dealing with cultural differences in environmental management exploring the cep cfp relationship abstract despite numerous attempts to agree on the nature of the relationship between environmental and financial performance controversial results still exist in the literature this discrepancy suggests that we must enlarge the spectrum of analysis to understand when it pays to be green the way in which society takes a stance on environmental responsibility is deeply bounded to the cultural lenses through which it sets its priorities a cultural perspective can help explain the capacity for social phenomena to shape behaviour we consider how the contextual environment of culture thus far neglected might moderate the corporate environmental performance corporate financial performance relationship and thus influence firms capacity to offset the costs of environmental management by using a sample of 954 companies we contribute to the long running debate showing how the effect of cultural influence can overcome the hurdle of contrasting results and offer novel insights for both academia and practitioners

resolving new keynesian anomalies with wealth in the utility function at the zero lower bound the new keynesian model predicts that output and inflation collapse to implausibly low levels and that government spending and forward guidance have implausibly large effects to resolve these anomalies we introduce wealth into the utility function the justification is that wealth is a marker of social status and people value status since people partly save to accrue social status the euler equation is modified as a result when the marginal utility of wealth is sufficiently large the dynamical system representing the zero lower bound equilibrium transforms from a saddle to a source which resolves all the anomalies

book review feature public policy in an uncertain world by charles f manski cambridge ma harvard university press 2013 pp 224 39 95 isbn 978 0674066892

fiscal decentralisation the knowledge economy and school teachers wages in urban china abstractwe examine how fiscal decentralisation and progress towards the development of a knowledge intensive economy has affected teachers wages in china utilising panel data from 2001 to 2013 we find that fiscal decentralisation has a negative impact on teachers wages and that this effect is magnified through a deepening of the knowledge economy while the knowledge economy itself has no effect on teachers wages the findings suggest that incentives being offered to local administrators need to be revisited if china is convinced of the need to increase teacher quality in ways suited to the knowledge economy which it wishes to construct

teacher quality in educational production tracking decay and student achievement growing concerns over the inadequate achievement of u s students have led to proposals to reward good teachers and penalize or fire bad ones the leading method for assessing teacher quality is value added modeling vam which decomposes students test scores into components attributed to student heterogeneity and to teacher quality implicit in the vam approach are strong assumptions about the nature of the educational production function and the assignment of students to classrooms in this paper i develop falsification tests for three widely used vam specifications based on the idea that future teachers cannot influence students past achievement in da ta from north carolina each of the vams exclusion restrictions are dramatically viola ted in particular these models indicate large effects of 5th grade teachers on 4th grade t est score gains i also find that conventional measures of individual teachers value added fade out very quickly and are at best weakly related to long run effects i discuss implic ations for the use of vams as personnel tools

fiscal policy interventions at the zero lower bound we build on a new keynesian dynamic stochastic general equilibrium dsge model to explore the macroeconomic consequences of fiscal expansionary shocks during the economic crisis of 2008 in the eurozone in this setting we find that the big four eurozone economies france germany italy and spain can effectively escape from their liquidity trap through fiscal policy interventions caused by government purchases we estimate the government spending multiplier to be above 1 8 when this policy is associated with a long term commitment to keeping the nominal interest rate at the zero lower bound as suggested by krugman 1998 notably the short term deficit effect on the budget balance can be offset five years after the implementation of a large spending program we also show that alternative policies with tax cuts that expand the supply do not appear to have the same power in the short run moreover we provide novel empirical evidence that a large government debt renders a government spending policy ineffective

policy options in a liquidity trap the specter of a liquidity trap originally proposed as a theoretical possibility by john maynard keynes 1936 but long considered to be of doubtful practical relevance has recently created alarm among the world s central banks in japan the overnight rate has been essentially at zero for most of the time since february 1999 making further interest rate cuts impossible yet until well into 2003 growth remained anemic while prices continued to fall suggesting a need for further monetary stimulus since march 2001 the bank of japan has supplemented its zero interest rate policy with a policy of quantitative easing under which additional bank reserves are supplied beyond those needed to keep overnight interest rates at zero yet an increase in base money of more than 50 percent failed to halt the deflation suggesting a liquidity trap more recently other central banks including the fed have come close enough to the zero bound to worry about how they would deal with a similar predicament here we first discuss whether monetary policy should actually become ineffective when the zero bound on interest rates is reached we argue that open market operations even of unconventional types will be ineffective if they do not change expectations about the future conduct of policy in this sense a liquidity trap is possible nonetheless a credible commitment regarding future policy can largely mitigate the distortions created by the zero bound we fully characterize the optimal commitment in a simple example

aggregate effects of minimum wage regulation at the zero lower bound abstract the fair minimum wage act of 2007 increased the u s nominal minimum wage by 41 just as interest rates hit the zero lower bound i study the interaction of these events in a parsimonious extension of the sticky price new keynesian model with heterogeneous labor a minimum wage augmented phillips curve relates inflation to output and the real minimum wage which i estimate with aggregate data consistent with theory controlling for the real minimum wage reduces the effect of output on inflation and increasing the minimum wage is inflationary i then calibrate the equilibrium model to match microeconomic elasticities of earnings with respect to the minimum wage on aggregate the zlb s contractionary effects are dampened because nominal wages cannot decline rapidly thereby halting the deflationary spiral caused by low aggregate demand the effect can be large in the calibrated economy gdp losses from the zlb are cut by half even though only 3 of earnings accrue to minimum wage earners furthermore increasing the minimum wage at the zlb is expansionary generating expected accumulated output gains of 14

