"The number of university students participating in exchange programs has risen sharply over the last decade, but a survey of Swiss university graduates (class of 1999 and 2001) shows that participation in student exchange programs significantly prolongs the period of time spent studying at university. Given this fact, the advantages of exchange programs for students need to be identified. Analyses show that student exchange programs are associated with higher starting salaries and an increased likelihood of opting for postgraduate study - but only if all exchange semesters are factored in, not just those accredited by the university of matriculation. Using instrumental variable estimations (IV), however, shows that the cited outcomes are not causally related to participation in exchange programs. Therefore the big question is: Where's the benefit that justifies having to study for almost a whole year longer?" IZA Discussion Papers 1656, 2005
Keywords: Student Exchange Program, Erasmus
useful slides for a presentation given by Yuriy Gorodnichenko:
Keywords: Ukraine, Europe
Welch, Kyle T., Private Equity's Diversification Illusion: Economic Comovement and Fair Value Reporting (January 14, 2014). Available at SSRN: http://ssrn.com/abstract=2379170 or http://dx.doi.org/10.2139/ssrn.2379170
"This study examines how accounting has informed private equity diversification claims and demand for private equity investments. Despite research showing private equity lacks portfolio diversification benefits, those marketing private equity assets continue to emphasize its diversification value, and demand for private equity investments has surged. Exploiting the change in international accounting, I show that returns provided by private equity firms understate the economic comovement between private equity and market returns, creating a diversification illusion. I find that private equity funds that adopted redefined fair value accounting reported returns with increased market beta and correlations. Additionally, I find that abnormal returns to private equity firms disappear after adopting fair value standards. In contrast to findings from public market research showing improved disclosure reduces the cost of capital, private equity firms that implement fair value standards encounter increased costs in accessing capital. This result is consistent with fair value reporting informing diversification benefits, improving resource allocation and mitigating agency concerns."
Keywords: Private Equity; IAS 39; FAS No. 157; Covariance Risk
The number of children per woman is more a question of wealth development than religion.
Keywords: Population, Population Growth,Religion
Mueller, Kai-Uwe and Steiner, Viktor, Distributional Effects of a Minimum Wage in a Welfare State – The Case of Germany (December 19, 2013). SOEPpaper No. 617. Available at SSRN: http://ssrn.com/abstract=2385893 or http://dx.doi.org/10.2139/ssrn.2385893
"A popular argument for a federal minimum wage is that it will prevent in-work poverty and reduce income inequality. We examine this assertion for Germany, a welfare state with a relative generous means-tested social minimum and high marginal tax rates. Our analysis is based on a microsimulation model that accounts for the interactions between wages, the tax-benefit system and net incomes at the household level as well as employment and price effects on the distribution of incomes induced by the introduction of a minimum wage. We show that the impact of even a relatively high federal minimum wage on disposable incomes is small because low wage earners are scattered over the whole income distribution and wage increases would to a large extent be offset by reductions in means-tested welfare transfers and high marginal tax rates. Taking into account negative employment effects and increases in consumer prices induced by the minimum wage would wipe out any positive direct effects on net incomes of households affected by the minimum wage."
Keywords: Minimum Wage, Employment Effects, Income Distribution,
Good presentation which helps to understand the current situation in emerging markets and the consequences of monetary policies of the past years on EMEs.
First Phase of Global Liquidity (2003 - 2008)
— Key theme is leverage
— Main actors: European banks intermediating US dollar credit
Second Phase of Global Liquidity (2010 - )
— Bond market-driven
— Key theme is search for yield
— Main actors: Asset managers with global reach
Keywords: Monetary Policy, Emerging Markets, Search for Yield
"Emerging-market economies had a brutal week. For years, during the crash and its aftermath, they did well as the advanced economies slumped. Recently, not so much. Many developing countries are seeing their currencies drop and their bonds and equities hammered. Just as the global recovery appeared to be strengthening, a fresh source of instability has presented itself.
