Abhijit Banerjee (MIT) and Esther Duflo
And quite rightly, as a new study shows. In the radio broadcast "Echo der Zeit", David Dorn (University of Zurich and UBS Center) and Dalia Marin, (Ludwig-Maximilians-Universität München) discuss the effects of digitalization for the economy.
Echo der Zeit online (in German)
In a recently published article by Business Insider Nederland, the authors brake down just how a protectionist trade scenario could affect the US economy and the geopolitical order. They cite research by labor economists David Autor, David Dorn, and Gordon Hanson on the China shock.
Since 1962, America has earmarked funding to help people adjust to trade-related shocks. Trade-Adjustment Assistance (TAA) offers people money for retraining and income while they do so. A current article in The Economist explains why more Trade Adjustment Assistance is unlikely to quell the backlash against globalisation. In the 12 months to September 2016 only 127,000 workers received TAA. David Dorn alongside his colleagues, David Autor and Gordon Hanson, have estimated that of the extra government payments associated with Chinese import competition between 1990 and 2007, only 6% came through TAA or unemployment insurance. Most came from other sources: 32% from disability or retirement insurance; 26% as federal-government income assistance; and 32% as extra medical spending.
Trump’s trade experts want to increase customs duty on steel – about 30 percent – on the grounds that it would protect the local weapon industry. Such customs duty or import quota for steel could be the start of a worldwide trade war, which could also affect Switzerland. This is shown in a recently published study by Ralph Ossa, Professor of Economics at the University of Zurich.
The Economist recently published an article about the influence of central banks on productivity growth. The author argues that technology may be contributing to economic fluctuations in a new way. Around the time productivity began to leap during recessions, America also began suffering a rash of jobless recoveries. In a paper published in 2015, Nir Jaimovich (University of Zurich) and Henry Siu (University of British Columbia), argue that this is because firms began responding to recessions by eliminating routine jobs through reorganisation, outsourcing and automation.
In an interview with the Swiss newspaper SonntagsBlick, Ernst Fehr talks about his research, on how behavior economics explains the Trump phenomenon, and how top managers should get compensated based on their objective performance.
Dina Pomeranz is prominently featured in the current edition of Schweizer Monat. In the spread, she talks about developments in economics, weighs in on the self-awareness of economists, and argues for the utilization of experiments and empirical methods in economic research.
A recent study by Joachim Voth and his co-authors was mentioned in the online edition of Nature Human Behaviour and shows that social capital can be used for good or ill depending on the political and institutional context. By using new data on the networks of clubs and associations in 229 German cities from the inter-war period, the authors found that towns with denser networks had higher party entry rates – showing that association density contributed to the rise of the Nazi party. Although this is unique historical data documenting the role of physical organizations, its potential implications for our present circumstances regarding the Trump administration should not be overlooked.
US President Trump once again criticized the German trade surpluses on May 25, 2017, reinforcing the fear of a trade war. In a recent edition of the SRF news program “10vor10”, international trade expert David Dorn elaborates on the economic implications of Trump’s trade policy.
10vor10 on SRF Play (in German)
From Amazon to Google to Walmart: Since 40 years, the power concentration in the core industries have been increasing, leaving smaller companies with little to nothing. David Dorn, alongside four other top-economists, investigated the rise of so-called "superstar companies".
NZZ am Sonntag Online (in German)
New research by David Autor, David Dorn, and Gordon Hanson find that men and women from the US react completely different in times of economic troubles. The study shows that the decline of manufacturing has affected the supply of what the authors’ deem “marriageable” men. Men with lower wages often struggle to make ends meet and can spiral down into drug and alcohol abuse, while women in the same situation are more likely to marry and have children. Evidence proves that when men don’t earn much more than women do, fewer people get married, and more children are being born out of wedlock. This is because when the economic prospects for men decline, they migrate elsewhere, join the military, or fall out of the labor force. The inability of policymakers to help workers adapt is creating a crisis, which is affecting the entire U.S. economy, political system, and prosperity of future generations.World Economic Forum Online
The most important organization of economists in the world, the American Economic Association (AEA), has named the Zurich economist Ernst Fehr as a foreign honorary member. He is thus the first scientist who conducts research at a Swiss university to receive this honor.
