Escola Brasileira de Economia e Finanças

We employ real-time household data to study the impact of the pandemic lockdown on paid and unpaid work in Spain. We document large employment losses that affected more severely low-skilled workers and to some extent college educated women. We show that the pandemic resulted in an increase in the gender gap in total hours worked, including paid and unpaid work. This is due to the smaller decrease in paid work hours among women that was not compensated by a smaller increase in unpaid work. We also examine the impact of the lockdown on within-household specialization patterns. We find that while men slightly increased their participation in home production, the burden continued to be borne by women, irrespective of their labor market situation. This evidence suggests that traditional explanations cannot account for the unequal distribution of the domestic workload. Additional analysis supports gender norms as a plausible explanation for our findings.

In the single-IV model, researchers commonly rely on t-ratio-based inference, even though the literature has quantified its potentially severe large-sample distortions. Building on Stock and Yogo (2005), we introduce the tF critical value function, leading to a standard error adjustment that is a smooth function of the first-stage F-statistic. For one-quarter of specifications in 61 AER papers, corrected standard errors are at least 49 and 136 percent larger than conventional 2SLS standard errors at the 5 percent and 1 percent significance levels, respectively. tF confidence intervals have shorter expected length than those of Anderson and Rubin (1949), whenever both are bounded. (JEL C13, C26)

National material stock (MS) accounts have been a neglected field of analysis in industrial ecology, possibly because of the difficulty in establishing such accounts. In this research, we propose a novel method to model national MS based on historical material flow data. This enables us to avoid the laborious data work involved with bottom-up accounts for stocks and to arrive at plausible levels of stock accumulation for nations. We apply the method for the United States and Japan to establish a proof of concept for two very different cases of industrial development. Looking at a period of 75 years (1930-2005), we find that per capita MS has been much higher in the United States for the entire period, but that Japan has experienced much higher growth rates throughout, in line with Japan's late industrial development. By 2005, however, both Japan and the United States arrive at a very similar level of national MS of 310 to 375 tonnes per capita, respectively. This research provides new insight into the relationship between MS and flows in national economies and enables us to extend the debate about material efficiency from a narrow perspective of throughput to a broader perspective of stocks.

Abstract This book presents an in-depth discussion of the auction theory. It introduces the concept of Bayesian Nash equilibrium and the idea of studying auctions as games. Private, common, and affiliated values models and multi-object auction models are described. A general version of the Revenue Equivalence Theorem is derived and the optimal auction is characterized to relate the field of mechanism design to auction theory.

Marriage has declined since 1960, with the drop being more significant for noncollege-educated individuals versus college-educated ones. Divorce has increased, more so for the noncollege-educated. Additionally, positive assortative mating has risen. Income inequality among households has also widened. A unified model of marriage, divorce, educational attainment, and married female labor-force participation is developed and estimated to fit the postwar US data. Two underlying driving forces are considered: technological progress in the household sector and shifts in the wage structure. The analysis emphasizes the joint role that educational attainment, married female labor-force participation, and marital structure play in determining income inequality. (JEL D13, D31, D83, I20, J12, J16, O33)

There has been an increase in the number of children going to school in England who do not speak English as a first language. We investigate whether this has an impact on the educational outcomes of native English speakers at the end of primary school. We show that the negative correlation observed in the raw data is mainly an artefact of selection: non-native speakers are more likely to attend school with disadvantaged native speakers. We attempt to identify a causal impact of changes in the percentage of non-native speakers. Our results suggest zero effect and rule out negative effects.

Degraded pasture is a major liability in Brazilian agriculture, but restoration and recovery efforts could turn this area into a new frontier to both agricultural yield expansion and forest restoration. Currently, rural properties with larger degraded pasture areas are associated with higher levels of technical inefficiency in Brazil. The recovery of 12 million ha of degraded pastures could generate an additional production of 17.7 million bovines while reducing the need for new agricultural land. Regional identification of degraded pastures would facilitate the targeting of agricultural extension and advisory services and rural credit efforts aimed at fostering pasture recovery. Since only 1% of Brazilian municipalities contain 25% of degraded pastures, focusing pasture recovery efforts on this small group of municipalities could generate considerable benefits. More efficient allocation of degraded and native pastures for meat production and forest restoration could provide land enough to fully comply with its Forest Code requirements, while adding 9 million heads to the cattle inventory. Degraded pasture recovery and restoration is a win-win strategy that could boost livestock husbandry and avoid deforestation in Brazil and has to be the priority strategy of agribusiness sector.

