MARS 1 2018

Neil Irwin, NYT: How Low Can Unemployment Really Go? Economists Have No Idea. There exists, in theory at least, some magic number for the unemployment rate that keeps those priorities in perfect balance, a bare minimum level of joblessness that makes room for people to move around yet ensures that nearly everyone who wants to can find work without inflation bubbling up. Economists, as they are prone to do, have created an acronym for it: Nairu, or the non-accelerating inflation rate of unemployment. The problem is, it is looking more and more as if we have no idea what this magic number is  — an uncertainty that has huge economic consequences. Does the 4.1 percent jobless rate in January represent something lower than this “natural rate” of unemployment and presage damaging inflation, as mainstream estimates have long suggested? Or could it fall more — maybe a lot more — putting more people to work without negative side effects?

Kasey Buckles, Daniel Hungerman, Steven Lugauer, NBER: Is Fertility a Leading Economic Indicator? Many papers show that aggregate fertility is pro-cyclical over the business cycle. In this paper we do something else: using data on more than 100 million births and focusing on within-year changes in fertility, we show that for recent recessions in the United States, the growth rate for conceptions begins to fall several quarters prior to economic decline. Our findings suggest that fertility behavior is more forward-looking and sensitive to changes in short-run expectations about the economy than previously thought.

Hamish Low, Costas Meghir, Luigi Pistaferri, Alessandra Voena, NBER: Marriage, Labor Supply and the Dynamics of the Social Safety Net. The 1996 PRWORA reform introduced time limits on the receipt of welfare in the United States. We use variation by state and across demographic groups to provide reduced form evidence showing that such limits led to a fall in welfare claims (partly due to “banking” benefits for future use), a rise in employment, and a decline in divorce rates. We then specify and estimate a life-cycle model of marriage, labor supply and divorce under limited commitment to better understand the mechanisms behind these behavioral responses, carry out counterfactual analysis with longer run impacts and evaluate the welfare effects of the program. Based on the model, which reproduces the reduced form estimates, we show that among low educated women, instead of relying on TANF, single mothers work more, more mothers remain married, some move to relying only on food stamps and, in ex-ante welfare terms, women are worse off.

Nadia Garbellini, Institute for New Economic Thinking: What Piketty Missed in Measuring Wealth. Despite assembling a formidable data set and leveling a bold argument, Thomas Piketty’s Capital in the Twenty-First Century has theoretical and accounting flaws that distort its central findings. First, excluding Corporations from the computation of national wealth strongly distorts results. Second, physical and financial capital should be kept separate, also in order to interpret results consistently with a reference theoretical paradigm. Third, Neoclassical theory normally considers accumulation as generated by income, and hence the concept to be used is that of disposable income, and not of GNI. Finally, in line with Classical/Keynesian tradition, an analysis of capital accumulation should reverse Neoclassical logic: it is accumulation that generates income, and not the other way around. Hence, the concept to be used is that of GDP, as compared to the stock of physical capital which generated it.

Daniel Little, Understanding society: Computational social science.  Is it possible to elucidate complex social outcomes using computational tools? Can we overcome some of the issues for social explanation posed by the fact of heterogeneous actors and changing social environments by making use of increasingly powerful computational tools for modeling the social world? Ken Kollman, John Miller, and Scott Page make the affirmative case to this question in their 2003 volume, Computational Models in Political Economy. The book focuses on computational approaches to political economy and social choice. Their introduction provides an excellent overview of the methodological and philosophical issues that arise in computational social science.

Scott Sinnett, Cj Maglinti, Alan Kingstone, PLOS: Grunting's competitive advantage: Considerations of force and distraction. Grunting is pervasive in many athletic contests, and empirical evidence suggests that it may result in one exerting more physical force. It may also distract one's opponent. That grunts can distract was supported by a study showing that it led to an opponent being slower and more error prone when viewing tennis shots. The present findings indicate that simulated grunting may distract an opponent, leading to slower and more error prone responses. The implications for martial arts in particular, and the broader question of whether grunting should be perceived as 'cheating' in sports, are examined.

J. Robert Subrick, James Madison University: The Political Economy of Black Panther's Wakanda. This chapter explores the political economy of Wakanda and its leader, Black Panther. After explaining the origins of Black Panther, the chapter turns to the economic puzzle of Wakanda by exploring the geographic and economic implications of isolation. This is followed by an investigation into the way Wakanda has avoided the resource curse that has plagued so many other countries. Next, a comparison is made between Wakanda and the nation of Botswana. While there are some telling similarities, the lack of democracy in Wakanda is a glaring difference. It will discuss how it has developed high-levels of technology that help advance the Black Panther’s dictatorship. Finally, it will address the potential for democracy to emerge in Wakanda. Black Panther offers an opportunity to understand the role of political institutions in affecting the long-run economic, political, and technological development of a country.