italian university significantly improved students’ first-year outcomes, resulting in lower dropout rates, increased exam pass rates, and enhanced credit accumulation. Only a small share of these improvements can be explained by changes in the average quality of students enrolling after the reform. The policy also raised on-time graduation rates – the reform’s main objective – without adversely affecting students’ grade point average. Overall, our findings suggest that a cost-effective intervention, such as limiting exam retakes, can substantially enhance student progression and reduce the age at graduation.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"183 ","pages":"Article 105222"},"PeriodicalIF":2.4,"publicationDate":"2025-12-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145748823","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-04DOI: 10.1016/j.euroecorev.2025.105221
Augusto Cerqua, Costanza Giannantoni, Marco Letta, Gabriele Pinto
This paper investigates the socio-economic and geographic patterns associated with femicides and examines the role of local policies in combating gender-based violence. First, we construct a novel, granular dataset of femicide cases in Italy spanning 2006–2022 and analyze it with machine learning techniques. This empirical analysis identifies areas at highest risk for women and pinpoints the main territorial predictors of the phenomenon. Second, we collect data on all local anti-violence centers (AVCs) and show that our femicide risk map only partially aligns with the local deployment of existing public support, suggesting that predictive analytics could enhance targeting strategies. Third, using detailed information on the timing of AVC openings in each province and a staggered non-parametric difference-in-differences approach, we find that, on average, AVC openings did not significantly reduce the number of femicides, although they led to a notable decline in sexual violence. These findings suggest ample room to improve the targeting and effectiveness of public policies aimed at combating violence against women.
{"title":"Femicides, anti-violence centers, and policy targeting","authors":"Augusto Cerqua, Costanza Giannantoni, Marco Letta, Gabriele Pinto","doi":"10.1016/j.euroecorev.2025.105221","DOIUrl":"10.1016/j.euroecorev.2025.105221","url":null,"abstract":"<div><div>This paper investigates the socio-economic and geographic patterns associated with femicides and examines the role of local policies in combating gender-based violence. First, we construct a novel, granular dataset of femicide cases in Italy spanning 2006–2022 and analyze it with machine learning techniques. This empirical analysis identifies areas at highest risk for women and pinpoints the main territorial predictors of the phenomenon. Second, we collect data on all local anti-violence centers (AVCs) and show that our femicide risk map only partially aligns with the local deployment of existing public support, suggesting that predictive analytics could enhance targeting strategies. Third, using detailed information on the timing of AVC openings in each province and a staggered non-parametric difference-in-differences approach, we find that, on average, AVC openings did not significantly reduce the number of femicides, although they led to a notable decline in sexual violence. These findings suggest ample room to improve the targeting and effectiveness of public policies aimed at combating violence against women.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"183 ","pages":"Article 105221"},"PeriodicalIF":2.4,"publicationDate":"2025-12-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145748822","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-03DOI: 10.1016/j.euroecorev.2025.105219
Andrea Gazzani , Vicente Herrera , Alejandro Vicondoa
This paper estimates the asymmetric effects of commodity price shocks in emerging economies. We employ non-linear panel local projections to show that negative commodity price shocks induce more abrupt effects on output and investment than positive shocks. The response of financial conditions, in terms of increased country spreads and reduced net capital inflows, is crucial in driving the sign-dependent responses. In contrast, neither the exchange rate regime nor fiscal policy explain the asymmetry. These empirical findings are consistent with a small open economy model with occasionally binding borrowing constraints proposed in previous works.
{"title":"The asymmetric effects of commodity price shocks in emerging economies","authors":"Andrea Gazzani , Vicente Herrera , Alejandro Vicondoa","doi":"10.1016/j.euroecorev.2025.105219","DOIUrl":"10.1016/j.euroecorev.2025.105219","url":null,"abstract":"<div><div>This paper estimates the asymmetric effects of commodity price shocks in emerging economies. We employ non-linear panel local projections to show that negative commodity price shocks induce more abrupt effects on output and investment than positive shocks. The response of financial conditions, in terms of increased country spreads and reduced net capital inflows, is crucial in driving the sign-dependent responses. In contrast, neither the exchange rate regime nor fiscal policy explain the asymmetry. These empirical findings are consistent with a small open economy model with occasionally binding borrowing constraints proposed in previous works.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"183 ","pages":"Article 105219"},"PeriodicalIF":2.4,"publicationDate":"2025-12-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145748824","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-03DOI: 10.1016/j.euroecorev.2025.105223
Vivien Lewis , Stefania Villa
Labor productivity is highly procyclical in the Euro Area. We investigate the sources of this procyclicality in an estimated New Keynesian business cycle model with labor search frictions and variable factor utilization in both capital and labor. Labor input can vary along three margins: employment, hours, and effort (or utilization). We find evidence for a significant use of the effort margin in labor adjustment. Moreover, a model with effort outperforms one with variable capital utilization or dominant technology shocks. Finally, the effort margin dampens inflation volatility.