on the validity of environmental performance metrics different proprietary databases have been used extensively in research to assess the environmental performance and environmental risk of companies this study explores the convergent validity of the environmental ratings of msci esg stats formerly known as kinder lydenberg and domini research analytics kld thomson reuters asset4 asset4 and global engagement services ges the study shows that the ratings have common dimensions but on aggregate they do not converge on the environmental opportunity side kld environmental strengths and asset4 and ges environmental performance metrics correlate highly and provide convergent scores for us companies from 2003 2011 on the environmental risk side kld environmental concerns converge with the ges environmental industry risk and company emissions from the asset4 database further analysis confirms that industry related risks are drivers of company specific environmental performance

measuring the impacts of teachers ii teacher value added and student outcomes in adulthood abstract are teachers impacts on students test scores value added a good measure of their quality this question has sparked debate partly because of a lack of evidence on whether high value ad

land tenure price shocks and insurgency evidence from peru and colombia abstract the paper examines how property arrangements a key determinant of rural income influence armed conflict in the presence of commodity price shocks using detailed data on district level land tenure crop produce and conflict intensity in peru and colombia estimates show that exogenous negative price shocks increase the intensity of conflict in districts with a greater presence of individual ownership relative to other types of land tenure the finding is consistent with small landowners in the export sector experiencing a sharper downturn in labor market outcomes thus reducing the opportunity cost of participating in insurgent groups

announcements of interest rate forecasts do policymakers stick to them if central banks value the ex post accuracy of their forecasts previously announced interest rate paths might affect the current policy rate we explore whether this forecast adherence has influenced the monetary policies of the reserve bank of new zealand and the norges bank the two central banks with the longest history of publishing interest rate paths we derive and estimate a policy rule for a central bank that is reluctant to deviate from its forecasts the rule can nest a variety of interest rate rules we find that policymakers appear to be constrained by their most recently announced forecasts

stabilizing expectations at the zero lower bound experimental evidence abstract our study demonstrates how agents expectations can interact dynamically with monetary and fiscal policy at the zero lower bound we study expectation formation near the zero lower bound using a learning to forecast laboratory experiment under alternative policy regimes in our experimental economy monetary policy targets inflation around a constant or state dependent target we find that subjects expectations significantly over react to stochastic aggregate demand shocks and historical information leading many economies to experience severe deflationary traps neither quantitatively nor qualitatively communicating the state dependent inflation targets reduce the duration or severity of economic crises introducing anticipated and persistent fiscal stimulus at the zero lower bound reduces the severity of the recessions when the recovery of fundamentals is sufficiently slow participants expectations become highly pessimistic and neither monetary nor fiscal policy are effective at stabilizing the economy

driven to be good a stakeholder theory perspective on the drivers of corporate social performance despite growing evidence of the benefits to a firm of improving corporate social performance csp many firms vary significantly in terms of their csp activities this research investigates how the characteristics of the stakeholder landscape influence a firm s csp breadth using stakeholder theory we specifically propose that several factors increase the salience and impact of stakeholders demands on the firm and that in response to these factors a firm s csp will have greater breadth a firm s csp breadth is operationalized as the number of different sub domains of csr for which a firm has taken positive actions and is captured using a unique dataset from kinder lydenburg and domini kld this data set includes positive and negative firm actions across more than 35 different dimensions of socially responsible behavior findings based on a longitudinal multi industry sample of 447 us firms during the period from 2000 to 2007 demonstrate that firms which 1 have greater sensitivity to stakeholder needs as a result of the firm s strategic emphasis on marketing and or value creation 2 face greater diversity of stakeholder demands and 3 encounter a greater degree of scrutiny or risk from stakeholder action have a greater breadth of csp in response to the stakeholder landscape that they face

the case for open market purchases in a liquidity trap prevalent thinking about liquidity traps suggests that the perfect substitutability of money and bonds at a zero short term nominal interest rate renders open market operations ineffective for achieving macroeconomic stabilization goals we show that even were this the case there remains a powerful argument for large scale open market operations as a fiscal policy tool as we also demonstrate however this same reasoning implies that open market operations will be beneficial for stabilization as well even when the economy is expected to remain mired in a liquidity trap for some time thus the microeconomic fiscal benefits of open market operations in a liquidity trap go hand in hand with standard macroeconomic objectives motivated by japan s recent economic experience we use a dynamic general equilibrium model to assess the welfare impact of open market operations for an economy in japan s predicament we argue japan can achieve a substantial welfare improvement through large open market purchases of domestic government debt

the effect of prenatal stress on cooperation evidence from violent conflict in uganda abstract are preferences endogenously determined in the womb we play a public goods game with ugandan children born during a conflict characterised by high civilian victimisation children whose caregivers suffer from post traumatic stress disorder are more likely to free ride in the game genetic and environmental factors alone do not explain the relationship but children s 2d 4d digit ratio a marker of fetal hormone exposure associated with epigenetic effects of maternal distress does our findings extend the fetal origins literature to the domain of preferences by reducing next generation s taste for cooperation conflict may have father reaching economic consequences than previously thought

the quality and distribution of teachers under the no child left behind act the heart of accountability under the no child left behind nclb act is an attempt to change the existing incentives in schools with the ultimate objective that all students meet a proficiency standard existing research indicates that nothing is more important to high achieve ment as having effective teachers implying that the impact of new incentives on teachers will be central to any consideration of the accountability statutes tracing the impacts of nclb on the stock and distribution of teachers is none theless a difficult and uncertain task the belief that the quality of teachers matters a great deal to the quality of education received by students has actually proven hard to substantiate and the reasons for this difficulty are key to assessing the impacts of no child left behind a substantial body of research going back to the coleman et al 1966 report has attempted to link commonly used measures of teacher quality such as experience degree level and state teacher certification to student outcomes surprisingly except for perhaps the first few years of classroom experience no robust connection has appeared for example hanushek and rivkin 2006 review various studies attempting to identify characteristics of effective teachers one

