The Department of Economic Analysis and ICAE organize a weekly research seminar that takes place at the meeting room of the ICAE (Room N101) on Wednesday at 13:00 h. unless otherwise announced. 

 

Organizers

 Jimenez-Martin, Juan-Angel   -   Finance & Econometrics
 Rodríguez Álvarez, Carmelo   -   Microecomics &  Game Theory
 Sartarelli, Marcello                  -   Microeconometrics
 Tomori, Françeska                   -   Applied Microeconomics

calendar

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                                             Winter - Spring 2025

 

Jun 2025

 

  Tue,  17  @ 12:30. Webinar / Onsite Econometrics - Finance Seminar  

Speaker: Evan Gilbert (Stellenbosch University-South Africa) Title: Using machine learning to predict investors’ switching behaviour Invited by: Alfredo García-Hiernaux (ICAE-UCM) Abstract: Individual investors’ decisions to switch investments very often lead to significantly lower investment returns so having an effective predictive model of these switches would be of value to clients, advisors and investment managers. A random forest algorithm was applied to a new dataset of over 20 million observations relating to 95,685 clients on Momentum Investments’ platform between 2018 and 2024. It identified a combination of investor characteristics (number of holdings, past switching behaviour, total assets) and external features (past returns, macroeconomic variables) as the key features of investor switch behaviour. This model exceeds commercially accepted standards in respect of the AUC and Gini metrics showcasing the model’s strength in its ranking capability. It can thus provide a useful basis for client segmentation and engagement by financial advisors.

 

  Wed,  11  @ 12:30. Webinar / Onsite  Macro Seminar  

Speaker: C. Carrillo-Tudela (Essex) Title: Equilibrium Job Turnover and the Business Cycle (joint with Alex Clymo and Melvyn Coles) Invited by: L. Puch (ICAE-UCM) Abstract: This paper develops and estimates a new equilibrium theory of unemployment, firm dynamics and on-the- job search over the business cycle. We investigate two seemingly unexplored facts. Firm job destruction is negatively correlated with cyclical unemployment and shares a similar cyclical correlation to job creation. We show that these dynamics explain why unemployment is highly persistent and so provide a new perspective on the behaviour of unemployment over the business cycle. Our model is rich enough to match a wide range of firm- and worker-level patterns in the cross-section, yet tractable enough to be estimated over the business cycle. A key success is that our framework jointly replicates the observed aggregate fluctuations in a both worker turnover and firm job flows. We show the importance of job destruction due to unreplaced quits in explaining why job destruction is procyclical and why unemployment is so persistent

 

May 2025

 

  Thu, (Note the change of day!!!! ) 29  @ 12:30. Webinar / Onsite  Econometrics - Finance Seminar  

Speaker: Conrado Brum (BCU) Title: IFCI-SA: International financial conditions index for South American economies Invited by: A. García-Hernaux (ICAE-UCM) Abstract: The Russian invasion of Ukraine in early 2022, triggered a wave of risk aversion in the global financial markets. In contrast to previous events, South American emerging economies experienced limited impact to this more restrictive global financial environment. To measure the financial conditions of these economies over time, we propose an International Financial Conditions Index for South American economies (IFCI-SA), built from a parametric factor model. This index includes standard variables provided by the literature, along with sovereign debt risk premia and the most relevant commodity prices for the region. We use our model and index to: (i) discuss South American financial conditions from 2007 to 2024; (ii) explain the impact of a particular global event like the Russo-Ukrainian war; (iii) decompose risk premia movements into global and domestic shocks; and (iv) test its forecasting capabilities.

 

  Wed, 28  @ 12:30. Webinar / Onsite  Micro Seminar  

Speaker: A. Sonora (UCL) Title:Kicked Out of School: Exploring the Impact of Childhood Physical Abuse on Educational Attainment Invited by: L. Moreno (DANAE-UCM) Abstract: In recent decades, the United States has grappled with a pronounced ``high school dropout" crisis. This paper investigates the causal role of childhood physical abuse in contributing to this ongoing issue. To accomplish this objective, I utilize data from the Add Health study and employ non-parametric partial identification methods to estimate the Average Treatment Effect (ATE) of childhood physical abuse on high school dropout rates. My analysis reveals a statistically and economically significant increase in the dropout rate, with an estimated impact of at least 1.4 percentage points attributable to childhood physical abuse. Furthermore, I explore mechanisms beyond academic performance that may mediate this effect. I find that children who experienced physical abuse during childhood are more likely to exhibit higher rates of class absenteeism, reduced social connectedness within the school environment, and lower self-esteem. These findings shed light on the critical role of childhood physical abuse in contributing to the high school dropout crisis, underscoring the need for targeted interventions aimed at reducing childhood abuse and the development of support systems to mitigate its adverse effects on educational outcomes.

 

  Wed, 21  @ 12:30. Webinar / Onsite  Micro Seminar  

Speaker: Paula González (UPO) Title: Uncovering Political Opportunism through Changes in Party Affiliation: Insights from Spanish Municipal Elections Invited by: C. Rodríguez-Alvarez (ICAE-UCM) Abstract:This article explores whether changes in party labels among politicians in Spanish municipal elections might correspond to opportunistic and strategic behaviors aimed at advancing their political careers. Using data from five municipal elections in Spain (2003-2019), we employ two complementary empirical strategies: a high dimensional fixed effects panel data model and a regression discontinuity design that exploits the randomness in seat allocation derived from the D’Hondt rule. The fixed effects approach controls for unobserved heterogeneity across candidates, while the RDD identifies causal effects in a quasi-experimental setting, enhancing internal validity. Our analysis reveals that political opportunism is a key force behind changes in party labels among politicians. Particularly, the absence of a council position in the current election increases the probability of changing political party affiliation in the next election by 1.3 to 2.3 percentage points (depending on the empirical strategy), corresponding to an increase of 8% to 14.7%. Interestingly, our analysis reveals larger opportunism motives behind changes in party labels among men and within more cohesive parties. Additionally, opportunistic motives tend to decrease in larger municipalities but (slightly) increase with higher levels of political fragmentation.

 

  Wed, 14  @ 12:30. Webinar / Onsite Econometrics Seminar  

Speaker: J. Dolado (UC3M) Title: Riders on the Storm Invited by: R. Carrasco (ICAE-UCM) Abstract: Online food delivery platforms typically operate through a controversial business model that relies on subcontracting self-employed workers, known as riders. We quantify the labor-market effects of the Spanish Riders' Law in 2021 that established the presumption of dependent employment for riders using a search and matching model. Riders with heterogeneous preferences for leisure trade off work flexibility and easier employability as self-employed against enjoying higher wages as employees. Our main finding is that the reform led to a higher share of employees but failed to fully absorb the large flows of workers transiting out of self-employment and decreased riders' wages leading to welfare losses. However, complementing the reform with a payroll tax cut for platforms hiring employees preserves employment levels and increases riders' welfare.

 

  Wed, 07  @ 12:30. Webinar / Onsite  Micro Seminar  

Speaker: Erik Ansink (VU Amsterdam) Title: Environmental regulation without centralized enforcement       Invited by: F. Tomori (ICAE-UCM) Abstract: We take a decentralized approach to managing environmental pollution in settings where each agent’s pollution possibly affects all others. There is no central agency to enforce pollution abatement or coordinate monetary transfers. Moreover, agents possess private information, which precludes deducing efficient abatement in general. We propose to implement transfer schemes through smart contracts to allow beneficiaries to compensate for abatement. We characterize all schemes that induce efficient abatement in unique dominant-strategy equilibrium. Moreover, appealing to classical fairness tenets, we pin down the “beneficiaries-compensates principle”. Supporting this principle through smart contracts provides a promising step towards decentralized environmental regulation.

 

Apr 2025

 

  Wed, 09  @ 12:30. Webinar / Onsite  Micro Seminar  

Speaker: I. Rodriguez-Lara (UMA) Title: Gender stereotypes and homophily in team formation Invited by: M. Sartarelli  (ICAE-UCM) Abstract: Women often find themselves in teams that hinder their productivity and earnings. We analyze the role of homophily and gender stereotypes in preferences for team formation and examine the effect of information on changing these preferences. We find that women are expected to perform better in female-type tasks (such as text and emotion-recognition). However, people prefer forming teams with their same gender. Our findings suggest that information can mitigate -but it does not eliminate- the influence of homophily on team formation.

 

  Wed, 02  @ 12:30. Webinar / Onsite  Micro Seminar  

Speaker: L. Bauluz (CUNEF) Title: The Wealth of Generations Invited by: M. Sartarelli  (ICAE-UCM) Abstract: This paper uses historical microdata available since 1960 to study lifetime wealth accumulation across birth cohorts in the U.S. We document a notable change in life-cycle behavior, with newer cohorts retiring after the 1980s accumulating significantly greater lifetime wealth than those before. Once retired, all cohorts exhibit zero wealth growth, but this hides the fact that the elderly in recent decades have become large dissavers amid rapidly appreciating assets. This phenomenon has led to a dramatic polarization in household saving flows between middle-aged rich savers and elderly dissavers. We link varying life-cycle saving with the post-1980s boom in asset prices.

 

 

Mar 2025

 

  Wed, 26 @ 12:30. Webinar / Onsite  Micro Seminar  This seminar has been cancelled. We will notify you of any rescheduling.

Speaker: R. Lopez-Perez (CSIC IPP) Title: TBA Invited by: M. Sartarelli  (ICAE-UCM) Abstract: TBA

 

 

  Wed, 19 @ 12:30. Webinar / Onsite  Micro Seminar  

Speaker: S. Fontenay (UaH) Title: Can Public Policies Break the Gender Mold? Evidence from Paternity Leave Reforms Invited by: M. Sartarelli  (ICAE-UCM) Abstract: We investigate the impact of paternity leave policies on gender role attitudes in the next generation. We measure gender-stereotypical attitudes using an Implicit Association Test with 3,000 online respondents in six countries. Using an RD design, we observe a significant reduction (-0.20 SD) in gender-stereotypical attitudes among men born post-paternity leave implementation. This shift influences career choices, as men whose fathers were affected by the reform are more inclined to pursue counter-stereotypical jobs, particularly in high-skilled occupations like healthcare and education. Our findings highlight how paternity leave fosters egalitarian gender norms and affects the occupational choices of the next generation.

