Megacities are increasing global connections while losing their local links. Rural areas are bereft of economic spillover effects.
An article in the NY Times quotes research on international airlinks and economic growth by David Yanagizawa-Drott.
An article in the NY Times quotes research on international airlinks and economic growth by David Yanagizawa-Drott.
Megacities are increasing global connections while losing their local links. Rural areas are bereft of economic spillover effects.
The issue of distribution of income and wealth is raging around the world in a heated debate. Daniel Hug (NZZ) takes a look at the conditions in Switzerland with Reto Föllmi and Isabel Martínez.
The incomes are relatively evenly distributed here, but the rise to higher strata is lacking. These and other findings can be read in the latest UBS Center Public Paper.
Florian Scheuer is named one of Germany’s outstanding talents.
Each year, 40 young people are honored by Capital in the four categories “entrepreneur”, “manager”, “politics and state”, “society and science”. The editorial team interviews managers, politicians, headhunters and consultants as well as the award winners of the previous years
David Dorn pleads for cooler minds in the discussion about digitization.
Technological change is not always straightforward and not necessarily entails mass unemployment, he says in an interview with the Volkswirtschaft. In addition, one overestimates the current progress.
We are delighted to announce that William N. Goetzmann (Yale) will open the 2018 edition of our Wirtschaftspodium with a keynote lecture.
This time, we will discuss how new technologies and regulatory frameworks have affected the finance sector and what the future holds for the financial center in Switzerland.
We are proud to launch the sixth UBS Center Public Paper, which focuses on the distribution of income and wealth in Switzerland.
The authors, Reto Föllmi and Isabel Martínez, show that Switzerland is a center of stability – in a good as well as in a less good sense.
We are pleased to announce that Nir Jaimovich, formerly of University of Southern California, joined the Department of Economics at the University of Zurich in July 2017.
He is affiliated with the UBS Center. You can find out more about his work in our interview.
Tagesanzeiger chief economist Markus Diem Meier reports extensively on our latest public paper.
Increased inequality in developed countries is one of the big issues of our time. Studies on the situation in Switzerland are still rare. Reto Föllmi and Isabel Martinez used tax data to take a closer look at both the development of income and wealth distribution in Switzerland.
Dan Ariely (Duke University) is a renowned behavioral economist who provides us with the practical tools we need to understand and improve our financial choices, save and spend smarter, and ultimately live better. We thus look forward to hearing his advice on these smart choices.
On October 31, 2017, the Center on Capitalism and Society gathered leading scholars in economics, philosophy and sociology to explore themes of individualism, emancipation and self-actualization.
Amongst other, Joachim Voth traced their roots to the day Martin Luther posted his 95 theses on the door at Wittenberg on October 31, 1517.
Biroli explained that genes and environment are inextricably intertwined.
The lecture took place in the main auditorium of the University of Zurich and was open to the public. Pietro Biroli is a microeconomist, interested in the early origins and the life cycle evolution of health and human capital. His research aims at understanding the mechanisms through which effective interventions and optimal choices of investment can help promote human development.
Joachim Voth elaborates the advantage of states with little debt: they have important reserves for crises.
As far as public debt is concerned, Switzerland is a model student. Since the mid-2000s, the debt burden has been continuously reduced, Switzerland is currently better off than Sweden or Germany.
«Rent regulation will not create one square meter of additional living space,» says Joachim Voth.
The regulation of the rental prices is harmful - for the landlords, the socially weak, the building stock and the labor market. A commentary in Finanz und Wirtschaft.
Irish economic historian Kevin O’Rourke warns of exaggerations in globalization.
Now it is important to maintain the current level of economic intergration, instead of calling for ever tighter interweaving. The interview was conducted by NZZ business editor Thomas Fuster at the Forum for Economic Dialogue.
SRF News asked Dani Rodrik (Harvard) at the Forum for Economic Dialogue about development in times of Brexit and America First.
The renowned development economist holds a critical stance towards total free trade and demands fair rules for the globalization. Free trade, democracy and national sovereignty are not available as one package, one has to decide against one of the three, according to one of his theses.
«Economics has undergone an incredible transformation over the past three decades», says David Dorn.
His research results would partially challenge the old wisdom of his subject. Tages Anzeiger chief economist and author Markus Diem Meier draws a detailed portrait of Dorn. He is considered one of the leading researchers on inequality and world trade and regularly appears in the media.
Prof. Reto Föllmi and Dr. Isabel Martínez of the University of St. Gallen analyse and discuss the distribution of income and wealth in Switzerland.
The analysis over the last 100 years shows that compared on a country level income and wages in Switzerland are high, the inequality between rich and poor is less distinct and the opening of the income gap stays within narrow limits over time.
The UBS Center is a main funding body for top international talent at the Zurich University’s Graduate School of Economics.
