A property market slump may have ripple effects on innovation, productivity of staff
A negative shock to household wealth, such as losses in property markets, can hamper employee productivity, according to a recent National Bureau of Economic Research (NBER) working paper authored by Shai Bernstein, associate professor at the Stanford Graduate School of Business, and others. They analyse the impact of the 2008 US housing and financial crisis on employees working at the same firm but exposed to different house price shocks.
Focussing on employees engaged in innovation, they find that those most affected by the crisis produced fewer patents and patents of lower quality (based on citations). The effects were seen to be strongest among employees who suffered the largest housing price declines.
Read more: Does Economic Insecurity Affect Employee Innovation? (bit.ly/2AVABiL)
The US dollar has an outsized effect on trade between two countries, even when it is not an official currency in either of them, according to a recent research paper by Emine Boz of the International Monetary Fund (IMF) and co-authors.
This is because the US dollar is often the currency of choice for invoicing trade across the globe. Thus, trade volumes between two countries often depend more on the dollar’s movement rather than movement in the bilateral exchange rate.
When the dollar strengthens, it becomes costlier to import from each other as prices are often sticky. The researchers at IMF conclude that a 1% appreciation in the dollar against all other currencies leads to a 0.6-0.8% decline in the global trade volume.
Read more: Global Trade and the Dollar (bit.ly/2hxOevY)
Contact between different caste groups can reduce prejudice if the groups work jointly to achieve common goals, a new study by Matt Lowe, an economist at the Massachusetts Institute of Technology shows. The field experiment assigned 1,261 young Indian men from different castes to either participate in month-long cricket leagues or to serve as a control group.
Of those assigned to play, some were allotted to homogenous caste teams while the others to mixed-caste teams. Once teams were formed, the author chose opponents randomly.
Thus, in the experiment, those in mixed-caste teams had collaborative contact with other castes, while those in same-caste teams often had an adversarial contact with others.
The results showed that while collaborative contact increased cross-caste friendship even with non-teammates, adversarial contact harms friendships even with non-opponents.
Read more: Types of Contact: A Field Experiment on Collaborative and Adversarial Caste Integration (bit.ly/2j1dGu8)
The representation of women economists in US academia has not risen noticeably in the last 15 years, according to a study by Anusha Chari and Paul Goldsmith-Pinkham, economists with the University of North Carolina at Chapel Hill and the Federal Reserve Bank of New York respectively.
They make this claim on the basis of trends observed in NBER’s prestigious Summer Institute conferences between 2001 and 2016.
Women constituted only 20.6% of all authors whose papers were scheduled to be presented in these conferences between 2013 and 2016. This was only a slight improvement over 18.5% in 2001-2004.
Representation in such conferences is important as it increases the visibility of new work and aids in professional advancement.
Low representation is not due to any evident bias against accepting papers submitted by women. Instead, it reflects a fewer number of submissions by women, in line with their general under-representation in the field.
However, gender does seem to matter in some cases; women in finance have a 2 percentage point lower probability of a paper’s acceptance when compared to men.
Read more: Gender Representation in Economics across Topics and Time (nyfed.org/2hybXfq)
Besides tackling outdoor pollution, authorities also need to focus on the widespread problem of indoor pollution in India, argues a recent article by Anca Balietti and Prateek Mittal, researchers associated with the Harvard Kennedy School and Institute for Financial Management and Research, Chennai, respectively.
Using data from the 2005-06 National Family Health Survey, they show that the use of solid cooking fuels, such as coal, wood, crop residue, and dung raises the risk of stunting among children.
A child is regarded as stunted if her height-for-age is below certain established thresholds.
Thirty-eight percent of Indian children under the age of five were stunted as of 2015-16. While a transition to cleaner fuels and technology is one long-term solution, another option is to have appropriate ventilation mechanisms. The authors show that the presence of a window in households burning solid fuels is associated with a 3.4% lower prevalence of stunting.
Read more: Indoor air pollution and stunting among Indian children (bit.ly/2hxPm2G)
Economics Digest runs weekly, and features interesting reads from the world of economics.
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- Sanskrit most suitable for machine learning, AI: Ram Nath Kovind