Why Governments Should Not Wait for Godot. Ricardo Hausmann, December 31, 2019, Opinion, “To ensure that anticipated foreign investment actually arrives, governments need organizational capabilities that go beyond Adam Smith’s maxim that they must do no more than ensure “peace, easy taxes, and a tolerable administration of justice.” They need to do at least three additional things.Link

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Moving to density: Half a century of housing costs and wage premia from Queens to King Salmon. Daniel Shoag, December 31, 2019, Paper, “Have workers stopped moving to the highest-density, highest-productivity places in the country because of a decline in the urban wage premium, or because the rent is too high? We analyze how important these two explanations are by studying them in one and the same empirical analysis. We find that non-college workers now effectively face a housing-inclusive urban wage penalty, while workers with college education continue to face a significant urban wage premium. We relate these findings to the share of native-born cross-state migrants across areas of different density levels, and stumble upon a puzzle: why aren’t more college workers moving to the city?Link

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The Dilemma of Gender Equality: How Labor Market Regulation Divides Women by Class. Torben Iversen, 2019, Paper, “Women shoulder a heavier burden of family work than men in modern society, preventing them from matching male success in the external labor market. Limiting working hours is a plausible way to level the playing field by creating the possibility of less gendered roles for both sexes. But why then are heavily regulated European labor markets associated with a smaller share of women in top management positions compared with liberal market economies such as in the United States? We explain this puzzle with reference to the difficulty of ambitious women to signal their commitment to high-powered careers in regulated markets.Link

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The (Non-) Effect of Opportunity Zones on Housing Prices. Edward Glaeser, December 2019, Paper, “Will the Opportunity Zone program, America’s largest new place-based policy in decades, generate neighborhood change? We compare single-family housing price growth in Opportunity Zones with price growth in areas that were eligible but not included in the program. We also compare Opportunity Zones to their nearest geographic neighbors. All estimates rule out price impacts greater than 1.3 percentage points with 95% confidence, suggesting that, so far, home buyers don’t believe that this subsidy will generate major neighborhood change. Opportunity Zone status reduces prices in areas with little employment, perhaps because buyers think that subsidizing new investment will increase housing supply.Link

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Strategies for managing the privacy landscape. Ramon Casadesus-Masanell, 2019, Paper, “Firms use consumer personal information to improve their products and services. Personal information is open to misuse, however, and when exploited for undesired or unexpected purposes reduces consumer’s trust in the firm and their willingness to provide personal information. How should firms manage consumer privacy? We present a framework to help firms identify their privacy impact on consumers and respond appropriately. We argue that firms should consider the full spectrum of entities they interact with and which can exploit consumer personal information, which includes: the political environment (government), the security environment (hackers), the market environment (third party firms), and the social environment (peers). Firms should pursue strategies to maximize the privacy impact consumers derive across these domains, augmenting sources of positive impact and mitigating those that generate negative impact. Successful strategies for managing privacy combine four approaches: balanced cooperation with government, heightened security against hackers, limited disclosure to third party firms, and moderated propagation with peers.Link

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Following Situation-Specific Social Expectations: Laboratory Evidence on Pro-Social Following. Michael Hiscox, December 30, 2019, Paper, “We design an experiment where second-movers anonymously contribute to a charity after a first mover’s contribution, and provide evidence that whether and how subjects follow first-movers depends on situation-specific social expectations. Subjects who observe a first-mover and know an audience will see their anonymous contribution respond positively to what their first-mover contributes. Subjects who observe a first-mover but have no audience respond positively what first-movers are expected to contribute. Subjects who do not observe a first-mover respond to what is expected in their situation. The evidence is inconsistent with standard explanations of following, such as information transmission, image concerns, reciprocity, or cost structure. We conclude that subjects follow if it is expected of them, and what they follow depends on whether someone might be disappointed with the outcome.Link

