The basis of Silvio Berlusconi's political power was his TV network Mediaset. Using the staggered roll-out of the network, the authors find that watching television made young people stupider -- and thus, more likely to vote for Berlusconi. 1/ The fundamental argument behind the paper is that the places where transmitters were placed, conditional upon controls like population and income, were unrelated to future propensity to vote for him.

Contrary to some earlier work, taxi drivers behave like any other worker. They do not engage in "income targeting", where they choose an amount they want to make in a day and work till that is reached, which would imply a negative response of hours worked to income shocks. 1/ Back in 1997, a group of leading behavioral economists thought they had found that the elasticity of labor supply was negative, which would track best with workers choosing a target. If wages are unexpectedly high, then they will work less.

In a recent op-ed, Prof. Jean Twenge claims that college students who took notes by hand had way better academic results. This would be incredible -- if it weren't for the fact that that's not what the study shows! This is a serious act of misrepresentation. 1/ The meta-analysis she cites is quite annoyingly paywalled, but I did eventually get to read it. The studies they are analyzing are standard lab experiments on undergrads for notetaking. They have two groups, and have them answer a quiz after watching a 15 minute talk.

Especially in the developing world, technological advancements are not used for puzzling reasons. When a group of Ivy League economists invented a better way to manufacture soccer balls, they couldn't get anyone to take it. Sialkot, Pakistan, is one of the foremost centers of soccer ball production in the world, and it all started with a chance encounter between a British soldier and a saddlemaker. By 2012, 135 firms employed around 36,000 people to produce 20% of the world's soccer balls.

In one of the more jaw-dropping papers of the year, these economists used the complete consumption data of every single person in Norway from 2006-2018 to answer the biggest question in contemporary macroeconomics: how much does inequality matter? Maybe -- not so much! 1/ So how did we get here? The standard New Keynesian approach was to assume a representative agent, with the average of each population characteristics. Finding the aggregate impacts of policy was easy -- just solve for the household, and multiply by the number of people.

How should we conduct monetary policy? Remember that, if firms could costlessly adjust, monetary policy would be irrelevant. Therefore, optimal monetary policy depends on the precise way in which firms are unable to adjust. This paper is one of the key pieces of evidence. 1/ We are going to have to detour a bit to explain the context. As noted, if prices could perfectly adjust, then monetary policy doesn't do anything. To fix this, we add in some form of stickiness. There are a few basic ways to do this.

Logarithms are ubiquitous in economics. They allow you to conveniently express percentage changes. However, your data includes a zero, the log representation breaks. It turns out that there is no solution fully robust to the choice of units used! 1/ Suppose you’re testing the effect of pay on hours worked. You have random assignment of the program, so you’re not concerned about identification. You find that it increases hours by 2 hours per person on average — no problem, the average treatment effect is easy to represent.

Myerson-Satterthwaite proved that efficiency through trading will never be reached, even if there are no costs to engaging in a transaction. The way in which goods are allocated initially really matters, and thus, so does auction design. 1/ Suppose two parties, A and B, are to trade a good. There are a few desideratum we would like to have — we’d like participating to be individually rational, we’d like to have the person who values the good more have it, we’d like no subsidies, and we’d like incentive compatibility

Total factor productivity growth is slowing down, but we have more patents than ever. What gives? Aakash Kalyani argues that if you look at the actual text of the patents, they’re getting less creative — a change likely caused by falling population growth. 1/ How can you tell creativity? Obviously, we cannot have RAs read all the patents, but we can use simple computational methods. Find all two word combinations, and discard those in common use before 1900. Those are technical bigrams. The less they’ve been used, the more creative.

This is one of the most extraordinary papers ever written. Economists have long wondered how much the growth of cities is due to spillovers. The authors use the fall of the Berlin Wall to show that while spillovers are substantial, they’re very local. Let’s understand how 1/ First, the question. There are two basic reasons why people might be where they are. It could be that the location is really good for a city, or it could be that there are already people there.