In a US News report, Maura Wyler-Zerboni, head of communication at the UBS Center, says the associated institute at the University of Zurich gives students access to “renowned experts from academia, the private and the public sector from both Switzerland and abroad.”
Make sure to set the reminder for the live streams on Monday, November 13 at the Forum for Economic Dialogue.
Questions and comments on YouTube and Twitter will be reviewed and selected for the Q&A. In addition, subscribe to our channel to be informed when the full event coverage will be available later on next week.
Prof. Ralph Ossa outlines the dilemma of competing governors wenn they subsidize company relocations.
The competition of the US states corresponds to at least 30% of their tax revenues, Ossa explains in the Frankfurter Allgemeinen Woche. The question is, whether this is the best way to serve the whole country.
From holocracy to the polarization of the labor markets – the digital transformation changes our work environment massively. Prof. David Dorn and alumnus Hans C. Werner (Swisscom), discuss the newest developments.
Dorn outlines in the Oec. magazine how the historical perspective helps to get a balanced picture of future labor markets. Who would have thought a 100 years ago, that there would be so few humans working in agriculture.
Prof. Dina Pomeranz, behavioral economist with over 18’000 followers on Twitter, uses the new possiblilites for her research.
She explains in an interview with Oec. magazine that she chose the platform to be informed early on about other projects in her research field, to discuss with other researchers and to draw attention to long-term economic trends, which get little space in other media amidst the news and negative headlines.
Shanker Satyanath (NYU), Nico Voigtländer (UCLA) and Joachim Voth offer an important lesson for civic leaders seeking ways to get out their message in an increasingly polarized climate.
Their research suggests that Germany’s dense network of clubs and social organizations — everything from bowling clubs to animal breeders — provided the social milieu that the Nazis used to spread their ideas and build membership, particularly in the early days of the National Socialist German Workers’ Party (NSDAP).
Neuroeconomics is still a young science. It explores the biological fundamentals of economic decisions. A visit by the NZZ to the SNS Lab shows what is happening.
The aim of the research activities there is not immodest: in contrast to traditional neoclassical economics, which bases its models on a rather abstract and unrealistic behavioral model, neuroeconomics wants to find out how decisions actually take place in the brain.
David Dorn held the “Global Economy Lecture” at the Vienna Institute for International Economic Studies.
The rise of the machines will have little impact on overall employment levels but will lead to rising labour market inequality and changes in demand for skills, David Dorn concluded. On the spot, he also spoke with “Die Presse” and the “Salzburger Nachrichten”.
With the award of the Sverige Riksbank Prize to Richard Thaler behavioral economics shifts into global focus.
We show a recording of Ernst Fehr in conversation with NZZ chief editor Eric Gujer and Marco Färber about the triangle of economics, psychology and neurology, about self-interest and altruism as the driving forces of our behavior and about behavioral economics as a guide for politics and business.
Florian Scheuer has been elected member of the editorial board of The Review of Economic Studies, a top 5 economics journal and the most visible journal in Europe.
Prof Scheuer is currently the second representative from Zurich serving on the board, joining Prof David Dorn who has been a board member since 2015.
Why does the disappearance of good jobs in the US for people with less education make it harder for them to start, and sustain, relationships?
In a recent paper, David Dorn and his colleagues find that when towns and counties lose manufacturing jobs, fertility and marriage rates among young adults go down, too. Unmarried births and the share of children living in single-parent homes go up. Meanwhile, places with higher manufacturing employment have a bigger wage gap between men and women, and a higher marriage rate.
His opening lecture at Goethe University provided a historical overview of the causes and consequences of bubbles in the financial markets.
Joachim Voth holds the Professorship of Macroeconomics and Financial Markets, endowed by the UBS Center at the University of Zurich. He will be the guest professor for financial history at the House of Finance at the Goethe University Frankfurt this year. The guest professorship was donated to Goethe University in 2014 by Bankhaus Metzler and the Edmond de Rothschild Group on the occasion of the centenary of the university.
Esther Duflo and Abhijit Banerjee (MIT) are two of the most influential development economists of the present.
It is important to attribute to them that field experiments are now a standard repertoire when development programs are designed or evaluated. The researcher couple studies experimentally how poverty can be fought better. In “Sternstunde Philosphie” (SRF) Duflo and Banerjee can be seen in conversation with Barbara Bleisch. In an interview with the NZZ, they explain why economists should be like plumbers.
Esther Duflo (MIT) and Abhijit V. Banerjee (MIT) visited the Department of Economics at the University of Zurich to talk about their research.
Their mission is to reduce poverty by ensuring that policy is informed by scientific evidence. The Event was organized by the Department of Economics together with the Swiss Re Foundation and the UBS Center.
His work is centered around Economic Growth, International Trade and Environmental Economics.
In particular, he has worked on the role of innovation for climate change policies, the long-term growth impact of countercyclical fiscal policy, the labor adjustments to international trade and the impact of relational contracts on innovation.
