Wage gaps between workers with a college or graduate degree and those with only a high school degree rose rapidly in the United States during the 1980s. Since then, the rate of growth in these wage gaps has progressively slowed, and though the gaps remain large, they were essentially unchanged between 2010 and 2015. I assess this flattening over time in higher education wage premiums with reference to two related explanations for changing U.S. employment patterns: (i) a shift away from middle-skilled occupations driven largely by technological change ("polarization"); and (ii) a general weakening in the demand for advanced cognitive skills ("skill downgrading"). Analyses of wage and employment data from the U.S. Current Population Survey suggest that both factors have contributed to the flattening of higher education wage premiums.
Recent Flattening in the Higher Education Wage Premium: Polarization, Skill Downgrading, or Both? -- by Robert G. Valletta
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Meet the Oligarchs: Business Legitimacy, State Capacity and Taxation -- by Rafael Di Tella, Juan Dubra, Alejandro Luis Lagomarsino
We analyze the role of people's beliefs about the rich in the determination of public policy in the context of a randomized online survey experiment. A question we study is the desirability of government-private sector meetings, a variable we argue is connected to State capacity. Survey respondents primed with negative views about business leaders want fewer meetings, as well as higher taxes to the top 1% and more regulation. We also study how these effects change when subjects are (additionally) primed with positive/negative views about government officials. Distrust in the government increases the preferred tax rate on the top 1% only when business legitimacy is low. A model with multiple equilibria helps interpret these findings. In one of the equilibria, meetings are allowed, business legitimacy is high, and people set a low income tax rate for businesspeople. In the other, meetings are forbidden, business legitimacy is low, and people set high taxes to punish the businesspeople for their corrupt behavior.
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Projections and Uncertainties About Climate Change in an Era of Minimal Climate Policies -- by William D. Nordhaus
Climate change remains one of the major international environmental challenges facing nations. Yet nations have to date taken minimal policies to slow climate change. Moreover, there has been no major improvement in emissions trends as of the latest data. The current study uses the updated DICE model to present new projections and the impacts of alternative climate policies. It also presents a new set of estimates of the uncertainties about future climate change and compares the results will those of other integrated assessment models. The study confirms past estimates of likely rapid climate change over the next century if there are not major climate-change policies. It suggests that it will be extremely difficult to achieve the 2°C target of international agreements even if ambitious policies are introduced in the near term. The required carbon price needed to achieve current targets has risen over time as policies have been delayed.
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International GAAP 2017: Generally Accepted Accounting Practice under International Financial Reporting Standards
IFRSs, the standards set by the International Accounting Standards Board (IASB), are complex and sometimes obscure. Understanding their implications and applying them appropriately requires something special; and that is why International GAAP® 2017 is the essential tool for anyone applying, auditing, interpreting, regulating, studying and teaching international financial reporting. It provides expert interpretation and practical guidance for busy
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Beecher Carlson Promotes Erin Lynch to President, Global Energy Practice
Beecher Carlson Insurance Services, LLC (âBeecher Carlsonâ), a specialized large account insurance broker, has promoted Erin Lynch to President of its Global Energy Practice. Â Lynch will lead the production and service teams that specialize in risk financing solutions for power generation clients.
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The Link Between a Happy Spouse and a Healthy You
Scholars William Chopik and Ed O'Brien have conducted some fascinating research on the link between your spouse's happiness and your health. According to the Booth Review,
A number of previous studies have linked a personâs own happiness to health and longevity, but the researchers wondered if being around âhappy othersâ might have a similar effect. To test the theory, Chopik and OâBrien assessed the health and happiness of nearly 2,000 couples, ages 50 to 94, over a period of six years. Both partners rated their individual happiness and life satisfaction, and answered questions about their personal physical health, including their activity level and any chronic health problems. It turned out that the happiness of a personâs spouse was strongly linked to how healthy the individual wasâin measures of overall health, physical impairment, and activity level. And this seemed to work for both partners. Even more, the effects of a partnerâs happiness on a personâs health were independent of the individualâs own happiness level. âThe current study demonstrates that happy partners seem to substitute as proxies for a happy self,â write Chopik and OâBrien.