the effect of evaluation on teacher performance observable teacher characteristics like graduate education and experience beyond the first few years are not typically correlated with increased productivity many researchers and policymakers have suggested that under these conditions the only way to adjust the teacher distribution for the better is to gather information on individual productivity through evaluation and then dismiss low performers this paper offers evidence that evaluation can shift the teacher effectiveness distribution through a different mechanism by improving teacher skill effort or both in ways that persist long run we study a sample of mid career math teachers in the cincinnati public schools cps who were assigned to evaluation in a manner that permits a quasi experimental analysis all teachers in our sample were evaluated by a year long classroom observation based program the treatment between 2003 2004 and 2009 2010 the timing of each teacher s specific evaluation year was determined years earlier by a district planning process to this setting we add measures of student achievement which were not part of the evaluation and use the within teacher over time variation to compare teacher performance before during and after their evaluation year we find that teachers are more productive during the school year when they are being evaluated but even more productive in the years after evaluation a student taught by a teacher after that teacher has been through the cincinnati evaluation will score about 10 percent of a standard deviation higher in math than a similar student taught by the same teacher before the teacher was evaluated under our identification strategy these estimates may be biased by patterns of student assignment that favor previously evaluated teachers or by preexisting positive

fairness spillovers the case of taxation abstract it is standardly assumed that individuals react to perceived unfairness or norm violations in precisely the same area or relationship where the original offense has occurred however grievances over being exposed to injustice may have even broader consequences and also spill over to other contexts causing non compliant behavior there we present evidence that such fairness spillovers can incur large economic costs a belief that there is unfairness in taxation in the sense that the rich do not pay enough taxes is associated with a twenty percent higher level of paid absenteeism from work

social spillovers in the classroom identification estimation and policy analysis i present a method to jointly estimate social spillovers in the classroom and the distributions of teacher and student effects this method is based on the covariance and higher order moments restrictions of the test scores requiring the random assignment of teachers and students to classrooms using the tennessee project star dataset i estimate sizeable spillovers in kindergarten classrooms and departures from normality of the teacher and student ability distributions the estimates also show that reducing class size has a positive effect on mean performance but it increases the inequality based on these estimates i perform several input neutral policy counterfactuals involving teachers and students assignment rules and changing the distribution of class sizes for the latter i derive an optimal class size distribution rule which increases mean test scores and reduces the overall variance

shareholder value stakeholder management and social issues what s the bottom line we test the relationship between shareholder value stakeholder management and social issue participation building better relations with primary stakeholders like employees customers suppliers and communities could lead to increased shareholder wealth by helping firms develop intangible valuable assets which can be sources of competitive advantage on the other hand using corporate resources for social issues not related to primary stakeholders may not create value for shareholders we test these propositions with data from s p 500 firms and find evidence that stakeholder management leads to improved shareholder value while social issue participation is negatively associated with shareholder value copyright 2001 john wiley sons ltd

investment crowding out firm level evidence from northern germany michalek j ciaian p and kancs d a investment crowding out firm level evidence from northern germany regional studies the main objective of this paper is to estimate the extent to which firm investment is substituted crowded out by investment support policies granted under the european union rural development programme rdp the empirical analyses employed the difference in difference propensity score matching approach which allows several important sources of bias to be addressed such as selection bias simultaneity bias and functional form misspecification from which many previous studies suffer using panel data of 1333 firms from the schleswig holstein region in germany it is found that the crowding out effect of the rdp is close to 100 implying that firms use public support to substitute for private investments furthermore no evidence was found that due to the rdp programme support firms would have brought forward their investments planned originally for a later period rejecting t

the consequences of child soldiering abstract little is known about the impacts of military service on human capital and labor market outcomes due to an absence of data as well as sample selection recruits are self selected screened and selectively survive we examine the case of uganda where rebel recruitment methods provide exogenous variation in conscription economic and educational impacts are widespread and persistent schooling falls by nearly a year skilled employment halves and earnings drop by a third military service seems to be a poor substitute for schooling psychological distress is evident among those exposed to severe war violence and is not limited to ex combatants

productivity returns to experience in the teacher labor market methodological challenges and new evidence on long term career improvement abstract we present new evidence on the relationship between teacher productivity and job experience econometric challenges require identifying assumptions to model the within teacher returns to experience with teacher fixed effects we describe the identifying assumptions used in past models and in a new approach that we propose and we demonstrate how violations of these assumptions can lead to substantial bias consistent with past research we find that teachers experience rapid productivity improvement early in their careers however we also find evidence of returns to experience later in the career indicating that teachers continue to build human capital beyond these first years

private or public school advantage evidence from 40 countries using pisa 2012 mathematics abstractit is known that in most countries private school students outperform students in public schools in international assessments however the empirical literature recognizes that assessing the true effect of private school attendance requires addressing selection and sorting issues on both observabland unobservables the existing empirical evidence on the private school effect mostly covers oecd and latin american countries with little evidence on other parts of the world there is recent emerging country specific evidence doubting the existence of a private school advantage i use pisa 2012 data for mathematics and two different methodologies to derive baseline and bias corrected estimates of the private dependent and independent school effect for 40 countries a robust private school advantage is found only in a handful of countries public schools generally perform as well as private subsidized schools and outperform independent schools accounting for both peer effects and selection is necessa