 

  Tue (Note the change of day!!!! ), 18 Mar 2025 @ 12:30. Webinar / Onsite Econometrics - Finance Seminar 

Speaker: A. Kirilenko (U. of Cambridge) Title: Limits on Equilibrium ESG Investing Invited by: D. Guerrero (UCM) Abstract: We derive an equilibrium between stakeholders who care about ESG and in vestors who only care about profits. We model stakeholder ESG interests as a non-pecuniary variable imbedded into the objective function of a corporate manager. The manager‘s goal is to get funding for a risky project from investors. We assume that the manager knows more about both the project’s financial payoff and its non-pecuniary ESG value than the investors. To investors, ESG is just extra noise that pollutes information about the project‘s expected payoff. In equilibrium, investors limit ESG activities rather than support them. The extent of the limit is determined by the degree of information asymmetry- how much less do the investors know than the manager. We extend our baseline model to include ESG externalities, ESG risk ratings, and ESG dividends and subsidies.

 

 Thu, 13 (Note the change of day!!!! ) @ 12:30. Webinar!!! / Onsite  Macro Seminar  

Speaker: T. Kehoe (U. Of Minnesota & FDR) Title: Growth and Redistribution with Heterogeneous Attitudes toward Risk Invited by: A. Díaz (ICAE-UCM) Abstract: We develop an endogenous growth model of overlapping generations in which agents leave warm-glow bequests. There are dynasties of risk neutral investors and dynasties of risk averse investors. We start with a simple model in which risk averse investors can invest only in a safe asset while risk neutral investors, whom we often refer to as entrepreneurs, can invest in a risky asset with a higher expected return. This simple structure allows us to analytically calculate the invariant distributions of wealth holdings. We define a social welfare function for this model and calculate tax and transfer policies that maximize social welfare in the invariant distribution. We later show some of the directions in which the model can be generalized.

 

 

  Wed, 12 Mar 2025 @ 12:30. Webinar / Onsite  Econometrics Seminar   

Speaker: Javier Capilla (UCM) and Teodosio Pérez Amaral (ICAE-UCM) Title: Eco-RETINA: A Green, Flexible Algorithm for Model Building Invited by: Teo Pérez Amaral (ICAE-UCM) Abstract: Eco-RETINA is an innovative and eco-friendly algorithm explicitly designed for out-of- sample prediction. Functioning as a regression-based flexible approximator, it is linear in parameters but nonlinear in inputs, employing a selective model search to optimize performance. The algorithm adeptly manages multicollinearity while emphasizing speed, accuracy, and environmental sustainability. Its modular and transparent structure facilitates easy interpretation and modification, making it an invaluable tool for researchers in developing explicit models for out-of-sample forecasting. The algorithm generates outputs such as a list of relevant transformed inputs, coefficients, standard deviations, and confidence intervals, enhancing its interpretability. Now implemented in Python and available on GitHub, Eco-RETINA introduces several new features, including measuring CO₂ emissions and energy consumption. These enhancements, alongside improved data transformations, bottleneck elimination, and a user-friendly interface, significantly boost its performance. The algorithm achieves remarkable reductions in carbon footprint and power consumption (ranging from 50% to 90%) while significantly reducing computational time. Empirical results indicate that Eco-RETINA is not only a sustainable alternative to conventional neural networks but also surpasses them in certain aspects, offering a competitive edge in accuracy, interpretability, and environmental impact.

 

  Wed, 05 Mar 2025 @ 12:30. Webinar / Onsite Macro Seminar   

Speaker: C. Ferreira (BdE) Title: Housing Tenure, Consumption and Household Debt: Life-Cycle Dynamics during a Housing Bust Invited by: Antonia Díaz (ICAE-UCM) Abstract: The housing bust in Spain was characterized by a significant and rapid drop in home ownership among the younger cohorts, a relatively homogeneous but significant decrease in consumption, and significant movements in the rent-to-house price ratio. To uncover the causes of these movements, we solve and estimate an equilibrium life-cycle model with non-linear income dynamics, mortgages, housing, and rental markets and simulate a series of counterfactual policy changes and macroeconomic conditions observed in Spain during the period. The lion's share of the observed drop in home ownership and consumption and the housing market dynamics can be explained by more cautious credit conditions and the major shift in income dynamics observed in Spain between the boom and bust phases.

 

Feb 2025

 

  Wed, 19 Feb 2025 @ 12:30. Webinar / Onsite Macro Seminar   

Speaker: M. Almunia (CUNEF) Title: Firm Networks and Tax Compliance: Experimental Evidence from Uganda Invited by: L. Puch (ICAE-UCM) Abstract: How do tax enforcement interventions diffuse through firm-to-firm networks? We explore this question with a randomized trial in Uganda. Using transaction-level VAT data, we map seller-buyer networks and identify discrepancies in the amounts reported by trading partners. Enforcement letters highlighting these discrepancies are sent to either the seller, the buyer, or both. The correction rate in the treatment group is 23.8%, fourteen times higher than in the control group. This response is asymmetric: corrections are primarily made by sellers, even when only buyers receive letters, providing novel evidence that firms can induce changes in their partners’ tax reporting. Spillover effects extend to transactions not listed in the letters, including those involving other trading partners. The intervention also results in sustained improvements in reporting behavior over subsequent months. Our study sheds light on firm-to-firm communication within networks and offers policy-relevant insights for fighting tax evasion.

 

  Wed, 12 Feb 2025 @ 12:30. Webinar / Onsite Macro Seminar   

Speaker: Damian Pierri (UAM) Title: External Debt Dynamics in an Endogenous Growth Model Invited by: Antonia Díaz (ICAE-UCM) Abstract: Economies experience periods of countercyclical borrowing, during which the stock of external private debt is negatively correlated with output growth rates, and periods of procyclical borrowing, where debt is positively correlated with growth. This paper shows that a group of middle-income countries spend approximately half their time in each state. We develop an open-economy model featuring endogenous growth and stochastic productivity shocks to explore this phenomenon. The model generates a well-defined stochastic balanced growth path, and we establish the existence of an invariant distribution for normalized external debt, analyzing its dynamic properties. We also identify the conditions under which the stock of normalized debt remains sustainable. In this framework, high debt-to-GDP ratios may follow an increasing or decreasing trajectory depending on productivity levels. Consequently, debt sustainability is closely linked to long-term growth. Calibrating the model to Argentinian data yields a remarkably accurate fit. Furthermore, our findings provide insights into the variability of the correlation between the trade balance and output growth, a key statistic often used to describe business cycle patterns in emerging economies. The results in this paper underscore the importance of understanding the global dynamics of macroeconomic models.

 

  Tue, 04 Feb 2025 @ 12:30. Webinar / Onsite Micro Seminar  Please note: date change

Speaker: F. Peinado (UAM) Title: Incentives for Green Technology Adoption and Compliance under Risk Aversion and Technological Uncertainty Invited by: P. André (ICAE-UCM) Abstract: In this paper, we study firms’ incentives to adopt environmentally friendly technologies as a response to emission taxes, in contexts of imperfect compliance and risk aversion. Previous work has analyzed technology adoption incentives and compliance issues under risk neutrality. However, the decision of whether to exceed a regulation entails risks, since polluting agents are exposed to penalties with some probability. Also, there may be uncertainty regarding the impact of green technology adoption on firms’ abatement costs. Hence, risk preferences may matter and should be accounted for. In a baseline model with certainty about future abatement costs, we find that adoption decisions are independent of risk preferences, even if the enforcement policy is so weak that induces imperfect compliance. However, in a context with uncertainty about future abatement costs, adoption incentives decrease with both risk aversion and weak enforcement, especially when the latter entails low sanctions rather than low inspection probabilities.

 

Jan 2025

 

  Thu, 23 Jan 2025 @ 12:30. Webinar / Onsite Macro Seminar   

Speaker: Françeska Tomori (ICAE-UCM) Title: Climate Events and Adaptation: Effects on Environmental Policy and Abatement Invited by: M. Sartarelli  (ICAE-UCM) Abstract: We examine how an extreme climate event affects the incentives of regulators to invest in adaptation measures that reduce the impact on firms´ production costs, and how this investment affects environmental policy and firms´ incentives to invest in abatement. Different government agencies implement these policies (adaptation and emission fees) and can exhibit asymmetric preferences for pollution. We find that investment in adaptation and abatement are substitutes, and more likely climate events decrease firms´ investment in abatement. We also find that severe climate events can induce less investment in adaptation, as they can be used as a tool to reduce expected output and pollution. In addition, we show that symmetric agencies induce a lower investment in adaptation. Finally, we separately identify the welfare gains from adaptation and environmental policy

 

  Tue, 21 Jan 2025 @ 12:30. Webinar / Onsite Macro Seminar   

Speaker: Laia Bosque-Mercader (UB) Title: Building Health across Generations: Childbirth, Childcare and Maternal Health Invited by: M. Sartarelli  (ICAE-UCM) Abstract: Family dynamics and institutions play significant roles in shaping individuals’ health. We evaluate the short- and long-term effects of (1) motherhood and (2) public early childcare on maternal health in Germany. Our results align with an intra-household disease spread from children to mothers after childbirth, which is further amplified by childcare availability. Additionally, mothers exhibit deteriorated mental health from the medium run, related to the psychological demands of motherhood. By contrast, our findings reveal long-term improvements for the remaining health conditions after childbirth, which is supported by childcare availability reducing non-communicable diseases through better labour market outcomes and healthier behaviours

 

  Tue 14 Jan 2025 @ 12:30. Webinar / Onsite Micro Seminar   

Speaker: Monica Vasco (USC) Title: Perception of social network relationships among adolescents Invited by: M. Sartarelli  (ICAE-UCM) Abstract: Social structures also exist in our minds, and these cognitive representations of networks can significantly differ from actual social network configurations. To understand how people perceive their networks, it is essential to evaluate their ability to recognize their direct relationships. In this study, we gathered data on friendships and enmities, as well as beliefs about these ties, from 3,077 students (aged 10-23) in Spanish secondary schools. Our findings reveal that students correctly identified 70.51% of their friendships but only 29.71% of their enmities. Additionally, a mere 0.29% of students accurately assessed all their relationships. We also uncovered several interesting dimensions of heterogeneity. While there are no gender differences in general, same-gender relationships are more accurately predicted than cross-gender ones, and males are better at predicting cross-gender ties than females. Moreover, students who more accurately estimate their networks tend to be older, possess higher cognitive abilities, and occupy specific positions within their networks. In a further extension, we find that bullying victims are less accurate in recognizing both friends and enemies, suggesting that misperceptions of social ties may contribute to the bullying dynamic.