The University of Zurich is the leading research-oriented university of economics in the German-speaking world and is now targeting the world’s top. Director Rainer Winkelmann in an interview with the Handelszeitung on the future of and the challenges for the guild.
The new position table of the VWL faculties in the Handelsblatt ranking shows: nowhere are there such research-intensive economists as at the University of Zurich. In addition to the behavioral- and neuroeconomist Ernst Fehr, there are so many distinguished experts in the meantime, that the university takes the first place in the new Handelsblatt ranking of the most research-intensive VWL faculties in the German-speaking world - by far.
The European Research Council (ERC) has announced the awarding of its Starting Grants to 406 early-career researchers throughout Europe. Three grants have been awarded to researchers at the University of Zurich, two of which are holding a professorship endowed by the UBS Center. Dina Pomeranz will be investigating tax evasion in developing countries, focusing on the role of firm networks in Chile and Ecuador. The grant amounts to more than 1.2 Mio. EUR. Florian Scheuer has been awarded a grant amounting to 1.5 Mio. EUR, which will support his research on inequality and its implications for tax policy and political economy.
Are the labor market reforms the only reason for the economic upswing in Italy and Spain? David Dorn, Professor of International Trade and Labor Markets at the University of Zurich, relativizes: “The main reason for the unemployment reduction is the economic recovery in these countries, also due to the increased stability of the Eurozone.”
An international group of neuroeconomists – with Ernst Fehr and Philip Tobler from the University of Zurich – has been examining how brain areas communicate to produce the so-called “warm glow” feeling of wellbeing and satisfaction that results after performing an altruistic act. In their experiments, they found that people who behaved generously were happier afterwards than those who behaved more selfishly. However, the amount of generosity did not influence the increase in contentment. The study – which was published in Nature Communications – generated media coverage around the world.
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.
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.
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.
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.
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.
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.
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”.
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.
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.
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”.
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.
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.
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.
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.
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.
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.
Trump has promised that by restricting international trade he would bring back those jobs which have been lost in the U.S. due to globalization. In a recently published article in Finanz und Wirtschaft, Dorn explains why the chances of success for Trump’s campaign promise are very low. If you want to actually help the globalisation-losers, you need a different approach.
The NZZ am Sonntag has published a feature on Dina Pomeranz in their latest edition. The article focuses on her academic career and her work in the field of development economics. Professor Pomeranz’ research is far away from the ideological approach which characterized the field of development economics during the movement of
The Big Idea is a platform from Vox for smart, often scholarly excursions into the most important issues and ideas in politics, science, and culture. Vox recently published an article by Filipe Campante and David Yanagizawa-Drott on how social mobility in the U.S. influenced voting behaviour during the presidential election. Did declining social mobility cause Trump’s rise? No, say Campante and Yanagizawa-Drott, but the influence of social mobility on voting seems to be growing.
After Donald Trump’s unexpected win on Tuesday, November 8, which will make him the 45th U.S. president, experts are trying to get to the bottom of his election victory. The Wall Street Journal recently published an article entitled “Jump in Chinese Imports Gave Trump Election Boost, Study Finds,” referring to a new study by David Dorn, David Autor, Gordon Hanson, and Kaveh Majlesi. Furthermore, David Dorn was interviewed by Swiss Television (SRF) for a special on the 2016 U.S. elections. His research shows that cheap imports from China led to an immense job loss in the U.S. economy. Interestingly, those regions which were hardest hit by Chinese import competition became much more likely to elect politicians from the far right or far left. This effect of strong ideological polarization became evident in the current elections. Moreover, Professor Dorn’s professional opinion on the U.S. economic policy under Trump can be found in several newspapers and online articles which are based on a news report by SDA-ATS (e.g., swissinfo.ch). While Dorn predicts little change for Switzerland, he identifies major uncertainties for the future of economic policy in the U.S.
The way in which parents interact with their children affects the formation of human capital, which in turn is a crucial determinant of long-run growth and future inequality. In Finanz und Wirtschaft Fabrizio Zilibotti shows that different parenting styles influence the future success of children in different ways and explains why income inequality has a strong effect on the choice of parenting styles.
The German economist program “makro” interviewed David Dorn on the decisive factors of globalization and the effects on the political landscape in areas in which the losers outnumber the winners of the process. David Dorn explains how the manufacturing workers in the US are hit hardest: They have fewer options to find new employment in other sectors and are more likely to have to take on lower paid jobs than their better educated colleagues.
The number of professors of economics at the University of Zurich has increased substantially from 23 to 30, with a corresponding contribution to research and teaching. Due to this growth of about 30 percent, the Department of Economics has gained a decisive advantage in the international competition between universities. This progress is largely due to the support from the UBS Center. After the University of Zurich appointed the first two of the professorships endowed by the UBS Center last year, two more full professorships, one assistant professorship, and one affiliated professor have now joined the Center and the University.
