How do the media scrutinise central banking? Evidence from the Bank of England

Central bank independence has raised questions of accountability ever since its global diffusion in the 1990s, and especially since the financial crisis. Yet, whilst the literature on central banks’ legislative oversight has expanded, the role of the media as account holders has been left largely unexplored. We assess media scrutiny by using an original dataset of news articles about the Bank of England published between 1997 and 2020, and by analysing the relationship between central banking outcomes and scrutiny in the form of evaluative and negative coverage of the Bank. We find that the variation in such coverage can be traced back to policy outcomes, but the association is largely confined to the post-crisis period. The findings support a view of the media as instrumental in central bank oversight, but also show the limits of this form of accountability.     

How much do alternative cookstoves reduce biomass fuel use? Evidence from North India

Despite widespread global efforts to promote clean cookstoves to achieve improvements in air and forest quality, and to reduce global climate change, surprisingly little is known about the degree to which these actually reduce biomass fuel consumption in real-world settings. Using data from in-house weighing of fuel conducted in rural India, we examine the impact of cleaner cookstoves ⿿ most of which are LPG stoves ⿿ on three key outcomes related to solid fuel use. Our results suggest that using a clean cookstove is associated with daily reductions of about 4.5 kg of biomass fuel, 160 fewer minutes cooking on traditional stoves, and 105 fewer minutes collecting biomass fuels. These findings of substantial savings are robust to the use of estimators with varying levels of control for selection, and to alternative data obtained from household self-reports. Our results support the idea that efforts to promote clean stoves among poor rural households can reduce solid fuel use and cooking time, and that rebound effects toward greater amounts of cooking on multiple stoves are not sufficient to eliminate these gains. We also find, however, that households who have greater wealth, fewer members, are in less marginalized groups, and practice other health-averting behaviors, are more likely to use these cleaner stoves, which suggests that socio-economic status plays an important role in determining who benefits from such technologies. Future efforts to capture social benefits must therefore consider how to promote the use of alternative technologies by poor households, given that these households are least likely to own clean stoves.     

How do voters perceive changes to the rules of the game? Evidence from the 2014 Hungarian elections

Voters often rely on partisan attachments as they evaluate new policy proposals, but does partisanship also color their interpretation of incumbent efforts to entrench themselves in power by changing the “basic rules of the political game”? We explore this question by taking advantage of a rare instance where a single party held a supermajority sufficient to unilaterally amend the constitution and overhaul the electoral system. We embedded a randomized experiment in a panel survey around the 2014 Hungarian elections, providing respondents with different information about recent changes to the Hungarian electoral rules. While respondents were largely pessimistic about the reforms, providing information yielded no significant effects on their views on the elections' legitimacy. But when information was presented alongside partisan cues, respondents became more negative in their views. Subgroup analysis shows that this effect is concentrated entirely among those not supporting the incumbent. Partisan differences in opinion dwarf any treatment effects we were able to induce. We provide evidence that these findings are unlikely the result of a well-informed populace. Rather, we provide the first experimental evidence that partisan-motivated reasoning applies not only to public policy under fixed institutions but also to changes to the institutional rules of a political system. Incumbents can exploit strong partisan attachments to reduce political competition.     

How global is FDI? Evidence from the analysis of Theil indices

It is open to question whether the intensified worldwide competition for FDI has reduced its traditionally strong concentration in a few large and relatively advanced host countries. We calculate and decompose Theil indices to track changes in absolute and relative concentration of FDI during the period 1970–2013. We find that both absolute and relative concentration decreased when excluding offshore financial centers from the overall sample. In addition to the narrowing gap between OECD and non-OECD countries, the concentration across non-OECD countries declined for both the absolute and relative measures. This is also true for major subgroups of non-OECD countries. Finally, recent developments indicate that low-income countries are no longer at the losing end of the competition for FDI.     

How much should we trust life satisfaction data? Evidence from the Life in Transition Survey

We analyse responses to two similar life satisfaction questions asked at different points in the same wave of a major cross-country household survey covering the transition region, Turkey and five Western European countries. We show that while the answers to the two questions are broadly consistent for most people, the responses for some groups differ significantly. Respondents of a lower socio-economic status and with a more favourable parental background show systematically higher levels of self-reported satisfaction in the later question. We also find evidence that responses to the later question are influenced by preceding questions on social capital. Our results have important implications for the design and length of household surveys that contain subjective questions.     

How much do immigration and trade affect labor market outcomes?

