The demand for money, financial innovation, and the welfare cost of inflation: an analysis with household data

We use microeconomic data on households to estimate the parameters of the demand for currency derived from a generalized Baumol-Tobin model. Our data set contains information on average currency, deposits, and other interest-bearing assets; the number of trips to the bank; the size of withdrawals; and ownership and use of ATM cards. We model the demand for currency accounting for adoption of new transaction technologies and the decision to hold interest-bearing assets. The interest rate and expenditure flow elasticities of the demand for currency are close to the theoretical values implied by standard inventory models. However, we find significant differences between individuals with an ATM card and those without. The estimates of the demand for currency allow us to calculate a measure of the welfare cost of inflation analogous to Bailey's triangle, but based on a rigorous microeconometric framework. The welfare cost of inflation varies considerably within the population but never turns out to be very large (about 0.1 percent of consumption or less). Our results are robust to various changes in the econometric specification. In addition to the main results based on the average stock of currency, the model receives further support from the analysis of the number of trips to and average withdrawals from the bank and the ATM

The demand for money, financial innovation, and the welfare cost of inflation: an analysis with household data

We use microeconomic data on households to estimate the parameters of the demand for currency derived from a generalized Baumol-Tobin model. Our data set contains information on average currency, deposits, and other interest-bearing assets; the number of trips to the bank; the size of withdrawals; and ownership and use of ATM cards. We model the demand for currency accounting for adoption of new transaction technologies and the decision to hold interest-bearing assets. The interest rate and expenditure flow elasticities of the demand for currency are close to the theoretical values implied by standard inventory models. However, we find significant differences between individuals with an ATM card and those without. The estimates of the demand for currency allow us to calculate a measure of the welfare cost of inflation analogous to Bailey's triangle, but based on a rigorous microeconometric framework. The welfare cost of inflation varies considerably within the population but never turns out to be very large (about 0.1 percent of consumption or less). Our results are robust to various changes in the econometric specification. In addition to the main results based on the average stock of currency, the model receives further support from the analysis of the number of trips to and average withdrawals from the bank and the ATM

Multilocus sequence types of invasive Corynebacterium diphtheriae isolated in the Rio de Janeiro urban area, Brazil

Invasive infections caused by Corynebacterium diphtheriae in vaccinated and non-vaccinated individuals have been reported increasingly. In this study we used multilocus sequence typing (MLST) to study genetic relationships between six invasive strains of this bacterium isolated solely in the urban area of Rio de Janeiro, Brazil, during a 10-year period. Of note, all the strains rendered negative results in PCR reactions for the tox gene, and four strains presented an atypical sucrose-fermenting ability. Five strains represented new sequence types. MLST results did not support the hypothesis that invasive (sucrose-positive) strains of C. diphtheriae are part of a single clonal complex. Instead, one of the main findings of the study was that such strains can be normally found in clonal complexes with strains related to non-invasive disease. Comparative analyses with C. diphtheriae isolated in different countries provided further information on the geographical circulation of some sequence types

Warfare, Fiscal Capacity, and Performance

We exploit differences in casualties sustained in pre-modern wars to estimate the impact of fiscal capacity on economic performance. In the past, states fought different amounts of external conflicts, of various lengths and magnitudes. To raise the revenues to wage wars, states made fiscal innovations, which persisted and helped to shape current fiscal institutions. Economic historians claim that greater fiscal capacity was the key long-run institutional change brought about by historical conflicts. Using casualties sustained in pre-modern wars to instrument for current fiscal institutions, we estimate substantial impacts of fiscal capacity on GDP per worker. The results are robust to a broad range of specifications, controls, and sub-samples

Sex differences in mathematics and reading achievement are inversely related: within- and across-nation assessment of 10 years of PISA data

We analyzed one decade of data collected by the Programme for International Student Assessment (PISA), including the mathematics and reading performance of nearly 1.5 million 15 year olds in 75 countries. Across nations, boys scored higher than girls in mathematics, but lower than girls in reading. The sex difference in reading was three times as large as in mathematics. There was considerable variation in the extent of the sex differences between nations. There are countries without a sex difference in mathematics performance, and in some countries girls scored higher than boys. Boys scored lower in reading in all nations in all four PISA assessments (2000, 2003, 2006, 2009). Contrary to several previous studies, we found no evidence that the sex differences were related to nations’ gender equality indicators. Further, paradoxically, sex differences in mathematics were consistently and strongly inversely correlated with sex differences in reading: Countries with a smaller sex difference in mathematics had a larger sex difference in reading and vice versa. We demonstrate that this was not merely a between-nation, but also a within-nation effect. This effect is related to relative changes in these sex differences across the performance continuum: We did not find a sex difference in mathematics among the lowest performing students, but this is where the sex difference in reading was largest. In contrast, the sex difference in mathematics was largest among the higher performing students, and this is where the sex difference in reading was smallest. The implication is that if policy makers decide that changes in these sex differences are desired, different approaches will be needed to achieve this for reading and mathematics. Interventions that focus on high-achieving girls in mathematics and on low achieving boys in reading are likely to yield the strongest educational benefits