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Urban migration and housing during resource booms: The case of Sekondi-Takoradi, Ghana. Michael Hooper, 2019, Paper, “This paper investigates the relationship between urban migration and housing in the context of an emergent oil boom in Sekondi-Takoradi, Ghana. The paper responds to the relative lack of research on resource boom-driven urbanization, particularly in Africa, and on the way in which urban migration shapes, and is shaped by, housing conditions. The paper analyzes the relationship between housing conditions and urban migrants’ choice of residential locations. Drawing on both qualitative and quantitative analysis of data from 322 surveys in two neighborhoods of Sekondi-Takoradi, the paper draws three primary conclusions. First, migrants’ choices regarding where they live are premised on neighborhood housing conditions. Second, most migrants are urban-urban migrants which means that the predominant theories of urban growth are poorly equipped to address the urban transformation occurring in Sekondi-Takoradi. Finally, migrants’ housing choices have considerable urban form implications, promoting in different contexts both urban densification and urban sprawl. The paper concludes by discussing the implications of these findings in the Ghanaian and wider African contexts.Link

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The Impact of Intranational Trade Barriers on Exports: Evidence from a Nationwide VAT Rebate Reform in China. Jie Bai, December 2019, Paper, “It is well known that various forms of non-tariff trade barriers exist within a country. Empirically, it is difficult to measure these barriers as they can take many forms. We take advantage of a nationwide VAT rebate policy reform in China as a natural experiment to identify the existence of these intranational barriers due to local protectionism and study the impact on exports and exporting firms. As a result of shifting tax rebate burden, the reform leads to a greater incentive of the provincial governments to block the domestic flow of non-local goods to local export intermediaries. We develop an open-economy heterogenous firm model that incorporates multiple domestic regions and multiple exporting technologies, including the intermediary sector. Consistent with the model’s predictions, we find that rising local protectionism leads to a reduction in interprovincial trade, more “inward-looking” sourcing behavior of local intermediaries, and a reduction in manufacturing exports. Analysis using micro firm-level data further shows that private companies with greater baseline reliance on export intermediaries are more adversely affected.Link

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Carbon Tax Review and Updating: Institutionalizing an Act-Learn-Act Approach to U.S. Climate Policy. Joseph Aldy, 2019, Paper, “The design of climate change policy faces the challenge of several key uncertainties. First, the potential benefits of reducing carbon dioxide (CO2) and other greenhouse gas (GHG) emissions are characterized by an array of uncertainties related to long-term economic growth, climate sensitivity, the effectiveness of emissions mitigation policy, and the climate risk mitigation actions undertaken through adaptation and geoengineering (Interagency Working Group on the Social Cost of Carbon 2010; Greenstone, Kopits, and Wolverton 2013; Aldy 2015; Taylor 2015). Second, the potential costs of reducing emissions are characterized by uncertainties about the relative costs of low-carbon and carbon-intensive energy sources, technological innovation, consumer responsiveness to energy price changes, as well as the cost-effectiveness of policy design (Aldy et al. 2010). Third, the distributional consequences of climate change and climate policy responses are also characterized by uncertainty (Burtraw, Sweeney, and Walls 2009; Metcalf 2009; Rausch et al 2011; Carleton et al. 2018). Finally, the competitiveness impacts of emissions mitigation policy are uncertain and may vary with the relative stringency of policies around the world, transportation costs, and the energy intensity of manufacturing (Ederington, Levinson, and Minier 2005; Aldyand Pizer 2015; Aldy2017b).Link

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Cities. Edward Glaeser, December 2019, Paper, “The United Nations forecasts that “Africa’s urban population is likely to nearly triple between 2018 and 2050”. Together, Africa and India account for almost two thirds of the projected growth in the world’s urban population from 4.2 billion in 2018 to 6.7 billion in 2050. The urbanisation of our planet’s poorer countries is one of the most important phenomena of the twenty-first century and a critical component of structural change. Yet, our intellectual tools for dealing with the great challenges of developing-country cities remain underdeveloped. In this paper, we survey the economics of developing-country cities and try to make the case that development economists should spend more of their time thinking about and working in cities and urban economists should spend more of their time thinking about and working in developing countries.Link

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