The study left me wondering... What about happy co-workers, and even happy bosses? Does your work context have a substantial impact on your health too? It seems to me that it should. Perhaps Chopik and O'Brien will examine that link next.
The study left me wondering... What about happy co-workers, and even happy bosses? Does your work context have a substantial impact on your health too? It seems to me that it should. Perhaps Chopik and O'Brien will examine that link next.
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The Topology of Inter-industry Relations from the Portuguese National Accounts. (arXiv:1612.06291v1 [q-fin.EC])
In last years, the Portuguese economy has gone through a severe adjustment process, affecting almost all industrial sectors, the building blocks of economic structures. Research on economic structural changes has made use of input/output tables to define networks of industrial relations. Here, these networks are induced from output tables of the Portuguese national accounting system, being each inter-industry relation defined by the output made by any two industries for the products that they both produce. The topological analysis of these networks allows to uncover a particular structure that comes out during the Portuguese adjustment program. The evolution of the industrial networks shows an important structural change in 2011-2014, confirming the usefulness of inducting similarity networks from output tables and the consequent promising power of the graph formulation for the analysis of inter-industry relations.
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The Blockchain: A Gentle Four Page Introduction. (arXiv:1612.06244v1 [q-fin.GN])
Blockchain is a distributed database that keeps a chronologically-growing list (chain) of records (blocks) secure from tampering and revision. While computerisation has changed the nature of a ledger from clay tables in the old days to digital records in modern days, blockchain technology is the first true innovation in record keeping that could potentially revolutionise the basic principles of information keeping. In this note, we provide a brief self-contained introduction to how the blockchain works.
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Does Trump's election victory divide US stock market into winners and losers?. (arXiv:1612.06200v1 [q-fin.GN])
Many analysts, who had anticipated a great market anxiety resulting in market-wide stock price losses over the event of a Trump presidential victory, remain puzzling through why the market rebounded since the next election day. Whatever the reason, investors appear to be digesting Trump's win speedier than expected. The present paper examines, at sectoral level, the behavior of a variety of US stock price indices (Dow Jones Industrial Average, S\&P 500 and Nasdaq Composite) surrounding the announcement of the Republican candidate's win on 08 November 2016. Although all companies face ongoing uncertainty, the 2016 US election outcome is likely to divide the stock market into losing (technology and utilities) and winning sectors (health care, oil and gas, real estate, defense, financials and consumer goods and services). Judging by the campaign promises, the best-performing companies are generally those that will gain directly from Trump's proposals revolving around rising infrastructure spending, renegotiating trade agreements, loosening financial regulation, easing restrictions on energy production, and repealing Obamacare.
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A Markovian Model of the Evolving World Input-Output Network. (arXiv:1612.06186v1 [q-fin.EC])
Using the recently available World Input-Output Database, we modeled the evolving world economic network (from 1995 to 2011) with a series of time-homogeneous finite Markov chains. Next, we investigated different aspects of the world economic network via different properties of the Markov chains including mixing time, Kemeny constant, steady state probabilities and perturbation analysis of the transition matrices. We showed how the time series of mixing times and Kemeny constants could be used as an aggregate index of globalization. Next, we focused on the steady state probabilities as a measure of structural power of the economies that are comparable to GDP shares of economies as the traditional index of economies welfare. Further, we introduced two measures of systemic risk, called systemic influence and systemic fragility, where the former is the ratio of number of influenced nodes to the total number of nodes, caused by a shock in the activity of that node and the latter is based on the number of times a specific economic node is affected by a shock in the activity of all the other nodes. Next, we showed that the sum of systemic fragility values of all the nodes as an aggregate measure of network fragility could be used as a predictive risk measure of the whole economic network. Finally, focusing on Kemeny constant as a global indicator of monetary flow across the network, we showed that there is a paradoxical effect of economic slow down of some of economic nodes on the overall flow of the world economic network. While the economic slowdown of the majority of nodes with high structural power results to a slower average monetary flow, there are some nodes, where their slowdowns improve the overall quality of the network in terms of connectivity and the average flow of money.