 

 

Dec 2024

 Thu, 12 Dec 2024 @ 12:30. Webinar / Onsite   Note the change of day!!!!    

Speaker: Charisios Grivas (U. Aalborg) Title: Bootstrap-Based Tests for Skewness, Kurtosis and Normality Under Unknown Dependence Invited by: M. Sartarelli  (ICAE-UCM) Abstract: This paper considers the problem of testing for symmetry, fat-tails, and normality of the one-dimensional marginal law for a wide class of stationary processes, which include short-range dependent, long-range dependent, and anti-persistent processes. The possibility of employing a bootstrap procedure to obtain the appropriate critical values and the p-values for these test statistics is explored in detail and the first-order validity of the procedure is also established. Bootstrap-assisted tests are easy to implement and require no prior estimation of the memory parameter or asymptotic variances. The small-sample properties of the test statistics are investigated using extensive Monte Carlo simulations.

 

 

Nov 2024

 

 Thu, 28 Nov 2024 @ 12:30. Webinar / Onsite   Note the change of day!!!!    Macro Seminar   

Speaker:Isaac Baley (UPF - Barcelona School of Economics) Title: Lumpy Forecasts (joint with Javier Turen) Invited by: L. Puch (UCM) Abstract: Professional forecasters adjust their inflation forecasts in a distinctly lumpy pattern, making infrequent but substantial revisions. Strategic concerns play a significant role---forecasters are more likely to adjust, and by larger amounts, when their forecasts deviate from the consensus. Using a fixed-event forecasting framework, we document the impact of consensus pressure and private information on forecast adjustments. Our quantitative model, which integrates Bayesian belief updating with forecast revision costs and strategic concerns, not only replicates the observed lumpiness in survey data but also sheds light on forecasters' apparent overreactions to new information. This structured framework enables us to ``cleanse" forecasts, isolating the underlying inflation beliefs that drive these forecasts.

 

Wed, 27 Nov 2024 @ 12:30. Webinar / OnsiteMicro Seminar 

Speaker: Carlos Vidal (U. Valencia) Title: The supplementary table on pensions (Table 29) and Actuarial Balance Sheets: Assessing the solvency of the Spanish Pension System Invited by: T. Pérez-Amaral (ICAE-UCM) Abstract: The aim of this paper is to advocate for a shift in the management of pension liabilities within social security schemes. The proposed change is from an 'out of sight, out of mind' approach to a more transparent approach that accurately reflects the net worth of the system, i.e. a 'tell it like it is' approach. This involves disclosing all assets and liabilities of the scheme through the use of an actuarial balance sheet (ABS) and its associated income statement (IS). EU regulations since 2017 have required all Member States to disclose their accrued-to-date pension liabilities (ADL) using a standard actuarial cost method and some common assumptions. These pension liabilities have to be disclosed in a supplementary table referred to as Table 29. The ABS can be used to assess the solvency of SS schemes, whereas Table 29 cannot. This paper develops the detailed steps to be followed in order to obtain the ABS, the IS and the information on the solvency of social security schemes from Table 29 and updates the results of Garvey et al. (2023) for the case of the Spanish social security system according to the most recent data from Table 29. The Spanish pension system’s lack of solvency and its continuous decline is very worrying; the indicators for the period 2020-2021 show values that, if they arose in a private pension institution, would lead to immediate intervention by the Spanish authorities. In short, we can say that the Spanish social security system is in a "critical and declining state".

 

 Thu, 21 Nov 2024 @ 12:30. Webinar / Onsite  Micro Seminar  

Speaker: E. Molis (U. Granada) Title: Group threshold when making a decision (con María Gómez-Rúa y Bernardo Moreno) Invited by: P. Álvarez (UCM) Abstract: On many occasions when an agent has to decide between 2 options, such a choice depends on a parameter exceeding a certain threshold. When the choice is collective, the final decision may involve some forms of aggregation of those individual thresholds. This paper aims to offer microfoundations of the aggregation procedure of these individual thresholds. In a model with two states and two decisions, we show that if Agents and societies are to maximize the expected utilities, the unique aggregation procedure satisfying desirable properties is the weighted average of the Agents thresholds.

 

 Wed, 06 Nov 2024 @ 12:30. Webinar ONLINE!!! Micro Seminar  

Speaker: Luc Behaghel (Paris School of Economics & INRAE) Title: Breaking the Barriers to Higher Education: The Long-Term Benefits of a Boarding School for Disadvantaged Students Invited by: M. Sartarelli  (ICAE-UCM) Abstract: We use an RCT to study the effects of a boarding school for disadvantaged students in France, on their higher education outcomes. We find large effects, comparable to those of celebrated preschool interventions. They are even larger among students who speak a language other than French at home, referred to as minorities. In the control group, as well as in a general population survey, minority parents exhibit higher educational ambition, conditional on test scores, and their children perform better all the way till higher education (HE) enrollment. However, minorities face a high HE dropout rate and do not graduate at higher rates. The boarding school helps overcome barriers that otherwise prevent minorities from fulfilling their ambitions: in our treatment group, they achieve better outcomes through to HE graduation. The school has short-run effects on minorities' cognitive and socio-emotional scores. A decomposition shows that both effects predict the school's long-term impact.

 

Oct 2024

 

Wed, 23 Oct 2024 @ 13:00  NOTE DIFFERENT TIME! Webinar / Onsite Micro Seminar 

Speaker: B. Pessoa Carvalho (UA) Title: Campaign spending in local elections: the effects of public funding Invited by: M. Sartarelli  (ICAE-UCM) Abstract: This paper proposes an analytically tractable model to assess the effect of public campaign funding on heterogenous candidates’ spending decisions and electoral outcomes. The empirical analysis relies on a novel campaign finance dataset spanning 3 Portuguese local elections between 2005 and 2013, and exploits the rules governing funds‘ allocation for causal inference. We find that expected public allowances are an important determinant of campaign spending, which causally boosts local vote shares. The implied cost-per-vote ranges between 7€ and 17€. As predicted by the model, we show public funding may widen or close the gap between incumbents and challengers.

 

Wed, 09 Oct 2024 @ 12:30. Webinar / Onsite  Micro Seminar  

Speaker: G. Mohan (U. Barcelona) Title: Regulating a Social Media Platform in the Data Economy Invited by: I. Herguera (ICAE-UCM) Abstract: This paper studies the effect of regulations on a social media platform (SMP). I consider a user-network with data externalities and an SMP that earns revenue from data driven personalization. The SMP offers a price for user data and users simultaneously accept or reject the offer. Under a microfounded model I show that sharing moderate amount of user data maximizes user welfare. However, externalities reduce price for data and all data is shared in equilibrium. A strict consent policy like GDPR over-corrects this imbalance, burdens users with complete data-control and decreases user welfare. Data minimization moderately shifts data-control to users and increases user welfare.

 

 

Sep 2024

 

Wed, 25 Sep 2024 @ 15:00. Webinar / Online !!!!  Macro / Ph. D. Seminar  

Speaker: Rodrigo Tranamil Vidal (Banco Central de Chile) Note: This is an ICAE-Department of Economic Analysis Ph.D. seminar meant to Ph.D. candidates to show their work to the teaching staff and their peers. Pass this seminar is a requirement for satisfactory progress in the Doctoral joint Program in Quantitative Finance and Economics/Programa de Doctorado en Finanzas y Economía Cuantitativas (UCM-UPV-UV-UCLM) Title: Essays on Macroeconomics in commodity-exporting economies Invited by: R. Pérez and J. Ruiz (ICAE-UCM) Abstract: This paper studies whether the inclusion of search frictions in the labor market with both margins of labor supply and endogenous separations improves the empirical fit and forecasting performance of an otherwise standard New Keynesian small open economy model. The model is estimated using Bayesian techniques and several macroeconomic indicators taken from the Chilean economy. The results show that our labor market speciation significantly improves the model's ability to match (and predict) labor market data and other macroeconomic variables such us inflation and output. Moreover, the extensive margin combined with endogenous separations are key for the model to explain employment fluctuations over the business cycle. Overall, we suggest our modeling approach who seek to improve labor market specifications in DSGE models used for policy analysis and forecasting.

 

FRI, 13 Sep 2024 @ 12:30. Webinar / Onsite  Micro Seminar  

Speaker: Lilia Maliar (CUNY) Title: The Power of Open Mouth Policies (with V Lepeytuk, S Maliar, J Taylor) Invited by: Antonia Díaz (ICAE) Abstract: Central banks' announcements about future monetary policy make economic agents to react before the announced policy takes place. We evaluate the anticipation effects of such announcements in the context of a realistic dynamic economic model of central banking. In our experiments, we consider temporary and permanent anticipated changes in policy rules including changes in inflation target, natural rate of interest and Taylor-rule coefficients,  as well as anticipated switches from inflation targeting to price-level targeting and average inflation targeting. We show that the studied nonrecurrent news shocks about future policies have sizable anticipation effects on the economy. Our methodological contribution is to develop a novel perturbation-based framework for constructing nonstationary solutions to economic models with nonrecurrent news shocks.

 

Spring 2024

Jun 2024

 

Mon, 24 Jun 2024 @ 12:30. Webinar / Onsite  Micro Seminar  

Speaker: M. Almagro (Chicago Booth School of Business) Title: Optimal Urban Transportation Policy: Evidence from Chicago Invited by: M. Sartarelli  (ICAE-UCM) Abstract: We characterize and quantify optimal urban transportation policies in the presence of congestion and environmental externalities. We formulate a framework in which a municipal government chooses among transportation equilibria through its choice of public transit policies—prices and frequencies—as well as road pricing. The government faces a budget constraint that introduces monopoly-like distortions and the potential need to cross-subsidize modes. We apply this framework to Chicago, for which we construct a new dataset that comprehensively captures transportation choices. We find that road pricing alone leads to large welfare gains by reducing externalities, but at the expense of travelers, whose surplus falls even if road pricing revenues are fully rebated. The optimal public transit price is near zero, with reduced bus and increased train frequencies. Combining transit policies with road pricing slackens the budget constraint, allowing for higher transit frequencies and lower prices, thereby increasing consumer surplus after rebates.

 

Wed, 19 Jun 2024 @ 12:30. Webinar / Onsite  Finance Seminar     !!!!!!!!!!!!!! Canceled !!!!!!!!!

