Category Archive: Sources

1. The Legend

   February 13, 2021 12:00 am Comments Off on The Legend

   INFLATION

   The proposed Covid-19 stimulus package in the US has reignited debate around inflation. Much contemporary concern and discussion on the topic still bears the mark of the 1970s, the Volcker disinflation, and the past consensus around the relationship between unemployment and inflation.

   In a recent paper, Jonathon Hazell, Juan Herreño, Emi Nakamura, and Jón Steinsson find evidence that points instead to the determining role of expectations around future monetary policy.

   From the paper:

   “The episode in US economic history that has perhaps most strongly influenced the profession’s thinking regarding the slope of the Phillips curve is the Volcker disinflation. In the early 1980s, Paul Volcker’s Federal Reserve sharply tightened monetary policy. Unemployment rose sharply and inflation fell sharply. The conventional interpretation of this episode is that it provides evidence for a relatively steep Phillips curve. The insensitivity of inflation to changes in unemployment over the past few decades has led many economists to suggest that the Phillips curve has disappeared—or is ‘hibernating.’ During the Great Recession, unemployment rose to levels comparable to those during the Volcker disinflation, yet inflation fell by much less. The ‘missing disinflation’ during and after the Great Recession then gave way to ‘missing reinflation’ in the late 2010s as unemployment fell to levels not seen in 50 years, but inflation inched up only slightly. A similar debate raged in the late 1990s, when unemployment was also very low without this leading to much of a rise in inflation. Some have argued that the apparent flattening of the Phillips curve signals an important flaw in the Keynesian model.

   An alternative to the standard narrative of the Volcker disinflation is that the decline in inflation was driven not by a steep Phillips curve but by shifts in beliefs about the long-run monetary regime in the United States that caused the rapid fall in long-run inflation expectations. Volcker’s monetary policy constituted a sharp regime shift that was imperfectly credible at the outset but became gradually more credible as time passed. This regime shift led to a large and sustained decline in long-term inflation expectations over the 1980s but also a transitory rise in unemployment. Perhaps it was this large change in inflation expectations that was the primary cause of the rapid fall in inflation over this period rather than high unemployment working through a steep Phillips curve.”

   Link to the paper.

   • Employ America’s Skanda Amarnath and Alex Williams blog on “Inflation: the good, the bad, the transitory.” Link. And Tim Barker blogs on the present inflation discourse. Link.
   • “A puzzle emerges when Phillips curves estimated over 1960-2007 are used to predict inflation over 2008-2010: inflation should have fallen by more than it did.” Laurence Ball and Sandeep Mazumder analyze inflation after the Great Recession. Link. And James Stock and Mark Watson probe the question of inflation forecasting. Link.
   • Two recent Phenomenal World essays on the topic: Yakov Feygin on “The Deflationary Coalition” and Andrew Elrod on “Inflation, Specific and General.” Link, and link.

   ‡ inflation monetary_policy stagflation

   NEW RESEARCHERS

   Public Works in Colonial Madras

   Presidential Fellow in Environmental History at the University of Manchester ADITYA RAMESH studies infrastructure projects, city-building, and technocratic politics in the British colonial and postcolonial world. A recent paper examines the construction of large dams financed through state debt in 19th-century Madras.

   From the paper:

   “The nineteenth century witnessed a major expansion in the construction of public works including canals, roads, and railways across the British empire. The question that colonial governments faced during the nineteenth century was on how to finance public works. Irrigation-related public works projects were to be divided under two headings – ‘protective’ and ‘productive’. Protective works would be financed from current revenue, and were largely for undertaking systematic repairs and executing small projects. A project classified as ‘productive’ implied a large financial outlay, drawn through complex networks of loans from financial markets in London, including the Bank of England, and guaranteed by the government of India. Provincial governments would have to approach the government of India with plans for particular public works projects in order to obtain loans. Key to approval was financial viability. Technical plans made by engineers would have to guarantee certain returns from a project, typically within ten or twenty years, depending on the project. In other words, projects would have to be self-financing, not immediately, but in the future. This category of ‘productive works’ – a way in which the economic potential of rivers could be harnessed through technology and finance – was profoundly important for the rise of the large dam as a state-led enterprise. The article argues that at the heart of the large dam, therefore, was a more fundamental relationship between the expansion of Victorian capital, contingent events such as the famine, and natural resources in the colonies.”

   Link to the paper, link to Ramesh’s website.

   ‡ infrastructure history new_researchers

   Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

   + + +

   • “Little by little, we’ve reduced public expenditure beyond the point which enabled the continuation of social rights, to the point where it has deteriorated them.” In PW’s “Market Economy, Market Society,” an interview with former Prime Minister of Italy Giuliano Amato. Link.
   • Also from the book, an interview with trade unionist and former PCI politician Emanuele Macaluso, and an interview with former president of Italian broadcast network RAI Claudio Petruccioli. Link, link.
   • “Virginia school neoliberalism is less an argument against taxation than an argument in favor of regressive forms of taxation that are rarely acknowledged as such—user fees, fines, and flat-rate levies.” Melinda Cooper on tax revolts. Link.
   • Belinda Archibong. Brahima Coulibaly, and Ngozi Okonjo-Iweala on Washington Consensus reforms and economic performance in Sub-Saharan Africa. Link.
   • “Spending and job finding facts suggest that benefit expansions during the pandemic were a more effective policy than predicted by standard structural models.” Peter Ganong et al. on the effects of expanded unemployment insurance. Link.
   • Kaiji Chen, Qing Wang, Tong Xu and Tao Zhahina on the distributional impacts of China’s loan-to-value program and 2014-16 mortgage boom. Link.
   • “We develop a theory of state formation shedding light on the rise of the first stable state institutions in Bronze Age Mesopotamia.” By Giacomo Benati and Carmine Guerriero. Link.
   • Pilar Nogues-Marco measures colonial extraction during the East India Company’s rule from 1757 to 1858. Link.
   • Massimiliano Ferraresi and Gianluca Gucciardi investigate how municipal government party affiliation shifts perceptions of central government responses to Covid-19 in Italy. Link.
   • Ann Varley and Clara Salazar examine periurban housing production resulting from the privatization of Mexican state-owned lands. Link.
   • “What is the impact of transport infrastructure access on economic development? This article takes the research question to a more micro level using a unique dataset constructed from Bangkok household-level orchard land deeds/tax records from the 1880s. Not only does the rare dataset provide an approximation of labor productivity, it also provides detailed property characteristics allowing us to determine whether households had access to transport networks. We can reasonably conclude with some degree of confidence that compared to inland properties, properties with direct access to canals had labor productivity gains of about 10.7 percent. These productivity increases are non-negligible and translate into real welfare gains for households with direct access to the canal network.” By Thanyaporn Chankrajang and Jessica Vechbanyongratana. Link.

2. The Villa in the Snow

   February 6, 2021 12:00 am Comments Off on The Villa in the Snow

   SOCIAL DEMOCRACY

   While the neoliberal era appears to be in crisis, we took on a project to investigate its historical foundations. The tensions of the current political moment are commonly traced to the financial deregulation and economic liberalization of the 1980s and 1990s. The “turn” that took place in these decades has been attributed to economic necessity, ideological commitments, and the interests of powerful political actors.

   But key to critiquing the economic policies of this period is the assumption of viable political alternatives. Adam Przeworski’s classic 1986 text examines the details of this question.

   From the piece:

   “What is a ‘mistake’? The very possibility of committing mistakes presupposes simultaneously a political project, some choice among strategies, and objective conditions that are independent with regard to the particular movement. If the strategy of a party is determined by economic circumstances, then the notion of mistakes is meaningless: the party can only pursue the inevitable. In a world of economic necessity, the question of errors cannot even be posed.

   The notion of mistakes is also rendered meaningless within the context of a radically voluntaristic understanding of historical possibilities. If everything is always possible, then only motives can explain the course of history. For an error is a relation between projects and conditions; mistakes are possible if and only if some strategies are ineffective in advancing the realization of a given project under existing conditions, while other strategies would have advanced it under the same conditions. If we are to draw lessons from historical experience, we can assume neither that the practice of political movements is uniquely determined by any objective conditions, nor that such movements are free to act at will, independently of the conditions they seek to transform. These conditions constitute at each moment the structure of choice: the structure within which actors deliberate upon goals, perceive alternatives, evaluate them, choose courses of action, and pursue them to create new conditions.”

   Link to the book.