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Optimal Investment under Information Driven Contagious Distress. (arXiv:1612.06133v1 [q-fin.PM])
We introduce a dynamic optimization framework to analyze optimal portfolio allocations within an information driven contagious distress model. The investor allocates his wealth across several stocks whose growth rates and distress intensities are driven by a hidden Markov chain, and also influenced by the distress state of the economy. We show that the optimal investment strategies depend on the gradient of value functions, recursively linked to each other via the distress states. We establish uniform bounds for the solutions to a sequence of approximation problems, show their convergence to the unique Sobolev solution of the recursive system of Hamilton-Jacobi-Bellman partial differential equations (HJB PDEs), and prove a verification theorem. We provide a numerical study to illustrate the sensitivity of the strategies to contagious distress, stock volatilities and risk aversion.
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Co-movements in financial fluctuations are anchored to economic fundamentals: A mesoscopic mapping. (arXiv:1612.05952v1 [q-fin.GN])
We show that there exists an empirical linkage between nominal financial networks and the underlying economic fundamentals across countries. We construct the nominal return correlation networks from daily data to encapsulate sector-level dynamics and calculate the relative importance of the sectors in the nominal network through centrality measure and clustering algorithms. The centrality measure robustly identifies the backbone of the minimum spanning trees defined on the return networks. We show that the sectors that are relatively large constitute the core of the return networks, whereas the periphery is mostly populated by relatively smaller sectors. Therefore, sector-level nominal return dynamics is anchored to the real size effect, which ultimately shapes the optimal portfolios for risk management. The results are reasonably robust across 27 countries of varying degree of prosperity and across periods of market turbulence (2008-09), as well as relative calmness (2015-16).
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The Barefoot Investor: The Only Money Guide You'll Ever Need
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Climate change threatens ability of insurers to manage risk
Climate change threatens ability of insurers to manage risk. https://t.co/2s864vF8jI â moneyscience (@moneyscience) December 7, 2016
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7,500 Faceless Coders Paid in Bitcoin Built a Hedge Fundâs Brain
7,500 Faceless Coders Paid in Bitcoin Built a Hedge Fundâs Brain https://t.co/WLw9BXpLER â moneyscience (@moneyscience) December 12, 2016
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[1612.05227] European banking supervision, the role of stress test. Some brief considerations
Research: European banking supervision, the role of stress test. Some brief considerations. (arXiv:1612.05227v1 ... https://t.co/GxBLJAXTR1 â moneyscienceâ¦
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In defense of social mediaâs predictive powers
"Just how useful is Twitter as a measure of broad sentiment?" https://t.co/rpg9yAW5lR ht @martin1975 â Arthur Charpentier (@freakonometrics) December 18, 2016
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[1612.06200] Does Trump's election victory divide US stock market into winners and losers?
Research: Does Trump's election victory divide US stock market into winners and losers?. (arXiv:1612.06200v1 [q-... https://t.co/flxnXFR1vz â moneyscienceâ¦
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[1612.06244] The Blockchain: A Gentle Four Page Introduction
Research: The Blockchain: A Gentle Four Page Introduction. (arXiv:1612.06244v1 [q-fin.GN]) https://t.co/pFmxpwYc65 â moneyscience (@moneyscience) December 20,â¦
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Bank networks: contagion, systemic risk and prudential policy
We present a network model of the interbank market in which optimizing risk averse banks lend to each other and invest in non-liquid assets. Market clearing takes place through a tâtonnement process which yields the equilibrium price, while traded quantities are determined by means of an assortative matching process. Contagion occurs through liquidity hoarding, interbank interlinkages and fire sale externalities. The resulting network configuration exhibits a ...
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