|By:||Rosas-Martinez, Victor H.|
We assess theoretically the effect of forming a free trade union on the total production of a nation, where such effects are caused by the absorption of technologies. A popular metaphor describes the people as crabs in a bucket because when one crab tries to scape, the others pull it down avoiding a possible way out for all of them. Given this knowledge, posteriorly and independently of the income inequality levels, we extend our analyses to consider the effect of envy in a macroeconomic level on the total production, and draw the implications which this phenomenon has on the formation of free trade unions. We make strategic policy recommendations to allow the achievement of a globalization that benefits each member nation, where we show that the great trade union might have to start with gradual and charitable subregional agreements.
|Keywords:||International Trade; Technological Absorption; Behavioral Macroeconomics; Economic Growth; Trade Policy|
A growing literature relies on natural experiments to establish causal effects in macroeconomics. In diverse applications, natural experiments have been used to verify underlying assumptions of conventional models, quantify specific model parameters, and identify mechanisms that have major effects on macroeconomic quantities but are absent from conventional models. We discuss and compare the use of natural experiments across these different applications and summarize what they have taught us about such diverse subjects as the validity of the Permanent Income Hypothesis, the size of the fiscal multiplier, and about the effects of institutions, social structure, and culture on economic growth. We also outline challenges for future work in each of these fields, give guidance for identifying useful natural experiments, and discuss the strengths and weaknesses of the approach.
|Keywords:||Civic Capital; Fiscal Multiplier; Institutions; Multiple Equilibria; Networks; Permanent Income Hypothesis; Social Structure; Social Ties; Trust|
|JEL:||C1 C9 E21 E62 H31 O11 O14 O43 O50|
|Barcelona LeeX Experimental Economics Summer School in Macroeconomics in Universitat Pompeu Fabra.
June 11-15, 2012:
Understanding the mechanisms behind economic growth is a fundamental task of macroeconomics. A class of models, called growth models, has been proposed to address this challenge. This lecture will describe how experimental methods have been used to evaluate the predictions of these models. Empirical evidence from field studies supports the view that institutions can influence the rate of economic growth. This lecture will cover how the role of institutions in economic growth can be studied using experimental methods. A particular type of model, the dynamic stochastic general equilibrium (DSGE) model, has become a standard tool of policy analysis. This lecture will describe how experiments with the same structure can be constructed and used to address policy questions.
Vivian Lei and Charles Noussair “An Experimental Test of an Optimal Growth Model", American Economic Review, Vol. 92, no 3, June 2002, pages 549-570.
C. Monica Capra, Colin Camerer, Tomomi Tanaka, Lauren Feiler, Veronica Sovero, and Charles Noussair “The Impact of Simple Institutions in Experimental Economies with Poverty Traps", Economic Journal 119, 539, July 2009, pages 977 – 1009.
Charles Noussair, Damjan Pfajfar, and Janos Zsiros, “Frictions, Persistence, and Central Bank Policy in an Experimental Dynamic Stochastic General Equilibrium Economy", Tilburg University working paper, 2011.
Relevant real world phenomena and relevant models of interest serve as two important benchmarks in designing laboratory experiments. With their fractal structure, phenomena in field are endlessly complex. Accordingly, realism (i.e., fidelity to the field environment) and theory (i.e., fidelity to the model) place important, often conflicting, demands on design of laboratory experiments. Do the details matter? Which ones do? How do we find out? Why do the details that “do not matter" exist in the field? If they are just matters of refinement, which refinements are and are not to be ignored in laboratory? How generalizable are the laboratory findings? How does an experimenter find his way through this maze that connects limitless complexity of the field to simple tidy models of economics to gain a better understanding of economic phenomena? We shall explore the practical problems of identifying interesting questions, and developing experimental designs to address them using some examples, notes, and some macro experiments.
Sunder, Shyam. “Determinants of Economic Interaction: Behavior or Structure." Journal of Economic Interaction and Coordination 1, no. 1 (May 2006): 21-32. Text (PDF).
Sunder, Shyam. “Real Phenomena, Theory and Design of Laboratory Experiments in Economics." Notes. Text (PDF).
Lim, Suk S., Edward C. Prescott and Shyam Sunder. “Stationary Solution to the Overlapping Generations Model of Fiat Money: Experimental Evidence." Empirical Economics 19, no. 2 (1994): 255-277. Text (PDF)
Marimon, Ramon and Shyam Sunder. “Indeterminacy of Equilibria in a Hyperinflationary World: Experimental Evidence." Econometrica 61, no. 5 (1993): 1073-1108. Text (PDF).
