Results

CEP discussion paper

The equilibrium impact of credit frictions: evidence from default risk using firm-level data

This paper examines the impact of credit frictions arising from firm-level default risk on aggregate economic performance. We build a micro-to-macro model with heterogeneous firms and sector-specific production functions...Read more...

CEP discussion paper

What happens in Paris, does not stay in Paris: trade fairs and search and matching frictions

Search and matching frictions keep firms from forming international trade links. Trade fairs are a common, often subsidized remedy, yet causal evidence is scarce. We study Hungarian firms at the 1900 Paris World Exhibiti...Read more...

Journal article

The Economic Journal:

Non-compete agreements, wages and efficiency: theory and evidence from Brazilian football

The Pele Act banned non-compete agreements in Brazilian football in 1998. We explore this policy change to study how non-competes affect the labour market. The Act changed the wage profile heterogeneously, reducing young...Read more...

Journal article

Journal of International Economics:

Tickets to the global market: first US patent award and Chinese firm exports

We investigate how international patent activity enables firms from emerging economies to thrive in the global marketplace. We match Chinese customs data to US patent records, and leverage the quasi-random assignment of ...Read more...

Journal article

Management Science:

Communication within firms: evidence from CEO turnovers

This paper uses novel, firm-level communication measures derived from communications metadata several months before and after a CEO transition for 102 firms to study whether and how this organizational event is reflected...Read more...

Journal article

American Economic Review:

Fighting climate change: international attitudes toward climate policies

This paper explores global perceptions and understanding of climate change and policies, examining factors that influence support for climate action and the impact of different types of information. We conduct large-scal...Read more...

CEP discussion paper

Multinational networks and trade participation

We provide a novel explanation for the dominance of multinational corporations (MNCs) in international trade: MNC affiliates face lower trade frictions in countries that belong to their parental network. Combining rich a...Read more...

External report

International Trade: Issue 2

Over the last four decades, many developing countries initiated reforms that have lowered barriers to trade. Yet despite these reforms, developing countries still remain far less open than developed ones, both because of...Read more...

CEP discussion paper

Measuring quality of life under spatial frictions

Using a quantitative spatial model as a data-generating process, we explore how spatial frictions affect the measurement of quality of life. We find that under a canonical parameterization, mobility frictions - generated...Read more...

Chapter

New technologies and evolving market structures

in Handbook on Labour Markets in Transition

This Chapter investigates the relationship between technological changes, labour market frictions, and firms' labour market power. We provide guidance through the main trends that characterised labour markets during the ...Read more...

CEP discussion paper

Firm heterogeneity and imperfect competition in global production networks

How do production networks and market structure interact to shape the effects of trade and competition policy? We develop a model with two-sided firm heterogeneity, matching frictions, and imperfect supplier competition....Read more...

CEP discussion paper

The wage of temporary agency workers

Using French administrative data, we estimate the wage gap distribution between in-house and temporary agency workers working in the same establishment and the same occupation. The average wage gap is about 3%, but the g...Read more...

Journal article

The Review of Economic Studies:

Using disasters to estimate the impact of uncertainty

Uncertainty rises in recessions and falls in booms. But what is the causal relationship? We construct cross-country panel data on stock market returns to proxy for first- and second-moment shocks and instrument these wit...Read more...

Journal article

Journal of Economic Geography:

Pay-as-they-get-in: attitudes toward migrants and pension systems

We study whether a better knowledge of the functioning of pay-as-you-go (PAYG) pension systems and recent demographic trends affects natives? attitudes toward immigration. In two online experiments conducted in Italy and...Read more...

CEP discussion paper

Tickets to the global market: first US patent awards and Chinese firm exports

We investigate how international patent activity enables firms from emerging economies to thrive in the global marketplace. We match Chinese customs data to US patent records and leverage the quasi-random assignment of U...Read more...

Journal article

Management Science:

Information spillovers in experience goods competition

Trialing an experience good allows consumers to learn their value for the sampled good and also informs beliefs about their value for similar products. These demand-side information spillovers across products create a re...Read more...

