International Trade and Polarization in the Labor Market

The paper builds an argument that international trade can be one explanation behind polarization of employment in the labor market observed in developed countries such as U.K. and U.S. It considers a small open economy, having production sectors which use three types of labor: high-skill, middle-skill and low-skill. The economy faces an increase in the relative price of the high-skill intensive sector. Using decision rules for choosing middle-skill and low-skill education, it is shown that such a terms of trade shock can lead to higher shares of high-skill as well as low-skill workers in the total workforce. The effects off-shoring on wages and job composition are also studied. That of low-skill and high-skill tasks, not middle-skill tasks, is shown to contribute towards polarization in job composition

A Nonbehavioral Theory of Saving

We present a model where the saving rate of the household sector, especially households at the bottom of the income distribution, becomes the endogenous variable that adjusts in order for full employment to be maintained over time. An increase in income inequality and the current account deficit and a consolidation of the government budget lead to a decrease in the saving rate of the household sector. Such a process is unsustainable because it leads to an increase in the household debt-to-income ratio, and maintaining it depends on some sort of asset bubble. This framework allows us to better understand the factors that led to the Great Recession and the dilemma of a repeat of this kind of unsustainable process or secular stagnation. Sustainable growth requires a decrease in income inequality, an improvement in the external position, and a relaxation of the fiscal stance of the government

Gender Differences in Sleep Deprivation Effects on Risk and Inequality Aversion: Evidence from an Economic Experiment

Excessive working hours—even at night—are becoming increasingly common in our modern 24/7 society. The prefrontal cortex (PFC) is particularly vulnerable to the effects of sleep loss and, consequently, the specific behaviors subserved by the functional integrity of the PFC, such as risk-taking and pro-social behavior, may be affected significantly. This paper seeks to assess the effects of one night of sleep deprivation on subjects’ risk and social preferences, which are probably the most explored behavioral domains in the tradition of Experimental Economics. This novel cross-over study employs thirty-two university students (gender-balanced) participating to 2 counterbalanced laboratory sessions in which they perform standard risk and social preference elicitation protocols. One session was after one night of undisturbed sleep at home, and the other was after one night of sleep deprivation in the laboratory. Sleep deprivation causes increased sleepiness and decreased alertness in all subjects. After sleep loss males make riskier decisions compared to the rested condition, while females do the opposite. Females likewise show decreased inequity aversion after sleep deprivation. As for the relationship between cognitive ability and economic decisions, sleep deprived individuals with higher cognitive reflection show lower risk aversion and more altruistic behavior. These results show that one night of sleep deprivation alters economic behavior in a gender-sensitive way. Females’ reaction to sleep deprivation, characterized by reduced risky choices and increased egoism compared to males, may be related to intrinsic psychological gender differences, such as in the way men and women weigh up probabilities in their decision-making, and/or to the different neurofunctional substrate of their decision-making.The authors acknowledge financial support from the Spanish Ministry of Economic Competititveness (ECO2012-34928), Italian Ministry of University and Research MIUR (PRIN 20103S5RN3_002), Generalitat Valenciana (Research Projects Gruposo3/086), the Instituto Valenciano de Investigaciones Económicas (IVIE), and the Ministero della Salute (RF-2009-1528677)

Prediksi Kenaikan atau Penurunan Indeks Pasar Keuangan Indonesia dengan Menggunakan Bayesian Network

Investasi saham pada pasar keuangan dilakukan untuk meningkatkan aset pada masa depan. Dalam melakukan investasi harus mempertimbangkan hasil yang akan didapatkan atau biasa disebut return. Setiap investor akan berusaha mendapatkan return semaksimal mungkin dari investasi yang dilakukannya. Oleh karena itu, perlu dilakukan prediksi perubahan kenaikan atau penurunan pada pasar saham. Beberapa metode untuk membuat prediksi adalah Bayesian Network dan Algoritma Naive Bayes. Pada Tugas Akhir ini, dilakukan pemodelan jaringan sektor-sektor pasar keuangan Indonesia dengan menggunakan Bayesian Network, lalu melakukan prediksi berdasarkan kenaikan atau penurunan harga penutupan dari tiap sektor. Metode yang digunakan adalah menggunakan Algoritma Naive Bayes Diskrit dan Kontinu. Setelah itu, menentukan metode yang terbaik untuk perhitungan prediksi dengan melihat tingkat akurasi dari setiap metode dengan confusion matrix. Sektor pasar keuangan yang digunakan yaitu nilai tukar USD/IDR, IHSG, dan Obligasi. Perhitungan dilakukan berdasarkan ketergantungan antara nilai tukar USD/IDR terhadap IHSG, dan nilai tukar USD/IDR terhadap Obligasi. Metode Naive Bayes Diskrit menunjukan hasil yang lebih akurat dengan akurasi sebesar 84% untuk IHSG dan 76% untuk Obligasi. Sedangkan perhitungan dengan metode Naive Bayes Kontinu memiliki akurasi sebesar 52% untuk IHSG dan 48% untuk Obligasi. Sektor nilai tukar USD/IDR lebih mempengaruhi IHSG, karena tingkat akurasi yang diperoleh IHSG lebih tinggi dibandingkan dengan Obligasi

Status Inequality, Moral Disengagement and Violence

This paper studies the causal effect of status differences on moral disengagement and violence. To measure violent behavior, in the experiment, a subject can inflict a painful electric shock on another subject in return for money. We exogenously vary relative status in the realm of sexual attractiveness. In three between-subject conditions, the assigned other subject is either of higher, lower or equal status. The incidence of electric shocks is substantially higher among subjects matched with higher- and lower-status others, relative to subjects matched with equal-status others. This causal evidence on the role of status inequality on violence suggests an important societal cost of economic and social inequalities