In a current article in the «Finanz und Wirtschaft», Joachim Voth elaborates on the fact that most people are not only interested in doing well, they rather want to be better off compared to others. For them, the competition among consumers and the related egotism are part of our economic system. Voth discusses whether the positive effect of social comparison does outweigh its downside. Can the resulting higher collective economic performance make up for costs of individual unhappiness, overconsumption and private bankruptcy?
Last Thursday – 70 years after Winston Churchill’s historical speech on Europe that took place in the aula at the University of Zurich - Paul Krugman talked about the future of Europe with a focus on fiscal and monetary policies and the European Monetary Union. Krugman’s lecture which was hosted by the UBS Center attracted over 600 people and received considerable media attention. If you missed the speech, you can watch the whole lecture on YouTube.
Will the development of intelligent machines lead to an increase of unemployment in the near future? In a recently published article in Finanz und Wirtschaft, David Dorn gives a clear answer to this question. On the one hand, humans still outdo computers in tasks requiring creativity, decision-making, and problem-solving skills (which remain highly paid) and lower product prices lead to more demand for personal services, on the other hand automation creates jobs on both ends of the income scale. However, this is not true for middle-income jobs, which are mostly affected by automation. Thus, the current phase of automation leads to an increasing income gap.
In a recent interview for China’s largest Newspaper «People’s Daily», Fabrizio Zilibotti explains how China is now standing at a historical point in time, moving from an investment and export driven to an innovation driven economy. China’s investments into R&D in relation to its GDP are at a similar level as within the EU, pushing forward the innovation based growth strategy. Professor Zilibotti continues recommending further steps: eliminating entry barriers and breaking up monopolies, loosening financing restrictions for SMEs and further investment into building high-tech industrial parks.
Fabrizio Zilibotti has been invited to hold the Fredric B. Garonzik Lecture at Brown University. Zilibotti will talk about „China at a Turning Point: The Difficult Transition from Investment-Led to Innovation-Led Growth”. The lecture is hosted by the William R. Rhodes Center for International Economics and Finance and will take place on Tuesday, September 13, 2016.
From August 22 to 26, 2016, nearly 1,800 members of the European Economic Association (EEA) and the Econometrics Society (ES) converged to Geneva for the annual EEA-ESEM Congress. Prof. Fabrizio Zilibotti, President of the EEA, held the Presidential Address entitled, “Growing and Slowing Down Like China” on Wednesday evening. In his talk Prof. Zilibotti analyzed the post-reform Chinese growth and explained why the growth in China is set to slow down.
The online-platform U.S. News interviewed Professor David Dorn for their article on the profound impact computers have in the labor market. Dorn explains that by substituting human labor in a wide range of clerical jobs through computers, not only the share of production employment but also the share in the overall employment of clerical occupations is declining since the 1980s. The U.S. government expects to see an 8 percent decline in the bookkeeping, accounting and auditing clerk industry sector between 2014 and 2024.
In his recent commentary for the Swiss newspaper Finanz und Wirtschaft, Fabrizio Zilibotti explains how Matteo Renzi’s government has come under pressure due to the banking crisis and the opposition party of the comedian, Beppe Grillo. An election victory for Grillo would have fatal consequences for the country, says Zilibotti.
Fabrizio Zilibotti held this year’s “Walras-Bowley Lecture” during the 2016 North American Meeting of the Econometric Society. The Meeting was hosted by the Wharton School and the Department of Economics at the University of Pennsylvania and took place from June 16 to 19, 2016. The “Walras-Bowley Lecture” is an annual lecture given by a non-North-American member at the North American meeting. Former lecturers include, among others, Philippe Aghion, Per Krusell, Andreu Mas-Colell, Nobel Laureate Christopher Pissarides, and Nobel Laureate Jean Tirole.
In this edition of the Swiss newspaper Finanz und Wirtschaft Professor Voth discusses how index funds are becoming increasingly powerful market forces undermining antitrust regulations. He argues that, given the structure of their portfolios and their influence on multiple companies within an industry, a monopolistic situation is created.
Ernst Fehr and Roberto Weber from the Department of Economics at the University of Zurich together with Alexander Wagner (Department of Banking and Finance) organized a Workshop on Behavioral Economics of Financial Markets. The two-day workshop brought together leading specialists in the field of behavioral finance to share and debate their latest insights in terms of methodologies and content.
Nobel Laureate Prof. Robert J. Shiller (Yale University) spoke about “Phishing for Phools: The Economics of Manipulation and Deception” in his lecture at the University of Zurich. This is also the title of his latest book in which George Akerlof and Robert Shiller argue that “competitive markets by their very nature spawn deception and trickery.” In a recent interview with the Swiss newspaper Tages-Anzeiger, Shiller talks about how companies manipulate their customers and why McDonalds has comparatively high standards thanks to regulations.
