9,144 research outputs found
Resolving the Identification Problem in Linear Social Interactions Models: Modeling with Between-Group Spillovers
The linear-in-means model has been a theoretical and empirical workhorse of the social interactions field. As was noted by Manski (1993), the collinearity between group-level 'contextual' and 'endogenous' effects leads to an inability to identify the structural parameters of this model. Manski called this the 'reflection' problem. This paper suggests that Manksiâs reflection problem is unique to a special case of a more general context in which agents care about multiple reference groups. Specifically, the identification problem is resolved through a model generalization to include between-group and within-group effects.Social Interactions, Identification, Linear-in- Means Model
Welfare Stigma or Information Sharing? Decomposing Social Interactions Effects in Social Benefit Use
Empirical research has shown that social interactions affect the use of public benefits, thus providing evidence in favor of the idea of âwelfare cultures.â In this paper we take the next crucial step by separately identifying the role of social stigma and information sharing in welfare participation, using Census data. We argue that the stigma vs. information distinction has possibly important consequences. Separate identification exploits the asymmetry between association and mere spatial proximity: we asume that while information is transmitted within groups, stigma works across groups as well. We also allow for heterogeneity of social effects across different race-ethnic groups and find non-trivial differences. We find that while the information channel is more important than stigma, White Americans appear to perceive stigma more from otherWhite Americans than by other races, and Black and Hispanic Americans appear to respond principally to stigma from external groupssocial interactions, neighborhood effects, welfare stigma
Monetary policy and capital regulation in the US and Europe
From the onset of the 2007-2009 crisis, the Federal Reserve and the European Central Bank have aggressively lowered interest rates. Both sets of changes are at odds with an anti-inflationary stance of monetary policy; indeed, as the crisis began in August 2007 inflation expectations were high and rising, particularly in the United States. We have two additions to the literature. One, we present a model economy with a leveraged and regulated financial sector. Two, we find optimal Taylor rules for our economy that are consistent with a strong pro-inflationary reaction during financial crisis while maintaining a standard output-inflation mandate. We have three interpretations of our results. One, because the Federal Reserve has partial control over bank regulation it can exercise regulatory lenience. Two, the Fedâs stronger output orientation means that it will potentially respond more quickly when faced with constrained banks. Three, our results support procyclical capital regulation. JEL Classification: E52, E58, G18, G28capital regulation, crisis, monetary policy
Evaluating claims of bias in academia : a comment on Klein and Western's "How many Democrats per Republican at UC-Berkeley and Stanford?"
The Balance Sheet Channel
In this paper, we study the role of the credit channel of monetary policy in the context of a DSGE model. Through the use of a regulated banking sector subject to a regulatory capital constraint on lending, we provide alternative interpretations that can potentially explain differences in the implementation of monetary policy without appealing to ad-hoc central bank preferences. This is accomplished through the characterization of the external finance premium as a function of bank leverage and systemic aggregate risk.
Systemic Risk and Network Formation in the Interbank Market
We propose a novel mechanism to facilitate understanding of systemic risk in financial markets. The literature on systemic risk has focused on two mechanisms, common shocks and domino-like sequential default. Our approach is a formal model that provides an intellectual combination of the two by looking at how shocks propagate through a network of interconnected banks. Transmission in our model is not based on default. Instead, we provide a simple microfoundation of banksâ profitability based on classic competition incentives. As competitors lending quantities change, both for closely connected ones and the whole market, banks adjust their own lending decisions as a result, generating a âtransmissionâ of shocks through the system. We provide a unique equilibrium characterization of a static model, and embed this model into a full dynamic model of network formation with n agents. Because we have an explicit characterization of equilibrium behavior, we have a tractable way to bring the model to the data. Indeed, our measures of systemic risk capture the propagation of shocks in a wide variety of contexts; that is, it can explain the pattern of behavior both in good times as well as in crisis.Financial networks; interbank lending; interconnections; network centrality; spatial autoregressive models
The K20 survey. IV. The redshift distribution of Ks<20 galaxies: a test of galaxy formation models
We present the redshift distribution of a complete sample of 480 galaxies
with Ks<20 distributed over two independent fields covering a total area of 52
arcmin^2. The redshift completeness is 87% and 98% respectively with
spectroscopic and high-quality and tested photometric redshifts. The redshift
distribution of field galaxies has a median redshift z_{med}\sim 0.80, with
\sim 32% and \sim 9% of galaxies at z>1 and z>1.5 respectively. A ``blind''
comparison is made with the predictions of a set of the most recent LambdaCDM
hierarchical merging and pure luminosity evolution (PLE) models. The
hierarchical merging models overpredict and underpredict the number of galaxies
at low-z and high-z respectively, whereas the PLE models match the median
redshift and the low-z distribution, still being able to follow the high-z tail
of N(z). We briefly discuss the implications of this comparison and the
possible origins of the observed discrepancies. We make the redshift
distribution publicly available.Comment: 5 pages, 5 figures, to appear in Astronomy & Astrophysics Letter
Detecting implausible social network effects in acne, height, and headaches: longitudinal analysis
Objective To investigate whether ânetwork effectsâ can be detected for health outcomes that are unlikely to be subject to network phenomena
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