CEP discussion paper

Pay-as-they-get-in: attitudes towards migrants and pension systems

We study whether a better knowledge of the functioning of pay-as-you-go pension systems and recent demographic trends in the hosting country affects natives' attitudes towards immigration. In two online experiments in It...Read more...

CEP discussion paper

Import competition, trade credit and financial frictions in general equilibrium

We analyze the role of trade credit and financial frictions in the propagation of international trade shocks along the supply chain. First, we show empirically that exposure to import competition from China increased the...Read more...

Journal article

Economica:

Information provision and postgraduate studies

This is the first paper to examine experimentally effects of information provision on beliefs about pecuniary and non-pecuniary returns of postgraduate education, enrolment intentions and realized enrolment. We find that...Read more...

Journal article

Journal of Human Resources:

The urban wage premium in imperfect labor markets

Using administrative data for West Germany, this paper investigates whether part of the urban wage premium stems from fierce competition in thick labour markets. We first establish that employers possess less wage-settin...Read more...

CentrePiece article

In brief... How Pele changed Brazilian football

A ban on non-compete agreements in Brazilian football led to an increased lifetime income for players. But as research by Bernardo Guimaraes, Jo?o Paulo Pessoa and Vladimir Ponczek reveals, it was older players who gaine...Read more...

CEP discussion paper

Omnia Juncta in Uno*: foreign powers and trademark protection in Shanghai's concession era

We examine how trademark protection - a prevalent but underexplored intellectual property right - affects international firms and market outcomes in an emerging economy. Exploiting the unexpected introduction of China's ...Read more...

Journal article

Review of Economics and Statistics:

The impact of contract enforcement costs on value chains and aggregate productivity

I study how supplier contracting frictions shape the patterns of intermediate input use and quantify the impact of these distortions on aggregate productivity. Using the frequency of litigation between US firms as a nove...Read more...

CentrePiece article

In brief... UK gender pay gap reporting: a crude but effective policy

Forcing employers to reveal their gender pay gap has been effective in its main goal of narrowing the gap, according to research by Jack Blundell who finds the difference between women and men's pay has shrunk by just un...Read more...

Journal article

Small Business Economics:

Soft and hard information in equity crowdfunding: network effects in the digitalization of entrepreneurial finance

As a digital financial innovation, equity crowdfunding (ECF) allows investors to exploit the complementarity of information provision and network effects in a reduced transaction cost environment. We build on the underly...Read more...

CEP discussion paper

Non-compete agreements, wages and efficiency: theory and evidence from Brazilian football

We propose a model to study non-compete agreements and evaluate their quantitative effects. We explore an exogenous policy change that removed non-compete clauses in the market for Brazilian footballers, the Pele Act of ...Read more...

CEP discussion paper

Wage responses to gender pay gap reporting requirements

In this paper I study a policy in which employers are required to publicly report gender pay gap statistics. Proponents argue that increasing the information available to workers and consumers places pressure on firms to...Read more...

Journal article

Journal of Urban Economics:

Market tremors: Shale gas exploration, earthquakes, and their impact on house prices

Shale gas has grown to become a major new source of energy in countries around the globe. While its importance for energy supply is well recognized, there has also been public concern over potential risks from hydraulic ...Read more...

Journal article

Education Economics:

Minority report: the impact of predicted grades on university admissions of disadvantaged groups

We study the UK's university application system, in which students apply based on predicted examination grades, rather than actual results. Using three years of UK university applications data we find that only 16% of ap...Read more...

Journal article

Heliyon:

Estimating the impact of the Internet of Things on productivity in Europe

The Internet of Things (IoT) refers to interconnected devices and objects that collect and transmit data via the Internet. The IoT is an evolving technology, promising to revolutionise industries, but also demanding far-...Read more...

CEP discussion paper

The aggregate consequences of default risk: evidence from firm-level data

This paper studies the implications of perceived default risk for aggregate output and productivity. Using a model of credit contracts with moral hazard, we show that a firm?s probability of default is a sufficient stati...Read more...