Twelve percent of the Malawian population is HIV infected. Eighteen percent of sexual encounters are casual. A condom is used a third of the time. To analyze the Malawian epidemic, a choice‐theoretic general equilibrium search model is constructed. In the developed framework, people select between different sexual practices while knowing the inherent risk. The calibrated model is used to study several policy interventions, namely, ART, circumcision, better condoms, and the treatment of other STDs. The efficacy of public policy depends upon the induced behavioral changes and equilibrium effects. The framework complements the insights from epidemiological studies and small‐scale field experiments.

We investigated community-based data of the Mini-Mental State Examination (MMSE) scores of elderly residents along with the effects of age and educational level. MMSE was planned for all residents over 65 years of age in a town in northern Japan. The number of elders who took the MMSE was 2,266 (90%). The score significantly declined with age and lower educational level, although no effect of sex was apparent. For the MMSE subitems, all the values except for that of naming showed effects of both age and educational level. Those screened by MMSE who fell in the range of cognitive impairment (< 24) accounted for 21.8% and those with severe cognitive impairment (< 18) constituted 6.0%. Despite the differences in language and culture, the mean scores are remarkably similar between Japan and other countries. This is the first normative, community-based study of MMSE among elderly adults in Japan.

Abstract State repression is a prominent feature of nondemocracies, but its effectiveness in quieting dissent and fostering regime survival remains unclear. We exploit the location of military bases before the coup that brought Augusto Pinochet to power in Chile in 1973, which is uncorrelated to precoup electoral outcomes, and show that counties near these bases experienced more killings and forced disappearances at the hands of the government during the dictatorship. Our main result is that residents of counties close to military bases both registered to vote and voted “No” to Pinochet's continuation in power at higher rates in the crucial 1988 plebiscite that bolstered the democratic transition. Potential mechanisms include informational frictions on the intensity of repression in counties far from bases and shifts in preferences caused by increased proximity to the events. Election outcomes after democratization show no lasting change in political preferences.

Firms that want to exploit Smart City's opportunities need to cooperate with local governments. From a managerial point of view, there is scant research on how to select public partners in Smart City projects. In fact, while there are several cities claiming to be ‘smart’, not all cities fulfil the essential requirements for successful Smart City projects. This paper shows how to build successful public–private alliances in Smart Cities and, more specifically, how to select the right city to test, develop or sell smart technologies. This study uses a multiple‐case research design and follows an exploratory and qualitative methodology. The results show that firms improve the success of their projects if they assess three main aspects of partner selection, these being partner complementarity, commitment and compatibility. The paper, therefore, provides several managerial implications regarding how firms may be more effective in selecting where to start their Smart City projects and how public organisations may become more attractive. Finally, academic implications, limitations and future lines of research are presented.

This paper develops a general framework to study how misinterpreting information impacts learning. Our main result is a simple criterion to characterize long‐run beliefs based on the underlying form of misspecification. We present this characterization in the context of social learning, then highlight how it applies to other learning environments, including individual learning. A key contribution is that our characterization applies to settings with model heterogeneity and provides conditions for entrenched disagreement. Our characterization can be used to determine whether a representative agent approach is valid in the face of heterogeneity, study how differing levels of bias or unawareness of others' biases impact learning, and explore whether the impact of a bias is sensitive to parametric specification or the source of information. This unified framework synthesizes insights gleaned from previously studied forms of misspecification and provides novel insights in specific applications, as we demonstrate in settings with partisan bias, overreaction, naive learning, and level‐k reasoning.

Households face large income uncertainty that varies substantially over the business cycle. We examine the macroeconomic consequences of these variations in a model with incomplete markets, liquid and illiquid assets, and a nominal rigidity. Heightened uncertainty depresses aggregate demand as households respond by hoarding liquid “paper” assets for precautionary motives, thereby reducing both illiquid physical investment and consumption demand. We document the empirical response of portfolio liquidity and aggregate activity to surprise changes in idiosyncratic income uncertainty and find both to be quantitatively in line with our model. The welfare consequences of uncertainty shocks and of the policy response thereto depend crucially on a household's asset position

The use of debt to finance risky entrepreneurial-firm projects is rife with informational and contracting problems. Nonetheless, we document widespread lending to startups in three innovation-intensive sectors and in early stages of development. At odds with claims that the secondary patent market is too illiquid to shape debt financing, we find that intensified patent trading increases the annual rate of startup lending, particularly for startups with more re- deployable (less firm-specific) patent assets. Exploiting differences in venture capital (VC) fundraising cycles and a negative capital-supply shock in early 2000, we also find that the credibility of VC commitments to refinance and grow fledgling companies is vital for such lending. Our study illuminates friction-reducing mechanisms in the market for venture lending, a surprisingly active but opaque arena for innovation financing, and tests central tenets of contract theory.

