Kutatások, projektek

Presenter: Chris Ball

Adding Outside Money to Sidrauskian Economies: Mechanisms Matter

Authors: Chris Ball (Quinnipiac University)

Abstract: How monetary policy functions has changed dramatically in recent decades.  Modern models have actually not caught up to practice yet our intuition based on traditional models is no longer accurate.  This paper is one step along the road of re-thinking how our traditional models work in light of more modern topics like how balance sheets matter.  It starts with a key classic in monetary theory, Sidrauski’s (1967) paper establishing money in the utility function and money neutrality in growing economies. I explore the possible mechanisms for adding money to the economy in this model and the implications for policy objectives including feasibility in terms of balance sheet stability for the central bank.  The key finding is that the standard means of introducing money, via net transfers from the fiscal authority, is neither realistic nor feasible nor particularly “monetary”. The only other options lead to natural ways to think about commodity and gold standards.  I close by comparing the policy and balance sheet feasibility of each option.

Presenter: Daniel Deak

GLOBAL MINIMUM TAX AND HUNGARIAN REACTION

Authors: Daniel Deak

Abstract: The research topic to be discussed seeks to answer the question of the global minimum tax plan and how international organisations came to propose a radical reform of international tax law.  It also seeks to answer the question of why Hungary did not join the agreement of 136 states in October 2021 (although it did join after some delay) and why it remained the only Member State in the European Union that did not support adopting a directive on applying the global minimum tax in the EU.  A related question is why the United States took the unusual step of making a notice to the 1979 US-Hungarian double taxation treaty that is not unrelated to Hungary’s reluctance to cooperate.  These issues are linked to Hungary’s specific behaviour, for which an explanation is sought below.

Presenter: Hubert János Kiss 

  Language use and intertemporal choice 

  Authors: Tamás Keller (KRTK) and Hubert János Kiss (CUB) 

  Abstract: The influential study by Chen (2013) shows that the degree to which languages require future events to be grammatically marked is associated with intertemporal choice, often referred to as the Linguistic Savings Hypothesis. Recent studies attempted to unveil the mechanisms behind this association by manipulating exogenously the language used when interacting with participants, with ambiguous results. Instead of such exogenous manipulation, we elicit the participants’ natural language use with a novel sentence completion task. We investigate whether the endogenous use of grammatical markers of the future correlates with more impatient intertemporal choices, a potential mechanism behind the Linguistic Savings Hypothesis. We find no convincing evidence that future time reference correlates with intertemporal choice. 

Presenter: Dominik Karos (http://www.imdokay.com/)

  From prejudice to racial profiling and back

  Authors: Dominik Karos (Bielefeld University) and Manuel Förster (Bielefeld University) 

  Abstract: A designer conducts random searches to detect criminals, and may condition the search probability on individuals’ appearance. She updates her belief about the distribution of criminals across appearances using her search results, but incorrectly takes her sample distribution for the population distribution. In equilibrium she employs optimal search probabilities given her belief, and her belief is consistent with her findings. We provide sufficient conditions for the existence of an equilibrium and show that she will be discriminating an appearance if and only if she overestimates the probability of this appearance’s being criminal. Notably, the ranking of two appearances’ being criminal may be reversed in equilibrium. We then fit our model to data from New York City. The equilibrium that best explains the data is such that the high perceived crime rate among Black people is mostly due to them being stopped overproportionally often. 

Presenter: Arseniy Samsonov (https://sites.google.com/view/asamsonov)

How can social media limit disinformation?

  Author: Arseniy Samsonov (QSMS, BME) 

  Abstract: Political disinformation is dangerous for democracies. Social and government pressure made Facebook and Twitter start labeling posts that contain disinformation. This policy became known as fact-checking. Does competition between platforms promote fact-checking? I propose a model in which two platforms decide whether to fact-check a politician. One of the platforms is ex-ante more attractive to voters than the other. The politician chooses which platforms to use and how often to misrepresent the state of the world if it is bad for her. In equilibrium, fact-checking is more likely if the politician has low approval or one of the platforms is highly more attractive than its competitor. The model’s policy implication is that reducing market power for the dominant social media firm can make fact-checking less likely.

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Presenter: Nickolas Gagnon (https://www.nickolasgagnon.com/)

The Effect of Gender Discrimination on Labor Supply

  Authors: Nickolas Gagnon (Aarhus University), Kristof Bosmans (Maastricht University), and Arno Riedl (Maastricht University)

  Abstract: We conduct experiments on an online platform to investigate the causal effect of gender discrimination on labor supply decisions. Controlling for the piece-rate wage, workers who face negative gender-discriminatory wage inequality supply substantially less labor compared to workers who face gender-neutral wage inequality (−0.16 standard deviations) and compared to workers with equal wages (−0.21 standard deviations). We also examine the effect of positive discrimination, differences between men and women, and the role of beliefs about facing discrimination. Our results point to the labor supply reaction to discrimination as a novel mechanism driving a gender gap in earnings.