Marimon, Ramon and Shyam Sunder. “Expectations and Learning Under Alternative Monetary Regimes: An Experimental Approach." Economic Theory 4 (1994), 131-162. Text (PDF)
Huber, Juergen, Martin Shubik, and Shyam Sunder. “Financing of Public Goods through Taxation in a General Equilibrium Economy: Theory and Experimental Evidence," Cowles Foundation Discussion Paper 1830, October 23, 2011.
Huber, Juergen, Martin Shubik and Shyam Sunder. “Sufficiency of an Outside Bank and a Default Penalty to Support the Value of Fiat Money: Experimental Evidence." Cowles Foundation Discussion Paper No. 1675, Revised June 12, 2011.
Laboratory exploration of properties of economic institutions and policies has traditionally been done using profit motivated human traders. Outcomes of such experiments, when compared with outcomes of identical economies populated with minimally intelligent algorithmic agents yield valuable insights. We can isolate which of the properties of the economies of interest arise from their structure, and which ones are attributable to the behavior of agents. Starting with three micro applications, we shall study three macro applications of this human-algorithm hybrid approach to experimentation.
Gode, Dhananjay K. and Shyam Sunder. “Allocative Efficiency of Markets with Zero Intelligence Traders: Market as a Partial Substitute for Individual Rationality." The Journal of Political Economy 101, no. 1 (February 1993): 119-137.Text (PDF).
Gode, Dhananjay K., and Shyam Sunder. “Double Auction Dynamics: Structural Effects of Non-Binding Price Controls."Journal of Economic Dynamics and Control 28, no. 9 (July 2004): 1707-1731. Abstract(PDF), Text (PDF).
Huber, Juergen, Martin Shubik and Shyam Sunder. “Three Minimal Market Institutions: Theory and Experimental Evidence." Games and Economic Behavior 70 (2010) 403-424.
Angerer, Martin, Juergen Huber, Martin Shubik and Shyam Sunder. “An Economy with Personal Currency: Theory and Experimental Evidence."Annals of Finance, Volume 6, Number 4, October 2010, pp.475-509.
Huber, Juergen, Martin Shubik and Shyam Sunder. “Default Penalty as a Selection Mechanism Among Multiple Equilibria."Cowles Foundation Discussion Paper 1730R, Revised February 6, 2011.
The patterns of financial crises are remarkably predictable. Minsky (1972) has described these patterns by phases, some of which contain behavioural hypotheses that can be tested by laboratory experiments. Under which conditions can bubbles arise? When do they burst? Why do people herd and does herding destabilize financial markets? What triggers a bank run and how do people coordinate in an environment with multiple equilibria? This lecture will lay out experimental evidence containing some answers to these questions. In particular, we will look at experiments on games with strategic complementarities. How predictable are choices if the game has multiple equilibria and which theory is well-suited to give advice for individual behavior? Managing information flow is one of the major challenges for central banks and bank supervisors. The lecture explains what we can learn from experiments for managing information flow in the presence of strategic complementarities.
Minsky, H.P. (1972), Financial Instability Revisited: the Economics of Disaster, http://fraser.stlouisfed.org/historicaldocs/dismech/download/59037/fininst_minsky.pdf
Brunnermeier, Markus, and John Morgan (2008), Clock Games: Theory and Experiments, Games and Economic Behavior, forthcoming, http://www.princeton.edu/~markus/research/papers/clock_games.pdf
Kübler, Dorothea, and Georg von Weizsäcker (2004), Limited Depth of Reasoning and Failure of Cascade Formation in the Laboratory, Review of Economic Studies 71, 425-442.
Schotter, Andrew, and Tanju Yorulmazer (2009), On the Severity of Bank Runs, Journal of Financial Intermediation 18, 217-241.
Heinemann, Frank, Rosemarie Nagel, and Peter Ockenfels (2009), Measuring Strategic Uncertainty in Coordination Games, Review of Economic Studies 76, 181-221.
Cornand, C., and F. Heinemann (2010), Measuring Agents’ Reaction to Private and Public Information in Games with Strategic Complementarities, CESifo Working Paper 2947, http://anna.ww.tu-berlin.de/~makro/Heinemann/download/ch_3.pdf
Speculative attacks can be viewed upon as coordination games: if a sufficient number of traders (and a sufficient amount of capital) is involved in an attack, the pressure on foreign exchange markets forces the central bank to devaluate its currency. Then, all attacking traders gain from the devaluation. But, if the number of attackers is too small, the central bank can defend the peg, and attacking traders lose on transaction costs. Speculative-attack games have multiple equilibria if payoff functions are common knowledge. The theory of global embeds a coordination game in an environment with private information about parameters of the payoff function. If private information is sufficiently precise, the global game has a unique equilibrium. Hence, the theory of global games can be used for a unique prediction of the outcome of a speculative-attack game. This theory provides a number of hypotheses that can be tested in laboratory experiments. This lecture first presents some of the theoretical background and derives testable hypotheses. Then, it explains experiments that have been used for these tests and shows how they have been analyzed.