"This paper provides new estimates of the impact of immigration and trade on the U.S. labor market.... We examine the relation between economic outcomes for native workers and immigrant flows to regional labor markets.... We...use the factor proportions approach to examine the contributions of immigration and trade to recent changes in U.S. educational wage differentials and attempt to provide a broader assessment of the impact of immigration on the incomes of U.S. natives." Comments and discussion by John DiNardo, John M. Abowd, and others are included (pp. 68-85).     

How do telecommunications reforms affect labour market arrangements? Evidence from Central and Western Europe

This paper exploits variations in the timing of telecommunications reforms across Europe to investigate the relationship between the rise of alternative work arrangements and the emergence of the Internet. We evaluate whether sectors that are technologically more dependent on information and communication technologies (ICT) experienced disproportionately larger changes in their employment outcomes after telecommunications reforms were introduced. Our main results point to a disproportionate increase in total employment, part‐time work and home‐based work among ICT‐dependent sectors after the implementation of telecommunications reforms. These results suggest that telecommunications reforms affected labour market arrangements by fostering the adoption of ICT. The results are robust to several specifications.     

How well do patent citations measure flows of technology? Evidence from French innovation surveys

Patent citation data are used in a growing body of economics and business research on technological diffusion. Until now, there exists little evidence on whether patent citations are a good measure of knowledge flows. Our paper assesses the legitimacy of using European patent citations as a measure of technology flows. It uses information from the Community Innovation Survey collected by the French Service des Statistiques Industrielles (SESSI), which contain firms’ responses to questions about their innovative activity. We show that patent citations are indeed related to firms’ statements about their acquisition and dispersion of new technology, but that the strength and statistical significance of this relationship varies across geographical regions and across channels of knowledge diffusion.     

How do mega-bank merger policy and regulations contribute to financial stability? Evidence from Australia and Canada

Although the role of financial regulatory failures in the global financial crisis (GFC) has been explored extensively in the post-GFC literature, our knowledge of the role of bank merger and takeover policy and regulation in reinforcing financial stability is limited. Based on an exploratory case study of Australia, which is examined in comparison to Canada, this article argues that competition policy and regulation contributed to financial stability by insulating the largest Australian and Canadian banks from domestic or foreign hostile takeover threats, and by limiting their asset size, and thus their internationalization and interconnections with the global banking community.     

Does simplifying divorce and marriage registration matter? Evidence from China

This article evaluates the marital consequences of easier access to divorce and marriage by exploiting a major policy change in China that simplifies both. I first use a regression discontinuity design to examine the short-run effect and find that simplified registration immediately triggered more and faster divorces and marriages. In estimating the long-run effect, I adopt a difference-in-differences strategy that further exploits cross-sectional variation in urbanization rate. Results indicate that the positive effect on marital outcomes, especially on marriage rate, persisted in the medium run for 4 years.     

Efficient payments: How much do they cost for the Central Bank?

Previous works related to optimal denominations for coins and banknotes consider that the “principle of least effort” that defines an efficient payment is the most important criterion for two main reasons. Firstly, it is more convenient for transactors and, secondly, it limits the production costs of denominations incurred by the central bank. Exploiting production cost data for the U.S. currency system in 2010, we show using simulations that efficient payments actually increase the annual production costs of the Federal Reserve by $156 million. As a consequence, we raise a larger issue for central banks which consists in issuing an efficient denominational mix that is more convenient for transactors and that reduces the production costs of denominations.     

How do transport costs affect firms’ exports? Evidence from a vanishing bridge

In this paper we provide estimates of the effects of international transport costs on firms’ exports and disentangle the channels of these effects. In so doing, we use a unique dataset consisting of highly disaggregated transaction-level trade and transport cost data and, in order to account for endogeneity, we exploit the exogenous variation in these costs associated with the non-trade related closure of the main bridge connecting two countries.     

Spillover effects of fiscal policy in a monetary union: Why do fiscal instruments matter?

Using a two‐country DSGE model, we analyse the spillover effects of fiscal policy in a monetary union. Based on a non‐Walrasian labour market with a labour force participation decision and involuntary unemployment and a detailed fiscal sector, we focus on the relative cross‐border effects of different kinds of fiscal shocks (government expenditure and tax shocks). Among the major lessons from this analysis, five general and striking results are worth highlighting : (1) spillover effects differ widely according to the fiscal instrument, (2) all fiscal instruments produce positive spillover effects on foreign GDP except a rise in government consumption, (3) the response of unemployment is not always negatively correlated with the response of output (4) the different fiscal shocks trigger different effects on foreign inflation and the term of trade, which implies heterogeneous interest‐rate and trade channels, and (5) a more accommodative monetary policy and a scenario of ‘fiscal dominance’ alter greatly the effects of fiscal policy shocks.     

