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Recent QED Working Papers

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#1485.

James G. MacKinnon, Morten Ø. Nielsen, Matthew D. Webb

Fast and Reliable Jackknife and Bootstrap Methods for Cluster-Robust Inference

We provide new and computationally attractive methods, based on jackknifing by cluster, to obtain cluster-robust variance matrix estimators (CRVEs) for linear regression models estimated by least squares. These estimators have previously been computationally infeasible except for small samples. We also propose several new variants of the wild cluster bootstrap, which involve the new CRVEs, jackknife-based bootstrap data-generating processes, or both. Extensive simulation experiments suggest that the new methods can provide much more reliable inferences than existing ones in cases…

#1484.

Charles Beach

Better Off or More Apart? Empirically Testing Welfare and Inequality Dominance Criteria

This paper provides the tools and procedures for empirically implementing several dominance criteria for social welfare comparisons and broad income inequality comparisons. Dominance criteria are expressed in terms of vectors of quantile ordinates based on income shares or quantile means. Statistical properties of these sample ordinates are established that allow a framework for statistical inference on these vectors. And practical empirical criteria are forwarded for using formal statistical inference tests to reach conclusions about ranking social welfare and inequality between…

#1483.

James G. MacKinnon, Morten Ø. Nielsen, Matthew D. Webb

Leverage, Influence, and the Jackknife in Clustered Regression Models: Reliable Inference Using summclust

Cluster-robust inference is widely used in modern empirical work in economics and many other disciplines. The key unit of observation is the cluster. We propose measures of "high-leverage'' clusters and "influential'' clusters for linear regression models. The measures of leverage and partial leverage, and functions of them, can be used as diagnostic tools to identify datasets and regression designs in which cluster-robust inference is likely to be challenging. The measures of influence can provide valuable information about how the results depend on the data in the various clusters. We…

#1482.

James G. MacKinnon

Using Large Samples in Econometrics

As I document using evidence from a journal data repository that I manage, the datasets used in empirical work are getting larger. When we use very large datasets, it can be dangerous to rely on standard methods for statistical inference. In addition, we need to worry about computational issues. We must be careful in our choice of statistical methods and the algorithms used to implement them.

#1481.

Allen Head, Timothy Kam, Sam Ng, Isaac Pan

Money, Credit and Imperfect Competition Among Banks

Using micro-level data for the U.S., we provide new evidence—at national and state levels—
of a positive (negative) relationship between the standard deviation (coefficient of variation)
and the average in bank lending-rate markups. In a quantitative theory consistent with these
empirical observations, banks’ lending market power is determined in equilibrium and is a novel
channel of monetary policy. At low inflation, banks tend to extract higher markups from existing
loan customers rather than competing for additional loans. As a result, banking activity need…

#1480.

Pejman Bahramian

Integration of wind power into an electricity system using pumped-storage: Economic challenges and stakeholder impacts

The Province of Ontario has had an aggressive program of introducing wind electricity generation technologies into its generation supply mix. This, combined with the rigid baseload production by nuclear and hydro plants, has for 20 years created a surplus baseload electricity supply. Pumped hydro storage (PHS) is suggested as an economically viable technology for storing energy from non-dispatchable wind energy sources. An analytical framework has been developed to explore the feasibility of the PHS facility to manage the surplus supply of electricity and compare its cost performance with the…

#1479.

John Hartwick

Solow Sustainablility with Varying Population Levels

We take up three variants of Solow [1974], each with population change endogenous. When each model exhibits sustainability the same three conditions are satisfied: (i) investment in produced capital is funded by resource rents plus "extra" saving, (ii) "extra" saving funds the same two gaps related to population increase and (iii) Hotelling's Rule is satisfied. We focus attention on condition (ii) here. The Stollery variant involves warming caused by current hydrocarbon extraction.

#1477.

Charles Beach

A Nifty Fix for Published Distribution Statistics: Simplified Distribution-Free Statistical Inference

This paper applies the tool box measures of disaggregative income inequality characterization and the statistical methodology of Beach (2021) to percentile-based distribution statistics such as quintile income shares and decile means typically published by official statistical agencies. It derives standard error formulas for those measures which are distribution-free and easy to implement. The approach is illustrated with Canadian Labour Force Survey data over 1997-2015. It is found that widely shared real earnings gains were experienced over this period, but that the gains were very…

#1476.

Samuel Brien

Wealth Inequality, Uninsurable Entrepreneurial Risk and Firms Markup

This paper examines the effect of wealth concentration on firms’ market power
when firm entry is driven by entrepreneurs facing uninsurable idiosyncratic risks. Under
greater wealth concentration, households in the lower end of the wealth distribution are
more risk averse and less willing (or able) to bear the risk of entrepreneurial activities.
This has implications for firm entry, competitiveness, and market power.

I calibrate a Schumpeterian model of endogenous growth with heterogeneous risk
averse entrepreneurs competing to catch up with…

Events

Christine Parlour (Weatherall)

2022 May 25

Research

Professor Christine Parlour (Haas School of Business UC, Berkeley), is a Weatherall Visiting Scholar to visit QED May 24-25, 2022.

Upon arrival she will be located in Dunning 216B.

Platforms and Data: Shaping the Future of Payments?

2022 May 26 - 27

Conference

Davide Porcellacchia - Department Seminar

2022 June 01

Research

Title: Central Bank Digital Currency and Financial Stability

Affiliation: European Central Bank