   • In Phenomenal World’s first book, Market Economy, Market Society, Przeworski reconsiders the issue: “The social democratic vision of transforming society survived for nearly one hundred years, even when it was imperative to cope with immediate crises, and even when social democrats experienced political defeats. This is what faded at the end of the 1970s.” Link. In the book’s second introductory text, Stephanie Mudge notes, “social democratic parties can make the difference between mere rights and actual representation. But simply occupying that space isn’t enough—it matters how these parties work, the agendas and policies they promote, and how and for whom (or what) they speak.” Link.
   • “It is, decisively, the Italian left’s weakness in proposing achievable reforms at the state level which has made it particularly suffer the effects of the decline of the mass workplace.” In the book’s first section, David Broder analyzes the “Italian Left After Keynesianism.” Link. Also in this section, an interview with former Prime Minister Giuliano Amato, link, and interviews with Emanuele Macaluso and Claudio Petruccioli.
   • In the book’s second section, an interview with former Spanish Prime minister Felipe González: “What worries me is that to some degree social democracy died of success. It died because it couldn’t understand that the society that it had helped create was not the society which existed when it started.” Link to the interview, link to the section’s introduction by Juan Andrade. Also in this section, interviews with Begoña San José and Héctor Maravall.
   • “Mitterrand shows that if the path of radical reformism is challenging and uncertain, the alternative has been disastrous.” In the final section, Jonah Birch analyzes the political shifts in France. Link to the article. And the section also features interviews with Anicet Le Pors, François Morin, and Roger Martelli.

   ‡ history politics

   NEW RESEARCHERS

   Hurricanes and Local Public Finance

   Assistant Professor in Economics at Temple University RHIANNON JERCH studies the relationship between public goods provision and environmental regulation in urban areas. A recent working paper, co-authored with Matthew Kahn and Gary Lin, examines the consequences of hurricanes on local budgets.

   From the abstract:

   “Since 1980, over 2,000 local governments in US Atlantic and Gulf states have been hit by a hurricane. Such natural disasters can exert severe budgetary pressure on local governments’ ability to provide critical infrastructure, goods, and services. We study local government revenue, expenditure, and borrowing dynamics in the aftermath of hurricanes. These shocks impact, both, current local public resources through reducing tax revenues and expenditures, as well as future local public resources through increasing the cost of debt. Major hurricanes have much larger effects than minor hurricanes: major storms cause local revenues to fall by 6 to 7%. These losses persist at least ten years after a hurricane strike, leading to a 6% decline in expenditures on important public goods and services and a significant increase in the risk of default on municipal debt. Our results reveal how hurricanes can create a “vicious cycle” for local governments by increasing the cost of debt at critical moments after a hurricane strike, when localities are in greatest need of funding sources. Cities deemed riskier by ratings agencies face higher borrowing costs and thereby face constraints to invest in climate change adaptation. Municipalities with a racial minority composition 1 standard deviation above the sample mean suffer expenditure losses more than 2 times larger and debt default risk 8 times larger than municipalities with average racial composition in the decade following a hurricane strike. These results suggest that climate change can exacerbate environmental justice challenges.”

   Link to the paper, link to Jerch’s’ website.

   Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

   + + +

   • Join us on Tuesday, February 9 at 6 pm ET for the year’s first session of the Social Wealth Seminar. Saule Omarova will be discussing the case for a US national investment authority. RSVP to sws_reservations@jainfamilyinstitute.org.
   • “We find that policies that limit evictions are found to reduce COVID-19 infections by 3.8% and reduce deaths by 11%.” Kay Jowers et al. on housing precarity and Covid-19. Link.
   • “At New York City higher education institutions, we found that, when compared to higher-income peers, student borrowers from low-income families: are less likely to complete their degree or certificates; earn less; often borrow more; and repay their loans at lower rates.” A new report from the NYC Department of Consumer and Worker Protection. Link.
   • Kunal Purohit on the rise of sedition cases in India under Modi. Link.
   • “In the world of clean energy, a new set of winners and losers will emerge.” In the FT, Leslie Hook and Henry Sanderson on renewable energy and the balance of power. Link.
   • Marcela López-Vallejo and María del Pilar Fuerte-Celis on organized crime, illegal and legal energy markets, and hybrid governance schemes in Northeastern Mexico. Link.
   • “Approximately 35 percent of workers receive no base wage change year over year.” John Grigsby, Erik Hurst, Ahu Yildirmaz on nominal wage adjustments. Link.
   • Alessia Vatta on bilateral bodies and funds in collective bargaining arrangements in Italy. Link.
   • Eméfah Loccoh et al. examine rural-urban disparities in mortality among low-income Medicare recipients from 2004 to 2017, finding that “the gap in mortality between rural and urban beneficiaries increased over time.” Link.
   • “Using novel weekly mortality data for London spanning 1866-1965, we analyze the changing relationship between temperature and mortality as the city developed. Our main results show that warm weeks led to elevated mortality in the late nineteenth century, mainly due to infant deaths from digestive diseases. However, this pattern largely disappeared after WWI as infant digestive diseases became less prevalent. The resulting change in the temperature-mortality relationship meant that thousands of heat-related deaths—equal to 0.9-1.4 percent of all deaths— were averted.” By W. Walker Hanlon, Casper Worm Hansen, and Jake Kantor. Link.

3. Turn and Burn

   January 30, 2021 12:00 am Comments Off on Turn and Burn

   SOCIAL HISTORY

   Next week marks the launching of our first book-length Phenomenal World publication: Market Economy, Market Society: Interviews and Essays on the Decline of European Social Democracy. The book examines the fracturing of the social democratic consensus through the eyes of policymakers, trade union leaders, and party politicians who lived through, and in some cases enacted, the liberal market reforms of the 1980s and 90s.

   A 1997 essay by Eric Hobsbawm reflects on the social, political, and cultural importance of historical inquiry in shaping collective understandings of the present and future.

   From the piece:

   “To be a member of any human community is to situate oneself with regard to one’s (its) past, if only by rejecting it. The past is therefore a permanent dimension of the human consciousness, an inevitable component of the institutions, values and other patterns of human society. The problem for historians is to analyze the nature of this ‘sense of the past’ in society and to trace its changes and transformations.

   Paradoxically, the past remains the most useful analytical tool for coping with constant change. Some sort of historicism, that is the extrapolation of past tendencies into the future, has been the most convenient and popular method of prediction. At all events the shape of the future is discerned by searching the process of past development for clues, so that the more we expect innovation, the more history becomes essential to discover what it will be like. However, at this point a contradiction arises: the capacity to discern general tendencies does not imply the capacity to forecast their precise outcome in complex and in many respects unknown circumstances of the future. History ceases to be of use at the very moment when we need it most. The value of historical enquiry into ‘what actually happened’ for the solution of this or that specific problem of present and future is undoubted. Yet the nature of this often arbitrary process of dipping into the past for assistance in forecasting the future by itself does not replace the construction of adequate social models, with or without historical enquiry. It merely reflects and perhaps in some instances palliates their present inadequacy.”

   Link to the book containing the paper.

   • “Students of history have imagined that they were dealing with phenomena like ocean tides, whose regularities they could deduce from sufficient knowledge of celestial motion, when they were actually confronting phenomena like great floods, equally coherent occurrences from a causal perspective, but enormously variable in structure, sequences, and consequences.” Charles Tilly on explaining political processes. Link.
   • “By the late twentieth century, it can be argued that concepts of identity at every level are crucially derived from highly fashioned and coherent narratives about the past.” A 1995 paper by Olivia Harris examines the relationship between historical narrative and political agency. Link.
   • A 1980 reflection from Braudel: “The one thing that fascinates me in the history profession is the extent to which it can explain the life of men as it is being woven before our very eyes, with its acquiescences and reticences, its refusals, complicities, or surrenders when confronted with change or tradition.” Link.

   ‡ history metaresearch

   NEW RESEARCHERS

   Pensions and Public Schools

   Assistant Professor in History at Boston College MICHAEL GLASS studies suburban inequality, examining processes of racial segregation and resource distribution. In a co-authored paper, Glass looks at the links between state pension management and suburban school growth in New York State.

   From the abstract:

   “Between 1940 and 1965, state-level officials changed the relationship between two pillars of the postwar social contract: secure retirement and modern public schools. In the early twentieth century, state pension managers, following an investment regime we call ‘fiscal mutualism,’ funneled the savings of government workers into government securities. Through direct participation in municipal bond markets, pension officials lowered the borrowing costs for local governments. Yet by the 1960s, pensions had completely abandoned this investment regime. We document this transformation through a close examination of New York State’s pension fund. Throughout the 1950s, the comptrollers who managed the New York State Employee Retirement System (NYSERS), the nation’s largest state pension, underwrote the boom in suburban school construction by purchasing the municipal bonds of local school districts. However, in response to changes in national political economy, along with shifts in the ideology guiding pension stewardship, New York Comptroller Arthur Levitt Sr. sought to deregulate the pension’s investment powers. As school budgets, and the property taxes supporting them, soared to repay the interest costs, tax revolts became a permanent response to the fiscal volatility. These transformations, we argue, stemmed from postwar liberalism’s dependence on financial markets to deliver retirement security, public education, and other social benefits.”

