CER-ETH Research Seminar, Spring Term 2019

Everyone who is interested is cordially invited!

If you would like to receive our weekly invitation via e-mail, or if you have any other question, please contact Volker Britz.

Speakers

Timo Trimborn

Boosting Taxes for Boasting about Houses? Status Concerns in the Housing Market

Abstract

Paula Gobbi

Childless Aristocrats. Inheritance and the extensive margin of fertility

This paper uses genealogical data of British aristocrats to show that inheritances can affect childlessness rates. We study settlements, a contract restricting heirs' powers and settling bequests for yet-to-be-born generations. This arrangement pushed childlessness to the "natural" rate of 2.4%, ensuring aristocratic dynasties' survival. Our estimation exploits that settlements were signed at the heir's wedding if the family head lived until this date. The heir's birth order, hence, provides as-good-as-random assignment into settlements. Next, we develop a theory that reproduces our findings and provides two novel results: exponential discounting cannot rationalize inheritance systems restricting heirs (settlements, trusts...); and inheritance systems can emerge endogenously when fertility concerns exist.

Tobias Cwik

Forecasting with DSGE models

Abstract

Antony Millner

Prediction: The long and the short of it.

Commentators often lament forecasters’ inability to provide precise predictions of thelong-run behaviour of complex economic and physical systems. Yet their concerns of-ten conflate the presence of substantial long-run uncertainty with the need for long-run predictability; short-run predictions can partially substitute for long-run predictions if decision-makers can adjust their activities over time. So what is the relative importance of short- and long-run predictability? We study this question in a model of rational dynamic adjustment to a changing environment. Even if adjustment costs, discount factors,and long-run uncertainty are large, short-run predictability can be much more importantthan long-run predictability.

Antoine Dechezlepretre

- cancelled -

Mouez Fodha

Mitigation, Adaptation and Public Finance

We analyze the interplay between public finance and the investments in the fight against GHG and climate change, namely private mitigation and public adaptation. A public sector of adaptation is financed by taxation and by public debt. Households can invest in private mitigation. Fiscal policy has a twofold impact on the agent budget constraints, through taxation for the financing of public adaptation and through the subsidy to private mitigation. We show that adaptation and mitigation should be substitutable or complementary depending on the level economic development, but also on the level of the mitigation subsidy. Finally, when government is indebted, we show that the financing of public adaptation and/or subsidizing private mitigation, through an increase of public debt, could be beneficial for developed countries, but could be detrimental for less developed countries. We hence add a new argument to the debate on the optimal mix between adaptation and mitigation, that is the financing schemes of these investments and public finance.