mobile phone coverage and producer markets evidence from west africa mobile phone coverage has expanded considerably throughout the developing world particularly within sub saharan africa existing evidence suggests that increased access to information technology has improved agricultural market efficiency for consumer markets and certain commodities but there is less evidence of its impact on producer markets building on the work of aker 2010 this paper estimates the impact of mobile phone coverage on producer price dispersion for three commodities in niger the results suggest that mobile phone coverage reduces spatial producer price dispersion by 6 percent for cowpea a semi perishable commodity these effects are strongest for remote markets and during certain periods of the year the introduction of mobile phone coverage has no effect on producer price dispersion for millet and sorghum two staple grains that are less perishable and are commonly stored by farmers there are no impacts of mobile phone coverage on traders gross margins or producer price levels but mobile phone coverage is associated with a reduction in the intra annual price variation for cowpea these results are potentially explained by the fact that farmers engage in greater storage for storable commodities such as millet and sorghum

computers skills and wages computer technology is most prominently used by skilled high wage workers this suggests that computer use requires skills to take full advantage of the possibilities which are particularly present among relatively skilled workers this article develops a simple technology adoption model showing that the decision to adopt computer technology depends on i the tasks to be performed ii the level of skill or education and iii the level of wages applying this model to british data it is shown that the effect of wages and particular tasks on computer adoption is larger than the effect of skills on adoption the estimates suggest that in britain computer use is likely to be a matter of cost efficiency and not so much of workers skills

reconciling conflicting evidence on the performance of propensity score matching methods there is a long standing debate in the literature over whether social programs can be reliably evaluated without a randomized experiment this paper summarizes results from a larger paper smith and todd 2001 that uses experimental data combined with nonexperimental data to evaluate the performance of alternative nonexperimental estimators the impact estimates based on experimental data provide a benchmark against which to judge the performance of nonexperimental estimators our experimental data come from the national supported work nsw demonstration and the nonexperimental data from the current population survey cps and the panel study of income dynamics psid these same data were used in influential papers by robert lalonde 1986 james heckman and joseph hotz 1989 and rajeev dehejia and sadek wahba 1998 1999 we focus on a class of estimators called propensity score matching estimators which were introduced in the statistics literature by paul rosenbaum and donald rubin 1983 traditional propensity score matching methods pair each program participant with a single nonparticipant where pairs are chosen based on the degree of similarity in the estimated probabilities of participating in the program the propensity scores more recently developed nonparametric matching estimators described in heckman et al 1997 1998a b use weighted averages over multiple observations to construct matches we apply both kinds of estimators in this paper heckman et al 1997 1998a b evaluate the performance of matching estimators using experimental data from the u s national job training partnership act jtpa study combined with comparison group samples drawn from three sources they show that data quality is a crucial ingredient to any reliable estimation strategy specifically the estimators they examine are only found to perform well in replicating the results of the experiment when they are applied to comparison group data satisfying the following criteria i the same data sources i e the same surveys or the same type of administrative data or both are used for participants and nonparticipants so that earnings and other characteristics are measured in an analogous way ii participants and nonparticipants reside in the same local labor markets and iii the data contain a rich set of variables relevant to modeling the program participation decision if the comparison group data fails to satisfy these criteria the performance of the estimators diminishes greatly more recently dehejia and wahba 1998 1999 have used the nsw data also used by lalonde to evaluate the performance of propensity score matching methods including pairwise matching and caliper matching they find that these simple matching estimators succeed in closely replicating the experimental nsw results even though the comparison group data do not satisfy any of the criteria found to be important in heckman et al 1997 1998a from this evidence they conclude that matching approaches are generally more reliable than traditional econometric estimators in this paper we reanalyze the nsw data in an attempt to reconcile the conflicting findings smith department of economics university of western ontario social science centre london on n6a 5c2 canada and nber todd department of economics university of pennsylvania 3718 locust walk philadelphia pa 19104 and nber versions of the paper that is the source for this paper have been presented at a 2000 meeting of the institute for research on poverty in madison wisconsin at the western research network on employment and training summer workshop august 2000 at the canadian international labour network meetings september 2000 and at the university of north carolina we thank james heckman for comments on this paper and we thank robert lalonde for comments and for providing us with the data from his 1986 study we thank rajeev dehejia for providing us with information helpful in reconstructing the samples used in the dehejia and wahba 1998 1999 studies jingjing hsee and miana plesca provided excellent research assistance

the wto trade effect this paper reexamines the gatt wto membership efiect on bilateral trade ows using nonparametric methods including pair matching permutation tests and a rosenbaum 2002 sensitivity analysis together these methods provide an estimation framework that is robust to misspeciflcation biases allows general forms of heterogeneous treatment efiects and addresses potential hidden selection biases this is in contrast to most conventional parametric studies on this issue our results suggest large gatt wto trade promoting efiects robust to various restricted matching criteria alternative indicators for gatt wto involvement different matching methodologies non random incidence of positive trade ows and inclusion of multilateral resistance terms

heterogeneous sports participation and labour market outcomes in england based on a unique composite dataset measuring heterogeneous sports participation labour market outcomes and local facilities provision this article examines for the first time the association between different types of sports participation and employment and earnings in england clear associations between labour market outcomes and sports participation are established through matching estimation while controlling for some important confounding factors the results which are supplemented and supported by a formal sensitivity analysis suggest a link between different types of sports participation to initial access to employment and then higher income opportunities with ageing however these vary between the genders and across sports specifically the results suggest that team sports contribute most to employability but that this varies by age across genders and that outdoor activities contribute most towards higher incomes

