We develop a model of a prediction market with ambiguity and derive testable implications of the presence of Knightian uncertainty. Our model can explain two commonly observed empirical regularities in betting markets: the tendency for longshots to win less often than odds would indicate and the...

In the 2016 election cycle, the two major parties held 20 primary debates, and the candidates spoke hundreds of thousands of words. In this paper, I turn them into “word data” and examine three characteristics of the candidates: (1) Where do the candidates stand on a spectrum of policy...

Noneconomic considerations for bilateral or regional trade agreements can be notoriously difficult to measure. In the case of US-Taiwan relations, one common factor defines the two countries’ security alliance: China. In this policy brief, we discuss a new metric we recently developed that...

A geopolitical incident in the Taiwan Strait would pose two immediate risks to the US economy: (a) potential disruptions to digital flows from vulnerable submarine cables with landing stations in Taiwan and (b) the delay or disruption of container shipments in the Taiwan Strait and nearby waters...

The US government’s response to the COVID-19 crisis included the exercise of emergency powers to suspend rules and regulations that hindered society’s efforts to mitigate the pandemic. It will be important to rescind or revise many of those regulations after the crisis, but we insist that...

Economic volatility varies substantially across democracies. We study how the difference between federal and unitary systems of government can contribute to these variations. We show empirically that a higher degree of federalism is associated with less volatility in both economic growth and...

For the first time in the literature, we develop a quantitative indicator of the Chinese government's policy priorities over a long period of time, which we call the Policy Change Index (PCI) for China. The PCI is a leading indicator of policy changes that covers the period from 1951 to the...