Global crises and populism : the role of Eurozone institutions

Populist parties are likely to gain consensus when mainstream parties and status quo institutions fail to manage the shocks faced by their economies. Institutional constraints, which limit the possible actions in the face of shocks, result in poorer performance and frustration among voters who turn to populist movements. We rely on this logic to explain the different support of populist parties among European countries in response to the globalization shock and to the 2008-2011 financial and sovereign debt crisis. We predict a greater success of populist parties in response to these shocks in Euro zone countries, and our empirical analysis confirms this prediction. This is consistent with voters’ frustration for the greater inability of the Euro zone governments to react to difficult-to-manage globalization shocks and financial crises. Our evidence has implications for the speed of construction of political unions. A slow, staged process of political unification can expose the EU to a risk of political backlash if hard to manage shocks hit the economies during the integration process

PLM adoption in SMEs context

The increasing market needs and technologies evolution, push companies to develop competitive advantages based on adequate and intensive use of information technology and communication (ICT). However, SMEs do not realize the importance of ICT adoption, which becomes vital for the development, and are not always well equipped to adopt and integrate them to their activities. The paper focused on issues regarding the ICT adoption, especially PLM solutions by SMEs. By analyzing the PLM definitions and works done, we explored indicators that impact positively or negatively ICT and PLM adoption. This paper proposes a model, currently theoretical, with empirical validation proposal through a survey

Are there Social Spillovers in Consumers’ Security Assessments of Payment Instruments?

Even though security of payments has long been identified as an important aspect of the consumer payment experience, recent literature fails to appropriately assess the extent of social spillovers among payment users. We test for the existence and importance of such spillovers by analyzing whether social influence affects consumers’ perceptions of the security of payment instruments. Based on a 2008–2014 annual panel data survey of consumers, we find strong evidence of social spillovers in payment markets: others’ perceptions of security of payment instruments exert a positive influence on one’s own payment security perceptions. The significant and robust results imply that a consumer’s assessments of security converge to his peers’ average assessment: a 10 percent change in the divergence between one’s own security rating and peers’ average rating will result in a 7 percent change in one’s own rating in the next period. The results are robust to many specifications and do not change when we control for actual fraud or crime data. Our results indicate that spillovers rather than reflection appear to be the cause, although separating the two causes is very difficult (Manski 1993). In particular, the spillovers are stronger for people who experience an exogenous shock to security perception, people who have more social interactions, and younger consumers, who are more likely to be influenced by social media. We also examine the effects of social spillovers on payment behavior (that is, on decisions regarding payment adoption and use). Our results indicate that social spillovers have a rather limited impact on payment behavior, as others’ perceptions seem to affect one’s own payment behavior mainly indirectly through the effect on one’s own perceptions

Refining public policies with machine learning: The case of tax auditing

We study how machine learning techniques can be used to improve tax auditing efficiency using administrative data without the need of randomized audits. Using Italy’s population data on sole proprietorship tax returns and audits, our new approach addresses the challenge that predictions must be trained on human-selected data. There are substantial margins for raising revenue from audits by improving the selection of taxpayers to audit with machine learning. Replacing the 10% least promising audits with an equal number selected by our algorithm raises detected tax evasion by as much as 39%, and evasion that is actually paid back by 29%

Risiken im Lebenszyklus: Theorie und Evidenz

Der einzelne Mensch ist im Lebensverlauf erheblichen biometrischen, ökonomischen, familiären und politischen Risiken ausgesetzt. Viele meinen, diese wären in den letzten Jahren größer geworden. Haben wir die richtigen Institutionen, um diese Risiken effizient abzudecken? Unter Institutionen verstehen wir individuelles Sparen, familiäre Hilfe, private Versicherungen und schließlich den Staat mit seinen Sozialversicherungen. Wo und wann funktionieren diese Institutionen? Wo und wann nicht? Was muss man tun, um sie zu verbessern? Wie sieht modernes "Social Risk Management" aus? Der erste Teil dieses Übersichtsbeitrags skizziert die wirtschaftstheoretischen Grundlagen des Sparverhaltens, der Portefeuillewahl und der Versicherungsnachfrage. Im Hauptteil werden die empirischen Befunde gesammelt, um im dritten Teil wirtschaftspolitische Schlussfolgerungen zu ziehen