Showing papers in "Journal of Economic Surveys in 2021"

A literature review of the economics of COVID-19

Abstract: The goal of this piece is to survey the developing and rapidly growing literature on the economic consequences of COVID-19 and the governmental responses, and to synthetize the insights emerging from a very large number of studies. This survey: (i) provides an overview of the data sets and the techniques employed to measure social distancing and COVID-19 cases and deaths; (ii) reviews the literature on the determinants of compliance with and the effectiveness of social distancing; (iii) mentions the macroeconomic and financial impacts including the modelling of plausible mechanisms; (iv) summarizes the literature on the socioeconomic consequences of COVID-19, focusing on those aspects related to labor, health, gender, discrimination, and the environment; and (v) summarizes the literature on public policy responses.

Machine Learning Advances for Time Series Forecasting

Abstract: In this paper we survey the most recent advances in supervised machine learning and high-dimensional models for time series forecasting. We consider both linear and nonlinear alternatives. Among the linear methods we pay special attention to penalized regressions and ensemble of models. The nonlinear methods considered in the paper include shallow and deep neural networks, in their feed-forward and recurrent versions, and tree-based methods, such as random forests and boosted trees. We also consider ensemble and hybrid models by combining ingredients from different alternatives. Tests for superior predictive ability are briefly reviewed. Finally, we discuss application of machine learning in economics and finance and provide an illustration with high-frequency financial data.

Where do we stand in cryptocurrencies economic research? a survey based on hybrid analysis

Abstract: This survey develops a dual analysis, consisting, first, in a bibliometric examination and, second, in a close literature review of all the scientific production around cryptocurrencies conducted in economics so far. The aim of this paper is twofold. On the one hand, proposes a methodological hybrid approach to perform comprehensive literature reviews. On the other hand, we provide an updated state of the art in cryptocurrency economic literature. Our methodology emerges as relevant when the topic comprises a large number of papers, which make unrealistic to perform a detailed reading of all the papers. This dual perspective offers a full landscape of cryptocurrency economic research. First, by means of the distant reading provided by machine learning bibliometric techniques, we are able to identify main topics, journals, key authors, and other macro aggregates. Second, based on the information provided by the previous stage, the traditional literature review provides a closer look at methodologies, data sources, and other details of the papers. In this way, we offer a classification and analysis of the mounting research produced in a relative short time span.

Does investor protection increase foreign direct investment? a meta‐analysis

Abstract: We undertake a meta‐analysis of the effects of international investment agreements for the protection of foreign investors on foreign direct investment using 2107 estimates drawn from 74 studies. Our meta‐analysis finds robust evidence that effect of international investment agreements is so small as to be considered zero. However, our results do not rule out the possibility that the effect of these agreements is, in fact, positive and that current research methods are insufficiently powerful or precise to identify the underlying genuine effect. FDI from developed countries appears to be more responsive to the existence of investment protection, and there is evidence of publication–selection bias in favour of studies that find a positive effect for investor protection.

Parametric representation of the top of income distributions: Options, historical evidence, and model selection

Abstract: Empirical distributions of top incomes suffer from statistical problems affecting the measurement of inequality and its trend. Researchers and practitioners have been increasingly noting parametric regularities across income distributions and turning to parametric functions to approximate or supplement the observed distributions, both for descriptive purposes and for correcting distributional statistics derived from data. The proliferation of distinct branches of modeling literature has highlighted the need to compare the alternative modeling options, and develop systematic tools to discriminate between them. This paper reviews the state of methodological and empirical knowledge regarding the adoptable parametric functions, and lists references and statistical programs allowing practitioners to apply these models to microdata in household surveys and administrative registers, or grouped‐records data from national accounts statistics. Implications for modeling the distributions of other economic outcomes including consumption and wealth, and incomes below the topmost tail, are drawn. For incomes, a handful of distribution functions hold promise for modeling the top tails based on theoretical and empirical properties—namely the extreme values distributions, the generalized Pareto, the Singh–Maddala and the generalized beta type 2. Understanding these functions in relation to other commonly invoked alternatives is a contribution of this review.