   Link to the paper, link to Glass’ profile.

   ‡ education finance new_researchers

   Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

   + + +

   • In an adapted chapter from PW’s forthcoming publication, co-published with the Boston Review, Adam Przeworski explores how social democratic parties became trapped by “a language that does not extend beyond a program for the next election, a language that does not guide the society toward long-term goals.” Link.
   • Phenomenal World is now on Twitter. Follow us at @WorldPhenomenal.
   • Collective Actions in Tech, in partnership with JFI, is launching a paid fellowship for tech workers, researchers, journalists and content creators who want to tell the stories of collective action in tech in the Global South. Learn more here.
   • JFI is hiring a full-time Operations Associate to join our operations team in supporting our diverse projects and general nonprofit administration. See more details here.
   • “Central bank purchases reflect the new macro-financial role that government bonds play in this collateral-intensive financial system organised around securities, derivatives, and wholesale money markets.” Daniela Gabor on 2020’s “Revolution Without Revolutionaries.” Link.
   • In an earlier report for the same series, Joscha Wullweber assesses global financial stability: “The financial system was, indeed, already in crisis mode when the pandemic hit.” Link.
   • “Scientists have had to reckon with the limitations of models as tools—and with the realization that pandemics can push the utility of models to the breaking point.” In Quanta, Jordana Cepelowicz on the year of modeling and Covid-19. Link h/t Francis
   • Ju Li on the development of e-commerce and its employment effects in China. Link.
   • In VoxEU, So Kubota, Koichiro Onishi, Yuta Toyama on Covid stimulus payments in Japan. Link.
   • Barbara Samaluk on the challenges of non-standard job schemes and labor market entry for welfare professionals in Slovenia. Link.
   • “Compared to past decades, refugees today (i) travel longer distances, (ii) are less likely to seek protection in a neighboring country, (iii) are less geographically concentrated, and (iv) are more likely to reside in a high-income OECD country.” By Xavier Devictor, Quy-Toan Do and Andrei A. Levchenko. Link.
   • “This paper presents two wage-series for unskilled English women workers 1260–1850, one based on daily wages and one on the daily remuneration implied in annual contracts. The series are compared with each other and with evidence for men, informing several debates. For long periods of time, in fact from the Black Death until the late 1500s, women’s daily or weekly wages from casual or short-term work exceeded the implicit equivalent available from annual service. In the era of industrialization, we find this relationship reversed with the daily wages implicit in longer-term contracts outstripping falling or flattening casual day rates for women workers.” By Jane Humphries and Jacob Weisdorf. Link.

4. Luxor

   January 23, 2021 12:00 am Comments Off on Luxor

   SOCIAL POLICY IN BRAZIL

   Outside of Brazil, the Bolsa Familia is known as the hallmark social policy of the former President Lula and remains the world’s largest conditional cash transfer program. Less well known is the history of Brazil’s social policy in the early decades of the twentieth century.

   In her 1996 book, BARBARA WEINSTEIN examines how industrialists influenced the nation’s social programs from 1920 to 1964.

   From the book:

   “Although the industrialist proponents of rational organization did aspire to remake the workplace and the workforce, their concern in the first instance was to remake themselves, or at least their class image. By identifying with new currents in rational organization and scientific management, these industrialists, engineers, and educators claimed for themselves the professional authority and technical expertise necessary to modernize Brazilian society. In contrast to the ‘arbitrary’ authority of the old-style planter or mill owner, these new industrial owner-managers defined a wide variety of problems affecting the organization of production in the workplace, and even life beyond the factory walls, as technical, not social, questions to be resolved on a systematic, scientific basis. Such an approach, they claimed, would not only increase productivity but also promote social peace.

   This effort by certain industrialists and their allies to capture the discourse of technical competence had formidable implications for labor relations and the work process, but workers were not the industrialists’ sole concern. The industrialists also sought to change the perception of industry among politicians, professionals, and middle-class reformers who harbored doubts about the industry’s contribution to economic progress and social peace. By asserting the centrality of technical expertise as well as their privileged access to it, industrialists attempted to protect and expand their authority within the factory and claim an authoritative role in the making of public policies and programs.”

   Link to the book.

   • On Monday, join us for a conversation on Brazilian social policy and party politics, moderated by Weinstein and featuring Lena Lavinas, Rosana Pinheira-Machado, and André Singer. Register here.
   • In a recent article, Singer looks at the role of industrialists in Dilma Rousseff’s presidency, arguing that “the president bet on a coalition between industrialists and workers to sustain a developmentalist turn…[and] the industrialists changed their position.” Link.
   • “We investigate how and why ‘new consumers’—those who accessed the finance system during the Workers’ Party (PT) Administration—came to support a far-right candidate.” Rosana Pinheira-Machado and Lucia Mury Scalco examine the links between social policy and the popularity of Bolsonaro in Porto Alegre. Link.
   • “Social policy has played a crucial role in advancing financialization and reducing the scope of rights and entitlements.” Lena Lavinas critiques Brazil’s monetary transfer programs. Link.

   ‡ brazil politics social_policy

   NEW RESEARCHERS

   Monopsony in the Meat Market

   In her job market paper, UCLA PhD Candidate in Economics JINGYI HUANG studies the effects of monopsony in the US meatpacking industry from 1903 to 1918.

   From the paper:

   “In this paper, I examine the U.S. meatpacking cartel to show that a monopsonistic cartel can obtain substantial markdowns by manipulating future supply responses. In the early 20th century, five meatpackers formed one of the largest manufacturing cartels in American history; collectively, they produced more than 80% of refrigerated beef. In an era of weak antitrust enforcement, they openly colluded to manipulate the wholesale cattle market from 1893 to 1920. I collected weekly data from historical trade journals published between 1903 and 1918 for the four largest stockyards, which collectively produced more than 58% of U.S. refrigerated beef. I first show that such manipulation led to different aggregate market outcomes: under manipulation, on average, 15.8% more cattle were shipped to the stockyards for sale, while the realized price was 35.5% lower. Cattlemen were “tricked” to believe that the market would be good when they made large shipments; once the cattle arrived at the stockyards, however, cattlemen ended up facing lower-than-expected spotmarket prices. Without manipulation, however, more cattle were shipped when the market price was higher.”

   Link to the paper, link to Huang’s website.

   ‡ markets agriculture new_researchers

   Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

   + + +

   • “The real cause for the inflation was structural, as political as it was economic. At its root, rising prices are an index of social tension.” New on Phenomenal World, Andrew Elrod examines historical and present-day concerns of inflation. Link.
   • “Publicizing abuses has a significant impact on multinationals. Firms associated with an assassination have a median loss in market capitalization of over 100 million USD following violence.” David Kreitmeir, Nathaniel Lane, and Paul Raschky study the effects of international media campaigns around human rights abuses on multinational corporations. Link.
   • Andreas Kern, Mario Negre, and Michael Aklin find “a strong relation between central bank independence and inequality.” Link.
   • “We estimate that more than 2% of all properties in London, and up to 7% in some local areas are being misused through Airbnb as short-term holiday rentals.” Zahratu Shabrina, Elsa Arcaute, and Michael Batty on Airbnb and the London housing market. Link.
   • Debolina Biswas analyzes the causes of declining inequality in rural Bengal, post-land reform. Link.
   • “Fintech borrowers are significantly more likely to default than neighbor individuals with the same characteristics borrowing from traditional financial institutions.” Marco di Maggio and Vincent Yao compare fintech and traditional lenders. Link.
   • Chiara Benassi and Lisa Dorigatti examine the challenges of external work arrangements for industrial union bargaining strategies in Germany and Italy. Link.
   • “In an examination of the most recent 200 academic articles published in 2020 that cite [the retracted papers], Science found that more than half—including many in leading journals—used disgraced papers to support scientific findings and failed to note the retractions.” By Charles Piller. Link.
   • “Using a novel data set on 2,483 British privateering cruises, we show that state-licensed raiding of commercial vessels was a popular and flourishing business among merchants that took a serious toll on enemy trade from 1689 to 1815. Why, then, did privateering merchants gradually turn away from these profitable endeavors? We show that the expansion of overseas trade increased the opportunity costs for merchants and resulted in the decline of privateering. Our findings document that the decline of privateering had as much to do with an expanding maritime economy as with the rising naval power of the British state.” By Henning Hillmann and Christina Gathmann. Link.