Speaker: C. Frau (UIB) Title: Calendar Spread Options on Energy Commodities Invited by: M. D. Robles (ICAE) Abstract: In this work we calculate the expressions followed by the joint characteristic function (JCF) of futures log-prices, for a panel of seven extant models, aimed for pricing calendar spread options (CSO); these expressions are new in the literature. We also present the analytical expressions followed by the component terms of the JCF; those referring to the more recent models are also new in the literature. We perform a pricing exercise on European CSOs on WTI crude oil futures prices, whereby we follow the methodology described in Caldana & Fusai (2013) enabling us to use closed formulae. Finally we compare model accuracy and processing times.

 

Wed, 12 Jun 2024 @ 12:30. Webinar / Onsite Econometrics Seminar  

Speaker: G. Domènech Arumi (Université Libre de Bruxelles) Title: Black Neighbors Matter: Officer Neighborhoods and Racial Differences in Policing Invited by: M. Sartarelli  (ICAE-UCM) Abstract: Ten years of data from a large American city reveal that Black civilians are consistently overrepresented in police street interactions. I combine property registry data, voter files, and employee records to locate officers’ exact addresses and study whether racial diversity in their neighborhoods impacts racial differences in policing. I find that White (unlike Black and Hispanic) officers are geographically clustered in a few (predominately White) neighborhoods. Those living in Black neighborhoods are more productive in Black interactions (e.g., more likely to seize drugs during stops). White officers quasi-randomly exposed to a new next-door Black neighbor interact with relatively fewer Blacks and are more productive. Effects are larger among officers in White neighborhoods, with less experience, and with more affluent new neighbors. These findings suggest that segregation may amplify racial differences in policing.

 

Wed, 05 Jun 2024 @ 12:30. Webinar / Onsite Macro Seminar 

Speaker: T. Dominguez-Lino (Chicago Booth) Title: Efficiency and Redistribution in Environmental Policy: An Equilibrium Analysis of Agricultural Supply Chains Invited by: M. Sartarelli  (ICAE-UCM) Abstract: I build an empirical model of the South American agricultural sector to show how environmental policy is transmitted along a supply chain when regulation at the externality’s source is infeasible. Given obstacles to a carbon tax on farmers, I show how alternative market-based policies—downstream agribusiness taxes—reduce upstream emissions but their effectiveness is limited by international leakage and domestic mistargeting, while also being regressive. Agribusiness monopsony power worsens targeting by lowering pass-through to upstream farmers in uncompetitive and emissions-intense regions, thus eroding the Pigouvian signal where social cost is highest. By contrast, command-and-control tools perform robustly when markets face pre-existing distortions.

 

May 2024

 

Wed, 29 May 2024 @ 12:30. Webinar / Onsite  Micro Seminar 

Speaker: Constantatos Christos (U. Macedonia) Title: On the Relative Effectiveness of Voluntary Agreements and Mandatory Regulation, when Consumers are Environmentally Conscious (joint with Apostolos-Ioannis Martis) Invited by: P. André (ICAE-UCM) Abstract:We examine the impact of environmental policies in imperfectly competitive markets, when consumers care about the environmental damages of their consumption, and firms respond to consumers’ worries using end-of-pipe abatement. We focus on the choice of tax base between emissions and output, considering a flexible regulator who offers a Voluntary Agreement (VA) in the form of stick & carrot approach: the regulator offers a credible menu of tax rates based on firm’s abatement, and the firm chooses its abatement and the tax rate that will apply on its output or emissions. We find that the emissions tax base provides higher welfare for most levels of consumers’ environmental consciousness because the output tax may lead to over-abatement. Moreover, for low (high) levels of consumers environmental consciousness, an emissions (output) tax provides better environmental conditions. Comparing with previous results where the regulator resorts to mandatory regulation, we find that the emissions tax when the regulator offers a VA menu leads to higher welfare. In contrast, in the case of the output tax the decision between committing to a tax rate (mandatory regulation) or not (VA) depends on the level of environmental consciousness. Considering the environmental impact of a VA, an output tax is superior when the social planner does not commit, whereas emissions tax is better when he chooses to commit.

 

Wed, 22 May 2024 @ 12:30. Webinar / Onsite   Finance Seminar 

Speaker: H. Veiga (UC3M) Title: Stock market returns predictability: A time-varying analysis (joint with I. Casas, and X. Mao) Invited by: M Fernanda Rivas (UCM) Abstract: In this paper, we conduct a comprehensive comparative analysis of the predictability of stock market returns using two types of predictive regressions: Regressions with time-varying coefficients and traditional predictive regressions. The predictability of returns is examined in both in-sample and out-of-sample scenarios, with the variance risk premium and conditional variance serving as the main predictors. To predict the conditional variance, we use four traditional Heterogeneous Autoregressive (HAR) type models and four HAR type models with non-constant coefficients, three of which are new proposals. The in-sample analysis shows that predictive regressions with time-varying coefficients consistently improve predictability compared to traditional predictive regressions. This result is supported by both unconditional and conditional tests of superior predictive ability. To analyze the impact of the business cycle on the predictability of stock returns, we condition on economic activity. We also condition on the existence of extreme weather events. Although the out-of-sample results show lower predictive power for time-varying predictive regressions compared to the in-sample analysis, they still prove to be relevant depending on the business cycle and the range of extreme weather events. Finally, HAR models with non-constant coefficients often perform better than traditional HAR models.

 

 Thu, 16 May 2024 @ 12:30. Webinar / Onsite  Micro Seminar 

Speaker: Abel Brodeur (U Ottawa) Title: Mass Reproducibility and Replicability: A New Hope Invited by: M. Sartarelli  (ICAE-UCM) Abstract: This study pushes our understanding of research reliability by reproducing and replicating claims from 110 papers in leading economic and political science journals. The analysis involves computational reproducibility checks and robustness assessments. It reveals several patterns. First, we uncover a high rate of fully computationally reproducible results (over 85%). Second, excluding minor issues like missing packages or broken pathways, we uncover coding errors for about 25% of studies, with some studies containing multiple errors. Third, we test the robustness of the results to 5,511 re-analyses. We find a robustness reproducibility of about 70%. Robustness reproducibility rates are relatively higher for re-analyses that introduce new data and lower for re analyses that change the sample or the definition of the dependent variable. Fourth, 52% of re-analysis effect size estimates are smaller than the original published estimates and the average statistical significance of a re-analysis is 77% of the original. Lastly, we rely on six teams of researchers working independently to answer eight additional research questions on the determinants of robustness reproducibility. Most teams find a negative relationship between replicators' experience and reproducibility, while finding no relationship between reproducibility and the provision of intermediate or even raw data combined with the necessary cleaning codes.

 

Wed, 08 May 2024 @ 12:30. Webinar / Onsite  Finance Seminar  

Speaker: T-M. Niguez (U. of Westminster) Title: Analytic moments of TGARCH(1,1) models with polynomially adjusted densities Invited by: J-A. Jimenez-Martin (ICAE-UCM) Abstract: This paper extends He et al. (2008) and Francq and Zakoïan (2010) by providing analytical expressions for the moments of the unconditional distribution of the TGARCH(1,1) under alternative specifications for the conditional mean and different skewed distributions for the innovations. We consider polynomially adjusted (PA) densities, such as the PA Logistic, PA hyperbolic secant and the PA Gaussian or Gram-Charlier (GC), along with the skewed Student-t. Our results show that: (i) the main driver of the skewness of the TGARCH(1,1) is the skewness of the innovations, while the excess kurtosis has a comparatively lesser impact. However, both skewness and kurtosis of the innovations affect significantly the TGARCH(1,1) kurtosis; (ii) if the conditional mean is not constant, returns can be asymmetric even if innovations are symmetric; (iii) skewed innovations can generate cross-correlations different from zero, indicating leverage effect, even when the volatility model is symmetric. Finally, we illustrate our theoretical results with two empirical applications.

 

Apr 2024

 

Wed, 24 Apr 2024 @ 12:30. Webinar / Onsite  Macro Seminar 

Speaker: J. V. Rodriguez-Mora (CUNEF) Title: The role of industries in rising inequality Invited by: A. Díaz (ICAE-UCM) Abstract: We find that majority of the rise in earnings and wage inequality in Italy between 1985 and 2018 took place between firms and that this was mainly driven by the divergence of pay between firms in different industries. The growth in inequality was extremely concentrated with just 5% of industries accounting for all of the increase in between-industry variance. The rise in inequality was predominantly driven by rising employment in low-paying industries and to a lesser extent by increasing earnings of high-paying industries. The patterns of rising inequality in Italy are remarkably similar to the ones identified for the USA which suggests a common explanation centred around industry-level labour demand shifts.

 

Wed, 17 Apr 2024 @ 12:30. Webinar!!!  Onsite  Finance Seminar   

Speaker: Runfeng Yang (Università Ca' Foscari, Venice) Title: The Artificial Intelligence Premium Invited by: J-A. Jimenez-Martin (ICAE-UCM) Abstract: We study whether the Artificial Intelligence (AI) adoption is priced in the cross-section of US stocks. Firms with a higher level of adoption of AI exhibit higher stock returns. A one-standard deviation increase in the AI adoption level indicates an 18 basis-point increase in expected monthly stock returns. We study several economic channels. The AI premium is related to the slow realization of early AI investments and digital benefits. It is influenced by shifting investor perceptions of AI technology. The AI premium is associated with the market AI sentiment and technological adoption risk. The premium varies across sectors.

 

Wed, 10 Apr 2024 @ 12:30. Webinar / Onsite   Macro Seminar 

Speaker: Javier Quintana (Banco de España) Title: Carbon Pricing, Border Adjustment and Renewable Energy Investment: a Network approach Invited by: A. Díaz (ICAE-UCM) Abstract: We develop a dynamic open economy model with production networks, investment networks and renewable energy sector to analyze the economic and environmental consequences of the extension of the European Union (EU) carbon pricing initiatives under alternative carbon border adjustment scenarios. The introduction of an incremental carbon price of €100 per tonne in the EU implies a reduction in carbon footprint by 14% in the EU but does so at the cost of a reduction in GDP by up to 2.3% in the short term. The fall is concentrated in the most energy-intensive sectors, especially in upstream sectors such as metals and chemicals. We also considered the impact that endogenous investment in renewables in the medium. The increase in carbon prices in the EU creates an important incentive to invest in renewable energy (which is not the case in third countries due to the higher cost of fossil fuels, which leads to a reduction of electricity prices and we calculate the induced aggregate and sectoral effects. In the EU as a whole, the loss of GDP would be reduced up to 1.1% while the reduction in carbon footprint would reach 16%. The increase in carbon prices also originates carbon leakage, due to import substitution and higher consumption of fossil fuels in foreign countries, while a import tariff partly reverses it. However, we find that it does so at the cost of a marginally negative effect on GDP and inflation, as the competitive gain is offset by the additional increase in the cost of imported intermediate inputs, which affects differently sectors with higher shares of inputs imported. We also consider the effects of policy alternatives such as the introduction of export subsidies as well as retaliatory tariffs from third countries.

