Measuring Monetary Policy with Residual Sign Restrictions at Known Shock Dates

We propose a novel identification strategy to measure monetary policy in a structural VAR. It is based exclusively on known past policy shocks, which are uncovered from high-frequency data, and does not rely on any theoretical a-priori restrictions. Our empirical analysis for the euro area reveals that interest rate decisions of the ECB surprised financial markets at least fifteen times since 1999. This information is used to restrict the sign and magnitude of the structural residuals of the policy rule equation at these shock dates accordingly. In spite of its utmost agnostic nature, this approach achieves strong identification, suggesting that unexpected ECB decisions have an immediate impact on the short-term money market rate, the narrow money stock, commodity prices, consumer prices and the Euro-Dollar exchange rate, and that real output responds gradually. Our close to assumption-free approach obtains as an outcome what traditional sign restrictions on impulse responses impose as an assumption.Series: Department of Economics Working Paper Serie

Atmospheric Pollution, Health and Height in Late Nineteenth Century Britain

Atmospheric pollution was an important side effect of coal-fired industrialisation in the nineteenth century. In Britain emissions of black smoke were on the order of fifty times as high as they were a century later. In this paper we examine the effects of these emissions on child development by analysing the heights on enlistment during the First World War of men born in England and Wales in the 1890s. We use the occupational structure to measure the coal intensity of the districts in which these men were observed as children in the 1901 census. We find strong negative effects of coal intensity on height, which amounts to difference of almost an inch between the most and least polluted localities. These results are robust to a variety of specification tests and they are consistent with the notion that the key channel of influence on height was via respiratory infection. The subsequent reduction of emissions from coal combustion is one factor contributing to the improvement in health (and the increase in height) during the twentieth century

Association of body mass index in midlife with morbidity burden in older adulthood and longevity

Importance: Abundant evidence links obesity with adverse health consequences. However, controversies persist regarding whether overweight status compared with normal body mass index (BMI; calculated as weight in kilograms divided by height in meters squared) is associated with longer survival and whether this occurs at the expense of greater long-term morbidity and health care expenditures. Objective: To examine the association of BMI in midlife with morbidity burden, longevity, and health care expenditures in adults 65 years and older. Design, Setting, and Participants: Prospective cohort study at the Chicago Heart Association Detection Project in Industry, with baseline in-person examination between November 1967 and January 1973 linked with Medicare follow-up between January 1985 and December 2015. Participants included 29 621 adults who were at least age 65 years in follow-up and enrolled in Medicare. Data were analyzed from January 2020 to December 2021. Exposures: Standard BMI categories. Main Outcomes and Measures: (1) Morbidity burden at 65 years and older assessed with the Gagne combined comorbidity score (ranging from -2 to 26, with higher score associated with higher mortality), which is a well-validated index based on International Classification of Diseases, Ninth Revision codes for use in administrative data sets; (2) longevity (age at death); and (3) health care costs based on Medicare linkage in older adulthood (aged ≥65 years). Results: Among 29 621 participants, mean (SD) age was 40 (12) years, 57.1% were men, and 9.1% were Black; 46.0% had normal BMI, 39.6% were overweight, and 11.9% had classes I and II obesity at baseline. Higher cumulative morbidity burden in older adulthood was observed among those who were overweight (7.22 morbidity-years) and those with classes I and II obesity (9.80) compared with those with a normal BMI (6.10) in midlife (P \u3c .001). Mean age at death was similar between those who were overweight (82.1 years [95% CI, 81.9-82.2 years]) and those who had normal BMI (82.3 years [95% CI, 82.1-82.5 years]) but shorter in those who with classes I and II obesity (80.8 years [95% CI, 80.5-81.1 years]). The proportion (SE) of life-years lived in older adulthood with Gagne score of at least 1 was 0.38% (0.00%) in those with a normal BMI, 0.41% (0.00%) in those with overweight, and 0.43% (0.01%) in those with classes I and II obesity. Cumulative median per-person health care costs in older adulthood were significantly higher among overweight participants ($12 390 [95$10 427 to $14 354]) and those with classes I and II obesity ($23 396 [95% CI, $18 474 to$28 319]) participants compared with those with a normal BMI (P \u3c .001). Conclusions and Relevance: In this cohort study, overweight in midlife, compared with normal BMI, was associated with higher cumulative burden of morbidity and greater proportion of life lived with morbidity in the context of similar longevity. These findings translated to higher total health care expenditures in older adulthood for those who were overweight in midlife