5. Metaesquema

   January 16, 2021 12:00 am Comments Off on Metaesquema

   DECENTRALIZATION

   The simultaneous integration of global markets and decentralization of government within nation states has been a hallmark of the age of globalization.

   In a 2004 article, NEIL BRENNER looks to Europe to argue that through processes of decentralization and localization, national state power has been increasingly articulated through competitive forms of urban and regional governance.

   From the paper:

   “As in the 1970s, the reorientation of urban governance during the 1980s was initiated in part through the bottom-up strategies of local political coalitions struggling to manage the disruptive consequences of economic restructuring by means of ad hoc, uncoordinated policy adjustments. In this period, national goals of equalizing economic development capacities across the national territory was increasingly seen to be incompatible with a new priority of promoting assets within each country’s most powerful cities and city-regions. Accordingly, in addition to their strategies to undercut traditional redistributive regional policy relays, national governments now mobilized a number of institutional restructuring initiatives in order to establish a new, competitive infrastructure for urban economic growth within their territories.

   Local governments were granted new revenue-raising powers and an increased level of authority in determining local tax rates and user fees, even as national fiscal transfers to subnational levels were diminished. New responsibilities for planning, economic development, social services and spatial planning were devolved downwards to subnational (regional and local) governments. In a number of western European countries, local economic development projects were a key focal point for such devolutionary initiatives. Although these trends were most apparent in traditionally centralized states, such as France and Spain, various policies to enhance regional and local autonomy were also enacted in less centralized European states as well. Decentralization policies were seen as a means to limit the considerable welfare demands of urban areas and to encourage lower-level authorities to assume responsibility for growth policies that might reduce welfare burdens. Even in the United Kingdom, where major aspects of local governance were subjected to increasing central control under the Thatcher regime, the problem of local economic governance was among the key issues upon which the restructuring of intergovernmental relations was focused.”

   Link to the text.

   • “Changing the territorial boundaries and institutional arrangements of governance for metropolitan cities is viewed as integrally related to leadership capacity and development strategy and therefore the competitiveness of the city in the world economy.” H.V. Savitch and Ronald Vogel address the limitations of urban government and policy. Link. And a 1986 paper by Joanne Fox Przeworski on contemporaneous transformations in OECD countries. Link.
   • “The roots of urban experimentation lie not only in shifts in the international governing of climate change, but also in the restructuring of the (local) state.” Harriet Bulkeley and Vanesa Castan Broto examine urban climate change governance in 100 cities. Link.
   • “The first decentralization period consolidated itself just before and at the point of independence (from the late 1940s through the early 1960s), when local authorities were being established by mutual agreement between the nationalists and the departing colonial authorities.” Richard Stren and Dickson Eyoh locate decentralization in West Africa within the context of anticolonial movements and postcolonial developments. Link.

   ‡ state politics development

   NEW RESEARCHERS

   Women and the Great Migration

   In her job market paper, UMass Amherst PhD Candidate Jennifer Withrow studies the mass migration off farms and into urban centers that took place in the early decades of the twentieth century, examining in particular the differing labor market patterns driving the migration of Black and white women in the South.

   From the paper:

   “In 1920 the United States Department of Agriculture (USDA) published a report titled ‘The Farm Woman’s Problem’ aimed at better understanding why rural women were choosing to leave farm life and migrate to urban areas. I evaluate the farm woman’s problem in the South, focusing on the intersection of race and gender in conditioning migration likelihoods. I create a novel dataset of over 200,000 Black and white women linked from 1920 to 1930 or 1930 to 1940 to understand the economic, societal, and familial drivers of their off-farm migration. Using marriage certificates, I am able to link both women who remained single and women who married between census years. I find that Black and white women were up to 7 to 13 percentage points more likely to leave the farm than their male counterparts. My results on threats to farm family socioeconomic mobility created by the farm crisis highlight how female migrants, facing a more limited set of economic opportunities on the farm, were more responsive to the crisis than men. I also find that racial segregation in urban employment and in farming had important ramifications for who among rural women were most likely to leave, as Black women were more constrained by family responsibilities and had fewer options for urban work that rewarded education than white women.”

   Link to the paper, link to Withrow’s website.

   ‡ labor migration new_researchers

   Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

   + + +

   • “The development of globalization ran through not only the realms of ideas and finance, but also through Romania’s national computer industry.” New on Phenomenal World, Ella Coon probes the failed experiments of the 1960s supercomputer manufacturer Control Data Corporation. Link.
   • “The Wall Street Consensus in Pandemic Times.” A new paper by Yannis Dafermos, Daniela Gabor, and Jo Michell examines the flourishing of climate-focused financial development schema since the pandemic. Link.
   • Ho-fung Hung on US-China trade policy in Clinton’s first year. Link.
   • “According to the Chamley-Judd result, capital should not be taxed in the long run. In this paper, we overturn this conclusion, showing that it does not follow from the very models used to derive it.” New paper by Iván Werning and Ludwig Straub. Link.
   • Giovanni Maggi and Ralph Ossa review emerging literature on the political economy of “deep integration” trade agreements. Link.
   • Belinda Archibong and Francis Annan study the effects of negative news on vaccine compliance, looking at the disastrous effects of a 1996 Pfizer trial in Nigeria. Link.
   • “For centuries, defaulting governments were immune from legal action by foreign creditors. This paper shows that this is no longer the case. Building a dataset covering four decades, we find that creditor lawsuits have become an increasingly common feature of sovereign debt markets.” By Julian Schumacher, Christoph Trebesch, and Henrik Enderlein. Link.
   • Oddny Helgadóttir and Cornel Ban examine if and how macroeconomics has changed since the 2008 financial crisis. Link.
   • “We examine the impact of rigorous trade suppression during 1550–1567 on the sharp rise of piracy in this period of Ming China. By analyzing a uniquely constructed historical data set, we find that the enforcement of a ‘sea (trade) ban’ policy led to a rise in pirate attacks that was 1.3 times greater among the coastal prefectures more suitable for silk manufactures—our proxy for greater trade potential. Our study illuminates the conflicts in which China subsequently engaged with the Western powers, conflicts that eventually resulted in the forced abandonment of its long upheld autarkic principle.” By James Kai-sing Kung and Chicheng Ma. Link.

6. Plucked Goose

   January 9, 2021 12:00 am Comments Off on Plucked Goose

   AMERICAN EXCEPTIONALISM

   The deep divisions in American political and social life have long been thought to explain the unique weakness of America’s welfare infrastructure, and the absence of an integrated system of universal benefits.

   But on their own, demographic divisions need not necessarily fragment coalitions for universal demands—history is teeming with political movements which were capable of uniting different factions. In his 1981 book, City Trenches, political scientist IRA KATZNELSON situates a history of immigration and racial conflict within a structural account of America’s urban geography and economic development.

   From the text:

   “Analyses of games or contests, political or otherwise, must do more than describe the players and their adversary play. They must also say something about the boundaries of the contest, which define its limits prior to the playing of the game itself. Attempts to make sense of what is special about class in America have ordinarily proceeded without this specification. They have most frequently focused on one of three conditions of American life—the racial and ethnic fragmentation of the working class itself, the unusual economic rewards of the economy, or the values that integrate American society—and they have generally argued that these conditions have made virtually impossible the development of class-based politics.

   But America’s working class was not created once and for all. It has been fashioned and refashioned as members of national, ethnic, or religious groups that had been outside of the frame of capitalist labor relations have entered the ‘free’ labor market. I argue below that the unique characteristics of American institutions are aspects of a sharply divided consciousness about class in American society that finds many Americans acting on the basis of the shared solidarities of class at work, but on that of ethnic and territorial affinities in their residential communities. Each kind of conflict has had its own separate vocabulary and set of institutions: work, class, and trade unions; community, ethnicity, local parties, churches, and voluntary associations. Class, in short, has been lived and fought as a series of partial relationships, and it has therefore been experienced and talked about as only one of a number of competing bases of social life. What is distinctive about the American experience is that the linguistic, cultural, and institutional meaning given to the differentiation of work and community, a characteristic of all industrial capitalist societies, has taken a sharply divided form, and that it has done so for a very long time.”

   Link to the book.

