Fachbereich Wirtschaftswissenschaft

Impact of Tax Incentives on Industry Performance and Growth

Abstract:

In this paper we develop a theoretical framework to analyze the impact of tax incentives on productivity growth of firms. The effect of subsidies on agricultural performance is one of the most debatable topics in economics academic literature and in agricultural economics in particular. Subsidies, however, can take many forms. The effect of explicit budgetary outlays on sector efficiency received a great deal of attentions in the literature. The effect, however, of implicit forms of subsidization on efficiency and productivity is not well explored in the empirical agricultural economics literature. And this is despite the fact that implicit subsidies in the form of tax incentives, for example, are very popular for developing countries. The empirical analysis is carried out using Ukraine-wide farm-level accounting data for an unbalanced panel of agricultural enterprises over the period 1995-2014

Please not that the lecture will take place in lecture hall 104 in Garystraße 21.

Philipp Bach: Causal Machine Learning - New Estimation Approaches for Empirical Economics

Abstract: In this welcome event, Philipp Bach will present his research on causal machine learning and its applications in empirical economics.High-performance machine learning algorithms have been a significant innovation that has transformed research across various fields over recent decades. However, applying machine learning techniques for empirical economic analysis, such as policy evaluation, presents specific statistical challenges. Philipp Bach will provide an overview of his current research projects, outline his future research plans, and offer an outlook on upcoming topics for teaching econometrics at FU Berlin.

Shushanik Margaryan: An Applied Micro Perspective on Causal Machine Learning 

Abstract: Recent development in econometrics offer new ways for causal evaluation. This talk presents an applied perspective on the role of machine-learning based modeling in microeconometrics with a focus on education, labour economics, and health economics. We'll discuss the huge potentials and open challenges of ML-based causal evaluation as compared to established estimation approaches. 

Combining portfolio rules to improve prediction of global minimum variance portfolio

Abstract: 

We consider the prediction of the global minimum variance portfolio (GMVP) weights based on realized covariance matrices computed from high-frequency intraday returns of risky assets. As the multivariate high-dimensional time series process of covariance matrices is rather complex and hard to estimate without substantial simplifications of the model structure, there exist various competing approaches for predicting the GMVP weights. Our major contribution is the development of a novel approach for combining several given GMVP prediction rules in order to determine a low dimensional time-varying vector of these rules‘ proportions for the GMVP. We provide statistical results on realized rule proportions and suggest a feasible low-dimensional approach to forecast the proportions based on a set of pre-determined GMVP prediction rules. Our findings are illustrated in an empirical study where we forecast the GMVP weights based on 265 risky assets by combining various popular portfolio rules.

Preparing Kids for Capitalism: The Effect of German Reunification

Empirical research has shown that children and their parents are similar to each other in terms of in economic preferences such as patience and risk aversion. What drives this intergenerational correlation in preferences? To address this question, we build a model of preference formation in which children's preferences are shaped by genetic transmission, passive transmission in the local environment, and active socialization by parents. We then use natural experiment of German reunification to assess the importance of these channels. Specifically, our model implies that genetic channels should act independently of the political regime; that passive transmission channels should respond to the greater use of government-provided childcare in East Germany versus parent-provided care in West Germany; and that parents' active socialization efforts should be responsive to the new challenges that moving from a socialist to a capitalist system presents. Empirical evidence on the correlation of preferences between parents and children born on both sides of the border before, during, and after reunification suggests that government intervention had little impact on preference transmission. In contrast, both genetic and active transmission channels find strong support.

Abortion Access and Long-Run Household Outcomes: Evidence from Population-Wide Administrative Data

Abstract:

This paper uses individual-level, linked administrative data on the universe of pregnant females and their families in Australia to study the long-run impacts of abortion on a comprehensive set of outcomes covering the entire household domain. We exploit the unexpected listing of the abortion pill on the Australian national health insurance plan on August 1, 2013, and see a dramatic first-stage reduction in births. Follow-on analyses reveal positive, persistent female labor market reactions, while existing partners do not change their labor supply. However, partners do show significant improvements with their mental health up to ten years after the event. Pre-existing kids in the household are also affected: income per kid rises, and they are more likely to attend University in the future; boys show better mental health; and girls’ use of oral contraceptives increases.