David Dorn discusses changes in the national and international labor market with Brigitta Bernet, an economic historian, in the current edition of the UZH Magazin. There is a long history of people fearing that new technologies would lead to massive unemployment, says Dorn. Surprisingly, despite the fact that computers, the internet and robot-driven machines have been used for decades, many people still have jobs today. In Switzerland, there have never been so many people employed like in the past few years.
“Cheap imports from China led to an immense job loss in the US economy,” says David Dorn in an interview with the Swiss newspaper NZZ am Sonntag. His research shows that the U.S. regions which were hardest hit by Chinese import competition became much more likely to elect politicians from the far right or far left, thus contributing to the strong ideological polarization of U.S. Congress.
The relationship between inequality and economic growth is complex. Yet, an evergrowing income inequality risks harming future growth by creating support for bad policies. A column by Fabrizio Zilibotti in the current issue of the Swiss newspaper Finanz und Wirtschaft.
The New York Times features David Dorn’s research on trade and political polarization on its front page. The new research shows that the U.S. regions which were hardest hit by Chinese import competition became much more likely to elect politicians from the far right or far left, thus contributing to the strong ideological polarization of U.S. Congress. While trade-exposed regions with white population majority move to right, non-white voters move to the left, thus eroding support for moderate candidates in both the Republican and Democratic parties.
Can directed technical change be used to combat climate change? David Hémous (University of Zurich) together with his colleagues Philippe Aghion (Harvard University), Antoine Dechezleprêtre (LSE), Ralf Martin (LSE), and John Van Reenen (LSE) answer this question in their recently published article in the Journal of Political Economy. They show that firms tend to innovate more in clean (and less in dirty) technologies when they face higher tax-inclusive fuel prices.
Often, it is hard to understand why people behave the way they do, because their true motives remain hidden. A team around Grit Hein and Ernst Fehr have now shown how peoples’ motives are characterized by a specific interplay between different brain regions and how this interplay allows precise classification of the motives underlying a shown behavior.
A new study by labor economists David Autor, David Dorn, and Gordon Hanson shows that increased trade with China caused severe and permanent harm to many American workers. Exposed workers experience greater job churning and reduced lifetime income.
Joachim Voth has been invited to deliver the 2016 Hicks Lecture at All Souls College, Oxford. Named after Sir John Hicks, Nobel Laureate in Economics (1972), the lectures bring prominent economic historians to Oxford to give a keynote. Speakers in recent years have included Claudia Goldin, Joel Mokyr, Jeffrey Williamson, Christina Romer, Peter Temin, and Robert Allen. The lecture will take place on April 26.
Fabrizio Zilibotti delivered the “Keio Economic Society Lecture 2016” with the title “Do Unequal Societies Have More Pushy Parents? The Economics of Parenting Styles” on December 24. 2015. Following the event, Nikkei Shinbun Nikkei’s flagship publication and the world’s largest financial newspaper published a full-page interview with Zilibotti on January 11, 2016.
Read about recent and current highlights of the UBS Center. In this issue, we feature Joachim Voth’s work on the economic history of conflict and sovereign debt. Furthermore, you will find several articles in this edition, which cover our recent events as well as the launch of the fourth UBS Center Public Paper, which focuses on how computers have changed our working life.
The UBS Center is pleased to announce that, on November 1, 2015, Joachim Voth was appointed to the Professorship in Macroeconomics and Financial Markets, endowed by the UBS Center. Voth has been Professor at the University of Zurich and Affiliated Professor at the UBS Center since 2014. On March 7, 2016, Voth will give his inaugural lecture on “Fear, Folly and Financial Crises – Some Policy Lessons from History.” The lecture will take place at the main auditorium of the University of Zurich and will be open to the public.
Fabrizio Zilibotti has been invited to give the “Walras-Bowley Lecture” at the 2016 North American Meeting of the Econometric Society. The Meeting is hosted by the Wharton School and the Department of Economics at the University of Pennsylvania and will take place from June 16 to 19, 2016.
According to the study, published in Science, families actually vary tremendously in matters related to cutting. This indicates that heterogeneous motives at the family level play a crucial role when parents decide whether to cut their daughters. The results question the assumptions behind many programs that attempt to reduce cutting. Worldwide an estimated 125 million girls and women are cut despite the fact that female genital cutting leads to serious health problems throughout life. Development agencies spend considerable resources each year on programs that attempt to reduce cutting. These programs are often based on the assumption that cutting is a deeply entrenched social norm arising from a strong need for families to be alike.
The economists Hans-Joachim Voth (University of Zurich), and Nico Voigtländer (University of California) show that Germans who grew up under the Nazi regime are much more anti-Semitic than those born before or after that period. The share of committed anti-Semites, who answer a host of questions about attitudes toward Jews in an extreme fashion, is 2–3 times higher than in the population as a whole. Results also hold for average beliefs, and not just the share of extremists; average views of Jews are much more negative among those born in the 1920s and 1930s.