   • “The factors that lead people to see the world in class terms may not be the same as those that sustain organizations created to act on such a vision. We need to investigate the conditions which encourage both the world view and organizational longevity in critical moments.” Kim Voss’s 1992 paper examines American Exceptionalism through the rise and fall of the Knights of Labor. Link.
   • Mike Davis considers the question in a 1980 NLR: “On the one hand we must discard the idea that the fate of American politics has been shaped by any overarching telos. On the other hand, we cannot underestimate the role of sedimented historical experiences as they influenced and circumscribed capacities for development in succeeding periods.” Link.
   • “Perhaps the debate over American exceptionalism has gone on for so long and so inconclusively because the question itself is fundamentally flawed. Perhaps beginning our investigation with a negative question inevitably invites ahistorical answers.” A 1984 article by Eric Foner casts doubt on the debate. Link.

   ‡ labor class history

   NEW RESEARCHERS

   Agribusiness in Brazil

   PhD Candidate at the International Institute of Social Studies of Erasmus University DANIELA ANDRADE studies rural poverty and agrarian development, with an interest in agrarian change in Mozambique and Brazil. In a 2017 paper, Andrade traces the rise of agribusiness and primary commodities export specialization in Brazil.

   From the paper:

   “In the course of the 2000s, the expansion of agribusiness production and exports has boosted economic growth in Brazil, contributing to its rise as an emerging economy and a major player in the global food system. This article explores the relationship between the empirical rise of Brazilian agribusiness and its fundamental historical and material sense (or essence), which is abstracted from its relations with the broader economy and its logic of reproduction and accumulation. Using statistical series from the country’s Balance of Payments (BoP), macroeconomic and sector parameters, agribusiness expansion is analysed in the context of the overall transformations in the patterns of production, trade and capital flows, underpinned since the neoliberal policy reforms of the 1990s. The analysis shows that the rise of Brazil as an agribusiness powerhouse is part and parcel of the economy-wide effects of financialisation, sponsored by state macroeconomic policies. While these policies have created opportunities for transnational financial – and often speculative – gains, they have also undermined production and exports, particularly in the industrial sector, inducing a process of primary commodities export specialisation. As it is discussed, reprimarisation has contributed to BoP fragility, the reproduction of debt and external dependence, which are at the core of the current crisis.”

   Link to the paper, link to Andrade’s profile.

   ‡ agriculture trade new_researchers

   Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

   + + +

   • “The ‘Volcker Shock’ ended the era of stagflation by destroying the demand for money. It wasn’t the reduction of the state’s money supply, but the absolute destruction of the private economy that ended the great inflation.” New on the blog, Yakov Feygin on the political economy of inflation. Link.
   • Save the date: Join Phenomenal World on January 25 at 2 pm ET for a discussion on “Party Politics and the Financialization of Social Policy in Brazil,” moderated by Barbara Weinstein and featuring Lena Lavinas, Rosana Pinheiro Machado, and André Singer. Register here.
   • “The pandemic provides further evidence of the intimate interconnection between occupational health and public health and the need for both practice and policies to be shaped with these interactions in mind.” Michael Quinlan on Covid-19 and worker health. Link.
   • Edward Glaeser and James Poterba on infrastructure investment. Link.
   • “We offer a dynamic theory of climate politics based on the present and future revaluation of assets.” By Jeff Colgan, Jessica Green, and Thomas Hale. Link. h/t Paul
   • David Francis, Imraan Valodia, and Edward Webster on exacerbating inequality amid the Covid-19 pandemic in South Africa. Link.
   • “I use geospatial analyses to map ocean currents and explore routes of passage for maritime maroons from the island of St. Croix.” By Justin Dunnavant. Link.
   • In Bloomberg CityLab, Sarah Holder calls 2021 “The Year of Guaranteed Income Experiments,” referencing JFI’s work with the Compton Pledge. Link.
   • “Our analysis shows that Left parties face a trade-off between mobilizing workers and other voters and that unionization renders workers more loyal to Left parties that mobilize non-workers.” Line Rennwald and Jonas Pontusson revisit Przeworski and Sprague’s Paper Stones. Link.
   • “Credit undersupply and regional fragmentation could only be overcome through the integration of the South within a larger Italian market, in which, however, the lion’s share went to a predominantly Northern institution.” Maria Stella Chiaruttini on 19th-century financial development in Southern Italy. Link.
   • “Based on data from all US recessions since 1949, this column shows that the 2020 recession deviates most sharply from the historical norm in its disparate gender impact.” Titan Alon, Matthias Doepke, Jane Olmstead-Rumsey, and Michèle Tertilt in VoxEU. Link.
   • “During the second half of the seventh century AD, the coin-using regions of North-west Europe switched from gold to silver currencies. This change was a key element in the social and economic transformations that resulted in increased long-distance trade, greater specialisation and the growth of large port settlements.Yet the sources of the silver that allowed the shift from gold to silver coinage have proven enigmatic. Recent archaeological exploration of an early medieval silver mine at Melle (Deux-Sèvres, France) and the isotopic profiling of its lead have indicated that exploitation of these deposits could have contributed to the epochal economic shift of the mid seventh century AD. Data on lead pollution from a new ice core at Colle Gnifetti, Switzerland, provides evidence of the renewed smelting of silver-lead ores from c. AD 640–670. This unambiguously shows that, alongside any residual pool of Roman bullion and imported metal, new mining facilitated the production of the last post-Roman gold coins—debased with increasing amounts of silver—and the new silver coinages that replaced them.” Link.

7. Au Matin

   December 19, 2020 12:00 am Comments Off on Au Matin

   GREEN CENTRAL BANKING

   In the wake of recent financial convulsions, central banks have emerged yet again as the first responders to crisis. But to confront the crisis of anthropogenic climate change, there is growing acknowledgement that central banks should go further, beyond their limited remit of maintaining price stability.

   Central banks should be more cognizant of their own role in creating credit-fueled growth; monetary policy already features distributing the benefits and burdens of decarbonization. Crucially, stepping up ambitions for active climate change mitigation would involve abandoning spurious notions of “market neutrality.”

   In a recent e-book, PATRICK BOLTON , MORGAN DESPRES, LUIZ AWAZU PEREIRA DA SILVA, FRÉDÉRIC SAMAMA, and ROMAIN SVARTZMAN argue that facilitating decarbonization is in fact consistent with concerns over financial and price stability:

   “An additional ambitious and controversial proposal is to apply climate-related considerations to central banks’ collateral framework. The goal of this proposal is not that central banks should step out of their traditional role when implementing monetary policies, but rather to recognise that the current implementation of market neutrality, because of its implicit bias in favour of carbon-intensive industries […] could end up affecting central banks’ very own mandates in the medium to long term. Honohan (2019) argues that central banks’ independence will be more threatened by staying away from greening their interventions than by carefully paying attention to their secondary mandates such as climate change. Thus, and subject to safeguarding the ability to implement monetary policy, a sustainable tilt in the collateral framework could actually contribute to reducing financial risk.”

   Link to the book.

   • “The ECB has recently invoked a principle of market neutrality to justify the absence of
     environmental criteria from the design of its Corporate Sector Purchase Programme operations. It should be noted that this principle is not in the ECB mandate and is in fact relatively new […] It does not prohibit a market-based programme such as Green TLTROs.” In a recent report for Positive Money Europe, Jens van ‘t Klooster and Rens van Tilburg make the case for the ECB to use its Targeted Longer-Term Refinancing Operations to boost green lending. Link.
   • Sandra Batten, Rhiannon Sowerbutts and Misa Tanaka present a typology of risks associated with climate change and discuss their impact on monetary policy objectives. Link.
   • Paola D’Orazio and Lilit Popoyan examine ‘macroprudential greening’ and how central banks could incentivize the decarbonization of bank balance sheets. Link.

   ‡ central_banks climate political_economy

   

   The top section of the newsletter this week is written by guest contributor Dominik Leusder. An economist in London (and Phenomenal World contributor), he is launching is own newsletter focused on finance and political economy. You can subscribe to it here.

   

   NEW RESEARCHERS

   Racial Disparities in Job Displacement

   Postdoctoral Scholar at the Department of Demography at UC Berkeley NATHAN SELTZER studies the impacts of economic change on demographic processes. A recent Center for Equitable Growth paper, co-authored with Elizabeth Wrigley-Field, examines Black and white disparities in job displacement from 1981 to 2017.

