Toward a Combined Merchant-Regulatory Mechanism for Electricity Transmission Expansion. William Hogan, April 14, 2007, Paper. “Electricity transmission pricing and transmission grid expansion have received increasing regulatory and analytical attention in recent years. Since electricity transmission is a very special service with unusual characteristics, such as loop flows, the approaches have been largely tailor-made and not simply taken from the general economic literature or from the more specific but still general incentive regulation literature. An exception has been Vogelsang (2001), who postulated transmission…” Link

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The Rise of the Sunbelt. Edward Glaeser, Kristina Tobio, April 2007, Paper. “In the last 50 years, population and incomes have increased steadily throughout much of the Sunbelt. This paper assesses the relative contributions of rising productivity, rising demand for Southern amenities and increases in housing supply to the growth of warm areas, using data on income, housing price and population growth. Before 1980, economic productivity increased significantly in warmer areas and drove the population growth in those places. Since 1980, productivity growth has been more modest, but housing supply growth has been…” Link

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Disagreement and the Stock Market. Jeremy Stein, Spring 2007, Paper. “A large catalog of variables with no apparent connection to risk has been shown to forecast stock returns, both in the time series and the cross-section. For instance, we see medium-term momentum and post-earnings drift in returns — the tendency for stocks that have had unusually high past returns or good earnings news to continue to deliver relatively strong returns over the subsequent six to twelve months (and vice-versa for stocks with low past returns or bad earnings news); we also see longer-run fundamental reversion — the tendency for “glamour” stocks…” Link

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Democracy, Technology, and Growth. Philippe Aghion, Alberto Alesina, May 2007, Paper. “We explore the question of how political institutions and particularly democracy affect economic growth. Although empirical evidence of a positive effect of democracy on economic performance in the aggregate is weak, we provide evidence that democracy influences productivity growth in different sectors differently and that this differential effect may be one of the reasons of the ambiguity of the aggregate results. We provide evidence that political rights are conducive to growth in more advanced sectors of an economy, while they do not matter or…” Link

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The Power of the Family. Alberto Alesina and Paola Giuliano, April 2007, Paper. “The structure of family relationships influences economic behavior and attitudes. We define our measure of family ties using individual responses from the World Value Survey regarding the role of the family and the love and respect that children need to have for their parents for over 70 countries. We show that strong family ties imply more reliance on the family as an economic unit which provides goods and services and less on the market and on the government for social insurance…” Link

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The Structure of the Product Space and the Evolution of Comparative Advantage, Ricardo Hausmann, April 2007, Paper, This paper establishes a robust stylized fact: changes in the revealed comparative advantage of nations are governed by the pattern of relatedness of products at the global level. As countries change their export mix, there is a strong tendency to move towards related goods rather than to goods that are farther away. The pattern of relatedness of products is only very partially explained by similarity in broad factor or technological intensities, suggesting that the relevant determinants are much more product-specific. Moreover, the pattern of relatedness of products exhibits very strong heterogeneity: there are parts of this ‘product space’ that are dense while others are sparse. Link 

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The Product Space and its Consequences for Economic Growth. Ricardo Hausmann, March 5, 2007, Paper. “In this paper, we test the assumption underlying the foundational models of trade that there always exist products through which countries can express their endowments and technology. We map the `space’ of products in the world, and find it to be quite heterogeneous, with a central core and outer periphery. Moreover, we show that the way countries develop comparative advantage is far from random, and that the empirical rules observed herein predict, together with the structure of the product space, explain…” Link

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Credit Constraints as a Barrier to the Entry and Post Entry Growth of Firms. Philippe Aghion, March 2007, Paper. “Advanced market economies are characterized by a continuous process of creative destruction. Market forces and technological developments play a major role in shaping this process, but institutional and policy settings also influence firms’ decision to enter, to expand if successful and to exit if competition becomes unbearable. In this paper, we focus on the effects of financial development on the entry of new firms and the expansion of successful new businesses…Link

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The Race between Education and Technology: The Evolution of U.S. Educational Wage Differentials, 1890-2005. Lawrence Katz, Claudia Goldin, March 2007, Paper. “U.S. educational and occupational wage differentials were exceptionally high at the dawn of the twentieth century and then decreased in several stages over the next eight decades. But starting in the early 1980s the labor market premium to skill rose sharply and by 2005 the college wage premium was back at its 1915 level. The twentieth century contains two inequality tales: one declining and one rising. We use a supply-demand-institutions framework to understand the factors that…” Link

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Political Economy of Panchayats in South India. Rohini Pande, February 24, 2007, Paper. “Based on a study of some 500 villages in the four southern Indian states of Andhra Pradesh, Karnataka, Kerala and Tamil Nadu, this paper examines how the functioning of the panchayat system mandated by the 73rd amendment to the Constitution has had an impact on the economic status of villages and the households within them. The study finds that gram panchayats, created by this massive experiment in democratic decentralisation, have had an effect on the delivery of public services, for example…” Link

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