This is a great resource for PhD students who wish to learn how to solve and estimate (with GMM/SMM) structural life-cycle models: github.com/vfitoolkit/I...
From simple one-asset models to richer settings with portfolio choice, housing, dual-earner couples, etc.
“.. The Yale Budget Lab have updated their simulations using the 30% tariff on China, .. Bottom line: Still a significant stagflation shock to the US economy.”
- Apollo
budgetlab.yale.edu/research/sta...
Q: "I do wonder what you think might make some of these tariffs worth it? In other words what your guideposts are for justifying the trade war that this White House has launched."
My answer: "Let's not tie ourselves up in knots trying to make sense of something that we can't make sense of."
NEW: @goolsbee.bsky.social tells @nytimes.com that despite the reprieve with China, tariffs are likely to still raise prices and lower growth. He's in wait-and-see mode and the bar to cut is high
"The way that we’re doing this is not free for the economy"
www.nytimes.com/2025/05/12/b...
Very interesting! Cc @leokaas.bsky.social @haominwang.bsky.social
I don't see how 104% tariffs on China will help Americans, and I see lots of ways they'll hurt.
Let's explore iPhone economics.
Last week I pointed out that most economists think President Trump's ideas about tariffs are wacko. I also pointed out financial markets would soon express their views. Today all three major U.S. stock indices set new 52-week lows. I predict lower lows coming soon.
Submit your papers on search and matching (labor, housing, ...) and contribute to a great conference!
Submissions open for another 5 days👇
It seems almost unavoidable at this point that we are headed for a deep, deep recession. Just based on 200K+ federal firings & pullback of contracts, the March employment report (to be released April 4) seems certain to show bigger job losses than any month ever outside of a few in 2008-9 and 2020.
#EconSky
It's a MAGA eat MAGA world, and Musk is the president open.substack.com/pub/paulkrug...
I explain my increased enthusiasm for monetary policy rules in my latest WSJ. Not putting policy on autopilot but instead using them as a rebuttable presumption. Specifically would do three things:
And the new era begins. My Substack is alive again, and here's my first post paulkrugman.substack.com/p/the-fraudu...
👇
In today's Washington Post, I put numbers on the (modest) budget savings available from laying off federal workers.
Obviously govt shouldn't employ more workers than is necessary to get the job done, but the big savings still must come from the big programs.
www.washingtonpost.com/business/202...
< braddelong.substack.com/p/the-unmaki... > What happens when a global financial hub bets on the wrong policies at the wrong time? Britain's story since 2008 is one of lost potential, economic stagnation, and repeated grave self-inflicted wounds. And even those are not enough to account for... 1/
Explore the VFI toolkit by trying out this example based on Cocco, Gomes & Maenhout (2005) - Consumption and Portfolio Choice over the Life Cycle [https://doi.org/10.1093/rfs/hhi017] github.com/robertdkirkb...
Forthcoming in the AER: "Mortgage Pricing and Monetary Policy" by Matteo Benetton, Alessandro Gavazza, and Paolo Surico. www.aeaweb.org/articles?id=...
Interested in estimation of life-cycle models based on simulated method of moments? Look at this new feature of VFI toolkit in Matlab discourse.vfitoolkit.com/t/gmm-estima... and at an example based on Gourinchas and Parker (2022) github.com/robertdkirkb...
Very interesting job market paper 👇
SNAP work requirements fail to increase employment.
Just plain getting on SNAP does improve labor market outcomes.
www.hamiltonproject.org/publication/...
#EconSky
Cc @vfitoolkit.bsky.social
Nice toolkit to solve heterogeneous agents models in Matlab with GPU github.com/vfitoolkit. Codes to replicate well-known papers in the macro and finance literature are available as well 👇
Consider the simplest DiD setup with panel data. T = 2, controls X(i) don't change over time. D(i) is the "ever treated" indicator, f2(t) the second period time dummy. W(i,t) the time-varying treatment W(i,t) = D(i)*f2(t). The X(i) appear flexibly to allow selection and heterogeneous trends.
a graph of US business applications
US business formation still remains significantly elevated from pre-COVID levels, as a stronger labor market and the work-from-home shift continue to boost startup activity
It was a pleasure to co-organise the Cardiff Workshop on the Economics of Migration with @Luisanna Onnis, hosted by @Cardiff Business School! Many thanks to @ADR UK for their support, and to the presenters and keynote speakers for their insightful contributions. Find out more: ➡️ bit.ly/4eAAwSZ
![Robust Estimation of Private Business Wealth*
Job Market Paper
Simon J. Toussaint†
November 14, 2024
[Most recent version here]
Abstract
Estimating the market value of private businesses is essential for understanding both aggregate firm dynamics and top wealth
inequality, yet these values are inherently unobservable. This paper introduces an econometric approach that treats the gap
between true market values and initial estimates as measurement error. I employ time-series restrictions on these errors as
moment conditions within a GMM framework, and use the fitted values from these estimations as error-free estimates of
private business wealth and capital stocks. Applying this method to Dutch administrative data linking the universe of firms
to their owners, I find that aggregate private business wealth increases by 30% of GDP initially, and is more stable than the
unadjusted series. Top 1% and 0.1% wealth shares increase by 3–5 percentage points, peaking at 38% and 20%, respectively.
Adjusted returns to firm wealth exhibit a steeper gradient across the wealth distribution than unadjusted returns, consistent
with models of return heterogeneity.](https://cdn.bsky.app/img/feed_thumbnail/plain/did:plc:wus4g34bpbzjefp547irpkeu/bafkreibg34g2k7zwmjqytkllrcxfsj5tnov22hdny74qz7ks5jwa5csbou)
Robust Estimation of Private Business Wealth* Job Market Paper Simon J. Toussaint† November 14, 2024 [Most recent version here] Abstract Estimating the market value of private businesses is essential for understanding both aggregate firm dynamics and top wealth inequality, yet these values are inherently unobservable. This paper introduces an econometric approach that treats the gap between true market values and initial estimates as measurement error. I employ time-series restrictions on these errors as moment conditions within a GMM framework, and use the fitted values from these estimations as error-free estimates of private business wealth and capital stocks. Applying this method to Dutch administrative data linking the universe of firms to their owners, I find that aggregate private business wealth increases by 30% of GDP initially, and is more stable than the unadjusted series. Top 1% and 0.1% wealth shares increase by 3–5 percentage points, peaking at 38% and 20%, respectively. Adjusted returns to firm wealth exhibit a steeper gradient across the wealth distribution than unadjusted returns, consistent with models of return heterogeneity.
📯 Job Market Paper Alert 📯
Private businesses make up 50% of sales & profits and are the main wealth component of the wealthiest households. So, what is their value? Well, that's difficult, since they're not listed: their value is unobservable by definition!
My #EconJMP tackles this problem 1/
