In a labor market model with cheap talk, employers can send messages about their willingness to pay for higher-ability workers, which job-seekers can use to direct their search and tailor their wage bid. Introducing such messages leads—under certain conditions—to an informative separating...

In the spirit of Harberger, we apply a dynamic computable general equilibrium (CGE) model and estimate the excess burden stemming from the tax-induced distortion in the allocation of capital across the corporate and the non-corporate sectors in Germany. In doing so, we perform a counterfactual...

This paper addresses the steep learning curve in Machine Learning faced by non-computer scientists, particularly social scientists, stemming from the absence of a primer on its fundamental principles. I adopt a pedagogical strategy inspired by the adage ”once you understand OLS, you can work...

Spatial unit roots can lead to spurious regression results. We present a brief overview of the methods developed in Müller and Watson (2024) to test for and correct for spatial unit roots. We also introduce a suite of Stata commands (-spur-) implementing these techniques. Our commands exactly...

We combine unsupervised machine-learning and econometric methods to examine cultural change in 16th- and 17th-century England. A machine-learning digest synthesizes the content of 57,863 texts comprising 83 million words into 110 topics. The topics include the expected, such as Natural...

We examine how financial crises redistribute risk, employing novel empirical methods and micro data from the largest financial crisis of the 20th century – the Great Depression. Using balance-sheet and systemic risk measures at the bank level, we build an econometric model with incidental...

This paper investigates the relationship between real exchange rate changes and the German, French and UK automobile and mechanical engineering sector. In stylized models, exports decline whenever the domestic currency appreciates and vice versa. Strategic firm behavior, however, can obscure the...

We analyze the extent of the integrated control of the state over privatized firms during the post-privatization decade (1995-2005) in the Czech Republic. During this period the integrated control potential of the state resembled a corporate pyramid. While pyramidal control was not fully...

Understanding the reasons why individuals take risks, particularly unnecessary risks, remains an important question in economics. We provide the first evidence of a powerful connection between happiness and risk-avoidance. Using data on 300,000 Americans, we demonstrate that happier individuals...

In this paper we challenge the view that the oil price has lost its influence on economic activity after the mid-1980s. While we concede that typical VAR models put forward in the literature fail to identify oil price shocks that significantly affect aggregate production, we obtain clearly...