Smoking cessation and weight gain: Evidence from China

Cigarette smoking has long been viewed as a means to control body weight. However, studies on the association between smoking cessation and weight gain have reported mixed findings and, notably, there is limited evidence among the Chinese population – the world’s largest smoker population. The extent to which smoking cessation is positively associated with body weight is of interest as excessive weight gain contributes to heart disease, diabetes, hypertension, musculoskeletal disorders, and some cancers. Additionally, concerns over weight gain may dissuade current smokers from quitting. Using data from the China Health and Nutrition Survey (CHNS), we examine the association between smoking cessation and body weight in China. To account for the nonrandom nature of smoking cessation, our research design relies on within-individual variation in smoking status to remove the influence of time-invariant unobserved differences across individuals that are correlated with both cessation and body weight. We find that smoking cessation is associated with a modest increase in weight (0.329 kg, 0.51 % off the mean) and no significant changes in the prevalence of overweight or obesity

Returns from Investments in the General Skills of Principals: A Study of the Chicago Public Schools Principal Residency Program

Presentation given at Education Policy Research Symposium, Texas Schools Project

Die Deregulierung der Finanzmärkte als Ursache ihrer Krise

Die Finanzmarktreformen nach der Depression in den 1930er Jahren und die Neuordnung des internationalen Finanzsystems in Bretton Woods 1944 bildeten die Grundlage für eine marktwirtschaftliche Ordnung mit stark regulierten Finanzmärkten, die sich im Westen nach dem Zweiten Weltkrieg etablierte. Die Instabilität des Wechselkursregimes aufgrund der asymmetrischen Rolle des Dollars bewirkte den Zusammenbruch dieses Ordnungsrahmens. Starken Wechselkursschwankungen folgten Erdölpreisschocks, die eine Hochzinspolitik auslösten, welche die Regulierung der Finanzmärkte in den USA und in Großbritannien untergrub. Die durch die Erdölkrise beschädigte nachfrageorientierte Wirtschaftspolitik wurde zudem von einer neoliberalen Doktrin abgelöst, die den Deregulierungsprozess theoretisch fundierte. Der mit dessen kompetitivem Charakter einhergehende Druck auf geschützte Finanzdienstleistungen und auf deren Profitabilität erzeugte eine Welle an Zusammenschlüssen in der Finanzwirtschaft und ermöglichte den dadurch entstandenen Finanzkonglomeraten immer riskantere Geschäfte, die mit dem Einlagen- und Kreditgeschäft eng verzahnt waren. Diese Gemengelage, die an die Ursprünge der Finanzmarktkrise 1929 erinnert, entzündete sich schließlich am Immobilienpreisboom in den USA und mündete in die Finanzmarktkrise 2007/08

Labor supply shocks and the Beveridge Curve: Empirical evidence from EU enlargement

Labor supply shocks can have substantial effects on the Beveridge Curve. Structural VARs with sign restrictions show that the shocks associated with the free movement of workers from Eastern Europe have temporarily increased unemployment in Austria, a major destination country, by 25 percent and job vacancies by 40 percent. The 2 percent increase in total employment was accompanied by a temporary decline in the employment of domestic workers. The greatest impact is seen in regions bordering on the home countries of the migrant workers. Beyond these findings the paper addresses empirical regularities of labor supply shocks that are at odds with theoretical predictions

Local Violence and Teacher Turnover

This presentation was given during the Midwest Economics Association Annual Meeting