 

Mar 2024

 

Wed, 20 Mar 2024 @ 12:30. Webinar / Onsite  Macro Seminar 

Speaker: B. de Blas Pérez (UAM) Title: “Structural policy, growth and welfare in the medium-term of advanced countries” (joint with Mónica Correa-López) Invited by: C. Rodríguez-Alvarez (ICAE-UCM) Abstract:  In this paper, we use a two-country asymmetric model of endogenous growth in varieties, cross-country firm heterogeneity and trade (Correa-López and de Blas, 2021) to explore the quantitative effects of policy shifts in both, the balanced growth path and, especially, the transition between paths in the medium-term cycle. Endogenous growth is driven by embodied technical change in new intermediate varieties for the capital goods sector (Romer, 1990; Comin and Gertler, 2006). The model also features international spillovers in research. The second source of growth in the model is disembodied technological change, assumed to be exogenous. Countries trade in intermediate varieties (Comin et al., 2014; Santacreu, 2015) which are produced by heterogeneous firms (e.g. Melitz, 2003; Ghironi and Melitz, 2005; Melitz and Redding, 2014). We analyze changes across balanced growth paths and transitional dynamics after a policy shift has occured, such as variations in iceberg costs and barriers to adoption, among others. Very preliminary results show that a permanent shift in iceberg transportation costs at the Home country generates a strong and gradual contraction in real GDP and wages of Foreign relative to Home. The adjustment is more dramatic in investment and imported varieties. We also observe a sharp reduction in stock of adopted varieties at Foreign, and indication of a widening of the technology gap. Regarding the transitional dynamics, we find that a bilateral trade restrictiveness has asymmetric effects across countries, being the degree of interdependence of countries the key driver. Worldwide trade is affected negatively: there is a contraction in the number of varieties both imported and exported. All this widens the technology gap between Home and Foreign. Finally, in welfare terms, Home is better off than Foreign along the transition.

 

Wed, 13 Mar 2024 @ 12:30. Webinar!!! / Onsite  Micro Seminar 

Speaker: A. Hernando Veciana (UC3M) Title: Designing Price Benchmarks Robust to Manipulation Invited by: C. Rodríguez-Alvarez (ICAE-UCM) Abstract: Price benchmarks are utilized to incorporate the evolution of prices within a market into a contract. However, their usage implies that parties involved in the contract may benefit from manipulating the prices used for computing the benchmark. This paper examines this phenomenon within a realistic and tractable model inspired by the practical intricacies of smart contracts implemented in blockchains such as Ethereum. Our first main result is that trimmed means or Winsorized means perform worse than either the standard mean or the median. Our second main result is that the median outperforms the mean if and only if either the intensive margin of manipulation is sufficiently large or both the extensive margin and price dispersion are sufficiently small, a set of circumstances common in blockchain.

 

 Tue, 12 Mar 2024 @ 12:30. Webinar!!! / Onsite  Macro Seminar  

Speaker: T. Kehoe (U. Of Minnesota & FDR) Title: Default and Interest Rate Shocks: Renegotiation Matters Invited by: A. Díaz (ICAE-UCM) Abstract: We develop a sovereign default model with debt renegotiation in which interest-rate shocks affect default incentives through two mechanisms. The first is the standard mechanism through which higher rates tighten the budget constraint. The second rests on how risk-free rates affect lenders’ opportunity cost of holding delinquent debt. When rates are high, this cost increases and lenders accept larger haircuts, which makes default more attractive ex-ante. We use the model to study the 1982 Mexican default, which followed a large increase in US interest rates. Our novel renegotiation mechanism is key for reconciling sovereign default models with the narrative that US monetary tightening triggered the crisis.

 

Feb 2024

 

Wed, 28 Feb 2024 @ 12:30. Webinar / Onsite Finance Seminar

Speaker: M. A. Yagüe (UCM) This is an ICAE-Department of Economic Analysis Ph.D. seminar meant to Ph.D. candidates to show their work to the teaching staff and their peers. M. A. Yagüe is presenting the initial paper of his doctoral thesis under the supervision of A. García-Henaux and M. Jeréz. Invited by: Alfredo García-Hiernaux (ICAE-UCM) Abstract: We develop a theoretical framework that explains banks’ credit allocation to either households seeking real estate assets or companies requiring capital for consumer goods production. By analyzing the interaction between the credit and the real estate markets, the model shows that when banks have high lending capacity, they have a natural incentive to bias the credit allocation towards real estate acquisition, fostering the emergence of real estate bubbles. Then we analyze the specific conditions (real estate and credit markets, banks’ characteristics, household preferences and overall economy’s productivity growth) that favor this process, setting direction for a more effective macroprudential regulation.

 

Thu, 22 Feb 2024 @ 12:30. Webinar / Onsite  Micro Seminar 

Speaker: Carlos Vidal (U. Valencia) Title: The implicit (un)healthy life expectancy used for pricing long-term care insurance and life care annuities (with Ventura-Marco and Garvey). Invited by: T. Pérez-Amaral (ICAE-UCM) Abstract: This paper examines the implicit healthy life expectancy (HLE) used for actuarial calculations in some selected biometric data sets from Australia, China, Portugal, Spain and the US. We are interested in checking the demographic and epidemiological coherence of these data sets because this health indicator is rarely presented when authors build their biometric data sets, nor when they are used to calculate long-term care insurance (LTCI) and life care annuity (LCAs) premiums, nor when they are employed in research articles to estimate the future demand for LTC services in a particular country.

 

Wed, 21 Feb 2024 @ 12:30. Webinar / Onsite Micro Seminar 

Speaker: A. Nieto Castro (LISER) Title: Television and Academic Achievement: Evidence from the Digital Television Transition in the UK. Invited by: M. Sartarelli  (ICAE-UCM) Abstract: This paper exploits exogenous variation in the transition date from analogue to digital television signal in the UK across more than 32,000 geographical units to examine the causal impact of television on academic performance and potential mechanisms. Using a large administrative dataset on the universe of students in state-funded education in England, I show that the switchover increases pupil test scores and that the effect is driven by economically disadvantaged students and low achievers. Using TV market data and a child survey dataset, I investigate possible mechanisms. I find evidence supporting a displacement effect: the digital transition considerably increases TV viewing time and displaces forms of socialization implying risky behaviour for children. Instead, I find no evidence of an information effect: the switchover does not increase the availability of educational TV content, nor does it change children’s motivation towards school or emotional state.

 

Wed, 14 Feb 2024 @ 13:00. Webinar!!!   Onsite!!!!

Speaker: Gerard Llobet (CEMFI) Title: Understanding Power Contracts: The Role of Counterparty Risk (joint with Natalia Fabra, UC3M) Invited by: C. Rodríguez-Alvarez (ICAE-UCM) Abstract: The promotion of investment in renewable energy relies on Purchasing Power Agreements (PPAs). PPAs are contracts between electricity generators and their customers which establish a long-term price for the energy they trade. However, there is a concern that markets fail to provide enough liquidity for these long-term contracts. In this paper, we propose a model for this market and characterize its main features. We show that the buyers' counterparty risk enlarges the probability of default on the contract, giving rise to under-investment in renewable energy. We also study the effects on the performance of the electricity market and investment incentives of proposed market interventions, such as public support for long-term contracting, public guarantees, regulatory-backed contracts, and buyers' obligations to enter into long-term contracts.

 

 

Jan 2024

 

Wed, 31 Jan 2024 @ 13:00. Webinar!!!  Onsite!!!!

Speaker: D. Andrés (UCM) Title:  Storage and Renewable Energies: Friends or Foes? Invited by: M. Sartarelli  (ICAE-UCM) Abstract: Conventional wisdom claims that renewables and storage are complements. However, we show that this relationship does not always hold from the investors’ point of view. In markets where renewable energies move procyclically relative to demand and their capacity is small, increasing storage (renewable) capacity negatively impacts renewable (storage) firms’ profits. In markets with multiple technologies, at least one of them is negatively impacted by storage. These findings have policy implications for the optimal timing and effectiveness of mandates or subsidies for renewables and storage. Simulations of the Spanish wholesale electricity market illustrate our main results.

 

Wed, 24 Jan 2024 @ 13:00. Webinar!!!  Onsite!!!!

Speaker: E. García Miralles (BdE) Title: When Death was Postponed: The Effect of HIV Medication on Work, Savings, and Marriage. Invited by: M. Sartarelli  (ICAE-UCM) Abstract: Longer life expectancy can affect individuals’ incentives to work, save, and marry, net of any changes in their underlying health. We test this hypothesis by using the sudden arrival of a new treatment in 1995 that dramatically increased life expectancy for HIV-infected individuals. We compare the behavioral responses of HIV-infected individuals who were still in good health but who differed in their access to the new treatment. Those with access to treatment work substantially more, marry later, but do not save more. Our results highlight the importance of accounting for such incentive effects when valuing increases in life expectancy.

 

Dec 2023

 

Wed, 20 Dec 2023 @ 13:00. Webinar!!!  Onsite!!!!

Speaker: A. Hidalgo (UCM/IMT) Title: Your room is ready: Tourism and urban revival Invited by: M. Sartarelli  (ICAE-UCM) Abstract:

 

Thu, 14 Dec 2023 @ 13:00. Webinar!!!  Onsite!!!!

Speaker: Juan Miguel Londoño (Board of Governors of the Federal Reserve System) Title: The Price of Macroeconomic Uncertainty: evidence from Daily Options Invited by: E. Fernández (ICAE-UCM) Abstract: Using recently available daily S&P 500 index option expirations, we examine the ex ante pricing of uncertainty surrounding key economic releases and the determinants of risk premia associated with these releases. The cost of insurance against price, variance, and downside risk is higher for options that span U.S. CPI, FOMC, Nonfarm Payroll, and GDP releases compared to neighboring expirations. We calculate release-driven forward equity and variance risk premia and find that premia vary considerably across economic releases and increase with risk aversion as well as with monetary policy and real economic uncertainty. The empirical framework presented in this paper can be used to examine the ex ante pricing of a wide variety of events.