   From the abstract:

   “Social scientists have documented vast racial disparities in labor market outcomes such as hiring and firing decisions, compensation, and opportunities for occupational advancement. Yet little is known about the racial patterning of job displacement (permanent involuntary layoffs), a remarkably common labor market outcome. Using data from the Displaced Worker Survey, covering nearly four decades of displacements, 1981-2017, we provide the first systematic analysis of Black/white displacement disparities since the 1990s. We find that Black workers were nearly always more likely to be displaced than whites, but the Black/white disparity has grown over time, with excess Black displacement doubling for women and tripling for men since the 1990s. Additionally, during the 1990s, being Black replaced lacking a college degree as the better predictor of displacement. To evaluate whether these disparities are explained by compositional differences—i.e. whether Black workers were more likely to be employed in displacement-prone jobs than whites—we decompose Black-white displacement disparities by job characteristics including occupation, industry, and public vs. private sector, and indexes reflecting displacement risk and job quality. The results support arguments that the public sector has become less protective for Black workers, but generally provide scant evidence that compositional differences explain the rise of racial disparities in displacement.”

   Link to the paper, link to Seltzer’s website.

   ‡ demographics job_displacement new_researchers

   Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

   + + +

   • JFI Sources will be on break until the new year. See you in 2021, and thank you so much for reading.
   • Kim Stanley Robinson in Bloomberg on “air sewers,” a “process [that] involves using machinery to filter out CO₂ from ambient air, then disposing of the captured gas—either by injecting it underground, binding it to rock, or putting it to industrial use.” Link.
   • Aurélie Ouss on misaligned incentives and un-internalized costs of youth incarceration. Link.
   • “Blending the tools of micro-history with historical Geographical Information Systems (GIS) permits us to chart the social networks and everyday journeys of black working-class women activists and the middle-class men with whom they came into contact in Reconstruction St. Louis.” By Elizabeth Belanger. Link.
   • Forty percent of people who visited Feeding America food banks from March to June 2020 were first-timers. Link. h/t Halah
   • Can Nacar on tobacco worker labor struggles in the late Ottoman empire. Link.
   • “In this paper we survey the historical record for over two centuries on the connection between expansionary fiscal policy and inflation.” By Michael D. Bordo and Mickey D. Levy. Link.
   • Sascha Becker, Yuan Hsiao, Steven Pfaff, and Jared Rubin on Martin Luther’s network ties in the Early Reformation. “Based on novel data on Luther’s correspondence, Luther’s visits, and student enrollments in Luther’s city of Wittenberg, we reconstruct Luther’s influence network to examine whether local connections to him increased the odds of adopting Protestantism.” Link.
   • Daina Bellido de Luna on union-weakening practices in Chile. Link.
   • “We use random variation in both wait times and prices to estimate a consumer’s [value of time] with a data set of more than 14 million observations across consumers in U.S. cities.” A new NBER working paper uses data from ride-sharing application Lyft to analyze value of time. Link.
   • “The decline of the physical stature of the U.S. population during the decades preceding the Civil War occurred just as the United States was experiencing the beginning of modern economic growth. Height—a measure of a population’s nutritional status—was not expected to decline in a dynamic economy in which average income grew by 60 percent from 1820 to 1860. A consensus view has emerged that calorie and protein intake of the population did decline during the antebellum decades. Floud et al. suggest, most recently, that food intake declined by 9–14 percent, while Haines, Craig, and Weiss estimate that calorie and protein output declined by 11 and 18 percent, respectively, between 1840 and 1850. The divergence between nutritional status and income has been attributed to an increase in inequality and an increase in the price of protein-rich food.” By John Komlos and Brian A’Hearn. Link.

8. Eight View

   December 12, 2020 12:00 am Comments Off on Eight View

   HOMEOWNERSHIP

   Between 1940 and 1990, housing growth in the United States outpaced population growth by 173 to 88 percent, and the proportion of homeowners nearly doubled. The same trend is observable internationally, and scholarly debate weighs whether demographic shifts or policy decisions are to blame.

   A 2015 book by NANCY H. KWAK examines the rise of homeownership in light of US foreign policy and economic objectives. Focusing on the export of low-income homeownership programs, the book situates housing policy within broader distributional debates.

   From the introduction:

   “In the US, the homeownership ideal had begun forming in the mid-nineteenth century. Tracts on pastoral-republican suburbinization, Calvin Coolidge’s call for a ‘Nation of Homeowners,’ the Better Homes in American Movement and the Home Modernizing Bureau all helped build an ideology that connected national identity with single-family owner occupancy. At the end of World War II, American advisors began urging countries around the world to push local, undocumented land uses to the margins and consider formal homeownership as a long term goal for the masses. Mass homeownership fuelled globalization by standardizing local processes of housing and land valuation, use, and tenure into a uniform system facilitating national and international investment. As more people participated in a globalized property and credit system, more of the urban landscape became friendly to corporate investment, making policymakers amenable to mass urban resettlement and modernization schemes. Implicit and reinforced in this system was the belief that the middle class served as a critical anchor for political stability, and that homeownership not only anchored the middle class but created it.

   The World Bank played a particularly important role in normalizing an American version of mass homeownership at the end of the twentieth century. Up until the 1970s, the Bank had not exhibited much interest in directly addressing urban poverty, and its workers thought of housing primarily as welfare provision rather than generative investment. It was only in an era of explosive urban poverty and declining congressional support for American bilateral aid programs that the Bank took a more active role, beginning in Senegal, then moving to Tanzania, Zambia, Indonesia, and others. World Bank housing experts clarified that property rights could confer ‘enormous benefits on many poor families.’ “

   Link to the book. h/t the one and only Paul Katz.

   • “In Canada and the United States, industrialization and urbanization occurred more or less simultaneously, creating a substantial working class in the growing cities by the early 20th century. In Latin America and the Caribbean, on the other hand, dependent industrialization resulted in a rapidly growing urban population with a relatively small industrial sector, a large commercial service sector, and a significant informal urban economy.” Kwak and Sean Purdy introduce a 2007 Urban History issue on “Public Housing Histories in the Americas.” Link.
   • “Planning colonias proletarias required surveying and subdividing land, actions undertaken by municipal engineers, architects, and planners. But it also required negotiating with resident associations and political brokers who deftly manipulated municipal codes and blueprints.” Emilio de Antuñano’s dissertation on urban planning in Mexico City, 1930-60. Link. And another dissertation by Michael William Sugarman compares housing policy in Bombay, Hong Kong, and Singapore from 1894-1960. Link.
   • “Taking the city of Sydney, Australia, as exemplary of a dynamic that has unfolded across the Anglo-American economies, we explain how residential property was constructed as a financial asset and how government policies helped to generate the phenomenal house price inflation and unequal capital gains of recent years.” A 2019 precursor to Lisa Adkins, Melinda Cooper, and Martijn Konings’ The Asset Economy. Link. And stay tuned for Martijn Konings forthcoming Phenomenal World piece on property inflation.

   ‡ housing cities urban_planning

   NEW RESEARCHERS

   Discrimination in Mental Health Care

   PhD Candidate in Economics at Georgia State University BENJAMIN HARRELL studies experimental and health economics. A recent co-authored NBER working paper uses an experimental design to examine discrimination against transgender and non-binary individuals in mental healthcare settings.

   From the paper:

   “A broad body of interdisciplinary research establishes that transgender and non-binary (TNB) individuals face discrimination across many contexts, including healthcare. However, no previous research quantifies the extent to which transgender and non-binary people face discrimination in mental healthcare markets. This paper provides the first experimental evidence of gender identity discrimination in the mental health care system. To do this, we conduct a large-scale experimental field study of mental health care providers throughout the United States. Specifically, we request appointments from mental health providers, including psychologists, counselors, social workers, and psychiatrists, using a popular online website. We generally find no differences in positive response rates between TNB and cisgender prospective patients in our preferred specifications. This lack of a difference occurs because positive response rates may be higher for white transgender women and men. However, the significantly more frequent discrimination against African American and Hispanic TNB people (mainly Hispanic transgender women and non-binary African American people) offsets this, such that is little evidence of a difference on average between TNB and cisgender prospective patients. Ignoring intersectionality thus obscures this discrimination against TNB people of color and apparent preference for white binary transgender people.”

   Link to the paper, link to Harrell’s website.

