A recent “revisionist” literature characterizes the pronounced rise in U.S. wage inequality since 1980 as an “episodic” event of the first half of the 1980s driven by nonmarket factors (particularly a falling real minimum wage) and concludes that continued increases in wage inequality since the late 1980s substantially reflect the mechanical confounding effects of changes in labor force composition. Analyzing data from the Current Population Survey for 1963 to 2005, we find limited support for these claims. The slowing of the growth of overall wage inequality in the 1990s hides a divergence in the paths of upper-tail (90/50) inequality—which has increased steadily since 1980, even adjusting for changes in labor force composition—and lower-tail (50/10) inequality, which rose sharply in the first half of the 1980s and plateaued or contracted thereafter. Fluctuations in the real minimum wage are not a plausible explanation for these trends since the bulk of inequality growth occurs above the median ...

Trends in U.S. Wage Inequality: Revising the Revisionists

This paper surveys what is known about the extent of international technology diffusion and channels through which technology spreads. Productivity differences explain much of the variation in incomes across countries, and technology plays a key role in determining productivity. The pattern of worldwide technical change is determined largely by international technology diffusion because a few rich countries account for most of the world's creation of new technology. Cross-country income convergence turns on whether technology diffusion is global or local. There is no indication that international diffusion is inevitable or automatic, but rather, domestic technology investments are necessary. Better understanding of what determines the effectiveness of technology diffusion sheds light on the pace at which the world's technology frontier may expand.

/pdf/international-technology-diffusion-2g6g5r4i0g.pdf

International Technology Diffusion

We offer the first large scale, multiple source analysis of the outcome of what may be the most extensive effort to selectively censor human expression ever implemented. To do this, we have devised a system to locate, download, and analyze the content of millions of social media posts originating from nearly 1,400 different social media services all over China before the Chinese government is able to find, evaluate, and censor (i.e., remove from the Internet) the large subset they deem objectionable. Using modern computer-assisted text analytic methods that we adapt and validate in the Chinese language, we compare the substantive content of posts censored to those not censored over time in each of 95 issue areas. Contrary to previous understandings, posts with negative, even vitriolic, criticism of the state, its leaders, and its policies are not more likely to be censored. Instead, we show that the censorship program is aimed at curtailing collection action by silencing comments that represent, reinforce, or spur social mobilization, regardless of content. Censorship is oriented toward attempting to forestall collective activities that are occurring now or may occur in the future --- and, as such, seem to clearly expose government intent, such as examples we offer where sharp increases in censorship presage government action outside the Internet.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2122937_code1697187.pdf?abstractid=2104894&mirid=5&type=2

How Censorship in China Allows Government Criticism But Silences Collective Expression

We offer the first large scale, multiple source analysis of the outcome of what may be the most extensive effort to selectively censor human expression ever implemented. To do this, we have devised a system to locate, download, and analyze the content of millions of social media posts originating from nearly 1,400 different social media services all over China before the Chinese government is able to find, evaluate, and censor (i.e., remove from the Internet) the subset they deem objectionable. Using modern computer-assisted text analytic methods that we adapt to and validate in the Chinese language, we compare the substantive content of posts censored to those not censored over time in each of 85 topic areas. Contrary to previous understandings, posts with negative, even vitriolic, criticism of the state, its leaders, and its policies are not more likely to be censored. Instead, we show that the censorship program is aimed at curtailing collective action by silencing comments that represent, reinforce, or spur social mobilization, regardless of content. Censorship is oriented toward attempting to forestall collective activities that are occurring now or may occur in the future—and, as such, seem to clearly expose government intent.

/pdf/how-censorship-in-china-allows-government-criticism-but-3mw377zu9z.pdf

How Censorship in China Allows Government Criticism but Silences Collective Expression

We model the dynamics of risk premia during crises in asset markets where the marginal investor is a financial intermediary. Intermediaries face an equity capital constraint. Risk premia rise when the constraint binds, reflecting the capital scarcity. The calibrated model matches the nonlinearity of risk premia during crises, and the speed of reversion in risk premia from a crisis back to pre-crisis levels. We evaluate the effect of three government policies: reducing intermediaries borrowing costs, injecting equity capital, and purchasing distressed assets. Injecting equity capital is particularly effective because it alleviates the equity capital constraint that drives the model's crisis.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2056642_code438873.pdf?abstractid=2056642&mirid=3

Intermediary Asset Pricing

We study product-level data for Taiwanese manufacturing establishments through the lens of a model with endogenously variable markups. We nd that the gains from international trade can be large: in our benchmark model, moving from autarky to a 10% import share implies an increase in welfare equivalent to a 27% permanent increase in consumption. By contrast, a standard trade model with constant markups implies a smaller gain, around a 4% increase in consumption. By increasing competition, trade reduces markups and so reduces distortions in labor and investment choices. Greater competition also induces a more ecient allocation of factors of production across establishments, thereby directly raising TFP. These channels are an order of magnitude more important than the love-of-variety eects in standard trade models. Our model predicts that industries that are more open are characterized by lower revenue productivity and lower dispersion in revenue productivity across producers. We nd strong support for these predictions of the model in the Taiwanese data. In our model, micro details such as as the dispersion of industry-level import shares determine how the Armington elasticity endogenously responds to a change in trade policy. Consequently, these micro details also matter for determining the size of the gains from standard love-of-variety eects.