 

Nov 2023

 

Wed, 29 Nov 2023 @ 13:00. Webinar!!!  Onsite!!!!

Speaker: Marc Vorsatz (UNED) Title: The structure of strategy-proof rules (conjunto con Jorge Alcalde-Unzu, UPNA). Invited by: M Fernanda Rivas (ICAE-UCM) Abstract: We establish that all strategy-proof social choice rules in strict preference domains follow necessarily a two-step procedure. In the first step, agents are asked to reveal some specific information about their preferences. Afterwards, a subrule that is dictatorial or strategy-proof of range 2 must be applied, and the selected subrule may differ depending on the answers of the first step. As a consequence, the strategy-proof rules that have been identified in the literature for some domains can be reinterpreted in terms of our procedure and, more importantly, this procedure serves as a guide for determining the structure of the strategy-proof rules in domains that have not been explored yet.

 

Wed, 22 Nov 2023 @ 13:00. Webinar!!!  Onsite!!!!

Speaker: J. Penalva (UC3M) Title: Operate, not Amputate: Rule 201 as an Example of a Surgical Approach to Dealing with Toxic Short Selling Invited by: Luis Puch (ICAE-UCM) Abstract: In 2011 the SEC introduced Rule 201 aimed at striking a balance between limiting the threat of short sellers on price stability while interfering as little as possible with the provision of liquidity and the process of price discovery. In this paper we provide a novel evaluation of this Rule using over two years of intraday data, carefully matching restricted and control assets, and separating local effects around the implementation from those over the remainder of the trading day. We find that the Rule achieves its objectives: despite a 4% drop in volume, liquidity and volatility improve (the spreads fall by 7% and the range by 13%). Our analysis indicates that the restrictions achieve this by increasing the cost of short selling in a way that primarily affects toxic short sellers.

 

Wed, 15 Nov 2023 @ 13:00. Webinar!!!  Onsite!!!!

Speaker: A. Nuevo (UAM) Title: The Birth Order Effect: A Modern Phenomenon? Invited by:  A. Díaz (ICAE-UCM) Abstract: We provide a historical perspective on the birth order effect by examining differences in adult occupational rank among brothers in 19th and early 20th century Netherlands. Using a rich historical dataset compiling administrative birth and marriage registry records linking family members, we further analyze the role of family composition and socio-economic status in modulating the birth order effect. While consistent with findings in modern developed countries, we find that later-born males hold lower-ranked occupations than their older male siblings, we also find that consistent with modern evidence from emerging economies like India and China, this negative birth order effect is primarily driven by differences between the first- and the last-born and their siblings, and by the number of brothers in the family. Birth order differences – particularly the first-born advantage – are larger among socio-economically advantaged families and in more urbanised areas, while the opposite is true for the last-born effect. Surprisingly, the first-born advantage or sonpreference is not driven by inheritance rules or transmission of occupations to children born earlier in the family. Taken together, our findings suggest that birth order effects and quantity-quality tradeoffs in families, are not merely modern phenomena but have been a source of context-dependent intrahousehold inequality throughout the centuries

 

Wed, 08 Nov 2023 @ 13:00. Webinar!!!  Onsite!!!!

Speaker: E. Zucchelli (UAM) Title: Intergenerational persistence of socioeconomic status, smoking and birth weight Invited by: M. Sartarelli  (ICAE-UCM) Abstract: The identification of key factors affecting infant health is a relevant issue in human development due to its established association with long-term health, educational and labour-market outcomes. This paper exploits intergenerational information on three generations (grandparents-parents-children) to aid the identification of the effects of parental education and smoking behaviour on offspring health at birth. We employ rich intergenerational data drawn from the US National Longitudinal Study of Adolescent to Adult Health (Add Health) and a two-stage empirical approach. We find that there is a strong intergenerational persistence of education and smoking across generations. Higher parental education reduces the likelihood of children’s low birth weight while maternal smoking during pregnancy as well as parental regular smoking increase it. Results are confirmed using a battery of robustness checks, including the use of an instrumental variable. Moreover, heterogeneity analyses by biological sex show that fathers might play an important role in affecting offspring’s health.

 

Oct 2023

 

Wed, 25 Oct 2023 @ 13:00. Webinar!!!  Onsite!!!!

Speaker: Jordi Paniagua (UV) Title: Mind the gaps: Gender complementarities in migration and FDI Invited by: Luis Puch (ICAE-UCM) Abstract: This paper analyzes the effect of increasing the share of female migrants on Foreign Direct Investment (FDI). We develop a model that introduces gendered labor and discrimination in a structural model of FDI. Our estimates reveal that the increasing feminization of the immigration labor force is positively associated with FDI. Furthermore, the model disciplines the quantification of the elasticity of substitution between male and female labor for 27 OECD countries (1.3 on average) and three job types: managers (3.2), professionals (2.1), and non-qualified workers (6.0). The elasticity of substitution is lower in countries with low gender gaps (e.g., 0.3 in Sweden) than in countries with high gender gaps (e.g., 6.1 in Mexico). Our analysis offers novel perspectives on the impacts of migration and the potential implications of policies targeted at enhancing female workforce participation. Keywords— FDI, migration, elasticity of substitution, gender, discrimination.

 

Wed, 04 Oct 2023 @ 13:00. Webinar!!!  Onsite!!!!

Speaker: Boris Ginzburg (UC3M) Title: Troll Farms and Voter Disinformation Invited by: C. Rodríguez-Alvarez (ICAE-UCM) Abstract: Political agents often attempt to influence elections through troll farms – organisations that flood social media platforms with messages emulating genuine information. We model the behaviour of a troll farm that faces a heterogeneous electorate of partially informed voters, and aims to achieve a desired political outcome by targeting each type of voter with a specific distribution of messages. We show that such tactics are more effective when voters are otherwise well-informed. Consequently, societies with high-quality media are more vulnerable to electoral manipulation, and counteracting troll farms may require promotion of informative but non-expert opinions. At the same time, increased polarisation, as well as deviations from Bayesian rationality, can reduce the negative effect of troll farms and restore efficiency of electoral outcomes.

 

Jun 2023

 

Thu, 15 Jun 2023 @ 13:00. Webinar!!!    And Onsite also!!!!

Speaker: Teresa González (Banco de España) Title:How to measure inflation volatility: A note. (joint with A. García Hiernaux, ICAE-UCM; D. Guerrero, CUNEF) Invited by: Alfredo García-Hiernaux (ICAE-UCM) Abstract: This note provides a methodology to measure inflation volatility under the P measure based on a model of prices and assuming rational inattention. We apply this methodology to estimate the inflation volatility for the Eurozone, Germany, Spain, and the US from 2002 to 2022. We find significant differences between the Eurozone and the US in the dynamics of inflation volatility in turmoil periods. As a robust test, we apply this methodology to estimate the 10-year Government bond yield volatility in Germany, Spain and the US, and the S&P 500 volatility, finding higher information content than standard approaches. This methodology can be used to assess useful volatility measures for several macro and financial series.

 

Wed, 14 Jun 2023 @ 13:00. Webinar!!!    And Onsite also!!!!

Speaker: Lior Cohen (Institut Barcelona d'Estudis Internacionals, Universitat Pompeu Fabra) Title: Cents and Sensibility: Exploring Non-Proportional Reasoning During Stock Market Declines Invited by: Simon Sosvilla-Rivero (ICAE-UCM) Abstract: The paper explores how individuals assess and respond to a stock market decline, using a survey that presents scenarios involving several stocks with prices at different orders of magnitude that all fall by the same percentage but are only presented in dollar terms. The results indicate that people's reactions to risk differ depending on the nominal value of the stock. Specifically, individuals perceived higher-priced stocks as riskier and tended to sell them more than lower-priced ones. In addition, certain factors, such as risk aversion and following stock-related news, were associated with more robust non-proportional reasoning. These findings suggest that individuals rely on nominal value rather than percentage change when evaluating the risk of a stock market decline.

 

 

 

Thu, 8 Jun 2023 @ 13:00. Webinar!!!    Onsite!!!!

Speaker: Antonio Cabrales (UC3M) Title: The Interactions of Social Norms about Climate Change: Science, Institutions and Economics (joint with  Manu García, WU Saint Louis, David Ramos Muñoz, UC3M, Angel Sánchez UC3M) Invited by: Luis Puch (ICAE-UCM) Abstract: We study the evolution of interest about climate change between different actors of the population, and how the interest of those actors affect one another. We first document the evolution individually, and then provide a model of cross influences between them, that we then estimate with a VAR. We find large swings over time of said interest for the general public by creating a Climate Change Index for Europe and the US (CCI) using news media mentions, and little interest among economists (measured by publications in top journals of the discipline). The general interest science journals and policymakers have a more steady interest, although policymakers get interested much later.

 

Wed, 7 Jun 2023 @ 13:00. Webinar!!!   Onsite!!!!

Speaker: Mattia Bevilacqua (University of Liverpool & Systemic Risk Center at LSE) Title: Uncovering the Asymmetric Information Content of High-Frequency Options Invited by: J-A. Jimenez-Martin (ICAE-UCM) Abstract: We propose option realized semivariances and signed jumps which can be seen as new “observable quantities” to summarize the asymmetric information contained in the sign of high-frequency options returns. We show that these measures successfully capture the direction of the discontinuities related to the underlying asset and risk factor, resulting in additional incremental information neither contained in the aggregate option realized measures nor in other end-of-day stock and options data. In specific, using options data on SPDR S&P 500 ETF (SPY) and 15 individual equities, we find that the negative (positive) semivariance and signed jump of out-of-the-money call (put) options play a prominent role in predicting future variance, variance risk-premia, and excess monthly returns.

 

May 2023

 

Wed, 31 May 2023 @ 13:00. Webinar   Onsite !!!!

Speaker: G. Correa Lopera (UPNA) Title: Voting Equilibria and Public Funding of Political Parties (joint with Bernardo Moreno, U Málaga) Invited by: E. Huergo (ICAE-UCM) Abstract: In most OECD countries direct public funding to political parties is provided and its allocation is executed on the basis of two principles, i.e., (i) proportional to the votes (or alternatively the number of seats), and (ii) equal distribution. We consider the existence of an optimal policy and study in a setting where the public political financing is a linear function of the received number of votes. First, we find that direct public funding to political parties necessarily has to be provided when implementing optimal policy as the goal. Second, sums to be allocated both proportionally and evenly between parties depend on the quality of voters’ information, the size of non-partisan voters and nature of parties, and the distribution of supporters of each party.

