On Tuesday, March 7th, the economics department held it’s annual “Life After Brandeis” event.  We were pleased to have a great group of alumni attend to answer questions from our students. The panel, pictured from left to right, are: Haotian Shen ’15 MAief’16, Ben Luxenberg ’09, Axel Szmulewiez ’16, Anna Kaufman ’10, and Joey Wang ’15.  Thank you to all for a successful and very informative evening!

Prof. Raphael Schoenle’s work “Inflation Dynamics During the Crisis” with Simon Gilchrist, Jae Sim and Egon Zakrajsek was published in the 2017 March issue of the American Economic Review, the flagship journal of the American Economics Association.

From the latest issue of the Atlantic

A well-known study by the economists Eli Berman and Linda T.M. Bui of Boston University looked at the aftermath of new regulations governing air quality in Los Angeles. The South Coast Air Quality Management District in Los Angeles enacted some of the country’s most stringent air quality standards in the 1980s, and Berman and Bui compared Los Angeles firms with those in Louisiana and Texas to see if the more regulated firms cut jobs as a result. They found that the local air quality regulations were not responsible for a large decline in employment, and that the regulations might have actually increased labor demand since firms need to hire people to help them deal with the new regulations. They argued that because all firms in a region were affected by the same regulations, they were still able to compete against one another while facing the same costs. “We find no evidence that local air quality regulation substantially reduced employment,” they concluded.

Linda T.M. Bui is at Brandeis!

Liquidity constrained firms increased prices in 2008, while their unconstrained counterparts cut prices, a study by Simon Gilchrist, Raphael Schoenle, Jae Sim, and Egon Zakrajšek shows. This reflects decisions by the constrained firms to preserve internal liquidity and avoid accessing external finance, factors that strengthen the countercyclical behavior of markups.

Prof. Schoenle presented his research “YOLO: Mortality Beliefs and Household Finance Puzzles” at the 2016 annual Academic Forum of the Defined Contribution Institutional Investment Association (DCIIA). The meeting took place November 29 and 30 at the Goldman Sachs Headquarters in New York City.

In his research, Prof. Schoenle studies how subjective mortality beliefs contribute to contradictory savings rate puzzles at opposite ends of the life-cycle. He shows that relative to a benchmark model using actuarial transition probabilities, the young under-save by 30%, and retirees draw down their assets 15% more slowly. Empirically, distorted mortality beliefs correlate with savings behavior, even controlling for risk preferences, and cognitive and socioeconomic factors. Salience of causes-of-death is a pivotal source of mortality belief distortions over the life-cycle.

Ad Blocking

November 11, 2016 | Leave a Comment

Prof. Ben Shiller is presenting his research on ad blocking at Harvard Business School this week, and at MIT in December.  The research was completed while visiting Harvard Business School during his sabbatical this semester.
Prof. Shiller’s research, with Joel Waldfogel, employs data on both traffic and the share of visitors blocking advertisements at roughly 2500 websites.  Using changes in traffic as a measure of changes in quality, they find that websites with a substantial fraction of ads blocked declined in quality relative to other websites, presumably because those sites had relatively less ad revenue to reinvest in producing high-quality content.  This implies a potential “web browser’s dilemma” (like a prisoner’s dilemma) – while installing ad blockers may help individual users, it may lead to quality changes which may harm consumers on balance.

On Wednesday, October 5th, the economics department held their “Meet the Majors” event in the World Court of the Lemberg Academic Center. Students enjoyed Lizzie’s Homemade Ice Cream with all of the fixings while chatting with faculty, UDR’s, and other econ majors.  The event is coordinated so that professors, TAs and UDRs are able to come and talk with prospective and declared Economics majors or minors who are looking for advice regarding courses, internships or jobs, and, of course, enjoy some ice cream!


IMG_1962IMG_1964 (1)

Professor Raphael Schoenle presented his latest research “The Propagation of Monetary Policy Shocks in a Heterogeneous Production Economy” at the bi-annual Federal Reserve Bank of Cleveland Inflation Conference on September 29-30. His research investigates how monetary policy shocks affect real economic activity when changing the conventional modeling of the economy. In particular, his paper studies the interaction of three kinds of heterogeneity not usually present in models of the monetary policy-makers: heterogeneity in customer-supplier relationships, heterogeneity of heavy-tailed frequencies of price changes and heterogeneity in the size of sectors.

On the theoretical side, one of the key findings is that it matters if the policy-maker chooses to work with a model with only a few sectors, and with a detailed model of many sectors. In a calibrated model, for example, a less disaggregated model of the economy with only 8 sectors understates the real effects of monetary policy by 20% relative to a 58-sector economy and by 34% relative to a more realistic 350-sector economy. The initial response of inflation – to which policy-makers pay a lot of attention – is similar across these calibrations, and thus does not provide sufficient information about where the economy is going. The paper also shows which of the heterogeneities matter the most quantitatively – it is the frequency of price changes – , which may prove useful for policy-makers.

Hej Hej

August 11, 2016 | Leave a Comment

The economics in Denmark program finished on Wednesday with a bang.  The students had their microeconomic theory final in the morning, and then we all went to an elegant closing dinner at the restaurant, Host.   The dinner consisted of three main courses, plus three surprise courses.   We had a good discussion about returning to Boston, and as one student put it, “reverse culture shock.”


I spent our final morning in Copenhagen going on a long run around the Harbor.   We will all miss the city, but we are looking forward to the coming semester.  We return with both a greater knowledge of economics, and a greater knowledge of the world.

On Thursday morning, Claus Rehfeld, a Healthcare Consultant in Denmark, came to speak to the Economics in Denmark program about the Danish healthcare system.  He focused both on economic principles and the institutional details of the Danish system.   The Danish system is a single payer system, built upon free and equal access to everyone.   But, as he pointed out in the cartoon below, what exactly does equal access mean?


The session raised some difficult questions.  In addition to questions about equal access, the question was raised about the amount a country should be spending on its healthcare, and whether or not more spending equals more health.  The organization of the healthcare system and the amount spent on healthcare are starkly different from organization and amount spent in the United States.

US.  Picture3

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