Monthly Archives: November 2018

Grant success for Amrit and Zaki

Congratulations to Amrit Amirapu and Zaki Wahhaj who have obtained a research grant from the UK Department of International Developmentā€™s EDI research programme to study peer effects in traditional marriage customs. In developing countries, where the state often has a weak capacity to enforce laws, social pressures and expectations can play an important role in hindering or accelerating behaviour proscribed by marriage laws. The project will build on an ongoing EDI project in Bangladesh to test these ideas, using an experimental design that exploits a recent change in child marriage laws. They are partnering in this research with the University of Malaya in Kuala Lumpur and the research firm Data Analysis and Technical Assistance in Bangladesh.

The image is taken from a psychological test designed to measure the impact of the new law on attitudes towards early marriage practices among men and women in rural Bangladesh.

Prof Denise Osborn leads talk on Women in Economics

On Tuesday 13 November, we had the pleasure of welcoming Professor Denise Osborn to the School of Economics. Both Secretary General for the Royal Economics Society and Emeritus Professor at the University of Manchester, Denise delivered an inspirational talk on the role of women in Economics, focusing on research and her own personal experience.

Looking back on her career, she examined the perception of women in the field of Economics over time, comparing and contrasting the start of her career in 70s, where she was very much a minority, to now where more and more women are joining the field. Denise compared the gender distribution of researchers within Economics and looked into why Economics is still one of the lowest STEM subjects for its percentage of women. Denise concluded her talk by looking at the actions that are being taken to challenge gender norms and encourage more women to consider a career in Economics. The session finished with a lively Q&A session with the audience.

Measured Productivity with Endogenous Markups and Economic Profits

by Dr Anthony Savagar, University of Kent.Ā Discussion paper KDPE 1812, October 2018.

Non-technical summary:

A standard way to measure productivity is to take output growth and subtract input growth. Typically input growth is growth in capital and growth in labor weighted by their share in production. Whatever remains after subtracting is known as total factor productivity (TFP).

Under specific circumstances, this productivity measure also reflects underlying technology growth. This is important for economists because they struggle to measure underlying technology at an aggregate level, but it is a key variable to understand the behaviour of the economy.

However when we diverge from some basic assumptions, such as perfect competition, the TFP measure no longer reflects underlying technology. Therefore using our TFP measure to represent technology could lead to incorrect conclusions.

In this paper I show that when we recognize the slow adjustment of firms to arbitrage profits and the effect that slowly entering firms have on competition, the relationship between our measure of TFP and technology becomes much more complex. In fact, when we observe changing TFP, it will compose changing technology, changing profits and changing markups. This decomposition allows us to understand how we can get a true measure of underlying technology from our calculated TFP measure. It emphasizes that the composition of profits and markups vary in importance as firm entry takes place.

You can download the complete paper here.