Abstract Can attitudes towards minorities, an important cultural trait, be changed? We show that the presence of African American soldiers in the UK during World War II reduced anti-minority prejudice, a result of the positive interactions which took place between soldiers and the local population. The change has been persistent: in locations in which more African American soldiers were posted there are fewer members of and voters for the UK’s leading far-right party, less implicit bias against blacks and fewer individuals professing racial prejudice, all measured around 2010. Our results point towards intergenerational transmission from parents to children as the most likely explanation.

Based on a family of discrepancy functions, we derive nonparametric stochastic discount factor bounds that naturally generalize variance, entropy, and higher-moment bounds. These bounds are especially useful to identify how parameters affect pricing kernel dispersion in asset pricing models. In particular, they allow us to distinguish between models where dispersion comes mainly from skewness from models where kurtosis is the primary source of dispersion. We analyze the admissibility of disaster, disappointment aversion, and long-run risk models with respect to these bounds. This paper was accepted by Jerome Detemple, finance.

We study the causal effect of social media on ethnic hate crimes and xenophobic attitudes in Russia using quasi-exogenous variation in social media penetration across cities. Higher penetration of social media led to more ethnic hate crimes, but only in cities with a high pre-existing level of nationalist sentiment. Consistent with a mechanism of coordination of crimes, the effects are stronger for crimes with multiple perpetrators. We implement a national survey experiment and show that social media persuaded young and low-educated individuals to hold more xenophobic attitudes, but did not increase respondents' openness to expressing these views. Our results are consistent with a simple model of social learning where penetration of social networks increases individuals' propensity to meet like-minded people. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

This paper estimates exchange rate pass-through of six major industrial countries using a time-varying parameter with stochastic volatility model. Exchange rate pass-through is divided into impacts of exchange rate fluctuations to import prices (first-stage pass-through) and those of import price movements to consumer prices (second-stage pass-through). The paper finds that both stages of pass-through have declined over time for all the sample countries. The decline in second-stage pass-through is associated with the emergence of the low and stable inflation environment as well as a rise in import penetration, while the relationship to the inflation environment is weak for first-stage pass-through.

As we write, the Covid-19 coronavirus is spreading throughout the globe.Besides its impact on public health, this coronavirus outbreak is likely to have significant economic consequences.The consensus is that the virus will cause a negative supply shock to the world economy, by forcing factories to shut down and disrupting global supply chains (OECD, 2020).But how deep and persistent is this supply disruption going to be?Will aggregate demand be affected?What is the appropriate monetary policy response?What about fiscal policy?These questions are currently at the center of a heated debate.Tackling these questions requires taking into account a range of scenarios.In this short note, we consider the (hopefully pessimistic) possibility that the supply disruption caused by Covid-19 will be severe and persistent, potentially lasting beyond the end of the epidemic.To be clear, we have no reasons to believe that this scenario is more plausible than other -more optimistic -ones.It might very well be, in fact, that the virus will end up causing a relatively mild and short-lived global recession, followed by a V-shaped recovery (Wren-Lewis, 2020).Given the huge uncertainty surrounding the future evolution of the epidemic, however, it is useful to workout the macroeconomic implications of more pessimistic scenarios.To do so, we employ a very simple analytic framework.We highlight three results.First, the spread of the virus might depress global demand.Second, a supply-demand doom loop might take place, amplifying the supply disruption directly caused by the virus.Third, this epidemic might make the global economy vulnerable to stagnation traps, that is episodes of low growth and high unemployment driven by pessimistic animal spirits.While monetary easing can help mitigate the drop in global demand, our analysis suggests that aggressive fiscal policy interventions to support investment will be needed to push the global economy out of stagnation.Before starting, one disclaimer is in order.Both the model and the results that follow draw heavily on existing works.In particular, the results in Sections 1 and 2 are based on Gal (2009) and Lorenzoni (2009).Sections 3 and 4 are instead based on Benigno and Fornaro (2018).The

Business connections can mitigate agency conflicts by facilitating efficient information transfers, but can also be channels for inefficient favoritism. I analyze these two effects in the mutual fund industry and find that fund directors and advisory firms that manage the funds hire each other preferentially based on the intensity of their past interactions. I do not find evidence that stronger board-advisor ties correspond to better or worse outcomes for fund shareholders. These results suggest that the two effects of board-management connections on investor welfare—improved monitoring and increased potential for collusion—balance out in this setting.