4 December 2012
With a sample of more than 1,100 retractions of scientific papers, Pierre Azoulay
, Jeff Furman
, Josh Krieger
, and Fiona Murray
study how closely related articles that were published prior to these retractions are affected by this taint of "false science." They find that related articles experience a lasting 5-to-10 percent decline in the rate at which they are cited, although citations in for-profit publications respond less to the retractions than citations in academic publications. The decline in citations of related papers is more severe when the retracted article involves fraud or misconduct, rather than an honest mistake.
3 December 2012
Almost all 18 year-old males in Sweden who enlisted in the military between 1980 and 1994 were required to take a battery of cognitive tests in preparation for military service, but test dates were assigned randomly, so those of similar age and graduating class had accumulated slightly different days of schooling when tested. Magnus Carlsson
, Gordon Dahl
, and Dan-Olof Rooth
find that an extra ten days of school instruction raises the cognitive scores of these young men on intelligence tests.
30 November 2012
and Todd Rogers
study the short-run and long-run effects of an energy conservation initiative that involved mailing "Home Energy Reports" featuring personalized feedback, social comparisons, and energy conservation information to households monthly or every few months. This program has been running continuously since October 2008, and includes one randomly-selected group of households that stopped receiving the reports after two years. When the authors analyze over 200 million observations of daily electricity use over a six-year period, they find a pattern of "action and backsliding": consumers reduce electricity use markedly within days of receiving each of their initial reports, but their responses decay relatively quickly. However, there is a durable treatment effect that remains: for the group that continuously receives reports over a four-year period, the effects continue to grow. Even in the group whose reports were discontinued after two years, the backsliding happens more slowly, indicating that they had already formed habits of conserving.
29 November 2012
A repurchase agreement -- "repo" -- is the sale of securities together with an agreement for the seller to buy back those securities at a later date. Between the second quarter of 2007 and the first quarter of 2009, net repo financing provided to U.S. banks and broker-dealers fell by about $1.3 trillion. Gary Gorton
and Andrew Metrick
analyze official data sources on repo, along with the results of a unique market survey conducted by the Bond Market Association among its members on their use of repo as of June 30, 2004. The researchers conclude that the 2007-9 “run on repo” was predominantly driven by the flight of foreign financial institutions, domestic and offshore hedge funds, and other unregulated cash pools.
28 November 2012
According to the "unbiasedness hypothesis", the interest rate differential between two countries should be an unbiased predictor of the change in the exchange rate between them. In a sample of countries extending up to the year 2000, this was true at longer horizons of five and ten years, but not for shorter horizons of up to one year. Menzie Chinn
and Saad Quayyum
ask whether this relationship still holds in data extending up to 2011. They find that it does, but their results are sensitive to the bond yields used and are more pronounced at long horizons when they use the pound instead of the dollar as the base currency. For currencies characterized by particularly low bond yields – the Japanese yen and the Swiss franc -- interest rates from the mid-1990s onward do not point in the right direction for subsequent exchange rate changes.