Tuesday, May 10, 2016

APRIL 22 2016

Stanley Fischer, FED: Reflections on Macroeconomics Then and Now. There is an old joke about our field--not the one about the one-handed economist, nor the one about "assume you have a can opener," nor the one that ends, "If I were you, I wouldn't start from here." Rather it's the one about the Ph.D. economist who returns to his university for his class's 50th reunion. He asks if he can see the most recent Ph.D. generals exam. After a while it is brought to him. He reads it carefully, looking perplexed, and then says, "But this is exactly the same as the exam I wrote over 50 years ago." "Ah yes," says the professor. "It is the same, but all the answers are different."

Gabriel Chodorow-Reich, Loukas Karabarbounis, NBER: The Limited Macroeconomic Effects of Unemployment Benefit Extensions. By how much does an extension of unemployment benefits affect macroeconomic outcomes such as unemployment? Answering this question is challenging because U.S. law extends benefits for states experiencing high unemployment.  We use data revisions to decompose the variation in the duration of benefits into the part coming from actual differences in economic conditions and the part coming from measurement error in the real-time data used to determine benefit extensions.  Using only the variation coming from measurement error, we find that benefit extensions have a limited influence on state-level macroeconomic outcomes.  We use our estimates to quantify the effects of the increase in the duration of benefits during the Great Recession and find that they increased the unemployment rate by at most 0.3 percentage point.
Steven D. Levitt, John A. List, Sally Sadoff, NBER: The Effect of Performance-Based Incentives on Educational Achievement: Evidence from a Randomized Experiment. We test the effect of performance-based incentives on educational achievement in a low-performing school district using a randomized field experiment.  High school freshmen were provided monthly financial incentives for meeting an achievement standard based on multiple measures of performance including attendance, behavior, grades and standardized test scores.  Within the design, we compare the effectiveness of varying the recipient of the reward (students or parents) and the incentive structure (fixed rate or lottery).  While the overall effects of the incentives are modest, the program has a large and significant impact among students on the threshold of meeting the achievement standard.  These students continue to outperform their control group peers a year after the financial incentives end.  However, the program effects fade in longer term follow up, highlighting the importance of longer term tracking of incentive programs.
Richard Blundell, Michael Grabera, Magne Mogstad, JPE: Labor income dynamics and the insurance from taxes, transfers, and the family. What do labor income dynamics look like over the life-cycle? We use rich Norwegian population panel data to answer these important questions. We find that the income processes differ systematically by age, skill level and their interaction. To accurately describe labor income dynamics over the life-cycle, it is necessary to allow for heterogeneity by education levels and account for non-stationarity in age and time. Our findings suggest that the redistributive nature of the Norwegian tax–transfer system plays a key role in attenuating the magnitude and persistence of income shocks, especially among the low skilled. By comparison, spouse's income matters less for the dynamics of inequality over the life-cycle.
Julia Tanndal, Daniel Waldenström, VOX: Big Bang financial deregulation and income inequality: Evidence from UK and Japan. Financial deregulation in the US has been shown to be associated with rising income inequality over the past four decades. This column looks at the income effects of financial deregulation in the UK and Japan during the 1980s and 1990s. As in the US, deregulation substantially increased the shares of income going to the very top of the distribution. These findings highlight the importance of financial markets in the evolution of income inequality in society.
Jeffrey Sparshott, WSJ:  Do Cheaters Ever Prosper? A Lesson From N.Y. Student Tests. A 2011 analysis for The Wall Street Journal showed a bulge in New York City students’ test scores right over the passing mark. The evidence strongly suggested teachers were manipulating grades on statewide Regents Exams and helped spur changes to testing procedures. Thomas Dee, a professor at Stanford University, updated the numbers from his initial analysis after the state took steps to eliminate grade inflation. The findings: Teachers who manipulated scores appear to have been motivated by altruism, score manipulation was eliminated by 2012, and the graduation gap between black and white students is about 5% larger in its absence.
David Downs, Scientific American: The Science behind the DEA's Long War on Marijuana. Experts say listing cannabis among the world’s deadliest drugs ignores decades of scientific and medical data. But attempts to delist it have met with decades of bureaucratic inertia and political distortion. Speculation is growing about the possibility that the U.S. Drug Enforcement Administration (DEA) will review by summer its “Schedule I” designation of marijuana as equal to heroin among the world’s most dangerous drugs.
Crystal Smith-Spangler et al., Annals of Internal Medicine: Are Organic Foods Safer or Healthier Than Conventional Alternatives? A Systematic Review. 17 studies in humans and 223 studies of nutrient and contaminant levels in foods met inclusion criteria 1966-2011. Only 3 of the human studies examined clinical outcomes, finding no significant differences between populations by food type for allergic outcomes (eczema, wheeze, atopic sensitization) or symptomatic Campylobacter infection. The published literature lacks strong evidence that organic foods are significantly more nutritious than conventional foods. Consumption of organic foods may reduce exposure to pesticide residues and antibiotic-resistant bacteria.

 

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