Ulrich Koester, Professor of Agricultural Economics at Kiel University and IAMO Visiting Research Fellow, paid a visit to ISET on May 30. During his presentation, Prof. Koester provided an overview about the specifics of the agricultural sector and its impact on agricultural trade; furthermore, he clarified that traditional trade theory is of minor relevance for explaining agricultural trade policies and trade flows.

Prof. Ulrich started his presentation by explaining the standard model of trade liberalization. He clarified that the theory behind this does not explicitly claim that ‘free trade is best’, and instead states that ‘given certain assumptions, it is best’. In line with traditional trade theory, the effect of changes in trade policy cannot be quantified correctly with a comparative-static analysis. Adjustment effects are the most important, especially the specifics of agricultural factors of production limit adjustment in the short and medium terms. In addition, changes in the whole economy are of the most importance, rather than those of one specific sector.

On Tuesday April 11, ISET hosted Warwick University Professor Omer Moav. Professor Moav delivered a profoundly interesting lecture to the ISET Community about the work that he and his colleagues have worked on together, specifically a revolutionary hypothesis about the emergence of social and political hierarchies in early agrarian societies. Contrary to some of the established theories (e.g. by Karl Marx and Jared Diamond), Moav and his colleagues argue that hierarchies (and state structures) emerged not as a result of increased productivity per se (the traditional Marxian thesis is that the ruling classes emerged whenever and wherever agriculture became sufficiently productive in order generate surpluses). Instead, they argue that social and political hierarchies are causally linked to the cultivation of cereals (e.g. wheat, rice, and maize). Furthermore, storage itself is correlated with hierarchy, and cereals are a good storable staple.

On Monday, March 6 ISET hosted its graduate Robizon Khubulashvili, a PhD Student of Pennsylvania State University. Robizon presented his working paper entitled “Endogenous Team Formation Among Competitors”.

In this paper, Robizon analyzed endogenous group formation when competition among teammates is a concern. He showed an algorithm that could be used to find an equilibrium in which all the members of the competitors' group want to be in the group and want to exchange their information with every other member of the group.

Robizon also had answers to some interesting questions from group theory and organizational economics. First, he characterized conditions under which team managers should improve weak players of the team; the interesting result was that even if one player is more important than another, there is a strong incentive to improve the less important player. He also showed that team with homogeneous members have higher expected value than an average ability team with more heterogeneous members. Finally, Robizon addressed matching problems, and discussed allocation of agents in pairs.

On Thursday April 6, ISET hosted Professor Giorgio Brunello, who delivered a seminar for the ISET community. The title of his presentation was “Does Delayed Retirement Affect Youth Employment? Evidence from Italian Provinces”. According to his researcg, pension reforms that raise minimum retirement age increase the pool of senior individuals aged 50+ who are not eligible to retire from the labor market.

During the presentation, Professor Brunello claimed that reforms typically affect all local labor markets and the intensity of the treatment varies locally because of differences in the age structure of the labor force. Using data from Italian provinces and an instrumental variable strategy, the main interest of research was whether and how changes in the local supply of older workers have affected youth and prime age employment between 2004 to 2015.

Behavioral economics is one of the most notable fields of modern economics. It draws insights from psychology, sociology, biology, and other social sciences.

On 24th of November, ISET hosted Teimuraz Gogsadze, a graduate of the Class of 2011, who gave an introductory lecture in behavioral economics. Gogsadze started his talk by formally defining the scope of behavioral economics. He then discussed the antecedents and historical context of the field, highlighting the importance of psychological realism of assumptions in economic modelling before the start of 20th century and the gradual removal of psychology from economics during the first half of the 20th century.

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