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Presenter: Péter Isztin

Early and Late Specialization: General Framework and Applications

  Author: Péter Isztin (CUB)

  Abstract: Why do some parents send their children early to vocational schools or apprenticeships, or prepare them for a career in acting, while other parents leave specialization entirely to the child, sending the child first to general middle schools or to a liberal arts college? I consider these questions in a unified framework, where parents face uncertainty over their offspring’s labor market prospects. In general, consistent with related earlier results and basic intuition, greater uncertainty induces less early specialization. Early specialization may occur due to dynamic complementarities in human capital investments: later skills build on earlier accumulated skills. Early specialization is more likely when segregation along ethnic lines is more prevalent and when the parent’s (and child’s) ethnic group is small relative to the industry size, and when peer connections are especially important in landing a job in the given industry. As general human capital becomes more productive in the household (consumption) sector, and/or the time spent at “leisure” activities increases, specialization is often postponed, and intergenerational occupational mobility increases. Because accumulating general knowledge has a “learning how to learn” component, delayed specialization encourages later career switches and makes a “late bloomer” pattern more likely. Early specialization is shown to be more likely in “superstar” industries, as well as industries where learning by doing or on the job training is more important relative to formal learning. The framework developed in the paper also helps account for the emergence, durability and eventual decline of caste and other hereditary systems, and helps us understand the effects of gender-focused educational interventions.

Presenter: Wolfgang Kuhle

On Latency Arbitrage and the Synchronized Placement of Orders

Author: Wolfgang Kuhle (CUB & MEA, Max Planck Institute for Social Law and Social Policy, Munich, Germany)

Abstract: We argue that contemporary stock market designs are, due to traders’ inability to fully express their preferences over the execution times of their orders, prone to latency arbitrage. In turn, we propose a new order type which allows traders to specify the time at which their orders are executed after reaching the exchange. Using recent latency data, we show that the order type proposed here allows traders to synchronize order executions across different exchanges, such that high-frequency traders, even if they operate at the speed of light, can no-longer engage in latency arbitrage.

Presenter: András Borsos

Macroprudential policy evaluation in a high-resolution housing market agent-based model

Authors: András Borsos (Magyar Nemzeti Bank/ Hungarian National Bank), Zsuzsanna Hosszú (Magyar Nemzeti Bank/ Hungarian National Bank), Bence Mérő (Magyar Nemzeti Bank/ Hungarian National Bank), Nikolett Vágó (Magyar Nemzeti Bank/ Hungarian National Bank)

Abstract: In this study we investigated the impact of the LTV (loan-to-value) and the DSTI (debt service-to-income) regulations with a complex agent-based model (ABM) of the Hungarian housing market. Our framework represents all the 4 million households and flats in the country as well as the housing loan contracts existing between households and the banking sector, thus providing a complete mapping of the relevant part of the Hungarian economy based on empirical data. We can capture the complexity of the credit and real estate markets by featuring transactions in the housing and rental markets, a construction sector, buy-to-let investors, and a banking sector regulated by a macroprudential authority. In our analysis we compare nine regulatory scenarios coming from the combinations of stricter, looser or unchanged LTV and DSTI regulations complemented with a tenth “no regulation” scenario. Besides the typically considered stability-efficiency trade-off we also analyzed other aspects of the macroprudential regulations, such as social consequences and implications on the housing stock in the country. Furthermore, the 1:1 scale resolution of the model made it possible to generate disaggregated results based on geographical units, income deciles, and the type of the transactions (e.g. purchases first-time buyer households, or buy-to-let investors).

Presenter: Andreas Orland

Sharing rules in Bertrand duopolies with increasing returns

Authors: Andreas Orland (CIAS, CUB)

Abstract: Despite its empirical relevance, increasing returns to scale are understudied in experimental markets. We fill this gap by comparing two sharing rules in Bertrand duopolies with increasing returns: the symmetric sharing rule (where each of the two firms that set the same price serves half of the market demand) and the winner-takes-all sharing rule (where a fair randomization device decides which of the two firms serves the entire market). We hypothesized that market prices under the winner-takes-all rule are higher because it provides a collusion mechanism that the symmetric rule does not. While we find that subjects under the winner-takes-all rule indeed coordinate more than twice as often on one price compared to the symmetric sharing rule, we do not find that this increases market prices. This might be driven by the problem that subjects do not coordinate on sufficiently high prices. In further analyses, we report findings on alternation, an alternative collusion strategy, and intertemporal price adjustments.

Presenter: Álmos Telegdy

Subsidy-Driven Firm Growth: Does Loan History Matter? Evidence from a European Union Subsidy Program

Authors: Tirupam Goel (BIS), Álmos Telegdy (CUB), Péter Lang (Central Bank of Hungary), Ádám Banai (Central Bank of Hungary), Előd Takáts (CUB and London School of Economics and Political Science)

Abstract: Subsidies should target firms with profitable opportunities but without funding. We study how credit registry data can help design efficient subsidy programs. Using subsidy winners and losers as treated and control groups, we leverage variation in access to loans to identify the differential impact of subsidies. Despite the higher marginal value of capital, the impact of subsidy on assets and performance is not greater in loan-deprived than in loan-acquiring firms. Thus, loan deprivation is likely caused by borrower shortcomings instead of credit rationing. In such cases, subsidies need not privilege loan-deprived firms and banks may be better at distributing subsidies.