Journal article

European Economic Review:

Strategic inattention, delegation and endogenous market structure

We model an industry in which a discrete number of firms choose the output of their differentiated products, deciding whether or not to consider the impact of their decisions on aggregate output. The firm's choice of ign...Read more...

CEP discussion paper

The urban wage premium in imperfect labour markets

Using administrative data for West Germany, this paper investigates whether part of the urban wage premium stems from fierce competition in thick labour markets. We first establish that employers possess less wage-settin...Read more...

CEP discussion paper

Making smart meters smarter the smart way

We report first results from a large scale randomized control trial of different forms of energy consumption feedback facilitated by smart meters and smart phone feedback apps. Nearly 40,000 customers of a large energy r...Read more...

Journal article

The Lancet:

Transparency about the outcomes of mental health services (IAPT approach): an analysis of public data

Background: Internationally, the clinical outcomes of routine mental health services are rarely recorded or reported; however, an exception is the English Improving Access to Psychological Therapies (IAPT) service, which...Read more...

CEP discussion paper

Labor specialization as a source of market frictions

This paper investigates why labor specialization brings additional frictions to the labor market. The intuition is that labor specialized firms rely on complementarity and firm-specific human capital, assigning high valu...Read more...

CEP discussion paper

Pension shocks and wages

How do wages respond to firm-level idiosyncratic cost shocks? We create a unique dataset that links longitudinal data on workers? compensation to the unexpected costs that UK firms have been forced to pay to plug large d...Read more...

Journal article

The World Economy:

Service trade and occupational tasks: an empirical investigation

Using microdata for Belgium, we investigate the relationship between changes in the task content of production and the rise in the number of service exporters. We show that occupational tasks changes display an extremely...Read more...

Journal article

Journal of Urban Economics:

Spatial frictions

The world is replete with spatial frictions. Shipping goods across cities entails trade frictions. Commuting within cities causes urban frictions. How important are these frictions in shaping the spatial economy? We deve...Read more...

CentrePiece article

Faster broadband: are there any educational benefits?

Governments around the world are committing substantial public funds to upgrading their broadband infrastructure, partly in the hope of promoting education. Research findings by Rosa Sanchis-Guarner and colleagues raise ...Read more...

Journal article

Energy Policy:

Competition and norms: a self-defeating combination?

This paper investigates the effects of information feedback mechanisms on electricity and heating usage at a student hall of residence in London. In a randomised control trial, we formulate different treatments such as f...Read more...

Journal article

The Review of Economic Studies:

Landing the first job: the value of intermediaries in online hiring

Online markets for remote labour services allow workers and firms to contract with each other directly. Despite this, intermediaries-called outsourcing agencies-have emerged in these markets. This article shows that agen...Read more...

CentrePiece article

Online hiring of offshore workers: the value of intermediaries

`Old boy networks? have not been rendered obsolete by modern communications technology. That is one of the conclusions of a study of global online labour markets by Christopher Stanton and Catherine Thomas. Their researc...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Trade and Frictional Unemployment in the Global Economy

We develop a multi-country, multi-sector trade model with labor market frictions and equilibrium unemployment. Trade opening leads to a reduction in unemployment if it raises real wages and reallocates labor towards sect...Read more...

CEP discussion paper

Information frictions and adverse selection: policy interventions in health insurance markets

This paper develops and implements a general framework to study insurance market equilibrium and evaluate policy interventions in the presence of choice frictions. Friction-reducing policies can increase welfare by facil...Read more...

CEP discussion paper

The persistence of a banking crisis

This paper analyses the effects of bank lending on GDP and employment. Following losses on international financial markets in 2008/09, a large German bank cut its lending to the German economy. I exploit variation in dep...Read more...

CEP discussion paper

The impact of contract enforcement costs on outsourcing and aggregate productivity

Legal institutions affect economic outcomes, but how much? This paper documents how costly supplier contract enforcement shapes firm boundaries, and quantifies the impact of this transaction cost on aggregate productivit...Read more...

