Department of Economics

Abstract

Monogamy is ethnographically peculiar as an ethical ideal and emerged in the Early Middle Ages as a form of sexual repression imposed by the Church and employed by secular authorities to decompose powerful elite lineages. In its continued modern form, the independent and isolated monogamous household has been advanced as socially optimal by economists and as essential to civilization by anthropologists.   Although marriage, as a rightful claim on the sexuality of a woman, is a nearly universal institution, recent legislation and judicial opinion in both Europe and the United States have abrogated this basic marital right with the new crime of “marital rape”, thereby undermining the essential and defining characteristic of marriage. It is argued herein that these changes reflect the loss of relevance and significance of the domestic household to contemporary systems of capital accumulation; and it is in this new context that same-sex marriage becomes feasible.

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We propose a new electoral system, Mixed Local-Proportional (MLP), that reconciles reforms beneficial for the polity with existing political interests. The MLP system maintains the current distribution of seats among parties while addressing problematic issues with the existing Open-List Proportional Representation (OLPR) system by engineering OLPR’s intra-party properties. Key features include dividing districts into subdistricts with plurality voting, allocating proportional seats using a restricted Jefferson-D’Hondt method, and reducing the number of candidates per party. We explain the MLP system’s mechanics, simulate election results based on recent election data, and discuss variants. Expected political consequences include improved territorial representation, reduced intra-party competition, reduced voter cognitive overload, and stronger ties between voters and MPs. The Polish Parliamentary Committee on Electoral Reform accepted the proposal for further processing.

Recent evidence suggests that agents may base their forecasts for macroeconomic variables mainly on their personal life experiences. We connect this behavior to the concept of constant-gain learning (CGL) in macroeconomics. Our approach incorporates both heterogeneity in the life cycle via the perpetual youth model and learning from experience (LfE) into a linear expectations model where agents are born and die with some probability every period. For LfE, agents employ a decreasing-gain learning (DGL) model using data only from their own lifetimes. While agents are using DGL individually, we show that in the aggregate, expectations follow an approach related to CGL, where the gain is now tied to the probabilities of birth and death. We provide a precise characterization of the relationship between CGL and our model of perpetual youth learning (PYL) and show that PYL can well approximate CGL while pinning down the gain parameter with demographic data. Calibrating the model to U.S. demographics leads to gain parameters similar to those found in the literature. Further, variation in birth and death rates across countries and time periods can help explain the empirical time-variation in gains. Finally, we show that our approach is robust to alternative ways of modeling individual agent learning.

Credit default swaps (CDS) played an important role in the financial crisis of 2008 leading to calls for regulation. Here, we seek to understand the impact of a CDS regulation that restricts the possibility to hold naked CDS. We use a controlled laboratory experiment analyzing CDS pricing in a bond market subject to default risk. Our results show that the regulation achieves the goal of increasing the use of CDS for hedging purposes while reducing the use of CDS for speculation. This success does not come at the expense of lower initial public offering (IPO) prices for the bonds or worse pricing of bonds or CDS in the secondary market.

We report on a laboratory experiment testing the predictions of the Diamond–Mortensen–Pissarides (DMP) search-and-matching model, which is a workhorse, decentralized model of unemployment and the labor market. We focus on the job vacancy posting problem that firms face in the DMP model. We explore the model's comparative statics predictions concerning variations in the separation rate, the vacancy posting cost, and the firm's surplus earned per employee. Across all treatments, we find strong evidence for an inverse relationship between vacancies and unemployment, consistent with the Beveridge curve. We also find that the results of our various comparative statics exercises are in-line with the predictions of the theory.

The overall objective for HyperXite 9 was to design and build a more robust, and reliable pod, capable of proving the feasibility of a high-speed transportation system. We are working to improve a linear induction motor as the pod's propulsion system. We are also designing and implementing a thermal cooling system to actively dissipate the heat generated by this propulsion system. Our team is comprised of the following 7 subteams: Static Structures, Braking & Pneumatics, Dynamic Structures, Propulsion, Power Systems, Control Systems, and Outreach.