Economic Inquiry最新文献

This paper examines the effect of religious fasting on truth-telling using a laboratory experiment in Egypt. While fasting-induced religiosity may promote truth-telling, the physiological and psychological changes during fasting, due to alimentary abstention and self-control exertion, may reduce honesty, especially when fasting is augmented with effort. We examine this question by tracing individual truth-telling decisions, in the absence and presence of additional effort, both before and during Ramadan. We find that neither effort nor fasting alone affects honesty, but exerting effort while fasting reduces honesty. We provide suggestive evidence on the mechanisms potentially driving this negative effect on honesty.

How do capital controls and banking concentration affect economic development? This paper develops a general equilibrium model to study these important issues. To do so, we construct a framework with heterogeneous agents and imperfectly competitive financial intermediaries who help depositors manage liquidity risk. Importantly, higher levels of concentration raise the cost of domestic borrowing which increase the reliance on international capital markets. Finally, once the rate of money growth is sufficiently high, capital controls bind and the effects of monetary policy on capital formation are more pronounced.

How will climate change affect risks to economic activity? Research on climate impacts has tended to focus on effects on the average level of economic growth. I examine whether climate change may make severe contractions in economic activity more likely using quantile regressions linking growth to temperature. The effects of temperature on downside risks to economic growth are large and robust across specifications. These results suggest the growth at risk from climate change is large—climate change may make economic contractions more likely and severe and thereby significantly impact economic and financial stability and welfare.

The resurgence of inflation has been accompanied by a reversal of prospects of growth, with a prominent role assigned to the fall of households' purchasing power. Yet this real income effect of inflation surprises, independent of restrictive monetary policy, is not present in the standard New Keynesian models for monetary policy. The reason lies in the formulation of the consumption-based “IS equation”. The paper shows how the income effect can be introduced by reformulating the consumption function, with the consequence that it exerts an autonomus stabilization effect on inflation. The main monetary policy implications are examined by means of simulations.

This study presents evidence of global and regional comovements in public debt and examines their trends and features. We employ a Bayesian dynamic factor model with time-varying parameters based on the debt-to-GDP ratio of 115 countries. We find the global factor accounts for 38 percent of the total variation in the debt ratio worldwide, but its share decreases over time. Countries with more financial openness and a greater share of external public debt are more exposed to global/regional comovements. The assertion that international financial integration encourages higher government borrowing applies primarily to high-income countries and it does not hold globally.

We examine wages of Black and White interracially married individuals compared to their intramarried counterparts in the United States. We find a raw interracial marriage wage penalty for White spouses and a raw interracial marriage wage premium for Black spouses. The differential disappears for females, but not for males, when controlling for selection on standard wage equation variables. Negative selection on unobservables into interracial marriage explain the White male penalty. We find a larger penalty for White males and a smaller premium for Black males in states that were forced to allow interracial marriage by the Supreme Court.

The implications of a strategic model of plea bargaining are threefold. First, plea bargaining unequivocally increases wrongful convictions. Next, partial bans on plea bargaining reduce the frequency of wrongful convictions, and the reduction rises with the strength of the ban. Lastly, police share an important role in minimizing wrongful convictions.

This study analyzed the impact of the USDA's Broadband Initiatives Program on employment and business survival. While average employment declined in both program and non-program areas, the decline was less severe in program areas, suggesting a positive impact. This impact was primarily observed in metro counties, the service sector, and employer establishments. Businesses in program areas were also less likely to fail than those outside the program areas, with variation across location, business type, and industry.

Measures of cultural attitudes derived from the World Values Survey are often used in economics to investigate the relation between individual culture and aggregate output. We show (i) that these measures are constructed from underlying variables that exhibit within-country volatility and time trends; and (ii) that such lack of persistence implies fragile correlations between cultural measures and output. These points are illustrated by revisiting prominent studies in this literature.

Using a dynamic preferential trade agreement (PTA) formation model, we show that political biases in exporting and import-competing sectors substantially impact the extent of PTA formation. While both exclusion and free riding incentives constrain the expansion to global free trade in a free trade agreement (FTA) game, only the former incentive arises in a customs union (CU) game. When we endogenize the choice between FTAs and CUs, the tension between the flexibility benefit of FTAs and the coordination benefit of CUs reveals that FTAs always serve as PTA building blocks while CUs may serve as PTA building or stumbling blocks.