Trade economists typically believe that in addition to lower prices for imported goods, trade liberalization also brings import variety and domestic productivity gains. In a recently published VOX column, Ralph Ossa (together with Chang-Tai Hsieh, Nicholas Li, and Mu-Jeung Yang) account for these ‘new’ gains in a careful reconsideration of the Canada-US Free Trade Agreement. The authors state that although the agreement did see improvements in Canadian income associated with import variety and domestic productivity, these were far outweighed by the welfare loss associated with the reduction in domestic variety. Nonetheless, Canadian welfare did improve overall when one takes into account the ‘traditional’ gains associated with lower import prices.VOX Columns
More than 300 persons attended this year's economic podium entitled "Does Switzerland need a new migration policy". Top specialists from Switzerland and abroad discussed the migration problematic and its consequences for the economy and society. Keynote speaker Sir Paul Collier (Oxford University) spoke with the German "Handelszeitung" at the event. In the interview, Collier discussed the precarious position of refugees in Jordan and summaried an alternative plan for local help.
Interview with Collier in the Handelszeitung (in German)
The resource curse and problems with minorities are significant causes for conflict. The Swiss political system shows, how even minorities can exert influence. The Swiss newspaper Finanz und Wirtschaft recently published an article by Dominic Rohner on this issue. The article provides a summary of his Public Paper on "The Economics of Peace".FuW article (in German)
The University of Antwerp conferred an honorary doctorate to Prof. Ernst Fehr. He received this for his groundbreaking contribution to the development of economics into a multidisciplinary behavioral science and, in particular, for his pioneering role in neuroeconomics, in which insights and methods from neuroscience are used to expose the foundations of human decision-making in a socioeconomic context.Video announcement
In the current edition of the Weltwoche David Dorn talks about the effect of digitalization on productivity and workforce. Dorn argues that the ongoing discussion does not give enough credit to the extent of technical innovation that the second industrial revolution caused. Compared to that, today’s advancements of computers and networks are relatively small. It is even more surprising that such major technical advancements in the past did not lead to the substitution of human labor but lead to the creation of new jobs in new industries. Furthermore, Dorn does not believe that it will be different this time.Weltwoche article (in German)
There is a huge gap within the labor market in Switzerland. Whereas salaries of well-qualified workers constantly increase in many industrial countries, workers with simple tasks have been facing decreasing salaries. Hence, there has been an increase of wage inequality. In an interview with Alexander Trentin from Finanz und Wirtschaft, David Dorn elaborates on the reasons for the decreasing share of labor income for economic output.FuW article (in German)
The UBS Center welcomes three new advisory board members: Prof. Manuel Arellano (CEMFI), Prof. David Autor (Massachusetts Institute of Technology), and Nobel Laureate Prof. Oliver Hart (Harvard University).Advisory Board Website
In light of the 2017 World Economic Forum in Davos, SRF dedicated a television broadcast to the issue of globalization. What level of globalization is enough? Are there any limits? These questions took center stage in the «ECO Spezial» one day before the opening of the 2017 WEF. Moderator Patrizia Laeri discussed the issue with Harvard-Professor Dani Rodrik, Oxford-Professor Kevin O’Rourke, and Professor David Dorn from the University of Zurich.Watch "ECO Spezial" on SRF1 (in German)
With Ralph Ossa and Florian Scheuer, two outstanding researchers from the University of Chicago and Stanford University, respectively, are joining the UBS Center at the University of Zurich. Prof. Ralph Ossa’s research focuses on international trade, economic geography, and economic development. He has been appointed to the Professorship in Economics of Globalization and Emerging Markets, endowed by the UBS Center. Prof. Florian Scheuer has been appointed to the Professorship in Economics of Institutions, endowed by the UBS Center. His research focuses on public finance, taxation, inequality, public policy, and political economy.Ralph Ossa’s webpage