worker absence and productivity evidence from teaching a significant amount of work time is lost each year due to worker absence but evidence on the productivity losses from absenteeism remains scant due to difficulties with identification we use uniquely detailed data on the timing duration and cause of absences among teachers to address many of the potential biases from the endogeneity of worker absence our analysis indicates that worker absences have large negative impacts the expected loss in daily productivity from employing a temporary substitute is on par with replacing a regular worker of average productivity with one at the 10th 20th percentile of productivity

selection on observed and unobserved variables assessing the effectiveness of catholic schools in this paper we measure the effect of catholic high school attendance on educational attainment and test scores because we do not have a good instrumental variable for catholic school attendance we develop new estimation methods based on the idea that the amount of selection on the observed explanatory variables in a model provides a guide to the amount of selection on the unobservables we also propose an informal way to assess selectivity bias based on measuring the ratio of selection on unobservables to selection on observables that would be required if one is to attribute the entire effect of catholic school attendance to selection bias we use our methods to estimate the effect of attending a catholic high school on a variety of outcomes our main conclusion is that catholic high schools substantially increase the probability of graduating from high school and more tentatively attending college we find little evidence of an effect on test scores

evaluating the econometric evaluations of training programs with experimental data this paper takes the results of an employment and training program thatwas run as a field experiment in which the participants were randomlyassigned into a treatment or a control group and compares these results to the estimates that might have been produced by an econometrician who evaluated the program using the same econometric procedures that have been used in the program evaluation literature this comparison shows that many of these econometric procedures fail toreplicate the experimentally determined results and suggests that researchers should be aware of the potential for specification errorsin other nonexperimental evaluations copyright 1986 by american economic association

risk premia and the real effects of money this paper proposes a flexible price theory of the role of money in an economy with incomplete idiosyncratic risk sharing when the risk premium goes up money provides a safe store of value that prevents interest rates from falling reducing investment investment is too high during booms when risk is low and too low during slumps when risk is high monetary policy cannot correct this money is superneutral and ricardian equivalence holds the optimal allocation requires the friedman rule and a tax subsidy on capital the real effects of money survive even in the cashless limit

the impact of alternative grade configurations on student outcomes through middle and high school abstract we use statewide administrative data from florida to estimate the impact of attending public schools with different grade configurations on student achievement through grade 10 based on an instrumental variable estimation strategy we find that students moving from elementary to middle school suffer a sharp drop in student achievement in the transition year these achievement drops persist through grade 10 we also find that middle school entry increases student absences and is associated with higher grade 10 dropout rates transitions to high school in grade 9 cause a smaller one time drop in achievement but do not alter students performance trajectories

pension enhancements and the retention of public employees the authors use data from workers in the largest public sector occupation in the united states teaching to examine the effect of pension enhancements on employee retention specifically they study

conducting monetary policy at very low short term interest rates can monetary policy committees accustomed to describing their plans and actions in terms of the level of a short term nominal interest rate find effective means of conducting and communicating their policies when that rate is zero or close to zero the very low levels of interest rates in japan switzerland and the united states in recent years have stimulated much interesting research on this question and have led some central banks to make changes in their operating procedures and communications strategies in this paper we will give a brief overview of current thinking on the conduct of monetary policy when short term interest rates are very low or even zero monetary policy works for the most part by influencing the prices and yields of financial assets which in turn affect economic decisions and thus the evolution of the economy when the short term policy rate is at or near zero the conventional means of effecting monetary ease lowering the target for the policy rate is no longer feasible however it would be a mistake to think that monetary policy was impotent we discuss three strategies for stimulating the economy at an unchanged level of the policy rate these involve i providing assurance to investors that short rates will be kept lower in the future than they currently expect ii changing the relative supplies of securities in the marketplace by altering the composition of the central bank s balance sheet and iii increasing the size of the central bank s balance sheet beyond the level needed to set the short term policy rate at zero quantitative easing we also discuss the costs and benefits of very low interest rates an issue that bears on the question of whether the central bank should take the policy rate all the way to zero before undertaking alternative policies

the countervailing effects of competition on public goods provision when bargaining inefficiencies lead to bad outcomes political competition is widely recognized as a mediator of public goods provision through its salutary effect on incumbents electoral incentives we argue that political competition additionally mediates public goods provision by reducing the efficiency of legislative bargaining these countervailing forces may produce a net negative effect in places with weak parties and low transparency typical of many young democracies we provide evidence of a robust negative relationship between political competition and local public goods using panel data from mali tests of mechanisms corroborate our interpretation of this relationship as evidence of legislative bargaining inefficiencies to explore the generalizability of these findings we analyze cross country panel data and show that political competition leads to better worse public goods provision under high low levels of party system institutionalization the paper sheds light on why political competition is only selectively beneficial and underscores the importance of considering both the electoral and legislative arenas

the academic and labor market returns of university professors this paper estimates the impact of college teaching on students academic achievement and labor market outcomes using administrative data from bocconi university italy matched with italian tax records the estimation exploits the random allocation of students to teachers in a fixed sequence of compulsory courses we find that good teaching matters more for the labor market than for academic performance moreover the professors who are best at improving the academic achievement of their best students are also the ones who boost their earnings the most on the contrary for low ability students the academic and labor market returns of teachers are largely uncorrelated we also find that professors who are good at teaching high ability students are often not the best teachers for the least able ones these findings can be rationalized in a model where teaching is a multi dimensional activity with each dimension having differential returns on the students academic outcomes and labor market success

