European Economic Review最新文献

This paper studies the impact of pre-Great Recession immigrant inflows on the labour market during a recession. It develops a random search model of the labour market featuring vacancy persistence, endogenous return migration, and wage rigidity. Consistent with the Spanish data, some immigrants in the model leave the country during the recession, freeing up jobs for natives. Yet, differences in match-quality draws between immigrants and natives also impact firms’ job creation decisions. The return-migration channel positively affects natives, while job creation effects are negative in the calibrated Spanish economy. I find that immigrants mitigate the impact of the recession and enhance natives’ welfare. During the recession, the native unemployment rate would have been 2 percentage points higher in the absence of the pre-crisis immigration boom. Return migration plays a key role, with short- and medium-run impacts on the native unemployment rate 6 times larger than all other channels combined.

This paper assesses the macroeconomic impact of ECB’s unconventional monetary policies (UMPs) in the euro area. We show that: (i) the relevance of the transmission channels has changed over time, with portfolio re-balancing becoming more important than the signalling effect after June 2014; (ii) there exists a substantial heterogeneity in the transmission to core and peripheral economies. By leveraging on these findings, we identify UMP shocks in a time-varying SVAR with “dynamic” restrictions and we quantify the macroeconomic impact of ECB’s measures via counterfactual analyses. We find that, absent those measures between 2014 and 2018, output growth would be on average 0.27 pp lower in peripheral countries, whereas inflation would drop on average by 0.2 pp in core economies.

Many governments operate budgets that expire at the end of the fiscal year and rush to spend large amounts at this time. The scale and breadth of this heightened spending raises the possibility of government departments crowding out each other at the year-end while competing with one another for limited suppliers. This may exacerbate the extent of year-end spending spikes. We investigate this possibility using expenditures of all overseas embassies and offices of the UK. We leverage a unique setting where embassies share the UK fiscal year for their budgeting but operate in countries with varying fiscal years. Our results show that: (1) in every country embassies spend more at the UK fiscal year-end than in the average month; (2) the extent of this extra spending is greater in countries that have a fiscal year that overlaps with the UK; (3) embassies spend more at the end of the fiscal years of local firms.

We study the fiscal policy implications of a slowdown in trend growth using an estimated stochastic growth model. Our analysis underscores the risks associated with fiscal rules linked to growth rates, which may prove unsustainable under permanent shifts in productivity growth. For equilibria to exist, fiscal policy must respond to the slowdown ensuring that the government budget constraint holds in the low growth regime. While the slowdown imposes significant welfare costs on households, it also triggers a substantial endogenous response that boosts capital accumulation and functions as an automatic stabilizer. If fiscal policy maintains the provision of public goods per capita constant, the slowdown gives rise to a pleasant fiscal arithmetic, requiring tax cuts or a higher target debt-to-output ratio for long-term fiscal sustainability. We discuss the ramifications of various fiscal strategies, including increasing per capita public spending, altering the tax structure, and adjusting the target debt-to-output ratio.

This paper assesses the impact of temperature shocks on sectoral inflation in the four largest euro area economies. We combine high-frequency weather data with monthly data on consumer prices, industrial production, producer prices and farm gate prices within a set of Bayesian Vector Autoregressions which explicitly considers the seasonal dependence of the shock. Results suggest the presence of significant country asymmetries and seasonal responses of inflation to temperature shocks, mainly via food, energy and service prices. An increase in monthly mean temperatures has inflationary effects in summer – with a stronger response in warmer euro area countries – and reduces inflation on average in the other seasons.

The paper studies the spread of misinformation when agents have both individual and social learning. In the presence of sources of misinformation, the most vulnerable and harmful agents are those with poor individual learning and high centrality in the network. However, if opinions are polarized, providing some agents with better private information can backfire on other agents. Moreover, the incentives to spread misinformation have an inverted U-shaped relationship with the spreader’s influence; and, under certain conditions, an unaware spreader can be more harmful than a purposeful one. Overall, this paper warns that any policy that fails to consider both the precision of agents’ private information and the network structure runs the risk of backfiring.

I construct and analyze a growth model in which technical change can increase unemployment. I first analyze the forces that deliver a constant steady state unemployment rate in this setting. Labor-saving technical change increases unemployment, which lowers wages and creates incentives for future investment in labor-using technologies. In the long run, this interaction generates a balanced growth path that is observationally equivalent to that of the standard neoclassical growth model, except that it also incorporates a positive steady state level of unemployment and a falling relative price of investment. I also study the effects of a permanent increase in the ability of R&D to improve labor-saving technologies. In the long run, this change leads to faster growth in output per worker and wages, but it also yields higher unemployment and a lower labor share of income. In the short run, this change exacerbates existing inefficiencies and slows economic growth.

Do recommendations need to contain social information to change behaviour in allocation and risk tasks? We conducted two online experiments involving 1280 participants to compare the behavioural influence of recommendations based on normatively relevant information with that of recommendations that were transparently random. Although social recommendations generally shifted choices towards the recommended option, consistent with previous studies on norm compliance, their effects were statistically indistinguishable from those of random recommendations. This finding challenges the notion that norm compliance is the sole mechanism through which social recommendations exert their influence. In a follow-up study with 481 participants, we investigated four additional channels. Our results suggest that recommendations do not act as reminders of existing normative knowledge, but we find evidence partially consistent with recommendation following in order to deflect responsibility, because of an anchoring effect, and because of a social norm to follow recommendations.

Corrective comments posted in response to misinformation shared on social media are not only effective in reducing belief in misinformation among those observing the interaction but also serve as a publicly observable social punishment against fake news sharing. We suggest that, by visibly displaying punishing behavior, corrective comments have the potential to function as a norm nudge, updating observers’ perception of the norms regulating punishment, the so-called “meta-norms”. We conducted a preregistered online experiment in which participants joined discussions resembling an online forum and could comment on posts shared by previous users. We manipulated participants’ possibility to observe corrective comments replying to a post sharing fake news and measured the effect of this variation on their propensity to leave a corrective comment. We show that participants exposed to posts corrected by other users are significantly more likely to reply with a corrective comment, even after controlling for participants’ perceived accuracy of the shared post. Participants exposed to the corrections provided by previous users perceive replying with corrections as more socially appropriate. Our results suggest that social corrections work as a (meta) norm nudge, increasing the probability of punishing norm violations by increasing the social appropriateness of correcting. Our findings suggest that interventions targeting “would-be” enforcers could complement existing policies specifically directed at norm violators.

Despite the growing popularity of free college proposals, countries with higher subsidies often exhibit higher enrollment rates, but not necessarily higher graduation rates. This paper investigates the mediating role of student effort in the impact of tuition-free policies. We estimate a dynamic model of college enrollment, academic progression, and graduation using comprehensive student-level data from Colombia. In the model, student effort directly influences class completion and moderates the risk of poor performance or dropout. Simulating two policy scenarios — universal free college and performance-based free college — we find that universal free college triggers the largest enrollment increase but minimal change in graduation rates, aligning with observed cross-country patterns. Meanwhile, performance-based free college induces a more moderate enrollment expansion while simultaneously yielding a higher graduation rate. This divergence stems from the differing mechanisms of these policies: universal free college primarily addresses financial constraints, whereas performance-based incentives promote enhanced student effort.