Modeling the nexus between sustainable development and renewable energy: the african perspectives

Abstract: Motivated by the gained momentum of the sustainable development goals (SDGs) under the umbrella of the United Nations organization, in the light of the SDG‐7, which stipulates the access to affordable, sustainable, and modern energy, this paper explores the dynamic relationship between renewable energy and the pillars of sustainable development. Its insights are driven using a simultaneous equation model based on a panel of 25 African economies covering the period 1990–2014. The results show that renewable energy is important for sustainable development and that higher levels of renewable energy can increase sustainability. The findings also confirm the positive influence of renewable energy on the economic, environmental, social, and institutional dimensions. These positive effects stem from investment in clean energy in the whole of Africa, combined with structural changes promoting the use of clean energy and the achievement of the millennium development goals. The findings should be useful for policymakers in Africa. Aggressive renewable energy policies will be crucial for achieving energy‐policy goals and the “multiple benefits” of renewable energy, such as reducing climate change and air pollution, improving energy security, and increasing access to energy.

Cross‐sectional dependence and spillovers in space and time: where spatial econometrics and global var models meet

Abstract: To enhance the measurement of economic and financial spillovers, we bring together the spatial and global vector autoregressive (GVAR) classes of econometric models by providing a detailed methodological review where they meet in terms of structure, interpretation, and estimation. We discuss the structure of connectivity (weight) matrices used by these models and its implications for estimation. To anchor our work within the dynamic literature on spillovers, we define a general yet measurable concept of spillovers. We formalize it analytically through the indirect effects used in the spatial literature and impulse responses used in the GVAR literature. Finally, we propose a practical step-by-step approach for applied researchers who need to account for the existence and strength of cross-sectional dependence in the data. This approach aims to support the selection of the appropriate modeling and estimation method and of choices that represent empirical spillovers in a clear and interpretable form.

Does education really improve health? a meta-analysis

Abstract: While numerous studies assess the relationship between education and health, no consensus has been reached on whether education really improves health. We perform a meta‐analysis of 4866 estimates gleaned from 99 published studies that examine the health effects of education. We find that the current literature suffers from moderate publication bias towards the positive effects of education on health. After correcting for publication bias with an array of sophisticated methods, we find that the overall effect size is practically zero, indicating that education generates no discernible benefits to health. The heterogeneity analysis by Bayesian Model Averaging (BMA) and Frequentist Model Averaging (FMA) reveals that the reported estimates can be largely explained by whether the econometric models control for endogeneity of education, the types of data and the differences in health measurements. Our results also suggest that education may not be an effective policy option for promoting population health.

Gender disparities in international research collaboration: a study of 25,000 university professors

Abstract: In this research, we examine how gender disparities in international research collaboration differ by collaboration intensity, academic position, age, and academic discipline. The following are the major findings: (1) While female scientists exhibit a higher rate of general, national, and institutional collaboration, male scientists exhibit a higher rate of international collaboration, a finding critically important in explaining gender disparities in impact, productivity, and access to large grants. (2) An aggregated picture of gender disparities hides a more nuanced cross-disciplinary picture of them. (3) An analysis of international research collaboration at three separate intensity levels (low, medium, and high) reveals that male scientists dominate in international collaboration at each level. However, at each level, there are specific disciplines in which females collaborate more than males. Furthermore (4), gender disparities in international research collaboration are clearly linked with age: they are the lowest and statistically insignificant for young scientists and the highest and statistically significant for the oldest scientists. Finally, we estimate the odds of being involved in international research collaboration using an analytical linear logistic model. The examined sample includes 25,463 internationally productive Polish university professors from 85 universities, grouped into 24 disciplines, and 158,743 Scopus-indexed articles.

