Author: Laura Bowen
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Understanding ‘Home Bias’ in the Global Stock Market
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Stock price data for a set of Chinese firms highlight the effects of information asymmetry created by differences in social trust between local and foreign investors.
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The Economic Impact of Frugality: Evidence from Tobacco Farmers in Malawi
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Tobacco farmers in Malawi were offered a direct-deposit savings account, which yielded significant positive impacts on their financial behavior and increases in their agricultural outputs. These results suggest a potential driver for economic growth and poverty reduction in the region.
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Testing Greenspan’s ‘Spare Tire’ Hypothesis: Benefits of Shareholder Protection Laws during Banking Crises
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Firm-level data across 36 countries suggests that shareholder protection laws do mitigate the adverse consequences of banking crises by allowing stock markets to act as an alternative source of financing.
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Aligning Incentives: The Effectiveness of Performance-Based Pay for Tax Officials
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After being randomly assigned to a performance-based incentive structure, tax officials in Pakistan had significantly higher levels of revenue collection. This result suggests a potential solution to the widespread corruption and low collection rates of tax authorities in developing countries.
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Rethinking the Optimal Tariff Theory
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Using forty years of price data from the raw cane sugar market in New York City, trade economist Douglas Irwin finds that market demand responds asymmetrically to tariff increases versus tariff reductions.
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The “Brand Premium”: Measuring the Welfare Consequences of Advertising on Consumers
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New research finds that misinformation plays a significant role in the brand choices of consumers for most healthcare items and pantry staples, concluding that marketing and advertising campaigns have a negative impact on consumer welfare.
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Finance for Social Good: Are Microloans Truly Empowering the Impoverished?
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An experiment in rural Morocco finds that economic gains from access to microfinance are highly variable, and there are no significant indirect impacts on the status of women and children.
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Scaling Back Quantitative Easing: Domestic Recovery at a Foreign Cost
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Federal Reserve announcements about “tapering,” or reducing the level of quantitative easing, had significant negative impacts on financial asset prices in otherwise robust emerging market economies.
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No Gains From Good Governance?: Why Foreign Companies Opt Out of Strict Regulatory Practices
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Foreign companies that cross-list on US stock exchanges can make substantial financial gains from adopting US corporate governance practices yet firms overwhelmingly choose to opt out, suggesting substantial private opportunity costs from stricter regulations.
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Reevaluating Openness to Trade: Estimating the True Potential Gains from the Service Industry
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New research finds that potential welfare gains from trade liberalization are likely highly underestimated because international trade statistics fail to capture the true economic impact of tradable services.
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Discounts at the Pump: How Much is Cheap Gas Really Costing Us?
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Gasoline and diesel subsidies have been criticized for encouraging excess consumption, but the total global economic cost is truly staggering, representing an annual welfare loss worth four percent of the total market for fuel.