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Tag Archives: Organisation of Markets

Moral Values and Voting

Summary What roles do moral values play in elections, and how do politicians appeal to them? To examine these questions, this research introduces a core idea of modern moral psychology into the study of political economy. People may endorse “universalist” values, such as individual rights, justice, and impartial fairness, or more “communal” concepts, such as community, loyalty, betrayal, respect, and...

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Age of marriage, weather shocks, and the direction of marriage payments

Summary Child marriage, defined as marriage before the age of 18, has been associated with a wide array of poor economic, social, and health outcomes for women and their children. It was estimated in 2014, however, that around half of all prime-aged women living in South Asia and in Sub-Saharan Africa were married as children.  This post summarizes a recent article, which has demonstrated that aggregate...

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Innovation in the global firm

Summary Multinational corporations are among the most innovative firms in the world. Although they are defined by their geographically fragmented production processes, the innovation that they carry out is comparatively concentrated, with a large share of them pursuing innovation investment mainly in one ‘headquarters’ country.  A new study analyzes data on the global operations of US-based...

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How acquisitions affect firm behavior and performance: Evidence from the dialysis industry

Summary Health care markets have become increasingly concentrated through mergers and acquisitions. This consolidation can lower costs due to economies of scale and improve patient outcomes through coordinated care. However, greater concentration may also result in higher prices or lower quality. A recent paper studies the effects of mergers and acquisitions in the dialysis industry, which makes up 6% of...

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Who Profits from Patents? Rent-Sharing at Innovative Firms

Summary Mounting empirical evidence that intra-firm wage differences contribute substantially to wage inequality among identically skilled workers has renewed interest in theoretical models of the ways in which variation in firm productivity can influence worker pay. A key question is the extent to which firms pass changes in the average labor productivity through into wages, but observational...

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Capitalists in the Twenty-First Century

Summary In the 21st century, top incomes have risen due to business income and other non-wage income like interest and rent (Piketty 2014; Piketty, Saez, and Zucman 2018). Hence, recent trends raise the possibility that the financial-capital rich—those who derive most of their income from nonhuman capital—may possibly now dominate the ranks of America’s highest earners instead of the human-capital...

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Insuring the Poor: Experimental evidence from contract farming in Kenya

Summary Around the world, the poor do not typically purchase insurance, despite having the most to gain from risk reduction. In the case of crop insurance, studies consistently find low adoption among small farmers, despite the large risks they face from drought, flood, and pests. One explanation is that insurance products typically require the premium to be paid upfront. Farmers must pay premiums at the...

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Consumer spending during unemployment: evidence from US bank account data

Summary Unemployment insurance (UI) benefits provide an important financial cushion for the many people who lose their jobs, helping to stabilize their consumer spending while they look for new work opportunities. But is the typical duration of UI benefits in the United States of six months the appropriate length of time – or might some people be better off with a longer period, perhaps at a lower level...

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Jury verdicts: evidence from eighteenth century London of the dangers of sequential decision-making

Summary When juries in criminal courts determine whether a defendant is guilty or not guilty, are their decisions at all influenced by the verdict and characteristics of the previous trial on which they were sitting? In an ideal world, every case should be assessed solely on its own merits, but a new study suggests that there is a strong element of what economists call ‘path dependency’ in jury...

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The Age of Mass Migration: contrasting economic and political effects

Summary Recent waves of immigration to Europe and the United States have triggered concerns about the economic impact on the native populations, as well as calls for tighter restrictions. There are historical echoes in the Age of Mass Migration in the late nineteenth and early twentieth centuries, when more than 30 million European immigrants moved to the United States, and the share of immigrants in the...

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