Decision rights carry not only instrumental value but may also be valuable for their own sake. The ideas of autonomy, freedom, and liberty derive their intuitive appeal—at least partly—from an assumed positive intrinsic value of decision rights. Providing clean evidence for the existence of this intrinsic value and measuring its size, however, is intricate. Björn Bartling, Ernst Fehr, and Holger Herz from Zurich University developed a method capable of achieving these goals. The data reveal that the large majority of the subjects intrinsically value decision rights beyond their instrumental benefit.
Jaume Ventura (Universitat Pompeu Fabra) and Joachim Voth (Zurich University) say that when the dangers of debt in today’s world are considered, the potential benefits should not be forgotten. Looking at the conditions under which the Industrial Revolution in Britain took place, the researchers ask why the country that borrowed the most industrialised first.
Kenneth Rogoff (Harvard University) spoke about “Dealing with debt” at the University of Zurich. He regards the elimination of the zero bound as a major turn in monetary policy, after the ending of the gold standard and the fixed exchange rates.
After a golden decade, economic growth in China has slowed down since 2012. In the year 2014, a growth of 7.4% of the GDP was reported for China. Forecasts for 2015 set the GDP growth rate below 7%, with no rebound in sight for 2016. Fabrizio Zilibotti says China’s institutions have been successful in promoting investment-led growth. However, the transition towards innovation-led growth necessitates economic reforms that raise the opposition of vested interests.
Fabrizio Zilibotti will be the keynote speaker of a conference on Innovation and Global Economy organized by the College of Economics (Zheijang University), the Center for Finance and Development (The Graduate Institute Geneva), and the Alibaba Group. The conference will take place at Alibaba Headquarters in Hangzhou.
Professor Ernst Fehr talks about self-interest and altruism as incentives for human behavior and about behavioral economics as an adviser for politics and economics with NZZ-editor-in-chief Eric Gujer and Marco Färber.
Andreas Müller, Kjetil Storesletten, and Fabrizio Zilibotti say the best response to the Greek debt crisis is pragmatism and sequential compromise. The economists plead for an assistance programme providing the country with debt relief.
At the Economy Festival Trento, economy scholars, Nobel Prize winners and managers from all over the world meet for dicussing economic topics with the audience. Fabrizio Zilibotti talked about “Parents put to the Test. Educational Styles and Social Consequences”.
In the policy circles, there are confronting positions regarding Greece’s assistance programme and the structural reforms it should implement. In a recently published column Fabrizio Zilibotti, Kjetil Storesletten, and Andreas Müller argue that the best response is pragmatism and sequential compromise. Efficiency requires an assistance programme providing the country with debt relief with an intervention of an institution such as the IMF. Thus, misconceived economic principles could bring large welfare losses for Greece and renewed financial instability in the Eurozone.
In their recently published paper, Hans-Joachim Voth and Nico Voigtländer use survey data on anti-Semitic beliefs and attitudes in a representative sample of Germans to show that Nazi indoctrination was highly effective. Between 1933 and 1945, young Germans were exposed to anti-Semitic ideology in schools, in the (extracurricular) Hitler Youth, and through radio, print, and film. As a result, Germans who grew up under the Nazi regime are much more anti-Semitic than those born before or after that period.
It is a common misconception that large governments are the main obstacles to economic prosperity. That is according to Joachim Voth, keynote speaker at the Citywire Montreux 2015. He said big governments are not a source of inefficiency but tend to drive economic performance and stability.
In his opening address at the Citywire Montreux 2015, Joachim Voth said the ECB’s stimulus measures are not doing enough to dispel the fear of a ‘full-blown’ European crisis. According to Voth, political support for measures are on an increasingly fragile footing which could lead to an economic collapse in the next 12-to-24 months.
On April 15, Fabrizio Zilibotti delivered an honorary lecture on “Parenting with Style” at the International Academic Conference on Economic and Social Development in Moscow. He addressed some interesting questions: Does the economy influence the way people bring up their children? How can we determine and measure a child’s utility? How can parenting styles be categorized in an economic model?
Starting in June 2015, Joachim Voth will be a Joint Managing Editor at The Economic Journal. The journal belongs to the Royal Economic Society, which is one of the oldest and most prestigious economic associations in the world.
Fabrizio Zilibotti criticizes that many politicians believe that only a tough stand can solve the Greek problems. Current research findings at the University of Zurich indicate an efficient way to handle a debt crisis involving an economy struggling with a persistent recession. Zilibotti points out the risk that – in the name of misconceived economic principles – the outcome imposes large welfare losses.
In the years to come, China will be one of the main engines of worldwide economic growth. In the year 2014, a growth of 7.4% of the GDP is reported for China. By comparison, the l atest IMF-forecast suggests an increase of 3.5% in the global GDP in 2015. This is why the presence of Chinese Premier Li Keqiang in this year’s annual meeting of the World Economic Forum in Davos draws worldwide attention. China Radio International interviewed Professor Fabrizio Zilibotti on the China-relevant elements of this year’s World Economic Forum and on the importance of China and Switzerland to each another.
