Economic Inquiry

Could the optimal labor tax be 0%?

This model suggests that replacing labor taxes with consumption and capital taxes raises worker consumption by 5.7%, with entrepreneurs taking an initial hit. In the long run, 86% of agents benefit from the change.

Read more: tinyurl.com/5d4x5fkm
#econbluesky

Economic Inquiry Read the new symposium "Symposium on Reproducibility and Replicability in Economics - Part II."

Part II of the Symposium from Economic Inquiry on Reproducibility & Replicability in Economics is now available. This symposium spans a range of topics and methodologies, examining where and when prominent papers do or do not survive replication.
Read the full symposium: https://ow.ly/IY8m50Y4zhU

We recently published our first issue of the year!

Follow the link below to check out the second part of our Symposium on Reproducibility and Replicability
in Economics. It also features several other original articles.

Link: tinyurl.com/mr3d7pyj

#economics #econbluesky

As the world faces rising conflict, how do we maintain economic ties?

Using 70 years of IMF data (1948–2019), this study shows that countries with common DRM membership suffer significantly less trade disruption from war.

Read more: tinyurl.com/yd7kz69j

#EconSky

Are consumer switching and firm entry two sides of the same coin?

This paper brings new evidence about this relationship using 20+ years of data. They find that more suppliers trigger switching, while active consumers invite more entry.

Read the full study: tinyurl.com/5n6w5h7n

#EconSky

Can pricing algorithms coordinate without talking?

This study tests 7 different algorithms, with some achieving supra-competitive profits in <500 periods, 1000x faster than previously thought. Even with no communication, the algorithms are highly collusive.

Read more: tinyurl.com/6av2eevt
#EconSky

Is it time to rethink the foundation of oil price forecasting?

This recent study revisits Baumeister and Kilian (2012), finding that once spurious predictability is addressed, model-based forecasts struggle to beat a traditional random walk.

Read more: tinyurl.com/yeytykp4

#EconSky #Oil

Language isn't just identity; it’s economic infrastructure.

This paper shows how bilingual education strengthens internal trade and U.S. welfare, underscoring how language policies yield economic benefits that stretch well beyond national borders.

Read more: tinyurl.com/yb3r6vzt

#EconSky

"Animal spirits" can be sources of productivity growth.

This paper finds that positive sentiment shocks can incentivize firms to increase R&D investment. Which can lead to permanent gains in productivity and potential output.

Read more: tinyurl.com/34edy43k

#EconSky #Economics

The Hot Hand fallacy is expensive.

This new study tracked live betting on 1,224 matches. A team that scores a 1-1 equalizer attracts 60% more bets in their favor.
However, always betting on the team with momentum leads to substantial negative returns.

Read more: tinyurl.com/45pv4tv5

#EconSky

Why can smaller nations now wage cyberwar against superpowers?

This paper provides some insights into this question. Cyber conflict gets more intense when the tech capabilities of the two nations are similar.

Find out more:
tinyurl.com/ycytk3v8

Press release about the paper:
tinyurl.com/4hhtcmhv

Did China's anti-corruption campaign work?

Research using housing discounts as a proxy for bribes to government officials says yes. Officials' discounts on new homes shrank significantly after the campaign started. Non-monetary benefits also diminished.

tinyurl.com/49evhfry

#economics #china

Does affirmative action work?

New research on India's 4% quota for backward class Muslims found it increased the average educational attainment by 0.54 years. However, the gains were concentrated among men, with no significant impact on women.

tinyurl.com/4hetju9z

#economics #education #india

Classic Constant Demand Elasticity growth models mute the links between population size, markup and innovation.

This paper uses a variable elasticity framework to re-examine this link, finding population growth determines whether growth is semi or fully endogenous.

tinyurl.com/4yd998my
#Economics

Our 2024 Editor's Report was published recently.

Last year, we published 81 papers across diverse topics in economics. The report also includes important updates on journal policy and activities.

Read the full report: tinyurl.com/297bpfrs

Publish your latest and greatest research in Economic Inquiry @ei-sky.bsky.social ! Now with lower submission fees in celebration of WEAI's centennial milestones 🥳. Learn more at www.weai.org/ei

#EconSky

How do we inspire future generations to pursue science?

Evidence from Tanzania showed that a STEM bootcamp increased children’s interest in science, improved academic engagement & self‐esteem, and shifted girls’ gender attitudes and perceptions.

tinyurl.com/2kbbwzbc

#Economics #STEM #tech

Mitigating technology gaps' contribution to international income inequality This replication study revisits a 2023 analysis by Sampson on the impact of international technology gaps on income inequality, trade, and wages. We extend the original framework by using broader pat...