liquidity traps capital flows abstract motivated by debates surrounding international capital flows during the great recession we conduct a positive and normative analysis of capital flows when a region of the global economy experiences a liquidity trap capital flows reduce inefficient output fluctuations in this region by inducing exchange rate movements that reallocate expenditure towards the goods it produces restricting capital mobility hampers such an adjustment from a global perspective constrained efficiency entails subsidizing capital flows to address an aggregate demand externality associated with exchange rate movements absent cooperation however dynamic terms of trade manipulation motives drive countries to inefficiently restrict capital flows impeding aggregate demand stabilization

disaster aid and preferences the long run impact of the tsunami on giving in sri lanka summary do natural disasters produce effects on preferences of victims in the long run we test the impact of the tsunami shock on generosity of a sample of sri lankan affected unaffected microfinance borrowers seven years after the event specifically we test the effect of the shock at the extensive margin by comparing damaged with non damaged individuals in terms of giving and expected giving in a dictator game moreover at the intensive margin we compare the participants based on the amount of damage experienced and recovery aid received the advantage of this last comparison is that differences in observables between the groups are minimized we reduce further identification problems by selecting a random sample of damaged and non damaged borrowers belonging to the same microfinance organization who are therefore likely to share some important common traits that are usually unobservable to researchers we complete our identification strategy with weighted least squares instrumental variable estimates and a sensitivity analysis on the exogeneity assumption the main findings of the paper support the hypothesis that the shock affects participants preferences in the long run first the tsunami negatively affects generosity at the extensive margin as those who suffered at least one damage give and expect less than those who did not second while large recovery assistance does not directly affect giving and expected giving it increases especially the latter indirectly i e when interacted with the number of damages our results reconcile that part of the literature showing evidence of natural shocks having a detrimental effect on social preferences fleming chong alberto bejarano 2011 cassar grosjean whitt 2013 with that supporting instead a positive link solnit 2009 whitt wilson 2007 cassar healy von kessler 2011 furthermore since our study focuses on the long run impact of a natural disaster previous results on short run effects are not necessarily inconsistent with ours

sensitivity to exogeneity assumptions in program evaluation in many empirical studies of the effect of social programs researchers assume that conditional on a set of observed covariates assignment to the treatment is exogenous or unconfounded aka selection on observables often this assumption is not realistic and researchers are concerned about the robustness of their results to departures from it one approach e g charles manski 1990 is to entirely drop the exogeneity assumption and investigate what can be learned about treatment effects without it with unbounded outcomes and in the absence of alternative identifying assumptions there are no restrictions on the set of possible values for average treatment effects this does not mean however that all evaluations are equally sensitive to departures from the exogeneity assumption in this paper i explore an alternative approach developed by paul rosenbaum and donald rubin 1983 where the assumption of exogeneity is explicitly relaxed by allowing for a limited amount of correlation between treatment and unobserved components of the outcomes the starting point of the sensitivity analysis is the assumption that the exogeneity assumption is satisfied only conditional on an additional unobserved covariate making assumptions about the effect of the unobserved covariate on the outcome and its correlation with the treatment i trace out the set of possible values for the treatment effect of interest by considering a sufficiently large set of possible correlations with outcomes and treatment one can recover the bounds on the treatment effect derived by manski 1990 the approach here in the spirit of rosenbaum and rubin 1983 and rosenbaum 1995 is to allow only a limited amount of correlation and to judge the sensitivity of average treatment effect estimates to such correlations there are two novel features of the proposed analysis first rather than formulate the sensitivity in terms of coefficients on the unobserved covariate the sensitivity results are presented in terms of partial r values which may be easier to interpret second the partial r values of the unobserved covariates are compared to those for the observed covariates in order to facilitate judgments regarding the plausibility of values necessary to substantially change results obtained under exogeneity the proposed sensitivity analysis is conceptually related to the practice of assessing sensitivity of estimates by comparisons with results obtained by discarding one or more observed covariates james heckman and v joseph hotz 1989 rajeev dehejia and sadek wahba 1999 jeffrey smith and petra todd 2001 the attraction of the sensitivity analysis is that it is more directly relevant one is not interested in what would have happened in the absence of covariates actually observed but in biases that are the result from not observing all relevant covariates

unconventional fiscal policy at the zero bound when the zero lower bound on nominal interest rates binds monetary policy cannot provide appropriate stimulus we show that in the standard new keynesian model tax policy can deliver such stimulus at no cost and in a time consistent manner there is no need to use inecient policies such as

the construct validity of the kinder lydenberg domini social performance ratings data carroll 1991 encouraged researchers in social issues management sim to continue to measure corporate social performance csp from a variety of different perspectives utilizing a variety of different measures in addition wolfe and aupperle 1991 and others have asserted that there is no single best way to measure csp and that multiple measures and perspectives help develop the field however pfeffer 1993 suggest that a lack of consistent measurement has constrained organization studies and by implication the field of social issues management in its development as a field it may be in the best interest of social issues management researchers to try to development a common body of measures and data recently kinder lydenberg and domini co kld a social choice investment advisory firm has made available their social performance database the kld data have potential to become a widely accepted set of csp measures the purpose of this paper is to present a construct validity study comparing the kld data to other measures of csp