 

 

Wed, 24 May 2023 @ 13:00. Webinar   Onsite !!!!

Speaker: Antoni-Italo Moragas (CUNEF) Title: Geographical Mobility as a Bridge to Opportunity: Evidence from the Spanish Military Service (joint with J Cáceres-Delpiano, UC3M;, Gabriel Facchini Royal Holloway; Ignacio González, American University) Invited by:  C. Rodríguez-Alvarez (ICAE-UCM) Abstract: We study the effects of a temporary and forced migration shock on individuals’ fu-ture geographical mobility and labor market outcomes. We exploit a feature of the mandatory military service in Spain, where individuals were randomly allocated to a military camp in their own region or in one of the other sixteen regions of the country. Using data from a nationally representative survey in Spain, we find that conscripts assigned to military service in a region different from their own have a substantially higher probability (8 pp) of changing their province of residence at some time in the future. The size of this effect is larger for the older cohorts. We find that most of the effect is driven by migrations to provinces different from that of the military ser- vice, which is consistent with the hypothesis that the decision to migrate does not rely on the individual having a preference for that destination, but on featuring a greater propensity to move after a previous migration experience. Furthermore, we find that the individuals who were sent out during the military service were more likely to be employed (5 pp), work more hours per week (1.8 hours), and were more likely to make social security contributions (6.2 pp) around five years after the service. All in all, our estimates suggest that a temporary migration shock during the early adulthood years had a positive effect on the future geographical mobility of conscripts and on their labor market outcomes.

 

Tue, 23 May 2023 @ 13:00. Webinar!!!    Onsite !!!!

Speaker: Runfeng Yang (UCM-Phd. candidate) This is an ICAE-Department of Economic Analysis Ph.D. seminar meant to Ph.D. candidates to show their work to the teaching staff and their peers. Pass this seminar is a requirement for satisfactory progress in the Doctoral joint Program in Quantitative Finance and Economics/Programa de Doctorado en Finanzas y Economía Cuantitativas (UCM-UPV-UV-UCLM) Title: Measuring the Climate Transition Risk Spillover Invited by: J-A. Jimenez-Martin (ICAE-UCM) Abstract: Climate transition risk, the generated from the transition to a low-carbon economy due to changing policies, can have cross-border impacts. In this paper, we study the transition risk spillover among six major financial markets globally from 2013 to 2021. We evidence the transition risk spillover. We find that Canada and the US are main transition risk transmitters, and Europe and Japan are the main receivers of the transition risk. Such role of transmission could change over time and change according to different types of transition risk shocks. It takes around three weeks for transition risk to be fairly transmitted. On average, around 40% – 50% of local climate transition risk shocks comes from outside. The transition risk spillover is also affected by other factors. When the financial markets are more connected, the risk spillover is higher. A more tense geopolitical relationship could mean higher risk spillover. A more stringent local climate policy means lower risk received and higher risk given. We also find that a higher climate sentiment is associated with higher level of risk transmission.

 

Fri, 19 May 2023 @ 12:00. Webinar   Onsite !!!!

Speaker: Amir Shmueli (Hebrew University Jerusalem) Title: Social Solidarity in Healthcare: The Israeli Case Invited by: Manuel García-Goñi (UCM) Abstract: While solidarity is at the basis of all social health insurance systems, little has been done to define and analyze it empirically. Equity in the delivery of medical care and progressivity of its finance are socially important, but miss the main principle of social health insurance systems – mutual help. The present study views social solidarity not as a value but as cross-subsidies among individuals, which are necessary to achieve a separation between finance and delivery of care in order to make healthcare affordable universally. A solidarity index, derived from the Kakwani Progressivity Index, is suggested and applied to the Israeli national health insurance system in 2010. The observed solidarity index for 2010 Israel is 0.242. Adjusting for possible barriers in use does not change the index. About 85% of the solidarity index originates from income solidarity. If the entire health budget was financed by the general revenue, the solidarity index would rise to 0.259. The level of solidarity in Israel is close to the one found in Canada, Finland and France. More comparative results over time and over systems will enable further insights and uses. The sustainability of solidarity requires, however, some altruism among the rich with respect to the health state of the poor.

 

Wed, 17 May 2023 @ 13:00. Webinar   Onsite !!!!

Speaker: Corrado di Maria (East Angllia) Title: The effect of climate policy on cost pass-through in the German manufacturing sector Invited by: P. André (ICAE-UCM) Abstract: We investigate productivity and cost pass-through of German manufacturing firms using administrative data from 2001 to 2018. Our framework allows for the estimation of quantity-based production functions for multi-product firms while controlling for unobserved productivity shocks and unobserved input quality. Using our parameter estimates, we can compute total factor productivity, markups and marginal costs. We find no effect of the EU ETS on firm productivity or profits for the whole sector, and a positive effect for some industries. Firms pass on shocks to materials costs completely, or even more than completely, whereas pass-through of energy costs is around 35-60%. Although the pass-through of energy costs is incomplete, it nevertheless allowed firms to recover more than their total carbon costs due to the generous free allocation of allowances. Our results add to the recent literature concerning the causal effects of climate policy on firms and are relevant for policymakers when defining the level of free allowance allocation to industry.

 

 

TUEm, 16 May 2023 @ 13:00. Webinar   Onsite !!!!

Speaker: Buhong Zheng (Colorado University, Denver) Title: Minimum Inequality Aversion and Welfare Ranking of Income Distributions Invited by: J.G. Rodríguez (ICAE-UCM) Abstract:  This paper takes on a well-known issue in applying the generalized Lorenz (GL) dominance as a welfare ranking criterion, proposes absolution and provides a characterization. The issue is the lack of equity-efficiency trade-off in the GL dominance and the cause is the inclusion of inequality-neutral social welfare function (SWF) in the set of SWFs that support the GL dominance. We propose to set a minimum inequality aversion and derive an extended dominance condition which is simply the GL dominance condition applied to utility profiles instead of income profiles. The extended condition is equivalent to Meyerís (1977) second degree stochastic dominance with respect to a function and it can be characterized by a sequence of the Diamond-Stiglitz (1974) type mean-utility-preserving transfers of income. We illustrate the extended GL dominance and its associated Lorenz dominance with the US income data. Finally, we briefly outline how the newly developed idea of "almost dominance" (Leshno and Levy, 2002; Zheng, 2018) can be further utilized to make the GL dominance a more versatile tool for welfare evaluation.

 

 

Tue, 9 May 2023 @ 13:00. Webinar   Onsite !!!!

Speaker: Joan Llull (UAB) Title:Selective Immigration Policies and the US Labor Market Invited by: L. Puch (ICAE-UCM) Abstract: While immigration of unskilled workers often generates controversy in the political arena, there is often more consensus in favor of selec- tive immigration policies. This paper studies the effects of selective immigration policies on the labor market. High skilled immigration introduces two potentially confronting forces on labor market prospects of native workers: first, it increases the competition for skilled jobs, reducing labor market opportunities, and, as a result, reducing native incentives to invest in human capital; second, it increases productivity through spillovers and technological progress. I pose and estimate a labor market equilibrium dynamic discrete choice model that can account for these effects. The estimated model is used to evaluate the labor market consequences of the two most important skill-biased immigration policies in recent U.S. history: the introduction of H-1B visa program in 1990, and the elimination of the National Origins Formula in 1965. I also use the model to simulate the level of selectivity of immigration policy that maximizes native workers’ well-being.

 

Wed, 3 May 2023 @ 13:00. Webinar   Onsite !!!!

Speaker: Galina Zudenkova (Dortmund University) Title: Can public policy increase paternity acknowledgment? Evidence from earnings-related parental leave (with Anna Raute and Andrea Weber) Invited by: E. Huergo (ICAE-UCM) Abstract: A child's family structure is a fundamental determinant of future well-being, making it essential to understand how public policies affect the involvement of fathers. In this paper, we exploit a reform of the German parental leave system---which increased mother's income and reduced legal father's financial support burden---to measure the impact on the relationship contract choices of parents who were unmarried at conception. Based on detailed birth record data, we demonstrate that short-run reform incentives during the first period after birth nudge unmarried fathers into the long-term commitment of acknowledging paternity. This shift reduces single motherhood by 6% but leaves the share of marriages at birth constant. Moreover, the change in relationship contract choices is mostly driven by parents of boys. These findings are compatible with predictions from a model where parents choose between three types of relationship contracts based on the mother's and father's incomes and support obligations. Our results highlight the necessity of studying intermediate relationship contracts (i.e., between the extremes of marriage and single motherhood) to improve our understanding of potential risk groups among the rising number of children growing up outside of marriage.

 

Apr 2023

 

Wed, 26 April 2023 @ 13:00. Webinar Online!!!!

Speaker: Francesca Foliano (UCL/LSE) Title: Perseverance in the classroom: results from a randomised educational intervention in primary schools in England (joint with  S Hoskins U Portsmouth & H Rolfer, Britsh Future) Invited by: M. Sartarelli  (ICAE-UCM) Abstract:  This paper studies the effect of a randomised educational intervention aimed at increasing perseverance in the classroom on cognitive outcomes, beliefs and attitudes towards learning. The trial is carried out in 100 primary schools in England. The subjects are Year 6 pupils who are introduced to the idea of resilience, perseverance and incremental intelligence by their teachers over several sessions. Pupils in the intervention group have significantly lower perception that their intelligence is a fixed trait. The intervention also has a small positive effect on the positive attitude towards learning of treated pupils. However, unlike other related trials in psychology, education and economics, our analysis finds that the intervention has no impact on literacy nor numeracy overall, and that this applies across all pupils including those eligible for Free School Meals.

 

Wed, 19 April 2023 @ 13:00. Webinar   Onsite !!!!