The Inflation-Uncertainty Amplifier

Abstract: 

We study how uncertainty shocks affect the macroeconomy across the inflation cycle using a nonlinear stochastic volatility-in-mean VAR. When inflation is high, uncertainty shocks raise inflation and depress real activity more sharply. A nonlinear New Keynesian model with second-moment shocks and trend inflation explains this via an ”inflation-uncertainty amplifier”: the interaction between high trend inflation and firms’ upward price bias magnifies the effects of uncertainty by increasing price dispersion. An aggressive policy response can replicate the allocation achieved under standard policy when trend inflation is low.

Media Consolidation

Abstract:

Recent decades have seen major changes to the local media environment in the United States, with the absorption of many formerly independent local TV stations into conglomerates. Using a comprehensive dataset of acquisitions, we examine the effects of ownership by the three largest television conglomerates on local news advertising, content, and viewership. Conglomerate owners consistently increase advertising duration during local newscasts. We find large effects on stations' coverage of local events and local politics, but the direction of these effects varies across owners. Despite these changes, viewer responses are minimal. We conclude by investigating downstream consequences on viewers' political knowledge.

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Harsh Rhetoric and Cultural Identity: Backlash Effects of Denmark‘s Ghetto List

Abstract:

We employ a regression discontinuity design to examine the effects of Denmark‘s Ghetto List on the cultural identity of non-Western residents in neighborhoods publicly designated as ``Ghettos‘‘. Despite its harsh rhetoric, the policy involved only modest measures aimed at altering neighborhood composition. We find that non-Western individuals residing in listed neighborhoods became more likely to give their children foreign-sounding names and less likely to enroll them in early childcare. This shift was accompanied by more traditional gender attitudes, stronger self-identification as an immigrant or member of a religious group, and lower propensity to follow Danish news and think immigrants get recognition in Denmark. The cultural responses do not appear to result from changes in labor market integration or residential peer composition, suggesting that the stigmatizing nature of the policy and its surrounding public discourse catalyzed the cultural backlash we observe.

A Causal Machine Learning Analysis of Swiss Active Labor Market Policies

Abstract:

Active labor market policies are widely used in Switzerland, enrolling more than half of all unemployed individuals. This paper evaluates the effectiveness of these programs in improving employment and earnings outcomes using rich administrative data on individuals unemployed in 2014 and 2015, which contains their detailed labor market histories and other covariates. The analysis applies causal machine learning to estimate heterogeneous program effects, enabling granular program evaluation and potential for improved program targeting. The results indicate that programs are most effective for individuals with a non-EU migration background, while Temporary Wage Subsidies also benefit those with lower educational attainment. Finally, shallow policy trees provide practical guidance for improving the targeting of program assignments.

Switching to English to Attract Global Talent

Abstract:          

When organizations’ demand for talent exceeds domestic supply, they can recruit from abroad, but language barriers impede matching. Switching operations to the lingua franca can, in principle, relax this constraint. We show for a model of assortative matching that the abolition of a language constraint increases the average ability of new hires. But an increase in capacity lowers it. We test these predictions in a laboratory of European universities’ economics and business academe. Leveraging a staggered difference-in-differences design, we show that when universities introduce English-taught degree programs, the number of new hires and their average ability—measured by top-quartile publications—rises substantially. After the switch European universities increase their size to that of the US control group. These gains must be weighed against potential costs related to cultural preservation and native-language labor supply.

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Can Democracy Cope with Extreme Views

Abstract:

We study how democracies can manage extremist minority views through Coalition-Preclusion Promises (CPPs), where parties credibly commit to excluding extremists from governing coalitions. We identify conditions under which CPPs improve social welfare by preventing extreme policy shifts. However, these benefits depend on parties’ incentives and voters’ ability to coordinate. The resulting voting game features multiple equilibria, and we extend typical equilibrium selection criteria. Our findings suggest CPPs can be an effective strategy to keep extremist parties out of government.