   ‡ healthcare discrimination new_researchers

   Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

   + + +

   • Join us next Thursday, December 17 at 3 pm ET for a JFI Research Session on “Reweaving the Safety Net: The Best Fit for Guaranteed Income,” led by JFI’s Director of Research Sidhya Balakrishnan, Lead Researcher on Guaranteed Income Stephen Nuñez, and Michael Lewis. See more details here, and register here.
   • “As algorithmic governance, the Online Compliance Intervention directs attention to the chronopolitics of contemporary welfare bureaucracies.” Andrew Whelan on Australia’s big data initiative in welfare provision. Link.
   • Perry Anderson in the LRB with nineteen thousand words on the European Union. Link.
   • “Workers have mobilized under circumstances normally associated with non-mobilization, meaning workplaces characterized by technological innovation and absent or ineffective trade unions.” Lorenzo Cini and Bartek Goldmann analyze worker mobilizations in Italian logistics and food delivery. Link.
   • Earnings inequality 1970-2018, by Olle Hammar and Daniel Waldenström. Link.
   • Katherine Clayton. Jordan Horrillo, and Paul M. Sniderman question the IAT and AMP as measures of racial prejudice, finding that “substantial numbers of white Americans that the IAT and the AMP classify as free of prejudice openly endorse explicitly negative stereotypes of Black Americans.” Link.
   • A new report from the Economic Policy Institute on the decline of private sector unions. Link.
   • In EdSurge, Tony Wan reports on college offers of income-share agreements. Link.
   • Francine D. Blau, Josefine Koebe and Pamela A. Meyerhofer on defining “essential” and “frontline” workers in the Covid-19 pandemic. Link.
   • John Berdell and Thomas Mondschean offer a view of Jeremy Bentham and Henry Thornton’s divergent approaches to financial stabilization in 1802. Link.
   • “In this article, we document a historical reversal of fortune within the Western agricultural core region, showing that regions which made early transition to Neolithic agriculture are now poorer than regions that made the transition later. Using data from a large number of carbon-dated Neolithic sites throughout the Western agricultural area, we determine approximate transition dates for about 60 countries, 280 medium-sized regions, and 1,400 small regions. We demonstrate that there is a strong negative association between time since agricultural transition and current income levels within Western countries, with a particularly strong relationship in Italy, Spain, and Turkey. Importantly, we find that the economic reversal appears to have started to emerge already by 1500 ce, that is, before the Western colonization and industrialization, and then grew stronger over time.” By Ola Olsson and Christopher Paik. Link.

9. Idyl

   December 5, 2020 12:00 am Comments Off on Idyl

   OIL POLICY

   This year’s turbulent oil market, in combination with the Covid-19 pandemic, has threatened the financial outlook of several Latin American nations. With many governments dependent on oil revenues, the issues of public ownership of the oil sector and financial liberalization are subject to intense political debate. But given the fluctuations of the market and national responses over the past three decades, some have called into the question the ideological nature of oil policy in the region.

   In a chapter from the 2019 volume The Political Economy of Taxation in Latin America, FRANCISCO MONALDI examines oil expropriation and taxation across Latin America, arguing that oil policy is determined less by political ideology and more by structural factors of the oil sector and investment cycles.

   From the chapter:

   “In 2013–2015 Mexico opened up its oil industry to private investment, following seventy-five years of exclusive state control. Other Latin American governments, including Argentina, Brazil, Colombia, Ecuador, and even Venezuela, covering all political tendencies, are also enthusiastically courting foreign investment in oil, offering increasingly attractive fiscal conditions, with lower government-take. This trend would seem to proclaim a new liberalization cycle in the industry. In contrast, during the previous decade, under an oil price boom, the region had witnessed a resource nationalism cycle. Most countries in the region significantly increased the government-take on hydrocarbons and the government control over the industry. What are the determinants of these swings in oil policy, and in particular in hydrocarbon taxation policy? This chapter argues that structural factors, such as the characteristics of the oil sector (rents, sunk costs, risk profile of projects), the countries’ geological endowments, and price and investment cycles are key determinants of oil taxation policy. These factors interact with the broader institutional environment of a country to define oil policy. Ideology usually plays a role in how policy change is enacted, particularly regarding the degree of government control, but the general direction of oil taxation policy is largely determined by the incentives provided by structural factors and market conditions.

   To understand the dynamic of resource nationalism it is important to focus on the deeper determinants of the historical cycles of private opening and expropriation. These are the incentives faced by political leaders under different scenarios of international prices, stages of the investment cycle, production and reserve tendencies, and size of net exports (imports). Expropriation in its different forms, including significant tax increases, tends to occur when prices rise substantially – that is, when its benefits increase significantly for the government. Expropriation is also more likely to occur in an environment of high and increasing reserves and production, and when the country becomes a large net exporter. Thus, after a cycle of significant and successful private investment, the probability of expropriation paradoxically increases. Given the amounts of the oil rents, which can be as high as 90% of revenues, the fiscal benefits can be politically irresistible. Most relevant petroleum exporters are fiscally reliant on oil. Thus, in this so-called high-sunk-cost sector, the effects of a decline in investment can take years to lead to the consequent decline in production. Therefore, government leaders with short-term horizons may be tempted to obtain high current benefits while deferring costs, leaving future leaders to bear the political consequences of declining production and revenues.”

   Link to the text.

   • “The scaling-up of NAFTA to the SPP (Security and Prosperity Partnership of North America)—which bolstered U.S. national security—is the basis for changes in the Mexican energy sector.” Alejandro Alvarez Béjar’s account of NAFTA’s implications for energy policy challenges Monaldi’s framing. Link.
   • “Contrary to an explanation based on rentier state theory, Chavez’s proclivity for state intervention, both as a candidate and as president remained constant regardless of significant changes in oil prices.” Gustavo Flores-Macías’ study of Latin American leftism sheds light on Chavez’s resource nationalism. Link.
   • “Compared with high-income resource-abundant countries, Latin American & Caribbean commodity exporters have much lower (known) natural resource endowments per capita but are much more dependent on natural resource revenues.” Emily Sinnott, John Nash, and Augusto de la Torre’s World Bank report provides an overview of commodity dependence in the region. Link. And Maristella Svampa examines the tensions between commodity dependence and indigenous rights. Link.

   ‡ oil markets latin_america

   NEW RESEARCHERS

   Post-Recession School Choice

   PhD Candidate in Economics at the University of Texas Austin JIWON PARK studies the economics of education. In a 2020 paper, Park investigates the effects of post-recession funding cuts to public schools on private school enrollment.

   From the abstract:

   “This paper asks whether funding for public schools affects parents’ decision to send their children to private schools. In the wake of the Great Recession, funding for public K-12 education fell precipitously in the United States and stayed low for several years. Critically, states with greater historical reliance on state appropriations (rather than local or federal appropriations) and states with no income tax experienced larger cuts. These two features were set decades before the Great Recession, changed little over time, and do not predict other impacts of the Recession, such as unemployment, providing plausibly exogenous sources for variation in public school funding. I combine these two sources with the timing of the Great Recession in an event study framework to instrument for local public school funding. I find that students exposed to a $1,000 (9.0 percent) decrease in per-pupil funding are more likely to enroll in private schools by 0.48 to 0.59 percentage points (4.5 to 5.6 percent). I show further that the effect is strongest among high socioeconomic status students living in disadvantaged areas. These findings suggest that reductions in public school resources lead to greater inequality in education through school choice.”

   Link to the paper, link to Park’s website.

   ‡ education k12 new_researchers

   Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

   + + +

   • “We should not let a stylized image of Manchester stand in for all of capitalism. But the dark satanic mills still must find a place, and a relatively important one, in any history of capitalism.” On the blog, Tim Barker reviews Jauris Banaji’s latest book, A Brief History of Commercial Capitalism. Link.
   • “This inability to pursue expansionary fiscal policy in a global economy is at the root of the economic problems we face today.” Also on the blog, an interview with Amit Bhaduri on social democracy, development, and growth. Link.
   • Join us on Tuesday, December 8 at 6 pm ET for the next meeting of JFI’s Social Wealth Seminar, featuring Sarah Quinn, Associate Professor of Sociology at the University of Washington, on the use of public credit as a multi-purpose political tool. RSVP to sws-reservations@jainfamilyinstitute.org.
   • JFI Senior Fellow Johannes Haushofer, with Robert Mudida and Jeremy P. Shapiro, compares the effects of cash transfers and psychotherapy on economic and psychological well-being, finding “cash transfer recipients had higher consumption, asset holdings, and revenue, as well as higher levels of psychological well-being.” Link.
   • Valentin Lang finds that IMF programs increase income inequality, an “effect…driven by absolute income losses for the poor and not by income gains for the rich.” Link. h/t Paul
   • “We find that work requirements reduce SNAP participation by 52 percent.” By Colin Gray, Adam Leive, Elena Prager, Kelsey Pukelis, and Mary Zaki. Link.
   • Adalmir Antonio Marquetti et al. compare the rate of profit in the United States and China between 2007 and 2014 by investigating “the trajectories of the national average rate of profit and their disaggregation; the distribution of different rates of profit by firms, economic sectors, and manufacturing sectors, and the stability of those distributions over time.” Link.
   • Brandon P. Martinez and Alan Aja on racial inequality in homeownership between Latinx groups. Link. And an earlier paper from Martinez looks at the homeownership gap between white and Black Cuban-Americans. Link.
   • “I compare rates of intergenerational occupational mobility across four countries in the late nineteenth century: 1869–1895 Argentina, 1850–1880 United States, 1851–1881 Britain, and 1865–1900 Norway. Argentina and the United States had similar levels of intergenerational mobility, and these levels were above those of Britain and Norway. These findings suggest that the higher mobility of nineteenth-century United States relative to Britain might not have been a reflection of ‘American exceptionalism,’ but rather a manifestation of more widespread differences between settler economies of the New World and Europe. I argue that the relative abundance of land in Argentina and the United States made the transition into independent farming relatively easier in these two countries than in Europe. This explanation is consistent with the fact that rates of intergenerational mobility in the United States appear to have converged to those in Europe during the twentieth century, after frontier expansion had concluded.” By Santiago Pérez. Link.