A review of nudges: Definitions, justifications, effectiveness

Abstract: In 2008, the behavioral economist Richard Thaler and the legal scholar Cass Sunstein published a book in which they advocated a novel approach to public policy based on the notion of a ‘nudge’. Roughly speaking, a nudge is an intervention in the decisional context that steers people’s decisions by acting on their cognitive biases. The notion of a nudge generated an intense debate across different disciplines and proved popular with many policy makers around the world. The present paper reviews the debate and research on nudges by focusing on three main dimensions: (1) the exact definition of nudges; (2) the justification of nudge policies, with a focus on ‘libertarian paternalism’; and (3) the effectiveness of nudges, both over time and in comparison with standard policies.

Causal mediation analysis in economics: Objectives, assumptions, models

Abstract: The aim of mediation analysis is to identify and evaluate the mechanisms through which a treatment affects an outcome. The goal is to disentangle the total treatment effect into two components: the indirect effect that operates through one or more intermediate variables, called mediators, and the direct effect that captures the other mechanisms. This paper reviews the methodological advancements in causal mediation literature in economics, in particular focusing on quasi-experimental designs. It defines the parameters of interest under the counterfactual approach, the assumptions and the identification strategies, presenting the Instrumental Variables (IV), Difference-in-Differences (DID) and the Synthetic Control (SC) methods.

The real exchange rate and development theory, evidence, issues and challenges

Abstract: This paper surveys the theoretical and empirical literature on the effects of the real exchange rate (RER) on international trade, economic development and growth. We summarize the main conceptual issues, discuss the relevance of the RER as an instrument of development policy, provide an overview of the macroeconomic and microeconomic mechanisms that link the RER to trade and long run growth and development, analyze the challenges – especially the disconnect between theory and data -that often arise in empirical applications, and present new avenues for future research. In the process, we present some updated estimates and illustrative figures. The mechanisms through which the RER influences long-run growth and structural change outcomes remains a promising area of research and the relevance of individual channels in different contexts deserves much more careful investigation. Greater data availability should help fill some of these gaps in our understanding.

Multisided platforms and markets: a survey of the theoretical literature

Abstract: Platforms are everywhere. The rise of Uber, Netflix, and Facebook has attracted a lot of attention to this business model. However, despite its relevance and presence in the digital economy, the definition of platforms, their main characteristics, the intuitions about how they set prices, solve coordination issues, or choose their ownership structure seem to be scattered in many papers. This review attempts to organize the last two decades of research on multisided platforms around three essential elements of platforms: price structure, network effects, and control rights. We highlight which definitions are used in the literature, how they are related to the defining characteristics of platforms, and what research has been made on those characteristics. We pay special attention to the research done on pricing, coordination problems, and ownership structure. We conclude by reviewing the theoretical evidence around monopolization and competition policy in multisided markets.

Recent developments of the autoregressive distributed lag modelling framework

Abstract: We review the literature on the Autoregressive Distributed Lag (ARDL) model, from its origins in the analysis of autocorrelated trend stationary processes to its subsequent applications in the analysis of cointegrated non-stationary time series. We then survey several recent extensions of the ARDL model, including asymmetric and nonlinear generalisations of the ARDL model, the quantile ARDL model, the pooled mean group dynamic panel data model and the spatio-temporal ARDL model.

Growth accounting in economic history: findings, lessons and new directions

Abstract: There is now a large volume of growth accounting estimates covering the long run experience of advanced countries. However, most of the studies in economic history are not based on state-of-the-art methods. There is a trade-off between maintaining international comparability and achieving the best results for individual countries. A one-size-fits-all approach will not always do justice to the variety of historical experiences since the conventional assumptions may sometimes be inappropriate. Nevertheless, growth-accounting studies have produced some eye-catching results which provide food for thought both for economic historians and for growth economists. These include (1) the finding that TFP growth was comparatively slow during the First Industrial Revolution, (2) Solow’s famous conclusion that TFP growth accounted for 7/8ths of American labour-productivity growth was atypical, (3) the impact of new general-purpose technologies on growth typically takes a long time to materialize, ICT being the notable exception, and (4) that capital-deepening was much more important relative to TFP growth in east Asian than in western European catch-up growth. Growth accounting is undoubtedly a valuable item in the cliometrician’s toolkit. Nonetheless, we anticipate the introduction of more sophisticated methods and look forward to progress in understanding what explains marked differences in TFP performance.