the optimal inflation rate in new keynesian models should central banks raise their inflation targets in light of the zero lower bound we study the effects of positive steady state inflation in new keynesian models subject to the zero bound on interest rates we derive the utility based welfare loss function taking into account the effects of positive steady state inflation and solve for the optimal level of inflation in the model for plausible calibrations with costly but infrequent episodes at the zero lower bound the optimal inflation rate is low typically less than two percent even after considering a variety of extensions including optimal stabilization policy price indexation endogenous and statedependent price stickiness capital formation model uncertainty and downward nominal wage rigidities on the normative side price level targeting delivers large welfare gains and a very low optimal inflation rate consistent with price stability these results suggest that raising the inflation target is too blunt an instrument to efficiently reduce the severe costs of zero bound episodes

financial asset holdings and political attitudes evidence from revolutionary england the english parliament s struggle for supremacy against monarchical dictatorship during the civil war 1642 1648 was crucial for the establishment of representative government yet its lessons continue to be debated i exploit novel data on individual mps drawn from 1 842 biographies to show that the conflict was over overseas interests and other factors over which the executive enjoyed broad constitutional discretion rather than over domestic property rights i further exploit the coincidence of individual mps ability to sign legally binding share contracts with novel share offerings by overseas companies to measure the effect of overseas share investment on their political attitudes i show that overseas shareholding pushed moderates lacking prior mercantile interests to support reform i interpret the effect of financial assetholding as allowing new investors to exploit emerging economic opportunities overseas aligning their interests with traders by consolidating a broad parliamentary majority that favored reform the introduction of financial assets also broadened support for the institutionalization of parliamentary supremacy over dictatorial rule jel codes o10 g11 f10 k00 n23 p10

central bank communication and the liquidity trap central bank communication plays an important role in shaping market participants expectations this paper studies a simple nonlinear model of monetary policy where agents have incomplete information about the economic environment it shows that agents learning and the dynamics of the economy are heavily affected by central bank s transparency about its policy rule a monetary authority that does not communicate its rule can induce learning equilibria where the economy experiences prolonged periods of deflation and slow growth more generally small expectational errors can result in complex economic dynamics inducing welfare reducing fluctuations on the contrary central bank communication helps stabilizing expectations around the inflation target equilibrium

can risk averse households make risky investments the role of trust in others in this paper using data from the survey on health ageing and retirement in europe share 2006 and 2013 waves we illustrate the link between individuals attitudes to financial risk combined with their willingness to trust others and their investments in risky assets individuals who display either risk tolerance alone or to a lesser extent risk aversion and trust more frequently decide to buy risky assets the comparison between scandinavian and mediterranean countries indicates that trust plays qualitatively different roles depending on the prevailing combination of risk attitude and trust in the area being studied

the impacts of teacher working conditions and human capital on student achievement evidence from brazilian longitudinal data abstractwe use a new longitudinal matched student teacher data from brazil to examine the impacts of teacher human capital and working conditions on student learning controlling for student teache

are they efficient in the middle using propensity score estimation for modeling middlemen in indian corporate corruption corrupt regulatory environment encourages firms to deploy middlemen for speedy and assured acquisition of different services from regulatory agencies using a world bank dataset of 2210 indian manufacturing firms this article examines how firms with middlemen deal with corrupt governmental agencies for its operational efficiency our results demonstrate that deployment of middlemen by the firms is often accompanied by a substantial increase in operational delay relatively trigger more consumption of senior management s time on regulatory disentanglement enhance the likelihood tendency to pay bribe and likely to face more court cases as a means of restitution of legal rights as firm specific attributes may contaminate our preliminary results we utilized the propensity score framework to examine relationships among variables of interests our study contributes to the inconspicuous part of the corruption literature by attempting to present a comprehensive but indirect assessment of the functions of middlemen that predominantly remained unattended except some scattered descriptive case based anecdotal presentations

rethinking monetary policy after the crisis abstract this lecture examines how the recent global financial crisis changes our thinking about how monetary policy should be conducted it starts with a discussion of the science and practice of monetary policy before the crisis and then uses the lessons from the crisis to argue how the practice of monetary policy should be rethought along six dimensions flexible inflation targeting response to asset price bubbles dichotomy between monetary policy and financial stability policy risk management and gradualism fiscal dominance and forward guidance

self fulfilling deflations abstract what types of monetary and fiscal policy rules produce self fulfilling deflationary paths that are monotonic and empirically relevant this paper presents simple theoretical conditions that guarantee the existence of these paths in a general equilibrium model with sticky prices these sufficient conditions are weak enough to be satisfied by most monetary and fiscal policy rules a quantification of the model which combines a real shock a la hayashi and prescott 2002 with a simultaneous sunspot that deanchors inflation expectations matches the main empirical features of the japanese deflationary process during the lost decade the results also highlight the key role of the assumption about the anchoring of inflation expectations for the size of fiscal multipliers and in general for any policy analysis

savings asset scarcity and monetary policy abstract this paper analyzes optimal monetary policy regarding asset markets in a model where money and savings are essential and asset markets matter the model is able to explain why different regimes for the correlation of real interest rates and stock price dividend ratios exist and offers two explanations why the correlation vanished after 2007 a decrease in inflation or changes in the supply of risky and safe assets the results on optimal policy show that away from the friedman rule fiscal policy can improve welfare by increasing the amount of outstanding government debt if the fiscal authority is not willing or able to increase debt the monetary authority can improve welfare of current generations by reacting procyclically to asset return shocks

does greater school autonomy make a difference evidence from a randomized natural experiment in south korea abstract we exploit the unique features of high schools in seoul to study the effects of school autonomy on student outcomes under south korea s equalization policy both private and public schools in seoul admit students that are assigned randomly to them receive equal government funding charge identical fees and use similar curricula however private schools have greater flexibility in personnel decisions and their principals and teachers face stronger incentives to perform we find that private high schools have better student outcomes than public high schools our results suggest that autonomy in personnel decisions explains the positive student outcomes in private schools

