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News Archive - Page 23
Jan 6, 2011
Bachmann and Bai examine the effects of wealth bias in the policy process.
In their paper, "Government Purchases Over the Business Cycle: the Role of Economic and Political Inequality (GCER Working Paper, 2010)," Ruediger Bachmann and Jinhui H. Bai explore the implications of economic and political inequality for the business cycle comovement of government purchases in the U.S. They conduct theirquantitative experiments in a standard model of economic growth in which public expenditures financed by income taxes are determined by the political process. A key feature of their study is a wealth bias in the political process that disproportionately weights the clout of upper income groups. Increases in income inequality therefore lead to increased political inequality. The analysis shows a negative correlation between wealth bias and the degree of business cycle comovement of government purchases.The estimated wealth bias that matches the observed mild procyclicality of government purchases in the data, is also consistent with cross-sectional survey data on political participation.
This effect is illustrated in the graph below where increases in the wealth bias of the policy-making process can be seen to dampen the correlation between income and purchases.
Dec 26, 2010
James Albrecht, Axel Anderson, Mark Huggett, and Susan Vroman.
Congratulations to the four GCER Fellows cited in this year's Nobel summary, MARKETS WITH SEARCH FRICTIONS . James Albrecht, Axel Anderson, Susan Vroman, and Mark Huggett were all cited for work related to this year's Nobel recipients, Peter Diamond, Dale Mortensen, and Christopher Pissarides. Albrecht and Vroman were invited to attend the Nobel ceremony in Sweden in December. At right they are pictured at the ceremony with Peter Diamond and past Nobel recipient Daniel McFadden.
Sep 20, 2010
How should the vulnerability of different securities to "systemic risk" be assessed? GCER's Luca Anderlini (right) and LSE's Leonardo Felli propose a simple measure in a recent article in Vox.
Sep 10, 2010
Greetings from the Chair. Welcome to the Georgetown Center for Economic Research (GCER), the newly established research institute housed within the Department of Economics at Georgetown University. GCER is set up to support the Department in its efforts to fulfill its core research and instructional mission for the University. Its primary goal is to foster an environment of open and rigorous scientific inquiry into current economic policy issues and problems. We think you'll find our programs and research interesting and innovative. More about GCER's mission can be found on About GCER , or scan our activities from the menus.