SERC/Urban and Spatial Programme Discussion Paper

ICT and Education: Evidence from Student Home Addresses

Governments are making it a priority to upgrade information and communication technologies (ICT) with the aim to increase available internet connection speeds. This paper presents a new empirical strategy to estimate the...Read more...

Journal article

Economics of Education Review:

Student satisfaction, league tables and university applications: evidence from Britain

We investigate the impact of information about student satisfaction on university choice, using data from the UK's National Student Survey (NSS) and on applications to undergraduate degrees. We show that NSS scores have ...Read more...

CEP discussion paper

New media, competition and growth: European cities After Gutenberg

This research studies how variations in competition and in media content characterized the use and impact of Gutenberg's printing press technology during the European Renaissance. The research constructs annual firm-leve...Read more...

CEP discussion paper

ICT and education: evidence from student home addresses

Governments are making it a priority to upgrade information and communication technologies (ICT) with the aim to increase available internet connection speeds. This paper presents a new strategy to estimate the causal ef...Read more...

CEP discussion paper

Financial constraints in search equilibrium: Mortensen and Pissarides meet Holmstrom and Tirole

The Great Recession has indicated that firms' leverage and access to finance are important for hiring and firing decisions. It is now empirically established that bank lending is correlated to employment losses when cred...Read more...

CEP discussion paper

Landing the first job: the value of intermediaries in online hiring

Online markets for remote labor services allow workers and firms to contract with each other directly. Despite this, intermediaries - called outsourcing agencies - have emerged in these markets. This paper shows that age...Read more...

CentrePiece article

In brief... New technology: who wins, who loses?

Technology has transformed the once powerful office of ambassador into a glorified sales position, while nurses, teaching assistants and medical technicians all benefit from the ICT revolution. According to an empirical ...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Student Satisfaction, League Tables and University Applications

We investigate the impact of information about student satisfaction on university choice, using data from the UK?s National Student Survey (NSS) and on applications to undergraduate degree courses. We show that the NSS h...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Do Long Distance Moves Discourage Homeownership? Evidence from England

We hypothesize that as the distance of a residential move increases, the cost of collecting information on the destination housing market rises, the amount and quality of information collected fall, and the chances of ma...Read more...

CEP discussion paper

The objective benefits of subjective well-being

The aim of this paper is to survey the 'hard' evidence on the effects of subjective well-being. In doing so, we complement the evidence on the determinants of well-being by showing that human well-being also affects outc...Read more...

CEP discussion paper

A model of aggregate demand and unemployment

We present a static model of aggregate demand and unemployment. The economy has a nonproduced good, a produced good, and labor. Product and labor markets have matching frictions. A general equilibrium is a set of prices,...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Does Better Rail Access Improve Homeowners? Happiness?: Evidence Based on Micro Surveys in Beijing

Development of urban transport infrastructures is a key policy focus---particularly in countries like China which have experienced fast urbanisation over the past decade. While existing studies provide marginal values fo...Read more...

CEP discussion paper

Optimal Policy for Macro-Financial Stability

In this paper we study whether policy makers should wait to intervene until a financial crisis strikes or rather act in a preemptive manner. We study this question in a relatively simple dynamic stochastic general equili...Read more...

CentrePiece article

Student awareness of the costs and benefits of higher education

Sandra McNally and colleagues report the results of a 'light-touch' information campaign about the value and affordability of going to university....Read more...

CEE/Education and skills discussion paper

Student Awareness of Costs and Benefits of Educational Decisions: Effects of an Information Campaign

University fees have recently trebled in England and there are fears that many young people may be put off from participating in further and higher education ? especially those from low income backgrounds. This could exa...Read more...

