Learning or Leaning: Persistent and Transitory Spillovers from FDI

Using firm-level data for Jordan, we estimate the extent to which growth spillovers from foreign direct investment (FDI) to local firms stem from persistent learning externalities (i.e., they endure even after foreign investment leaves as knowledge has been transferred to local firms) or from transitory effects (e.g., demand increases which evaporate following disinvestment). We find that they have a significant transitory nature, with employment and capital growth declining when FDI falls, particularly in downstream industries supplied by locals. This suggests that if FDI-attracting policies are intended to promote sustainable growth, it may be more effective to attract and retain FDI via long-term structural policies, for instance, through low corporate tax rates rather than temporary tax holidays or through policies that strengthen the domestic absorptive capacity and linkages between foreign and local firms. It also suggests that FDI-led growth can increase a country's vulnerability to adverse global shocks in that the productivity gains of domestic firms will be partly reversed with the disinvestment of multinational firms

Media Reporting and Business Cycles: Empirical Evidence based on News Data

Recent literature suggests that news shocks could be an important driver of economic cycles. In this article, we use a direct measure of news sentiment derived from media reports. This allows us to examine whether innovations in the reporting tone correlate with changes in the assessment and expectations of the business situation as reported by firms in the German manufacturing sector. We fi nd that innovations in news reporting affect business expectations, even when conditioning on the current business situation and industrial production. The dynamics of the empirical model con rm theoretical predictions that news innovations affect real variables such as production via changes in expectations. Looking at individual sectors within manufacturing, we fi nd that macroeconomic news is at least as important for business expectations as sector-spefici c news. This is consistent with the existence of information complementarities across sectors

Is time-variant information stickiness state-dependent?

This paper estimates information stickiness with regard to inflation expectations in the United States and the Eurozone for the 1981/06–2015/12 and 1998/Q4–2015/Q2 periods, respectively, and further investigates whether such information stickiness is state- dependent. Based on a bootstrap sub-sample rolling-window estimation, we find that information stickiness varies over time, which contradicts the strict time dependency implied under sticky-information theory. We provide evidence that information stickiness depends on inflation volatility, which indicates that information stickiness is state-dependent and that it has a time trend. Using a threshold model, we estimate structural changes in the state- dependence and time-trend of information stickiness. The results show that information stickiness has been more dependent on inflation volatility and has had a higher time-trend in both regions following the 2008 financial crisis.info:eu-repo/semantics/publishedVersio

Cyclic stretch increases splicing noise rate in cultured human fibroblasts

BACKGROUND: Mechanical forces are known to alter the expression of genes, but it has so far not been reported whether they may influence the fidelity of nucleus-based processes. One experimental approach permitting to address this question is the application of cyclic stretch to cultured human fibroblasts. As a marker for the precision of nucleus-based processes, the number of errors that occur during co-transcriptional splicing can then be measured. This so-called splicing noise is found at low frequency in pre-mRNA splicing. FINDINGS: The amount of splicing noise was measured by RT-qPCR of seven exon skips from the test genes AATF, MAP3K11, NF1, PCGF2, POLR2A and RABAC1. In cells treated by altered uniaxial cyclic stretching for 18 h, a uniform and significant increase of splicing noise was found for all detectable exon skips. CONCLUSION: Our data demonstrate that application of cyclic stretch to cultured fibroblasts correlates with a reduced transcriptional fidelity caused by increasing splicing noise

Signaling probabilities in ambiguity: who reacts to vague news?

Ambiguity affects decisions of people who exhibit a distaste of and require a premium for dealing with it. Do ambiguity-neutral subjects completely disregard ambiguity and respond to any vague news? We couple decision-making in ambiguity with a preliminary information processing stage, where news is used to test prior beliefs and, possibly but not necessarily, update them. All decision-makers, including ambiguity-neutral, recognize and account for ambiguity at this stage; higher confidence makes ambiguity-neutral subjects less susceptible to vague news. In a two-color Ellsberg experiment with imprecise signals about the unknown probability of success they are less likely to respond to signals; the difference between them and non-neutral to ambiguity subjects vanishes for high precision signals. Less than 60% subjects choose the ambiguous urn, even for high communicated probabilities of success, suggesting many participants, especially ambiguity-neutral, discard vague news at the information processing stage. JEL: C90, D01, D81, as well as seminar participants at ETH-Zürich, University of Essex, University of Glasgow and University of Hamburg, and participants of iCare conference at HSE in Perm and JE on Ambiguity and Strategic Interactions at the University of Grenoble for helpful comments, suggestions and encouragement. All remaining errors are ours

Explaining Disagreement on Interest Rates in a Taylor-Rule Setting

Most studies on disagreement focus on one specific variable, thereby neglecting the fact that disagreement can be co-moving with disagreement on other variables. In this paper, we explore to what extent disagreement regarding the interest rate is driven by disagreement on inflation and unemployment. This relationship can be motivated by the theoretical concept of the Taylor rule. Using survey microdata for both professional forecasters and consumers, we provide evidence that disagreement on the interest rate is mainly driven by disagreement on inflation. We further show that disagreement is significantly influenced by central bank transparency, as well as news on money and credit conditions