The European Central Bank (ECB) carries out monthly asset purchases to amount to 60 billion euros until at least September 2016. Mario Draghi, the president of the ECB, announced this program in late January 2015. Professor Fabrizio Zilibotti discusses the measure on Radio della Svizzera Italiana.
Fabrizio Zilibotti’s article on “Parenting with Style” (together with Matthias Doepke) has gained considerable attention in the media. A review of the article was published in the New York Times on 28 October, 2014, entitled “Unequal Societies Give an Incentive for Pushy Parenting”. The article has received additional media coverage in different newspapers. The column “Tiger moms and helicopter parents: The economics of parenting style” – based on the same research and published in VOX, CEPR’s Policy Portal – has consistently topped the number of downloads of the portal with over 30.000 reads.
The Forum for Economic Dialogue 2014 on “Sound Economic and Institutional Foundations for Europe” offered an ideal platform for academics, business people, public officials, and interested citizens to engage in an exchange of knowledge, latest insights, and ideas.
On November 6th, 2014, Fabrizio Zilibotti will deliver the 2014 YAN Fu Memorial lecture. Established in 2001 and hosted by the National School of Development at Peking University, the “Yan Fu Memorial Lecture in Economics” is one of the most prestigious academic events in China across all fields. It annually invites an internationally renowned economic scholars to speak, both to recall the contribution of sages, but also in order to inherit their ancestors and to continue to promote the development of Chinese modern economic discipline for China’s prosperity.
Previous speakers include Nobel Laureates Robert Mundell, Amartya Sen, Kenneth Arrow, and other renowned economists including Partha Dasgupta, Dani Rodrik, Prasanta Pattanaik, James Robinson, Timothy Besley, Robert Feenstra, and Steven Durlauf.
With only two months left in 2014, we would like to share a summary of recent highlights and give you a preview of what we have in store for 2015.
Prof. David Dorn has been appointed as professor at the University of Zurich and as affiliated professor with the UBS Center of Economics in Society in Zurich. This will allow for an expansion of the important and current fields of international trade and labor economics in research and teaching at the University of Zurich.
The UBS International Center welcomes this year’s UBS Center Scholarship holders. The three top students were selected from 400 applicants to the Zurich Graduate School of Economics, with the school’s international reputation attracting students from around the world.
Philippe Aghion (Harvard University), member of the UBS International Center advisory board, has been elected President of the European Economic Association (EEA). He will be Vice-President in 2015, President Elect in 2016, and President in 2017. The EEA is the most important association of academic economists in Europe. The list of current and past presidents comprises two Nobel laureates (Christopher Pissarides and James Mirrlees), and most renowned researchers.
In the newest issues of our Working Paper Series, you will find out, whether female officers improve law enforcement quality and what effects they have on crime reporting and domestic violence escalation. You will also learn about the role of the apprenticeship system in terms of employment polarization. We wish you much interest while reading these working papers.
The 5th Lindau Meeting on Economic Sciences provided an open exchange of economic expertise and inspired cross-cultural and intergenerational encounters among economists from all over the world.
The Department of Economics at the University of Zurich is bringing back Swiss talent with David Dorn who is leaving the CEMFI Madrid for a professorship in Zurich. In addition, the renowned professor Andrei Levchenko has accepted a guest professorship at the University of Zurich for one year. Both professors will be affiliated with the UBS Center.
The UBS Center welcomes six new advisory board members: Prof. Raquel Fernández (New York University), Prof. Rachel Griffith (University of Manchester), Prof. Yingyi Qian (Tsinghua University), Prof. Klaus Schmidt (Ludwig-Maximilians-Universität München), Prof. Kjetil Storesletten (University of Oslo), and Prof. Harald Uhlig (University of Chicago).
Fabrizio Zilibotti, Scientific Director of the UBS International Center of Economics in Society, has been elected President of the European Economic Association (EEA). He will be Vice-President in 2014, President Elect in 2015, and President in 2016. The election was held by a secret electronic vote involving all members of the association (ca. 3,000 members). The EEA is the most important association of academic economists in Europe. The list of current and past presidents comprises two Nobel laureates (Christopher Pissarides and James Mirrlees), and most renowned researchers including, over recent years: Manuel Arellano, Timothy Besley, Richard Blundell, Mathias Dewatripoint, Ernst Fehr, Jordi Gali, Andreu Mas Colell, Torsten Persson, Nick Stern, Guido Tabellini, and Jean Tirole. Since the foundation of the EEA in 1986, Prof. Zilibotti will be the third president from an institution located in the German-speaking world (after Martin Hellwig, 1992, and Ernst Fehr, 2008).
