Years of life lost to revolution and war in Iran

How was life expectancy in Iran affected by the Islamic Revolution and subsequent war with Iraq? This study examines the joint effect of regime change and the war against Iraq on life expectancy in Iran between 1978 and 1988. If there had been no revolution and war in Iran, how would the life expectancy of Iranians have developed? To answer this question, we use a synthetic control model to construct a counterfactual Iran based on a weighted average of other comparable countries, which reproduces the situation of pre-revolution Iran but does not experience the revolution and war. We then compare the life expectancies of the counterfactual and actual Iran that underwent a regime change and war with Iraq. Our results indicate that an average Iranian's total life expectancy would have been approximately five years longer without the revolution and war. The revolution had a moderate long-term impact on total life expectancy at birth, with the most significant influence being attributed to the war itself, particularly on male life expectancy. Our main findings are robust to a series of tests, including placebo tests. We investigate possible reasons that may explain the impact on longevity.     

The Formation of Inflation Expectations: Microdata Evidence from Japan

We propose a novel approach for measuring inflation expectations, which can alleviate the rounding number problem. Furthermore, we examine how consumers form inflation expectations. We find that consumers heterogeneously update their information sets on prices; 46% of the consumers collect information about the consumer price index at least once a quarter, while the remaining consumers less frequently or never obtain this information. We also find that forecast revisions are sensitive to a change in food prices. More than half of consumers are attentive only to a change in food prices and may form their inflation expectations using food price changes as a signal of fluctuations in the overall inflation rates. The existence of consumers who are inattentive to aggregate inflation casts doubt on the transmission of monetary policy through the management of expectations.     

Longevity,Fertility, and the Real Exchange Rate

We build a simple overlapping generation model to investigate the effect of life expectancy on the real exchange rate where fertility is chosen endogenously. The model reveals that, although the overall effect of life expectancy on the real exchange rate is not certain, longer life expectancy tends to cause the real exchange rate to depreciate by reducing fertility. Fertility thus serves as a mediator in the effect of life expectancy on the real exchange rate. Evidence from 148 economies (1980–2018) shows a statistically significant and robust negative relationship between life expectancy and the real exchange rate. It is estimated that a 1 year increase in life expectancy is associated with a 1.5 percent depreciation in the real exchange rate. The evidence also confirms the mediated effect of fertility. The mediated effect that fertility exerts accounts for 30 percent to 50 percent of the total effect, depending on the real exchange rate index used.