The issue now is how to keep the turmoil from derailing the global expansion. In a way, this was not an unexpected development: The recession in the advanced economies caused central banks to push short-term interest rates to zero and buy assets to drive long-term rates down as well. Capital flowed to the developing world in search of better returns. As investors prepare for a resumption of normal monetary policy, demand for emerging-market assets is bound to fall. The question has always been whether this adjustment would be smooth or abrupt. read more on Bloomberg"
Keywords: Monetary Policy, Emerging Markets
Keywords: Disruption, Creative Destruction, Innovation
"Economists Joseph J. Sabia and Richard V. Burkhauser examined the effects of state minimum wage increases between 2003 and 2007 and reported that they found no evidence the increases lowered state poverty rates.
Further, they calculated the effects of a proposed increase in the federal minimum wage to $9.50 on workers then earning $5.70 (or 15 cents less than the minimum in March 2008) to $9.49. They found that if the federal minimum wage were increased to $9.50 per hour:
. Only 11.3 percent of workers who would gain from the increase live in households officially defined as poor.
. A whopping 63.2 percent of workers who would gain were second or even third earners living in households with incomes equal to twice the poverty line or more.
. Some 42.3 percent of workers who would gain were second or even third earners who live in households that have incomes equal to three times the poverty line or more." more on Library of Economics and Liberty
Keywords: Minimum Wage, Employment
"We review the burgeoning literature on the employment effects of minimum wages - in the United States and other countries - that was spurred by the new minimum wage research beginning in the early 1990s. Our review indicates that there is a wide range of existing estimates and, accordingly, a lack of consensus about the overall effects on low-wage employment of an increase in the minimum wage. However, the oft-stated assertion that recent research fails to support the traditional view that the minimum wage reduces the employment of low-wage workers is clearly incorrect. A sizable majority of the studies surveyed in this monograph give a relatively consistent (although not always statistically significant) indication of negative employment effects of minimum wages. In addition, among the papers we view as providing the most credible evidence, almost all point to negative employment effects, both for the United States as well as for many other countries. Two other important conclusions emerge from our review. First, we see very few - if any - studies that provide convincing evidence of positive employment effects of minimum wages, especially from those studies that focus on the broader groups (rather than a narrow industry) for which the competitive model predicts disemployment effects. Second, the studies that focus on the least-skilled groups provide relatively overwhelming evidence of stronger disemployment effects for these groups."
Keywords: Minimum Wage, Regulation, Re-Distribution
World economic freedom has reached record levels, according to the 2014 Index of Economic Freedom, released Tuesday by the Heritage Foundation and The Wall Street Journal. But after seven straight years of decline, the U.S. has dropped out of the top 10 most economically free countries.
For 20 years, the index has measured a nation's commitment to free enterprise on a scale of 0 to 100 by evaluating 10 categories, including fiscal soundness, government size and property rights. These commitments have powerful effects: Countries achieving higher levels of economic freedom consistently and measurably outperform others in economic growth, long-term prosperity and social progress. Botswana, for example, has made gains through low tax rates and political stability. read the whole article in the Wall Street Journal
Keywords: Economic Freedom, Regulation, Taxes, Liberalism
Keywords: Economic Growth, Economic Freedom, Democracy
Find here some really interesting numbers on the development of mobile computing in the US - Trends which went global:
.."Fully 79% of the 181 million Americans who own smartphones reach for them within 15 minutes of waking up in the morning, according to a survey last year by IDC. And here’s what they do: 78% check email, 73% browse the web, 70% use Facebook, 64% get directions, 60% play games, 57% search for information, 44% read news or sports, 43% talk and/or text, and 37% make or view videos.
This has unhinged news consumption. In comparing preferred news sources among Americans, Pew found 68% chose television in 1991 vs. 55% in 2012, 56% chose newspapers in 1991 vs. 33% in 2012 and 54% chose radio in 1991 vs. 33% in 2012. By contrast, 30% of Americans named the Internet and mobile media as their preferred news outlets in 2012. A separate Pew study in 2013 found that the Internet is the top news choice for nearly half of those under the age of 45, as compared with the 17% in the cohort who favor newspapers." Source: Reflections of a NewsOSaur
Keywords: Mobile Computing, Internet
read the opinion of following people in the Politico Magazine:
Mohamed El-Erian, CEO and co-CIO of PIMCO
Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities
Laurence Kotlikoff, professor of economics at Boston University
Robert Reich, labor secretary in the Clinton administration and now professor of public policy at the University of California Berkeley Goldman School of Public Policy
Menzie Chinn, professor of public affairs and economics at University of Wisconsin, and Jeffry Frieden, professor of government at Harvard University
Jeffrey Frankel, professor of capital formation and growth at Harvard University
Dean Baker, co-director of the Center for Economic and Policy Research
Keywords: Economy, US Economy
"Normally, it’s not in the nature of law firms to oversimplify complex government regulations for their biggest customers. But Davis Polk & Wardwell LLP has decided to do just that for its mega-banking clients to start off the new year, giving them a handy, color-coded, “user-friendly” flow chart to help them navigate the Volcker rule, which restricts banks from making market bets with their own capital.