|By:||Surajeet Chakravarty (Department of Economics, University of Exeter)
Miguel A. Fonseca (Department of Economics, University of Exeter)
Todd Kaplan (Department of Economics, University of Exeter)
To understand the mechanisms behind bank run contagions, we conduct bank run experiments in a modified Diamond-Dybvig setup with two banks (Left and Right). The banks’ liquidity levels are either linked or independent. Left Bank depositors see their bank’s liquidity level before deciding. Right Bank depositors only see Left Bank withdrawals before deciding. We find that Left Bank depositors’ actions signicantly affect Right Bank depositors’ behavior, even when liquidities are independent. Furthermore, a panic may be a one-way street: an increase in Left Bank withdrawals can cause a panic run on the Right Bank, but a decrease cannot calm markets.
|Keywords:||bank runs, contagion, experiment, multiple equilibria.|
Notes by yinung
終於找到文獻回顧了! (哈, 其實以前已經找過了,… 人的記憶力真的很脆弱…)
an assessment of the micro-assumptions underlying macroeconomic models,
a better understanding of the dynamics of expectations which play a critical role in macroeconomic models,
a means of resolving equilibrium selection (coordination) problems in environments with multiple equilibria,
validation of macroeconomic model predictions for which field data are not available and
the impact of various macroeconomic policy interventions on individual behavior.
1) 總體經濟之個體基礎評估 (to be done)
主題例如: intertemporal consumption and savings decisions, inflation and unemployment, economic growth, bank runs, monetary exchange, monetary or fiscal policy
本文主要內容 (to be done)
2. Dynamic, Intertemporal Optimization
Optimal Consumption/Savings Decisions, Exponential discounting and infinite horizons
3. Coordination Problems
Poverty Traps, Bank Runs, Resolving Coordination Problems: Sunspots, Resolving Coordination Problems: The Global Game Approach
4. Sectoral Macroeconomics
5. Macroeconomic Policies
Ricardian equivalence, Commitment versus discretion, Monetary policy decision-making, Fiscal and tax policies, Exponential or Hyperbolic Discounting, Expectation Formation,
這是一個對經濟學「教學」和「學習」都很棒的網站: 目錄如下, 也有 PDF 版。
By Dieter Balkenborg and Todd Kaplan, University of Exeter (UK).
This work is a continuation of a macroeconomic classroom experiment … Although the number of macroeconomic experiments has increased over the past five …
檔案類型: PDF/Adobe Acrobat – 快速檢視
由 J Duffy 著作 – 被引用 15 次 – 相關文章
sociology. 2 Insights from Macroeconomic Experiments. To date, experimental macroeconomics research has yielded some important insights, including …
Surveys of experimental macroeconomics are found in Ochs (1995), Duffy (1998) and Ricciuti (2004).
- Ochs, J. (1995), “Coordination Problems,” in J.H. Kagel and A.E. Roth, eds., The Handbook of Experimental Economics Princeton: Princeton University Press, 195—251.
- Duffy, J. (1998), “Monetary Theory in the Laboratory,” Federal Reserve Bank of St. Louis Economic Review, 80 (September/October), 9-26.
- Ricciuti, R. (2004) “Bringing Macroeconomics into the Lab” International Center for Economic Research, working paper no. 26.
檔案類型: PDF/Adobe Acrobat – 快速檢視
由 J Duffy 著作 – 2008 – 被引用 6 次 – 相關文章
This chapter surveys laboratory experiments addressing macroeconomic phenomena. The …. competitive equilibrium as the first macro-economic experiment. …
Money Supply Game in Economics Network
The way in which individual expectations shape aggregate macroeconomic variables is crucial for the transmission and effectiveness of monetary policy. We study the individual expectations formation process and the interaction with monetary policy, within a standard New Keynesian model, by means of laboratory experiments with human subjects. We find that a more aggressive monetary policy that sets the interest rate more than point for point in response to inflation stabilizes inflation in our experimental economies. We use a simple model of individual learning, with a performance-based evolutionary selection among heterogeneous forecasting heuristics, to explain coordination of individual expectations and aggregate macro behavior observed in the laboratory experiments. Three aggregate outcomes are observed: convergence to some equilibrium level, persistent oscillatory behaviour and oscillatory convergence. A simple heterogeneous expectations switching model fits individual learning as well as aggregate outcomes and outperforms homogeneous expectations benchmarks.
|Keywords:||Experiments; Monetary Policy; Expectations; Heterogeneity|