generalizations about using value added measures of teacher quality the extensive investigation of the contribution of teachers to student achievement produces two generally accepted results first there is sub stantial variation in teacher quality as measured by the value added to achievement or future aca demic attainment or earnings second variables often used to determine entry into the profession and salaries including post graduate schooling experience and licensing examination scores appear to explain little of the variation in teacher quality so measured with the exception of early experience together these findings underscore explicitly that observed teacher characteristics do not represent teacher quality

localized knowledge spillovers and patent citations a distance based approach abstract we develop a new distance based test of localized knowledge spillovers that embeds the concept of control patents using microgeographic data we identify localization distance for each te

disruption versus tiebout improvement the costs and benefits of switching schools most students change schools at some point in their academic careers but some change very frequently and some schools experience a great deal of turnover while many argue that mobility harms students economists tend to emphasize tiebout type moves to procure better school quality sq this paper disentangles the disruption effects of moves from changes in sq importantly it identifies the negative externality movers impose on other students student turnover is shown to entail a substantial cost for movers and non movers alike this cost appears to be larger for lower income and minority students who typically attend much higher turnover schools

nonparametric bounds on treatment effects assume that each member of a population is characterized by values for the variables ya yb z x here x is a vector describing a person and z is a binary variable indicating which of two treatments this person receives the treatments are labelled a and b the variables ya and yb are scalar measures of the outcomes of the two treatments for example a cancer patient might be treated by a drug therapy or b surgery the relevant outcome y might be life span following treatment an unemployed worker might be given a vocational training or b job search assistance here the relevant outcome might be labor force status following treatment assume that a random sample is drawn and that one observes the realizations of z x and of the outcome under the treatment received thus ya is observed if treatment a is received but is a latent variable if treatment b is received similarly yb is either observed or latent suppose that one wants to learn the difference in expected outcome if all persons with attributes x were assigned to treatment a or b this treatment effect is

informal care and long term labor market outcomes in this paper we estimate long run effects of informal care provision on female caregivers labor market outcomes up to eight years after care provision we compare a static version where average effects of care provision in a certain year on later labor market outcomes are estimated to a partly dynamic version where the effects of up to three consecutive years of care provision are analyzed our results suggest that there are significant initial negative effects of informal care provision on the probability to work full time the reduction in the probability to work full time by 4 percentage points or 2 4 5 0 if we move from point to partial identification is persistent over time short run effects on hourly wages are zero but we find considerable long run wage penalties

beyond does it pay to be green a meta analysis of moderators of the cep cfp relationship review of extant research on the corporate environmental performance cep and corporate financial performance cfp link generally demonstrates a positive relationship however some arguments and empirical results have demonstrated otherwise as a result researchers have called for a contingency approach to this research stream which moves beyond the basic question does it pay to be green and instead asks when does it pay to be green in answering this call we provide a meta analytic review of cep cfp literature in which we identify potential moderators to the cep cfp relationship including environmental performance type e g reactive vs proactive performance firm characteristics e g large vs small firms and methodological issues e g self report measures by analyzing these contingencies this study attempts to provide a basis on which to draw conclusions regarding some inconsistencies and debates in the cep cfp research some of the results of the moderator analysis suggest that small firms benefit from environmental performance as much or more than large firms us firms seem to benefit more than international counterparts and environmental performance seems to have the strongest influence on market measures of financial performance

the trade off between child quantity and quality an empirical investigation of trade offs between number of children and their scholastic performance confirms that family size directly affects children s achievement though parents show no favori

the world capital markets perception of sustainability and the impact of the financial crisis using a unique dataset provided by the international rating agency ges we investigate the effects of corporate sustainability and industry related exposure to environmental and social risks on the market value of msci world firms the results show a negative relationship in the earlier years of our sample period however the analysis reveals that the capital market perception of sustainability has changed owing to the financial crisis looking at the height of the crisis in september 2008 the month in which lehman brothers shocked the world s capital markets by filing for chapter 11 bankruptcy protection we find that the previously negative perception of corporate sustainability across its various dimensions was positively affected and offset in addition as a moderated regression analysis shows the crisis led to a positive perception of corporate sustainability in industries that are exposed to higher environmental and social risks our study has the practical implication that executives in particular in industries with high environmental and social risks should increase their commitment to corporate sustainability due to the changes in the institutional setting triggered by the financial crisis

using experiments to evaluate performance standards what do welfare to work demonstrations reveal to welfare reformers this paper examines how experimental demonstrations can be used to inform planners about the efficacy of social programs in light of a performance standard the problem is illustrated by considering the situation faced by state governments attempting to design programs to meet the new federal welfare to work standards data from experimental evaluations alone allow only limited inferences about the labor market outcomes of welfare recipients combined with prior information on the selection process however these data are informative suggesting either that the long run federal requirements cannot be met or that these standards will only be met under special circumstances

the corporate social performance financial performance link strategic managers are consistently faced with the decision of how to allocate scarce corporate resources in an environment that is placing more and more pressures on them recent scholarship in strategic management suggests that many of these pressures come directly from sources associated with social issues in management rather than traditional arenas of strategic management using a greatly improved source of data on corporate social performance this paper reports the results of a rigorous study of the empirical linkages between financial and social performance corporate social performance csp is found to be positively associated with prior financial performance supporting the theory that slack resource availability and csp are positively related csp is also found to be positively associated with future financial performance supporting the theory that good management and csp are positively related 1997 by john wiley sons ltd