Do differences in innovation drive global income gaps?

A new study by @f-mariuzzo.bsky.social, @datanecon.bsky.social & Junjun Zhang, part of our replicability symposium, finds that the answer is yes, but depends on how innovation is measured and which countries are examined.

tinyurl.com/3v57yd9n

Present-biased preferences are often thought to lead to under-saving.

This paper shows that age-independent subsidies can help biased agents who understand their bias. But for those who don’t, high subsidies may backfire, while lower ones can actually help.

tinyurl.com/yn38hu5m

#econsky #policy

Does digital competition hurt truthful reporting?

Economists @ayushpan.bsky.social l & @icotrombetta.bsky.social construct a theoretical model to provide insights. For breaking news, speed can reduce accuracy, while for investigative work, reputation drives careful reporting.

tinyurl.com/mryp99zr

How does regulation uncertainty affect energy markets?

Using natural language processing to measure regulatory uncertainty, this paper shows that rising uncertainty reduces oil production and harms both national and state economic outcomes.

tinyurl.com/4trpmsfz

#Economics #Energy #EconBlueSky

Continuing our replicability symposium, economists @mdrouvelis.bsky.social and Zeyu Qiu revisit public goods games. They confirm existing evidence: cooperation and positive reciprocity are lower in maintenance than in provision stages. Results persist under income inequality.

tinyurl.com/4fwkb74a

Are there hidden downsides of expanding government assistance benefits?

Through a lab experiment, this research suggests that newly-eligible individuals are less competitive compared to a treatment in which they do not qualify for the benefit.

tinyurl.com/2ez46d3j

#Economics #EconBlueSky

How do peers affect your undergraduate major choice?

This paper finds that students emulate peers when choosing majors. Moreover, the evidence points to social learning, rather than social utility, being the main driver of these effects.

tinyurl.com/bdz52w5k

#Economics #EconBlueSky #Education

Re‐examining investor sentiment and stock returns: A replication and extension of Baker and Wurgler (2006) This study replicates and extends Baker and Wurgler's (2006) analysis on investor sentiment's impact on stock returns. We confirm their findings by demonstrating the significant cross-sectional effec...

As part of our replicability symposium, authors show that key findings from Baker & Wurgler (2006, tinyurl.com/3aswpjyu) on investor sentiment replicate and extend to recent US and Chinese data, though effects in China are less pronounced.

Read more: tinyurl.com/5xrwb4hc

#Economics #EconBlueSky

Housing market connectedness and transmission of monetary policy This paper investigates whether interconnectivity among local housing markets influences the effectiveness of the (United States) U.S. monetary transmission mechanism. We construct measures of housin...

Are connected housing markets influencing monetary policy transmission?

This research finds that more synchronized housing markets intensify monetary policy effects through spillovers to connected local markets.

tinyurl.com/4udtxtax

#Economics #EconBlueSky #MonetaryPolicy #HousingMarke

Assessing the benefits of education in early childhood: Evidence from a Pre‐K lottery in Georgia Using enrollment lotteries for over-subscribed school-based sites in Georgia's universal pre-K program, we analyze the impact of participation on elementary school outcomes. We find that lottery-winn....

Evidence from Georgia’s pre-K lottery shows kids enter kindergarten slightly more prepared than peers who didn't attend pre-K. However, gains fade by the end of kindergarten, questioning the belief that pre-K is essential in child development.

tinyurl.com/s4ukkj7k

#Economics
#Georgia
#EconBlueSky

Does additional school funding increase or decrease school donations?

Among these potential results, this paper finds evidence for a positive correlation between budgets and voluntary contributions when not accounting for their endogenous relationship!

tinyurl.com/pmvcc28n
#EconBlueSky

The hidden cost of political connection: Evidence from China's stock market responses to land transactions We construct a matched database of land transactions and Chinese listed companies. By analyzing the stock market's reaction to these transactions, we investigate the hidden cost of political connecti....

Is there a hidden cost to political connections in China?

Results using evidence from stock market responses to land acquisitions and a natural experiment in the form of an anti-corruption campaign suggest markets react to potential future political or legal risks!

tinyurl.com/7spkj5hf

#Economics

A simple model of competitive testing Multiple agents are competing for a prize. Each agent is privately informed about his type. The principal who allocates the prize wants to give it to the agent with the highest type. Each agent can t...

This experimental paper shows that competition reveals more information to a principal when costs are high:
tinyurl.com/4m3dxk6k

How might this result relate to school admissions and job interviews?

#EconBlueSky
#Economics