/pdf/competition-markups-and-the-gains-from-international-trade-1otg4gp8ws.pdf

Competition, Markups, and the Gains from International Trade †

This paper presents a model of information and political regime change If enough citizens act against a regime, it is overthrown Citizens are imperfectly informed about how hard this will be and the regime can, at a cost, engage in propaganda so that at face-value it seems hard This coordination game with endogenous information manipulation has a unique equilibrium and the paper gives a complete analytic characterization of its comparative statics If the quantity of information available to citizens is suciently high, then the regime has a better chance of surviving However, an increase in the reliability of information can reduce the regime's chances These two effects are always in tension: a regime benefits from an increase in information quantity if and only if an increase in information reliability reduces its chances The model allows for two kinds of information revolutions In the first, associated with radio and mass newspapers under the totalitarian regimes of the early twentieth century, an increase in information quantity coincides with a shift towards media institutions more accommodative of the regime and, in this sense, a decrease in information reliability In this case, both effects help the regime In the second kind, associated with diffuse technologies like modern social media, an increase in information quantity coincides with a shift towards sources of information less accommodative of the regime and an increase in information reliability This makes the quantity and reliability effects work against each other The model predicts that a given percentage increase in information reliability has exactly twice as large an effect on the regime's chances as the same percentage increase in information quantity, so, overall, an information revolution that leads to roughly equal-sized percentage increases in both these characteristics will reduce a regime's chances of surviving

Information Manipulation, Coordination and Regime Change

This article presents a model of information manipulation and political regime change. There is a regime that can be overthrown but only if enough citizens participate in an uprising. Citizens are imperfectly informed about the regime’s ability to resist an uprising and the regime can engage in propaganda that, taken at face-value, makes the regime seem stronger than it truly is. This coordination game with endogenous information manipulation has a unique equilibrium and the article gives a complete analytic characterization of the equilibrium’s comparative statics. Holding fixed the number of signals available to citizens, if the per-unit signal precision is sufficiently high then the regime is harder to overthrow. In contrast, if the number of signals increases, so that both total signal precision and the regime’s costs of manipulation rise together, then the regime is easier to overthrow unless there are strong economies of scale in information control.

/pdf/information-manipulation-coordination-and-regime-change-326jo5gdqv.pdf

Information Manipulation, Coordination, and Regime Change

We study the welfare costs of markups in a dynamic model with heterogeneous firms and endogenously variable markups. We find that the welfare costs of markups are large. We decompose the costs of markups into three channels: (i) an aggregate markup that acts like a uniform output tax, (ii) misallocation of factors of production, and (iii) an inefficiently low rate of entry. We find that the aggregate markup accounts for about two-thirds of the costs, misallocation accounts for about one-third, and the costs due to inefficient entry are negligible. We evaluate simple policies aimed at reducing the costs of markups. Subsidizing entry is not an effective tool in our model: while more competition reduces individual firms' markups it also reallocates market shares towards larger firms and the net effect is that the aggregate markup hardly changes. Size-dependent policies aimed at reducing concentration can reduce the aggregate markup but have the side effect of greatly increasing misallocation and reducing aggregate productivity.

/pdf/how-costly-are-markups-4b6ekqzawl.pdf

How Costly Are Markups

This paper studies endogenous information manipulation in games where a population canoverthrow a regime if individuals coordinate. The benchmark game has a unique equilibriumand in this equilibrium propaganda is effective if signals are sufficiently precise. Despite playing against perfectly rational individuals, a regime is able to manipulate information in a way that exploits heterogeneity in individual beliefs so that at equilibrium its chances of surviving are higher than they otherwise would be. This result is robust to alternative payoffs where the regime cares only for survival and to a number of alternative information structures,including situations where individuals have access to high-quality private information that is entirely uncontaminated by the regime.This paper studies endogenous information manipulation in games where a population can overthrow a regime if individuals coordinate. The benchmark game has a unique equilibrium and in this equilibrium propaganda is effective if signals are sufficiently precise. Despiteplaying against perfectly rational individuals, a regime is able to manipulate information in a way that exploits heterogeneity in individual beliefs so that at equilibrium its chances of surviving are higher than they otherwise would be. This result is robust to alternative payoffswhere the regime cares only for survival and to a number of alternative information structures, including situations where individuals have access to high-quality private information that is entirely uncontaminated by the regime.

https://papers.ssrn.com/sol3/Delivery.cfm/2451_26055.pdf?abstractid=1281937&mirid=1

Chris Edmond

Papers

Competition, Markups, and the Gains from International Trade †

Information Manipulation, Coordination and Regime Change

Information Manipulation, Coordination, and Regime Change

How Costly Are Markups

Information Manipulation, Coordination and Regime Change