{"title":"Labor productivity, effort and the Euro Area business cycle","authors":"Vivien Lewis , Stefania Villa","doi":"10.1016/j.euroecorev.2025.105223","DOIUrl":"10.1016/j.euroecorev.2025.105223","url":null,"abstract":"<div><div>Labor productivity is highly procyclical in the Euro Area. We investigate the sources of this procyclicality in an estimated New Keynesian business cycle model with labor search frictions and variable factor utilization in both capital and labor. Labor input can vary along three margins: employment, hours, and effort (or utilization). We find evidence for a significant use of the effort margin in labor adjustment. Moreover, a model with effort outperforms one with variable capital utilization or dominant technology shocks. Finally, the effort margin dampens inflation volatility.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"183 ","pages":"Article 105223"},"PeriodicalIF":2.4,"publicationDate":"2025-12-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145694766","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-03DOI: 10.1016/j.euroecorev.2025.105230
Christina Timko , Maja Adena
Behavioral design in smartphone apps aims at inducing certain, monetizable behavior, mainly increased engagement, measurable by usage time. Such design is rarely transparent and often restricts users’ ability to make alternative choices. In a framed field experiment, we document that behavioral design doubles app usage time compared to a version without behavioral elements. Providing users with choices—simply explained and conveniently adjustable design features—reduces usage time and increases their willingness to pay for the app. These findings suggest that offering choice could pave the way for new business models based on more responsible app design.
{"title":"The impact of behavioral design and users’ choice on smartphone app usage and willingness to pay: A framed field experiment","authors":"Christina Timko , Maja Adena","doi":"10.1016/j.euroecorev.2025.105230","DOIUrl":"10.1016/j.euroecorev.2025.105230","url":null,"abstract":"<div><div>Behavioral design in smartphone apps aims at inducing certain, monetizable behavior, mainly increased engagement, measurable by usage time. Such design is rarely transparent and often restricts users’ ability to make alternative choices. In a framed field experiment, we document that behavioral design doubles app usage time compared to a version without behavioral elements. Providing users with choices—simply explained and conveniently adjustable design features—reduces usage time and increases their willingness to pay for the app. These findings suggest that offering choice could pave the way for new business models based on more responsible app design.</div><div>JEL codes: C93, O33, D83, L86, M14</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"183 ","pages":"Article 105230"},"PeriodicalIF":2.4,"publicationDate":"2025-12-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145797363","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-29DOI: 10.1016/j.euroecorev.2025.105216
Jan Gromadzki , Przemysław Siemaszko
In recent decades, the number of people disclosing their LGBTQ identity has increased substantially. We use newly collected data from two waves of a spontaneous Twitter coming out campaign to study the role of peer effects in coming out. Importantly, we are able to distinguish actual public coming out decisions — costly, explicit disclosures — from mere engagement with the campaign. We combine data on users’ pre-campaign networks with the information on the exact time of coming out actions to construct a time-varying measure of the exposure to peers coming out as LGBTQ. A one standard deviation increase in the exposure increases the hourly probability of coming out by almost 20 percent. We also exploit the non-overlapping network structure of users’ peer groups as an exogenous source of variation, and we confirm the baseline results.
{"title":"#IamLGBT: Social networks and coming out","authors":"Jan Gromadzki , Przemysław Siemaszko","doi":"10.1016/j.euroecorev.2025.105216","DOIUrl":"10.1016/j.euroecorev.2025.105216","url":null,"abstract":"<div><div>In recent decades, the number of people disclosing their LGBTQ identity has increased substantially. We use newly collected data from two waves of a spontaneous Twitter coming out campaign to study the role of peer effects in coming out. Importantly, we are able to distinguish actual public coming out decisions — costly, explicit disclosures — from mere engagement with the campaign. We combine data on users’ pre-campaign networks with the information on the exact time of coming out actions to construct a time-varying measure of the exposure to peers coming out as LGBTQ. A one standard deviation increase in the exposure increases the hourly probability of coming out by almost 20 percent. We also exploit the non-overlapping network structure of users’ peer groups as an exogenous source of variation, and we confirm the baseline results.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"183 ","pages":"Article 105216"},"PeriodicalIF":2.4,"publicationDate":"2025-11-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145624955","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-25DOI: 10.1016/j.euroecorev.2025.105220
Marius F. Gunnesmo , Casper W. Hansen
In 1919, the Danish craft and industrial sector permanently adopted the 8-hour workday, representing the largest reduction in working hours in the country’s history. We collected quarterly data on hourly wages and employment from 1914 to 1931 across occupation groups, covering Copenhagen and the aggregate of the provinces in Denmark. By exploiting variation in percent work-time reductions across occupation groups and regions, we examine the income and employment effects of the reform. Our findings reveal only a compensating rise in hourly wages in Copenhagen, though this increase was insufficient to offset the decline in weekly earnings due to fewer working hours. Furthermore, we observe that the reduction in working hours was mitigated by new hires, particularly of unskilled workers. Overall, our results suggest that reductions in working hours were not (in any region) fully compensated by gains in hourly wages but tend to support the “work-sharing” hypothesis.
{"title":"Labor-market effects of introducing the 8-hour workday","authors":"Marius F. Gunnesmo , Casper W. Hansen","doi":"10.1016/j.euroecorev.2025.105220","DOIUrl":"10.1016/j.euroecorev.2025.105220","url":null,"abstract":"<div><div>In 1919, the Danish craft and industrial sector permanently adopted the 8-hour workday, representing the largest reduction in working hours in the country’s history. We collected quarterly data on hourly wages and employment from 1914 to 1931 across occupation groups, covering Copenhagen and the aggregate of the provinces in Denmark. By exploiting variation in percent work-time reductions across occupation groups and regions, we examine the income and employment effects of the reform. Our findings reveal only a compensating rise in hourly wages in Copenhagen, though this increase was insufficient to offset the decline in weekly earnings due to fewer working hours. Furthermore, we observe that the reduction in working hours was mitigated by new hires, particularly of unskilled workers. Overall, our results suggest that reductions in working hours were not (in any region) fully compensated by gains in hourly wages but tend to support the “work-sharing” hypothesis.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"182 ","pages":"Article 105220"},"PeriodicalIF":2.4,"publicationDate":"2025-11-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145624341","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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