Fetal Iodine Deficiency and Schooling: A Replication of Field,Robles, and Torero (2009)*

Scholars have theorized that congenital health endowment is an important determinant of economic outcomes later in a person's life. Field, Robles, and Torero (2009, American Economic Journal: Applied Economics 1, 140–169) find large increases in educational attainment caused by a reduction of fetal iodine deficiency following a set of iodine supplementation programs in Tanzania. We revisit the Tanzanian iodine programs with a narrow and wide replication of the study by Field et al. We are able to exactly replicate the original results. We find, however, that the findings are sensitive to alternative specification choices and sample restrictions. We try to address some of these concerns in the wide replication; we increase the sample size fourfold, and we improve the precision of the treatment variable by incorporating new institutional and medical insights. Despite the improvements, no effect is found. We conclude that the available data do not provide sufficient power to detect a possible effect, as treatment assignment cannot be measured with sufficient precision.     

A unified framework for robust modelling of financial markets in discrete time

Finance and Stochastics - We unify and establish equivalence between the pathwise and the quasi-sure approaches to robust modelling of financial markets in finite discrete time. In particular, we...     

Human capital inequality and income inequality: testing for causality

This study investigates the causal relationship between human capital inequality and income inequality in case of Pakistan. The annual time series data ranging from 1973 to 2009 is used for econometric analysis. Johanson co-integration and Granger Causality tests are used to confirm the existence of long run relationship and the causal relationship between human capital inequality and income inequality. The results indicate that there is positive relationship between the two types of inequalities in the long run. The estimates of causality test indicate that income inequality causes the human capital inequality but human capital inequality does not cause income inequality. Policy initiatives to reduce income inequality may empower people economically to avail skill building opportunities and accumulate their human capital through access to educational services.     

Trust relations in management of change

Trust is essential for the success of change, but transformational change challenges trust. This paper analyses how trust dynamics develop over time in two Danish manufacturing firms affected by major change programmes. The results show that change creates uncertainty among employees, thereby provoking intense scrutiny of management intentions and a tendency to make interpretations that exaggerate management intentions—with the end result of reduced trust. Management then react similarly with negative interpretations of employee reactions, creating a vicious cycle of reduced trust. The paper proposes a model for how change and trust interact and suggests a managerial strategy for trust repair: Strong management actions that symbolise integrity, competence and benevolence may counteract reduced trust, but if low trust turns into distrust, the result may be a deadlock that both parties find difficult to break.     

On the size of fiscal multipliers: A counterfactual analysis

We point out that fiscal multipliers derived from SVAR-models include the predicted future path of policy instruments. After the initial shock, net taxes and government expenditures react to each other and are autocorrelated. In a counterfactual simulation, we report fiscal multipliers that abstract from these dynamic responses.