ISET

On February 16th, ISET hosted David Bostashvili PhD. from the University of Houston. Dr. Bostashvili presented his job market paper: “Political Budget cycles and Civil Service in American State Governments”. The motivation for this paper was an observation that all levels of government tend to spend budgets right before elections. This phenomenon is known as the “political budget cycle”. Furthermore, evidence of the budget cycles is mostly studied in developing countries. There is a lack of study of this phenomenon in current literature from developed countries. Dr. Bostashvili used the establishment of civil service systems in the United States to study how it effects budget cycles.

On Friday, February 13th, ISET hosted Dr. Jan Fidrmuc from Brunel University, who presented a paper he co-authored with Juan De Dios Tena titled “Friday the 13th: The Empirics of Bad Luck”.

The speaker began his presentation by providing examples of superstitious beliefs in different countries and pointed out superstitions related to the number 13 and Friday the 13th—The authors of the paper wanted to check empirically how can be bad luck associated to superstitious beliefs. To do so, the authors compared people born on the 13th day of a month or on Black Fridays. Due to superstitious beliefs, people are often extra careful and empirically it is not possible to check the effect of an event that is believed to be unlucky.

On February 11th, ISET hosted Olivier Harlem, Ph.D. of the Erasmus School of Economics, Rotterdam. Dr. Harlem presented his job market paper, “Earmarks”. Earmarks were U.S. federal funds that are designated for local projects and were easy for local representatives to obtain for their electoral districts. Some of the reasons why earmarks are interesting is that they are seen as: (i)”[a] symbol of broken spending”, (ii)”[a] gateway to corruption” and (iii) a “political carrot for speeding up [the] legislative process”. From an academic point of view, studying earmarks is interesting, as they reflect the aspects of both politicians’ behavior and the impact of public funds on the electoral process.

Dr. Harlem used specifications from Grossman and Helpman’s model to build the essence of his empirical approach.

On February 12th, ISET hosted Dr. Andrea Ciani from Bocconi University, who presented his job market paper "Export Quality Upgrading under Credit Constraints".

The speaker began his presentation with a simple example that he used to explain his research paper. The Italian furniture company Kartell is famous for the production of plastic chairs. However, for export purposes, the firm decided to improve the quality of its product and started to produce chairs made from a mix of plastic and expensive materials, such as as silver, gold and even platinum. However, quality upgrades require investment. In many cases, companies have to take credits from local banks for this purposes.

On January 22, Dr. David Ubilava, from the the University of Sydney, led a seminar on the subject of his recent paper, "Rises and Falls in Primary Commodity Prices: Blame it on ENSO or Leave Them Kids Alone?"

The speaker began by introducing the essence of his research, which aims to estimate the effects of ENSO on commodity prices. ENSO is an abbreviation of El Niño Southern Oscillation, which refers to the effects of a band of sea surface temperatures that are anomalously warm or cold for long periods of time.

This process has a cyclical character and strong effect on the production and distribution of different commodities. If ENSO-related weather disturbances are synchronized across commodity producer countries, the causal relationship between ENSO and commodity price movement becomes an economic corollary; however, this causality is not always there. The strength of the linkage depends on the concentration of the primary commodities in the ENSO-affected regions, the availability of close substitutes, and the ability of producers to adapt to climate shocks in the short term.

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