Why Did (Almost) No One See the Inflation Coming?

To understand the possible trajectory of inflation in 2022 and beyond, it is helpful to understand why the United States and Europe had so much inflation in 2021.

     

Approximate maximum likelihood estimation for stochastic differential equations with random effects in the drift and the diffusion

Consider N independent stochastic processes \((X_i(t), t\in [0,T])\), \(i=1,\ldots , N\), defined by a stochastic differential equation with random effects where the drift term depends linearly on a random vector \(\Phi _i\) and the diffusion coefficient depends on another linear random effect \(\Psi _i\). For these effects, we consider a joint parametric distribution. We propose and study two approximate likelihoods for estimating the parameters of this joint distribution based on discrete observations of the processes on a fixed time interval. Consistent and \(\sqrt{N}\)-asymptotically Gaussian estimators are obtained when both the number of individuals and the number of observations per individual tend to infinity. The estimation methods are investigated on simulated data and show good performances.     

Aggregative games and oligopoly theory: short-run and long-run analysis

We compile an IO toolkit for aggregative games with positive and normative comparative statics results for asymmetric oligopoly in the short and long run. We characterize the class of aggregative Bertrand and Cournot oligopoly games, and the subset for which the aggregate is a summary statistic for consumer welfare. We close the model with a monopolistically competitive fringe for long-run analysis. Remarkably, we show strong neutrality properties in the long run across a wide range of market structures. The results elucidate aggregative games as a unifying principle in the literature on merger analysis, privatization, Stackelberg leadership, and cost shocks.     

Business strategy and firm location decisions: testing traditional and modern methods

Business Economics - For nearly a century, economists have relied upon the neoclassical principle of a “profit-maximizing firm.” Two modern challenges to this principle have arisen: the...     

The importance of consumer multihoming (joint purchases) for market performance: Mergers and entry in media markets

Consumer “multihoming” (watching two TV channels, or buying two news magazines) has surprisingly important effects on market equilibrium and performance in (two‐sided) media markets. We show this by introducing consumer multihoming and advertising finance into the classic circle model of product differentiation. When consumers multihome (attend more than one platform), media platforms can charge only incremental value prices to advertisers. Entry or merger leaves consumer prices unchanged under consumer multihoming, but leaves advertiser prices unchanged under single‐homing: Multihoming flips the side of the market on which platforms compete. In contrast to standard circle results, equilibrium product variety can be insufficient under multihoming.     

Cognitive reflection and economic order quantity inventory management: An experimental investigation

We use laboratory experiments to evaluate the effects of individuals' cognitive abilities on their behavior in a finite horizon economic order quantity model. Participants' abilities to balance intuitive judgment with cognitive deliberations are measured by the cognitive reflection test (CRT). Participants then complete a sequence of ordering decisions. Our results show that participants with higher CRT scores on average earn greater profit and choose more effective policies. However, these gaps are transitory as participants with lower CRT scores exhibit faster learning. We also show gender differences in performance do not hold when we control for individual CRT scores.     

Lobbying as a potent political marketing tool for firm performance: A closer look

This study endeavors to enhance political marketing literature about the impact of lobbying on firm performance. Our sample is composed of 140 U.S. firms and spans the years 2007–2014 to encompass the 2007–2009 recession and the subsequent recovery period. Our findings indicate that lobbying expenses positively contribute to firm performance. Also, government contracts in both ways, dollar amount and number of government contracts, act as mediators between lobbying expenses and firm performance. In addition, organizational slack moderates the relationship between lobbying expenses and government contracts. The managerial implications suggest that lobbying expenses can be leveraged as a potent tool for firm performance. Firms with larger lobbying efforts acquired both, higher dollar amounts and a greater number of government contracts.     

Shrinking Cities,Shrinking Households,or Both?

Household size decline accounts for a substantial portion of population loss in shrinking cities, yet little research has focused on it. Much of the literature presents a simple growth/decline binary that is largely determined via population figures. In this paper, we highlight the importance and assess the impact of household size changes on population decline, and determine what types of household size declines are more acute in shrinking cities than other locales. We find that elderly households and households with school-aged children are under-represented in shrinking cities, while households with pre-school-aged children are over-represented. More tellingly, we find the biggest source of household-related loss in shrinking cities to be the growth of single-person households now living in houses that were once home to entire families. These findings puncture the binary on which much of the shrinking cities discourse is based. The population dynamics of most cities are subtler than either practitioners or critical scholars assert. We argue that plans and development strategies for shrinking cities should reflect a range of demographic changes, including outmigration and internal household restructuring.     

Contradictions of the Climate-Friendly City: New Perspectives on Eco-Gentrification and Housing Justice

As local governments and corporations promote ‘climate friendliness’, and a low-carbon lifestyle becomes increasingly desirable, more middle- and upper-income urban residents are choosing to live near public transit, on bike- and pedestrian-friendly streets, and in higher-density mixed-use areas. This rejection of classical forms of suburbanization has, in part, increased property values in neighborhoods offering these amenities, displacing lower-income, often non-white, residents. Increased prevalence of creative and technology workers appears to accelerate this trend. We argue that a significant and understudied socio-environmental contradiction also occurs where the actual environmental outcomes of neighborhood transformation may not be what we expect. New research on greenhouse gas emissions shows that more affluent residents have much larger carbon footprints because of their consumption, even when reductions in transportation or building energy emissions are included. We describe an area in Seattle, Washington, the location of Amazon's headquarters, experiencing this contradiction and show a distinct convergence of city investments in low-carbon infrastructure, significant rises in housing prices and decreases in lower-income and non-white residents. We conclude with a discussion of a range of issues that require more attention by scholars interested in housing justice and/or urban sustainability.