22 September 2010
According to the Federal Housing Finance Agency, real house prices rose by 53 percent between 1996 and 2006. Ed Glaeser
, Josh Gottlieb
, and Joe Gyourko
conclude that lower real interest rates -- easy credit -- can explain only one-fifth of that increase. They do not find any evidence that changes in approval rates or loan-to-value levels were substantial contributors to the large changes in house prices over this period either.
21 September 2010
Although the yen is the only fully convertible currency in Asia, Japanese trading firms tend to invoice their exports to advanced countries in the importer's currency, and frequently they invoice their exports to East Asia in U.S. dollars.Taka Ito
, Satoshi Koibuchi
, Kiyotaka Sato
, and Junko Shimizu
conducted interviews with 23 Japanese representative firms in four industries -- automobile, electrical machinery, general machinery, and electrical component -- to learn more about their currency invoicing practices and their exchange rate risk management. Based on these interviews, the researchers find that there may be some savings to the firms from concentrating currency risk at the headquarters, and that the final products of Japanese electronics companies in Asia tend to be exported to the United States or Europe, so they may as well be priced in dollars.
20 September 2010
After analyzing the prices of identical goods that were sold online in 28 countries in 2008 by the Spanish women's clothing manufacturing company "Mango", Ina Simonovska
finds that Mango exploits cross-country differences in price elasticities of demand and sets systematically higher prices and mark-ups in its richer destinations. When she extends her analysis, she concludes that final tradable goods are more expensive in richer countries. Her model suggests that variable mark-ups account for 80 percent of the positive price-income relationship that can be observed across 123 countries.
17 September 2010
The HighScope Perry Preschool Program was a social experiment conducted in the 1960s in Ypsilanti, Michigan, which provided preschool education and home visits to disadvantaged children during their preschool years. James Heckman
, Seong Hyeok Moon
, Rodrigo Pinto
, Peter Savelyev
, and Adam Yavitz
find that the intended randomization protocol of this social experiment, which was necessary to appropriately evaluate its outcome, was compromised. Nonetheless, when they re-evaluate the program using improved methodology, they confirm that it had statistically significant and economically important effects.