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    INFORMAL ECONOMY

    Recent studies estimate approximately 60% of the world’s population earns their wages in the informal economy. Focusing on the prevalence of informal work across Africa, Latin America, and South Asia, analysts frequently advocate for a transition to the formal economy in these regions as part and parcel of development goals. But increased attention on informal work in the US and Europe has complicated how the informal economy is defined across both high-income and low-income nations.

    In the introduction to his co-edited 2000 book, sociologist FARUK TABAK considers informalization through a long term, world-systems view.

    From the text:

    “From the late 1960s to the 1980s, the interest in and literature on the informal economy grew almost exponentially—as did the informal economy itself. The term informal economy originally referred to that great mass and realm of economic activities and transactions lying outside official accounting, more by default than design (at least initially). And during the opening decades of the post-1945 period, its overwhelming presence in what was then referred to as the developing world was no surprise. Indeed, the informal economy was considered one of the developing world’s defining characteristics; the failure of these transactions to show up in official statistics was attributed mainly to the inability of state apparatuses to compel compliance and thereby reinforce relations of rule. In fact, in modernization theory, administering and overseeing the eradication of the informal realm was a political priority for buttressing relations of governance. It was a forgone conclusion that once these relations were solidly (re)established, the informal realm would steadily yet inexorably be brought under strict statal regulation.

    This paradigm reigned as long as informalization remained an attribute of the periphery, but was eventually undermined by the equally relentless pace of informalization in the core zones after the 1970s. As the research suggests, the inability of state apparatuses to effectively administer and regulate a wide and growing range of productive activities conducted within their jurisdictions contributed to the spread of the informal economy. At other times, a state’s unwillingness—not necessarily its inability—to police these activities and transactions was the most salient determinant. In certain locales, corporate restructuring swelled the ranks of of the informal sector by farming out the production of goods and services formerly produced in-house. In other locales, massive rural-to-urban migration and the resulting urban demographic explosion precipitated and sustained the process of informalization. Moreover, state bureaucracies in the periphery—the very agencies expected to preside over the demise of the informal sector—resorted to hiring and farming-out to firms and enterprises in the informal sector as they administered “public” enterprises. Yet the multiplicity of processes underlying informalization and the inability to identify a single cause does not mean the concept or the term itself should be dispensed with in toto. A narrow focus on the variety of the processes underlying the informal economy overlooks the sheer magnitude and cumulative significance of these activities in the functioning of the capitalist world-economy.”

    Link to the book.

    • A previous JFI Sources examines the International Labor Organization’s attempts to quantify the informal economy in the “developing world.” Link. And Saskia Sassen’s 1997 article looks to the US to understand informalization, asking “whether these systemic conditions in advanced market economies in the post-fordist era are also engendering a new dynamic of informalization in the Third World along with older dynamics.” Link.
    • Zoran Slavnic rejects the notion of separate informal and formal economies. Instead, “All economic actors are increasingly ready to adopt informal economic strategies.” Link. Martha Alter Chen comes to a similar conclusion, finding “most informal enterprises and workers are intrinsically linked to formal firms.” Link.
    • “The common impression that the devaluing of labor is a function of globalization and competition from lower-cost producers in the global south does not appear to be the case.” James DeFilippis, Nina Martin, Annette Bernhardt, and Siobhán McGrath examine informal work in Chicago and New York, finding that the bulk of labor violations occur in industries that serve local consumption. Link.

    ‡ informal_economy informality labor_market

    NEW RESEARCHERS

    Economic Geography in the Spanish Empire

    PhD Candidate in Economics at Universitat Pompeu Fabra and the Barcelona GSE SEBASTIAN ELLINGSEN studies economic geography and trade using spatial data. In a 2020 paper, Ellingson examines market access and economic activity in the Spanish Empire following reforms that opened up direct trade to Europe.

    From the paper:

    “The spatial distribution of economic activity depends largely on market access and history, but countries differ greatly in the extent to which their geographies reflect these two determinants. What explains these differences? To study these questions, I exploit a large-scale historical experiment: the expansion of direct trade with Europe in the Spanish Empire. To promote a comparative advantage in the extraction of bullion, early Spanish commercial policy severely restricted the direct trade of goods with Europe. However, driven by political developments in Europe, these restrictions were gradually lifted in the second half of the 18th century. While only four ports were permitted to trade goods directly with Europe in 1765, this number had increased to 50 by 1800. I find that the reform had large and heterogeneous effects on trade costs between Europe and the Americas. These changes in trade costs affected population growth and the incorporation of towns into the empire. These effects were substantially larger in localities with lower population density. Second, these effects were larger in the peripheral regions of the Spanish Empire, showing that the economic geography was much more sensitive to changing fundamentals in areas that were less densely populated. Finally, these effects were effect were larger in coastal areas. Consistent with these patterns, I show that the correlation between pre-colonial density and population density in the year 2000 is substantially smaller in areas more intensively treated by the reform.”

    Link to the text, link to Ellingsen’s website.

    ‡ trade empire new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

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    • A new JFI report by Marshall Steinbaum examines the crisis of un-repayable student debt: “Student debt cancellation is inevitable, in part because it’s already happening: a larger and larger fraction of the loans originated in any given year are not going to be repaid at all, and many more will never be fully repaid.” Link. The report is the fourth in JFI’s series on millennial student debt.
    • Join us on Tuesday, November 24 at 6 pm ET for the next meeting of the Social Wealth Seminar, featuring Phillip Rocco on Covid-19 and the crisis of American Federalism. RSVP to sws-reservations@jainfamilyinstitute.org.
    • “We find that the significant drop in tax progressivity starting in the late 1970s is the most important driver of the increase in wealth inequality since then.” By Joachim Hubmer, Per Krusell and Anthony A. Smith Jr. Link. And a new Peterson Institute report compares inequality across high-income nations. Link.
    • Till von Wachter examines the persistent effects of entrance to the labor market during an economic downturn. Link.
    • “Elites can use the threat of desegregation to unite both wealthy and poor members of high-status groups against taxes, and weaken the bureaucratic capacity essential for tax collection.” Pavithra Suryanarayan and Steven White on taxation and bureaucratic capacity in American South during Reconstruction. Link.
    • Mengzhu Zhang and Shenjing He on informal property rights and extralegal property systems in China. Link.
    • A recent Census Bureau report using 2017 data finds that homeowners are nearly 89 times wealthier than renters, with median wealth at $269,100 for homeowners and $3,036 for renters. Link.
    • Adam Storer, Daniel Schneider, and Kristen Harknett examine racial and ethnic inequality in service sector job quality, looking at precarious scheduling, firm segregation, and racial differences between managers and workers. Link.
    • “Book production is one of the few more or less reliable guides to the long-term development of the European economy in this period, since it matches not only periods of growth and decline, but also regional patterns of economic performance. Whereas during the sixth and seventh centuries on average only about 120 books were produced annually in Western Europe, in the peak year of 1790 total production was more than 20 million books. Sociocultural factors—the spread of Christianity and the growth of the monastic movement—have had a major impact on growth during the first half of the Middle Ages; these processes lead to a cultural homogenization of Western Europe, with relatively low regional differences in per capita consumption and production. From the eleventh to twelfth centuries on, however, the market took over the role of the monasteries. Demand from cities and universities drove the continuous growth of the book industry in the late medieval and early modern periods. The long-term increase in book consumption also reflected the significant decline in book prices, particularly after 1454.” By Eltjo Buringh and Jan Luiten Van Zanden. Link.