This paper is one of the most astonishing feats of sustained data wizardry I have ever seen. Using data from Uber, they are able to estimate the roughness of every road in America and precisely estimate the value people place on it, and so much more. 1/ First, what makes this all possible — acceleration data. Uber wants to know if people are suddenly braking. Their measurements along a horizontal axis incidentally allows them to measure up and down motion.

Fantastic job market paper from @vincent_rollet. Highlights key problem for upzoning — what can be built is shaped by the past. You need to demolish the small before you can build the large. This revises down the gains from upzoning, which accrue mainly to movers. 1/ First things first, he has *extremely* impressive datawork. If you doing research on New York, you may find this of use.

What the media shows really does matter. The introduction of Fox News substantially aided Republicans, and could plausibly have swung the 2000 election. When Trump interferes with who’s on television — yes, that really does matter. 1/ The concern, of course, is that the entry of Fox News is endogenous. Simply comparing before and after would not suffice, as there may be time varying trends. It might also be the case that Fox News targeted either more persuadable, or places they expected to change more.

Privatization raises profitability, but does this come at the expense of workers? Privatization leads to layoffs of unproductive workers, but pay raises for those that remain. Most of the gains in profits are due to increasing productivity. 1/ They have the universe of privatized firms in Mexico from the 80s. Their method for finding causation is to match to a set of similar companies.

When measuring inflation, we have to adjust for the quality of goods. This is really hard, though — how do we plausibly say how much more utility a vacuum gives as a function of suckage? Bils and Klenow have a clever solution. 1/ They exploit the fact that rich and poor households spend different amounts on the same kinds of goods. They interpret this as buying higher quality goods.

Why do banks fail? There are two basic stories: bank runs, and insolvency, which call for different policy responses. The authors find that bank runs are common in theory, but rare in practice. This substantially undermines the case for deposit insurance. 1/ Theory first. The bank gets deposits and lends them out to be paid back later. The bank promises to allow you to withdraw at will, but lacks the cash to pay everyone. If people believe it will fail, it will fail as everyone rushes to be first to withdraw their savings.

In 1945, George Stigler turned his attention to the question of a minimum diet. What is the absolute cheapest one could live off of for year? The answer: 370 lbs flour, 57 cans of evaporated milk, 111 lbs cabbage, 23 lbs spinach, and 285 lbs of dried navy beans. 1/ What makes it interesting was that there was, at that time, no methods of linear programming available. George Dantzig had not yet invented the simplex method.

The quality of management was, for years, a black box to economists. Everyone believed it had to matter. Nobody had the data to study it seriously until Bloom and Van Reenen (2007). 1/ The only way to elicit information on management is to ask people. Their RAs interviewed 732 firms in 45 minute long phone interviews, asking about basic good management practices, like recording inventories and promotions for good performance.

We finally have really credible evidence that cousin marriage is bad for your children. While not perfect, I think their identification strategy is believable, and lets us say that marrying your cousin wipes at least two years off of their life. 1/ Their empirical strategy is to only compare cousin marriage children to their cousins who were born from out of the family marriages. They check that the marrying cousins aren’t different either by showing that they live just as long as their siblings.

Much of economic growth comes not in the form of falling prices, per se, but from the introduction of new goods. Not including them will lead to us substantially understating welfare, and overstating inflation. But how do find the value of goods which didn’t exist? 1/ We can calculate it by figuring out the price of a good which would set demand to 0, and then presume that this shadow price fell when it came into being. To know this, we must estimate the demand curve.

This is the job market paper of the year, and the best paper on industrial policy I have ever seen. Industrial policy can affect outcomes either directly by changing an area’s fundamentals, or by coordinating simultaneous investment. How important is each? Let’s find out. 1/ Tishara Garg is studying the effects of industrial parks in India. These are plots of land set aside for industrialization, with substantial government promotion. These are not, to be clear, special economic zones like Shenzhen, but simply local initiatives.