How simple? The chart extends over 27 pages.
Take Step 2D-2, on page 11, which describes permitted trading in foreign government securities. There are 13 boxes, diamonds, or circles on the page, (plus eight yes’s and eight no’s). It notes how the rule impacts foreign affiliates of U.S. banks, but not foreign branches of the banks.
“Everybody is finding it a huge challenge to describe this one,” said Margaret Tahyar, a Davis Polk partner who oversaw the drafting of the charts. “It’s super hard to summarize.”
Intimidating as the chart may be, it reflects the breadth and density of the regulation, which extends for close to 1,000 pages. The Volcker rule is part of the Dodd-Frank Act, a response to the financial crisis that is intended to reduce systemic risks in the banking system. Though the Volcker rule does not take full effect until mid-2015, bankers have been gobbling up information to help guide them to safety. Ms. Tahyar said that a preliminary version of the flow chart that Davis Polk formulated based on proposals was downloaded more than 100,000 times.
But if the chart and its many arrows and red warning boxes seems challenging, Ms. Tahyar has what may be an unwelcome message. “You’re looking at half the rule,” she said. A flow chart on the second half, about limits on the investments banks may make in hedge funds and other trading firms, is due next week, and it is likely to be longer than the earlier chart." Source: New York Times
Keywords: Volcker Rule, Regulation
Quotes in article:
Buffett: "In Grand Island, Nebraska, everyone is interested in how the football team does. They're interested in who got married. They're maybe even more interested in who got divorced."
Prof. Benjamin C. Esty (Harvard): "In retrospect, his targeting just the smaller papers is a big clue about his forecast for the industry. Unlike regionals or big-city papers, small-town newspapers don't have a lot of competition or good substitutes."
Keywords: Media, Newspapers, Warren Buffett
Buffett will definitely also face major challenges:
Many regions struggle to attract innovation activity. This column discusses new evidence suggesting that there is no universal ‘best’ policy. Policies focused exclusively on attracting ‘anchor tenants’ or cultivating new ventures may not be as effective as those promoting a mix of large and small firms. Regions with large firms but few young entrepreneurial firms may benefit from policies that cultivate new ventures, while those without large firms may benefit most from policies that attract some. read more on Vox
Keywords: Innovation, Entrepreneurial Activity, Entrepreneurship
Econ Analysis: Selected contributions to economics: articles, papers, podcasts, blogs (constantly updated)__________________________________________________________________________________________________
Recommended search terms (click on terms):
Analysts, Analyst Recommendation, Animal Spirits, Austerity, Bail out, Behavioral Finance, Bubble, Buyout, Carried Interest Taxation, Central Banks, CEO, Compensation, Contagion, Corporate Governance, Creative Destruction, Crisis, Currency War, Decoupling, Deflation, Depression, Economic Outlook, Economic Stimulus, Entrepreneur, Exchange Rates, Fiscal Policy, Forecast, Hedge Fund, Herding, Inflation, Information Cascades, LBO, Innovation Minsky Cycle, Monetary Policy, Moral Hazard, Mortgage, Nationalization, Protectionism, Recession, Regulation, Shareholder Activism, Sovereign Wealth Funds, Subprime, Taxes, Tobin Tax, Venture Capital, Walker Report, Yield Curve,
Finance and Real Estate:
Biofuel, Carbon, Cleantech, Climate Change, CO2, Energy, Food Crisis, Food Prices, Externalities, Gold, Kuznets Curve, Solar, Oil, ______________________________________________________________________________________________________
Natural Resources and Food:
Latest articles of selected institutions:
Imported information which does not show the source will be removed.
_______________________________________________________________________________________ ________________________________________________________________________________________ __________________________________________________________________________________
|<< <||> >>|