Speaker: Francesca Lipari (UC3M) Title: When the design of climate policy meets public acceptance: an adaptive multiplex network mode Invited by: M. Sartarelli  (ICAE-UCM) Abstract: The socio-political processes which determine climate policy acceptance are of paramount importance for the design of mitigation policies. In this paper we identify relevant feedback processes between social and political levels that can affect climate policy using a stylized model of the climate–social system that seeks to understand how to achieve higher support for climate change mitigation policies. The factors influencing policy support include, among others social norms, self-efficacy, income, and participation. The research questions the paper addresses are: To what extent are public attitudes toward climate policies affected by social norms and self-efficacy when regressive and progressive policies are implemented? Do social norms and individual self-efficacy impair the efficacy of the policies? The current study addresses climate mitigation policy, with changing or even endogenous preferences, and shows how individuals engage in processes of social change. Simulation results show that even limited peer pressure has a positive and significant effect in citizen’s green propensity in both regressive and progressive green policy scenarios. Moreover, assuming homogeneous self-efficacy across society leads to overestimating society’s acceptance of green policies. Our results show that fostering existing competences or developing new ones, through complementary interventions (i.e. energy literacy, financial literacy), could help increase self-efficacy which would in turn increase acceptance of climate policies

 

Wed, 12 April 2023 @ 13:00. Webinar   Onsite !!!!

Speaker: David Medina (U. Padua/UMA) Title: Life Pension and Parliamentarian Effort Invited by: P. Álvarez (ICAE-UCM) Abstract: Many democracies grant their parliamentarians access to an exclusive pension system. While there has been much debate about the financial cost of such schemes, little attention has been paid to their effect on parliamentary effort. We propose a model that captures the two main features of life pension schemes: i) the pension amount is increasing with seniority, and ii) age determines parliamentarians’ eligibility. Our model highlights heterogeneous incentives to exert parliamentarian effort: introducing a life pension decreases the effort of eligible parliamentarians with high accumulation levels and increases or maintains the effort of all other parliamentarians. We test this model using the introduction of the life pension in Italy in 1955 where the eligibility of parliamentarians depends on their age and the amount accumulated depends on their seniority. Our empirical results show that the prospects of accumulating a higher pension stimulates parliamentarians to exert more effort, especially when parliamentarians are not eligible. In contrast, eligible parliamentarians face a trade-off between accumulating further benefits or enjoying the life pension straight away. Senior eligible parliamentarians decrease their effort while all other parliamentarians maintain or increase their effort.

 

Mar 2023

 

Wed 22 2023 @ 13:00. Webinar   Onsite !!!!

Speaker: Pietro Salmaso (U. Padova) Title: Dynamic One-Sided Matching (joint with Antonio Nicolò & Riccardo Saulle, U Padova) Invited by: P. Alvárez (ICAE-UCM) Abstract: We introduce a solution concept for one-sided dynamic matching models, called the dynamic core. The dynamic core is defined for a general class of dynamic markets where agents and objects arrive over time, and objects can be privately or collectively owned. We prove that the dynamic core is not empty and discuss the relation with the static notions of core and strong core. We show that the output of a dynamic extension of the Top Trading Cycle algorithm, the Intertemporal Top Trading Cycle (ITTC), is in the dynamic core and the mechanism induced by the ITTC is efficient and group strategy-proof. In private economies the output of the ITTC can be supported as a dynamic competitive equilibrium.

 

Wed 15 2023 @ 13:00. Webinar   Onsite !!!!

Speaker: J. Stuhler (UC3M) Title: Immigration and Monopsony: Evidence Across the Distribution of Firms (joint with Michael Amior, Hebrew University) Invited by: A. Díaz (ICAE-UCM) Abstract: We argue that immigration can strengthen the monopsony power of firms. If migrants have low reservation wages, firms can profit from “cheap” migrant labor by offering lower wages, at the cost of foregoing native workers with higher reservations. This monopsonistic trade-off can generate large negative effects on native employment that exceed those in competitive models, and which are concentrated among low-paying firms. We validate these predictions using firm-level evidence from a large immigration wave in Germany, and we corroborate our findings using more aggregated data from the US. These adverse effects are not inevitable, and may be ameliorated throughpolicies which constrain monopsony power.

 

Wed 08 2023 @ 13:00. Webinar   Onsite !!!!

Speaker: A. Romero-Medina (UC3M) Title: Reasonable Stability Invited by: C. Rodríguez-Alvarez (ICAE-UCM, joint with Matteo Triossi,  U Ca' Foscari-Venezia) Abstract: We present reasonable stability, a concept of stability for many-to-many matching markets with contracts where agents can sign more than one con- tract with each other. We show that reasonably stable allocations always exist if agents' preferences are substitutable. The set of reasonably stable allocations is a superset of the set of pairwise stable allocations and forms a lattice. Reasonably stable allocation can be obtained as an SPNE of a simple mechanism.

 

Wed 01 2023 @ 13:00. Webinar   Onsite !!!!

Speaker: L. Franjo (U Alicante) Title:  Growth, Housing and Global Imbalances (jont with Luisa Lambertini ,EPFL;  and Serhiy Stepanchuk, U Southampton) Invited by: A. Díaz (ICAE-UCM) Abstract: In the decade leading to the Great Recession, the United States experienced persistent current account deficits and rising house prices, while China, one of its major trading partners, experienced rapid house price growth coupled with large current account surpluses. Besides China, other Asian fast-growing economies also displayed a positive correlation between house prices and the current account. The existing literature, however, points towards a cross-country negative correlation. In this paper, we develop a two-country life-cycle model with housing in which both economies become financially integrated when one of the countries is a fast-growing economy in transition to its autarky steady state. We allow for asymmetries across countries in terms of productivity growth, the loan-to-value ratio, the wage profile over the life-cycle, and the population structure. We then calibrate the model economy to the U.S. and China and open both countries to trade. The model matches the observed relationship between the house prices and the current account in both economies. We then carry out two exercises: first, we reduce the importance of housing in the economy and find an amplification effect of housing on global imbalances; and, second, we study the counterfactual financial autarky paths and find a negative correlation between the current account and the difference between house prices in the benchmark and in autarky in both economies.

 

 

Feb 2023

 

Wed 22 2023 @ 13:00. Webinar   Onsite !!!!

Speaker: Antoine Loeper (UC3M) Title: Legislative Priorities and the Structure of Government (joint with Wioletta Dziuda, Harris School of Public Policy U Chicago) Invited by: C. Rodríguez-Alvarez (ICAE-UCM) Abstract: Passing a major reform takes time. Therefore, in a rapidly changing world, policy makers have to decide not only whether to implement a given reform, but also which reform to prioritize. To analyse how voters can affect legislative priorities via their choice of government, we consider a parsimonious dynamic model of legislative bargaining in which one policy dimension (e.g., tax policy) generates more disagreement than the other (e.g., infrastructure spending). In every period, both policy dimensions are subject to shocks, but the government can only reform one policy dimension at a time. In every period, the voters choose to appoint a unified or a divided government. The analysis shows that voters prefer electing a divided government. The reason is that voters fear that a unified government will waste its legislative time on partisan reforms, which may crowd out potentially beneficial consensual reforms. A divided government also has a bias: it often fails to pass an ideologically-charged reform, even when it is more pressing for the voters. But its inability to pass controversial reforms frees up legislative time for consensual reform, instead of crowding them out as in the case of a unified government.

 

Wed 15 2023 @ 13:00. Webinar   Onsite !!!!

Speaker: Juan-Cesar Palomino (ICAE-UCM) Title: Inequality of Opportunity in Educational Achievement in Western Europe: Contributors and Channels (joint with Gustavo Marrero & Gabriela Sicilia, U La Laguna) Invited by: M. Sartarelli  (ICAE-UCM) Abstract:  Evidence on inequality of opportunity in terms of educational achievement (IOpE) has not yet explored the relevance of different contributors and channels. Using the latest microdata from the 2018 Programme for International Student Assessment, we find that IOpE accounts, on average, for 32% of total educational inequality in Western Europe, with substantial variation across countries. Differences in households’ cultural environment and in parental occupation are the most important contributors, with school’s characteristics being also relevant in Central Europe. We then estimate for the first time the role of channelling variables in translating differences in circumstances into different educational achievement. In most countries, students’ educational and occupational expectations, their reading habits and skills, and the repetition of previous courses are the most influential channels. These findings provide policymakers with key insights to design educational interventions to effectively increase educational -and, ultimately, social- opportunities across European countries.

 

Wed 8 2023 @ 13:00. Webinar   Onsite !!!!

Speaker: Federico Curci (CUNEF) Title: Gentrifying Cities, Amenities and Income Segregation: Evidence from San Francisco (joint with Hasin Yousaf UNSW) Invited by: M. Sartarelli  (ICAE-UCM) Abstract: Over the past 20 years, U.S. cities have experienced a movement of the high-skilled workers into city centers. We study the effects of gentrification on local amenities and income segregation, exploiting the introduction of bus routes chartered by high-tech firms to transport employees from San Francisco to the workplace. We show that the influx of tech workers to specific neighborhoods increases the housing demand by other high-skilled individuals. Treated block groups experience an improvement in local amenities: new residents are willing to pay higher housing costs and accept longer commutes. We show that gentrification displaces the poorest households.

 

Wed 1 2023 @ 13:00. Webinar   Onsite !!!!

Speaker: Juanjo Ganuza (UPF) Title: Renegotiation, Discrimination and Favoritism in Symmetric Procurement Auctions (with L Arozamena and F. Weinschelbaum, U Torcuato di Tella) Invited by: C. Rodríguez-Alvarez (ICAE-UCM) Abstract: In order to make competition open, fair and transparent, procurement regulations often require equal treatment for all bidders. This paper shows how a favored supplier can be treated preferentially (opening the door to home bias and corruption) even when explicit discrimination is not allowed. We analyze a procurement setting in which the optimal design of the project to be contracted is unknown. The sponsor has to invest in specifying the project. The larger the investment, the higher the probability that the initial design is optimal. When it is not, a bargaining process between the winning firm and the sponsor takes place. Profits from bargaining are larger for the favored supplier than for its rivals. Given this comparative advantage, the favored firm bids more aggressively and wins more often than standard firms. Finally, we show that the sponsor invests less in specifying the initial design, when favoritism is stronger. Underinvestment in design specification is a tool for providing a comparative advantage to the favored firm.

 

Jan 2023

 

Wed 25 2023 @ 13:00. Webinar   Onsite !!!!

Speaker: Jorge García-Hombrados (UAM) Title: Specialised Courts and the Reporting of Intimate Partner Violence: Evidence from Spain Invited by: M. Sartarelli  (ICAE-UCM) Abstract: This paper assesses the effect of the creation of specialised intimate partner violence (IPV) courts on the reporting of these crimes and on the incidence of IPV homicides. We find that the opening of a specialised IPV court decreases the time to resolution of IPV cases in the judicial district by 65% and increases the reporting of IPV by approximately 24%. On the other hand, we do not find any effect of these courts on the incidence of IPV homicides within the period studied.

 

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