How does the entrepreneurial orientation of scientists affect their scientific performance? Evidence from the quadrant model

In order to identify the effect of academic entrepreneurship on science, this work compares the publication performance of entrepreneurial scientists with that of conventional scientists. Using Stokes's ‘quadrant model’, this paper examines how the entrepreneurial orientation affects scientific performance. The results on advanced materials research in Japan found that (i) entrepreneurial scientists publish more papers than conventional scientists do; (ii) the papers of conventional scientists demonstrate better citation performance than those of entrepreneurial scientists do, on average; (iii) coming to the top-cited papers, entrepreneurial scientists show higher propensity for publishing high-impact papers than conventional scientists do; and (iv) the portfolio interdisciplinarity of papers authored by entrepreneurial scientists is higher than that of conventional scientists. Although the influence of academic entrepreneurship on scientific performance is still unclear, our findings suggest that entrepreneurial scientists could make a relatively large contribution to furthering the scientific frontier by relying on innovation rather than convention.     

How large is the local fiscal multiplier? Evidence from Chinese counties

The paper estimates local fiscal multipliers using annual data for 1800 China counties. The identification exploits a peculiar feature of the allocation mechanism of China's intergovernmental transfers that triggers exogenous variations on local public spending. When aggregate central-local transfers go up at the national level, National Poor Counties can receive a disproportionate amount of transfers. We therefore construct an instrument that captures this heterogeneity in the response of local public spending to national central-local transfers. The analysis points to local fiscal multipliers of approximately 0.6, which is much lower than the estimates in most previous studies. The effects of local public spending are concentrated on non-tradable industries. Finally, we find local public spending has striking effects on stimulating in-county investment, but has negligible effects on stimulating in-county consumption.     

How effective are level-based R&D tax credits? Evidence from the Netherlands

This article examines the impact of the R&D fiscal incentive programme on R&D by Dutch firms. Taking a factor demand approach, we measure the elasticity of firm R&D capital accumulation to its user cost. Econometric models are estimated using a rich unbalanced panel of firm data covering the period 1996 to 2004 with firm specific R&D user costs varying with tax incentives. Using the estimated user cost elasticity, we perform a cost–benefit analysis of the R&D incentive programme. We find some evidence of additionality suggesting that the level based programme of R&D incentives in the Netherlands is effective in stimulating firms’ investment in R&D. However, the hypothesis of crowding out can be rejected only for small firms. The analysis also indicates that the level based nature of the fiscal incentive scheme leads to a substantial social deadweight loss.     

Do SPS measures matter for margins of trade? Evidence from firm-level data

According to the World Trade Organization (WTO) standards, countries are allowed to adapt regulations under the Sanitary and phyto-sanitary (SPS) and technical barriers to trade (TBT) agreements in order to protect human, animal and plant health, as well as environment and human safety. Yet, these measures can become an impediment in international trade, especially for developing countries. Therefore, using an Egyptian firm-level data set and a new database on specific trade concerns raised in the TBT and SPS committees at the WTO, we analyse the effects of product standards on two related aspects: first, the probability to export (firm-product extensive margin), and second, the value exported (firm-product intensive margin). We merge this data set with a new database on specific trade concerns raised in the TBT and SPS committees at the WTO. Our main findings show that SPS measures imposed on Egyptian exporters have a negative impact on the probability of exporting a new product to a new destination. By contrast, the intensive margin of exports is not significantly affected by such measures.     

Do national political parties matter? Evidence from Italian municipalities

Recently several countries have experienced a drop in popularity of national political parties, accompanied by the success of independent movements (e.g. “Civic Lists” in Italy). I exploit the success of “Civic Lists” in Italian municipalities and use them as a comparison group for party-affiliated politicians, to test whether national parties affect fiscal discipline. Using a Regression Discontinuity Design (RDD), I show that party-affiliated mayors are more fiscally responsible: they run lower deficits, accumulate less debt and reduce expenditures. The effect is significant only for municipalities not constrained by fiscal rules. This suggests that national parties act as a substitute for fiscal rules in constraining politicians. Besides, I provide evidence that the discipline of party-affiliated politicians is linked to better career prospects: party-affiliated mayors have a higher probability of being re-elected and better chances of being promoted to higher levels of government. Alternative stories find less support in the data.     

Does legal system matter for directed technical change? Evidence from the auto industry

Does the effect of fuel taxes on clean innovations (e.g. hybrid technology) depend on the legal system’s rigidity? Using 1986–2005 data from more than 1900 firms, evidence suggests that auto-industry firms located in civil law (with more rigid laws) countries increase clean technology patenting more than common law (with more flexible laws) firms when the tax-inclusive fuel price rises. A rigid legal system appears to raise clean technology innovation.