Ernst Fehr received the 2013 Gottlieb Duttweiler Prize. The prize was awarded for his pioneering research on the role of fairness in markets, organisations and in individual decisions. The ceremony took place on 9 April 2013 with the prize-giving speech by Dan Ariely, professor of behavioural economics.
For almost two decades Ernst Fehr has been carrying out detailed and cutting-edge research into the social behaviour and economic preferences of people. In doing so, he has revised the traditional concept of man as “homo oeconomicus”. Based on a number of experiments, Fehr has been able to document the “fairness preference” of people beyond cultural boundaries, in other words the fact that we are often driven not by selfishness but by a desire for fairness. As one of the most influential economic scientists in the world, Fehr has made an important contribution to the “psychological turnaround in economics”. Thanks to his transdisciplinary research approach he has managed to link economics with psychology, biology and neurosciences. The study areas of the award-winning researcher are diverse, ranging from the limits to the self-regulation capability of competitive markets to the role of the neuropeptide oxytocin in confidence-building and how to prevent female circumcision. The politically independent Gottlieb Duttweiler Prize is awarded at irregular intervals for outstanding contributions to the community. Previous prize-winners include Wikipedia founder Jimmy Wales, former UN Secretary General and Nobel Prize winner Kofi A. Annan and the last president of Czechoslovakia, Václav Havel. Ernst Fehr is yet another prize-winner whose work aims to create a better world. The presentation of the prize, worth 100,000 francs, took place on 9 April 2013 at the Gottlieb Duttweiler Institute in Rüschlikon/Zurich in front of invited guests. Professor Dan Ariely, lecturer in behavioural economics at Duke University, paid tribute to his research colleague. The ceremony marked the high point of the anniversary year of the GDI, which was founded in 1963.
UBS Center Working Paper series launched with papers on Chinese pensions and the origins of authority. The Lure of Authority: Motivation and Incentive Effects of Power Sharing High Growth Across Generations: Pensions and Demographic Transition in China
The Faculty of Economics, Business Administration, and Information Technology of the University of Zurich invites applications for a Professorship in Macroeconomics and Financial Markets
Applications are invited for a position as Full Professor (Chair), starting earliest in the fall 2013. Our faculty places strong emphasis on outstanding research and scholarship. Through its educational and research objectives, the University of Zurich aims at attracting leading international researchers who are willing to contribute to its development and to strengthening its reputation. The research focus of the chair will be the study of the nexus between macroeconomics and financial markets, from both a theoretical and an empirical perspective. Relevant topics include, among others, the nature of financial frictions, the channels through which they affect macroeconomic performance and business cycle fluctuations, the relationship between housing markets and macroeconomic stability, the targets of monetary policy (especially, in relationship with asset prices), and the analysis of policies and institutions promoting financial stability. This professorship is part of a broader initiative of the University of Zurich and the UBS Foundation that foresees the establishment of five new professorships at the Department of Economics, and led to the creation of the UBS International Center of Economics in Society, which supports cutting edge research in economics. The new professor will have the opportunity of being affiliated to the UBS International Center of Economics in Society. The position involves teaching undergraduate and graduate courses. The language of instruction is either German or English.
The UBS International Center of Economics in Society recently awarded its first UBS Center Scholarship. The recipient, Jean-Michel Benkert, will be investigating why people need incentives to complete tasks efficiently and behave in the interests of society.
Jean-Michel Benkert is fascinated by the abstract, by theory. “But a theory must have a practical use,” says the first recipient of the scholarship awarded by the UBS International Center of Economics in Society. Anyone who, like him, was a student during the financial crisis, is inclined to be skeptical about theories. After all, during the crisis many theories failed to deliver on what they had promised. As such, Benkert’s focus is always on finding practical solutions to problems.
Before this can happen, the first thing that needs to be done is to develop a concrete question from a theoretical idea. This is an art, and it requires discussion with others. That is why Benkert has now sought out the University of Zurich - because of the many like-minded people he has found there.
In addition to a critical mass of postgraduate students and researchers, Benkert also regards it as very important that there is a good level of supervision by professors. As a scholarship holder, he appreciates the independence that the UBS Center gives him. It gives him the opportunity to shape his ideas in an interdisciplinary environment. For him, the important thing is to take advantage of the entire research spectrum and to keep an inquiring mind. He therefore looks forward to the chance to exchange thoughts and ideas with leading figures from academia, the private and public sector at the events held by the UBS Center. “I think there are valuable synergies to be exploited through interaction with other disciplines, and in particular with society. The UBS Center provides a valuable shared platform for doing so,” says Benkert.
What interests Benkert is how we can use game theory to find solutions that can be applied to the economy. How, for example, can tasks be distributed so that the objective is achieved? Especially when the interests of the person who is placing the order are not the same as the interests of the person who is carrying it out. Incentives are the lynchpin here, according to Benkert.