CEP discussion paper

Capital Controls or Exchange Rate Policy? A Pecuniary Externality Perspective

In the aftermath of the global financial crisis, a new policy paradigm has emerged in which old-fashioned policies such as capital controls and other government distortions have become part of the standard policy toolkit...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Does Public Investment Spur the Land Market?: Evidence from Transport Improvement in Beijing

Over 140 billion CNY (1GBP=10CNY) has been spent between 2000 and 2012 in Beijing on the construction of new rail transit lines. This massive public investment allows me to examine the consequences of transport improveme...Read more...

CEP discussion paper

Why Do People Pay for Useless Advice?

We investigated experimentally whether people can be induced to believe in a non-existent expert, and subsequently pay for what can only be described as transparently useless advice about future chance events. Consistent...Read more...

CentrePiece article

Jobs in a recession

This article is based on a paper that models unemployment as the result of matching frictions and job rationing. Job rationing is a shortage of jobs arising naturally in an economic equilibrium from the combination of so...Read more...

Journal article

American Economic Review:

Americans do IT better: US multinationals and the productivity miracle

US productivity growth accelerated after 1995 (unlike Europe's), particularly in sectors that intensively use information technologies (IT). Using two new micro panel datasets we show that US multinationals operating in ...Read more...

CEP discussion paper

Preferential Trade Agreements and the Labor Market

Labor market consequences are at the forefront of most debates on the merits of trade liberalization. Preferential trade agreements (PTAs) have become the primary form of trade liberalization in most countries, and sever...Read more...

CEP discussion paper

Fiscal Multipliers over the Business Cycle

This paper illustrates why fiscal policy becomes more effective as unemployment rises in recessions. The theory is based on the equilibrium unemployment model of Michaillat (forthcoming), in which jobs are rationed in re...Read more...

CEP discussion paper

Spatial Frictions

The world is replete with spatial frictions. Shipping goods across cities entails trade frictions. Commuting within cities causes urban frictions. How important are these frictions in shaping the spatial economy? We deve...Read more...

CEP discussion paper

Does High Involvement Management Improve Worker Wellbeing?

Employees exposed to high involvement management (HIM) practices have higher subjective wellbeing, fewer accidents but more short absence spells than ?like? employees not exposed to HIM. These results are robust to exten...Read more...

CEP discussion paper

Optimal Unemployment Insurance Over the Business Cycle

This paper characterizes optimal unemployment insurance (UI) over the business cycle using a model of equilibrium unemployment in which jobs are rationed in recession. It offers a simple optimal UI formula that can be ap...Read more...

CEP discussion paper

Does High Involvement Management Lead to Higher Pay?

Using nationally representative survey data for Finnish employees linked to register data on their wages and work histories we find wage effects of high involvement management (HIM) practices are generally positive and s...Read more...

CEP discussion paper

Financial Crises and Macro-Prudential Policies

Stochastic general equilibrium models of small open economies with occasionally binding financial frictions are capable of mimicking both the business cycles and the crisis events associated with the sudden stop in acces...Read more...

CEP discussion paper

Do Matching Frictions Explain Unemployment? Not in Bad Times

This paper models unemployment as the result of matching frictions and job rationing. Job rationing is a shortage of jobs arising naturally in an economic equilibrium from the combination of some wage rigidity and dimini...Read more...

CEP discussion paper

Revisiting Overborrowing and Its Policy Implications

This paper analyzes quantitatively the extent to which there is overborrowing (i.e., inefficient borrowing) in a business cycle model for emerging market economies with production and an occasionally binding credit const...Read more...

CEP discussion paper

The Impact of Asymmetric Information Among Competing Insurgent Groups: Estimating an 'Emboldenment' Effect

This paper uses asymmetric access to information to test if an insurgency is factionalized. If it is factionalized, regional variation in information should influence attack levels as groups use violence to compete over ...Read more...

CEP discussion paper

Adjusting to Capital Account Liberalization

We study theoretically how the adjustment to liberalization of international financial transaction depends upon the degree of domestic financial development. Using a model with domestic and international borrowing constr...Read more...