An overview of dynamic model averaging techniques in time‐series econometrics

Abstract: Dynamic model averaging (DMA) has become a widely used estimation technique in macroeconomic applications. Since its introduction in econom(etr)ics by Gary Koop and Dimitris Korobilis in 2009, applications of DMA have increased in unimaginable ways. Besides applying the original (univariate) framework suggested by Koop and Korobilis on the data of interest, for example, the inflation rate of the country of choice or return on the rate of equity, practitioners have been able to use DMA‐based techniques to extend current models, thereby further improving out‐of‐sample forecast accuracy, overcome computational bottlenecks, and even help improve our understanding of economic phenomena by introducing new models. These include using Google search data in combination with the predictive likelihood to govern switching between different predictive regressions in the model set or specifying large time‐varying parameter vector autoregressions that can be estimated without resorting to simulation‐based techniques. This study provides an overview of DMA techniques and the ways in which they have evolved since the contribution of Koop and Korobilis.

Environmental hazards and risk management in the financial sector: a systematic literature review

Abstract: We conduct a systematic literature review on environmental and climate related risk management in the financial sector. The systematic literature review identified a total of 36 relevant articles. A formal coding leads to the aggregation and classification of papers to three main categories that consider the impact of environmental concerns on financial risk, the current state of environmental risk practices in the finance sector, and lastly measures to assess those risks within financial institutions. Our results put forward the risk reduction for financial institutions which highly commit with environmental responsibility and performance. More importantly, investors' increase in awareness and willingness to assess climate-related financial risk would incentivize corporate managers to adopt more proactive environmental policies and practices. These findings also allow for intriguing discussions about several alleys for future research.

Gender diversity in research teams and citation impact in economics and management

Abstract: The aim of this paper is twofold: (1) contribute to a better understanding of the place of women in Economics and Management disciplines by characterizing the difference in levels of scientific collaboration between men and women at the specialties’ level; and (2) investigate the relationship between gender diversity and citation impact in Economics and Management. Our data, extracted from the Web of Science database, cover global production as indexed in 302 journals in Economics and 370 journals in Management, with, respectively, 153,667 and 163,567 articles published between 2008 and 2018. Results show that collaborative practices between men and women are quite different in Economics and Management. We also find that there is a modest positive and significant effect of gender diversity on the citation impact of publications. Mixed‐gender publications (coauthored by men and women) receive more citations than nonmixed papers (written by same‐gender author teams) or single‐author publications. The regression analysis also indicates that there is, for Economics, a small negative effect on citations received if the corresponding author is a woman. Finally, the country (affiliation) of the corresponding author affects the citations received in the two disciplines.

The sources of British economic growth since the Industrial Revolution : not the same old story

Abstract: This paper updates the classic growth accounting research of the early 1980s taking account of improved data that has subsequently become available. The picture of long-run growth which results from incorporating many revisions is considerably different. The long-run path of productivity growth is now that of a roller-coaster with twin peaks in the third quarters of the 19th and 20th centuries rather than a U-shape. Productivity growth appears to have been very slow to accelerate in the Industrial Revolution, the notion of an Edwardian climacteric is not persuasive and the current productivity slowdown stands out as unprecedented.

The political economy of environmental consequences: a review of the empirical literature

Abstract: As a key concern for human survival and development, environmental issues have been widely perceived to be impacted by various political institutional factors. A considerable body of literature has attempted to investigate how different political factors affect environmental policymaking and outcomes. In this paper, we critically review related scholarly works published in peer‐reviewed economic journals in the past 30 years, with an emphasis on the empirical literature. Political institutional factors considered in this survey include corruption, the general concept and specific elements of democracy, and the vertical structure of environmental regulation authority within different levels of governments (i.e. environmental federalism). Studies focusing on the interplay of these factors are also highlighted. Based on a critical review, we provide a guide to the datasets, methodologies, and main findings of the literature. We also point out the existing gaps, and put forward suggestions for future research directions.