infonet-economy

We develop a theoretical model of international trade pricing in which individual exporters and importers bargain over the transaction price and exposure to exchange rate fluctuations. We find that the choice of price and invoicing currency respects the full market structure, including the extent of fragmentation and the degree of heterogeneity across importers and across exporters...

Export taxes usage has recently risen. They are widely presumed to affect trade, but the lack of data has prevented a systematic evaluation of their trade effects. Based on a new dataset of tax rates at the product level, this paper estimates the distortionary trade effects of export taxes. The results, which are based on theory-consistent estimation of a structural gravity model,...

In this paper, we study the role of education as insurance against a bad marriage. Historically, due to disparities in earning power and education across genders, married women often found themselves in an economically vulnerable position, and had to suffer one of two fates in a bad marriage: either they get divorced (assuming it is available) and struggle as low-income single...

Although monitoring and regulation can be used to combat socially costly unethical conduct, their intended targets can often avoid regulation or hide their behavior. This surrenders at least part of the effectiveness of regulatory policies to firms’ and individuals’ decisions to voluntarily submit to regulation. We study individuals’ decisions to avoid monitoring or regulation and...

We consider essential heterogeneity in the impact of a large-scale Community-Driven Development (CDD) program in Senegal. Essential heterogeneity arises when unobservables determine the idiosyncratic gains from participation in a program, thereby generating correlation between treatment effects and selection. Standard instrumental variables estimates are shown to provide an extremely...

Retail banks usually apply simple linear regression models for describing the dynamics of the deposit rates of non-maturing accounts (NMA) like savings deposits. Thus, typical patterns like asymmetry or rigidity that banks follow when adjusting their deposit rates are ignored. This is insofar surprising, as the asymmetric deposit rate adjustment affects the pricing of embedded...

This paper analyzes whether hosting the most prestigious European cultural event, the European Capital of Culture, has an impact on regional economic development or the life satisfaction of the local population. Concerning the economic impact, we show that European Capitals are hosted in regions with above average GDP per capita, but do not causally affect the economic development in...

This paper explores how extended unemployment insurance (UI) benefits targeted to older workers affect early retirement and social welfare. The trade-off of optimal UI between consumption smoothing and moral hazard requires accounting for the entire early retirement system, which often includes extended UI and relaxed access to disability insurance (DI). We argue that extended UI...