CEP discussion paper

The Distinct Effects of Information Technology and Communication Technology on Firm Organization

Guided by theories of management by exception, we study the impact of Information and Communication Technology on worker and plant manager autonomy and on span of control. We find, using an original dataset of American a...Read more...

CEP discussion paper

Labor Market Reforms, Job Instability, and the Flexibility of the Employment Relationship

We endogenize separation in a search model of the labor market and allow for bargaining over the continuation of employment relationships following productivity shocks to take place under asymmetric information. In such ...Read more...

CEP discussion paper

Competing for Contacts: Network Competition, Trade Intermediation and Fragmented Duopoly

A two-sided, pair-wise matching model is developed to analyse the strategic interaction between two information intermediaries who compete in commission rates and network size, giving rise to a fragmented duopoly market ...Read more...

CEP discussion paper

Information Costs, Networks and Intermediation in International Trade

This paper presents a pairwise matching model with two-sided information asymmetry to analyse the impact of information costs on endogenous network building and matching by information intermediaries. The framework innov...Read more...

CEP discussion paper

Incentives in Competitive Search Equilibrium

This paper analyses the interaction between internal agency problems within firms and external search frictions when workers have private information. We show that the allocation of resources is determined by a modified ...Read more...

CEP discussion paper

Information Technology, Organization, and Productivity in the Public Sector: Evidence from Police Departments

We examine how information technology (IT) contributes to organizational change, labor demand, and improved productivity in the public sector using a new panel data set of police departments covering 1987-2003. While IT ...Read more...

CEP discussion paper

The Division of Labor, Coordination, and the Demand for Information Processing

Since Adam Smith?s time, the division of labor in production has increased significantly, while information processing has become an important part of work. This paper examines whether the need to coordinate an increasin...Read more...

CEP discussion paper

Americans Do I.T. Better: US Multinationals and the Productivity Miracle

The US has experienced a sustained increase in productivity growth since the mid-1990s, particularly in sectors that intensively use information technologies (IT). This has not occurred in Europe. If the US ?productivity...Read more...

CEP discussion paper

Information Technology, Organisational Change and Productivity Growth: Evidence from UK Firms

We examine the relationships between productivity growth, IT investment and organisational change (?O) using UK firm data. Consistent with the small number of other micro studies we find (a) IT appears to have high retur...Read more...

CEP discussion paper

Information and Communication Technologies in a Multi-Sector Endogenous Growth Model

This paper investigates the impact of Information and Communication Technologies (ICT) on growth in an economy, consisting of three sectors, ICT-producing, ICT-using and non-ICT-using. The benefits from ICT come from the...Read more...

CEE/Education and skills discussion paper

New Technology in Schools: Is There a Payoff?

Read more...

CEP discussion paper

Labor and the Market Value of the Firm

What role does labor play in a firm?s market value? We explore this question using a production-based asset pricing model with frictions in the adjustment of both capital and labor. We posit that hiring of labor is akin ...Read more...

CEP discussion paper

Comparatively Open: Statutory Information Disclosure for Consultation and Bargaining in Germany, France and the UK

Information provision is an important part of all mechanisms which give employees voice at work. This paper considers the law on information disclosure for joint consultation and collective bargaining in three countries,...Read more...

CEP discussion paper

Digital Goods and the New Economy

Digital goods are bitstrings, sequences of 0s and 1s, which have economic value. They are distinguished from other goods by five characteristics: digital goods are nonrival, infinitely expansible, discrete, aspatial, and...Read more...

CEP discussion paper

The Right to Know: Disclosure of Information for Collective Bargaining and Joint Consultation

The legal obligation on employers to provide information to employees has grown since the early 1970s. At that time, the emphasis was on disclosure for collective bargaining. In the 1980s and 1990s, the emphasis shifted ...Read more...

CEP discussion paper

The Determinants Of Cross-Border Equity Flows

We apply a new approach to a new panel data set on bilateral gross cross-border equity flows between 14 countries, 1989-96. The remarkably good results have strong implications for theories of asset trade. We find that t...Read more...