CEF.UP – WiP Seminar/Webinar

Tuesday – December 6^th, 2022 at 1:00 p.m. | Room 305 | Online

“Firm Investment and Liquidity: Evidence from a Natural Disaster”

José Jorge – FEP and Cef.up (joint work with Sujiao Zhao)

Abstract:

“Natural disasters dramatically affect firms, but they also provide for an opportunity to start anew. We exploit information on the 15-16 October 2017 Portuguese wildfires and the ensuing official assistance that subsidized 85% of the losses, applying a differences-in-differences approach. Firms affected by the wildfires increase output and fixed assets, with employment and productivity remaining stable. Their book value of fixed assets increases substantially more than their economic value. Affected firms activate their existing credit lines, borrow long term credit, and increase cash holdings. The evidence is consistent with the theory that firms invest both in scale and in liquidity.”

CEF.UP – WiP Seminar/Webinar

Tuesday – November 22^nd, 2022 at 1:00 p.m. | Room 305 | Online

“Universal Basic Income: The Worst Bar All Others?”

Luís Guimarães – Cef.up (joint work with Diogo Lourenço)

Abstract:

“Extant welfare programmes introduce unintended distortions and suffer from low take-up, transfers to ineligible recipients, and administrative costs. A noteworthy alternative, arguably immune to these imperfections, is a Universal Basic Income (UBI), i.e., an unconditional transfer to all citizens. Yet, UBI is a blunt instrument that does not discriminate rich from poor and is useless for incentivizing work or further education. The welfare and other macroeconomic impacts of replacing means-tested welfare programmes with a UBI are therefore far from obvious. To elucidate them, we build a dynamic general-equilibrium model with incomplete markets and heterogeneous agents. We find that replacing a suite of means-tested US programmes with an expenditure neutral UBI would increase the stock of capital, employment, and output, but lower welfare. Further experiments, however, also indicate that if the magnitude of current transfers increased substantially, an expenditure neutral UBI would be welfare-improving.”

CEF.UP – WiP Webinar

Tuesday – May 24^th, 2022 at 1:00 p.m. | Online

“Pope Francis’ Economics of Fraternity: A Co-Evolutionary Analysis”

Fernando Oliveira – Cef.up and University of Auckland

Abstract:

“Pope Francis has criticized the economy of exclusion created by capitalism. Based on a stylized pie-sharing game, the article proposes a co-evolutionary network model, using reinforcement learning, to analyze the interaction between social classes. This article aims to answer the following questions: Why do socioeconomic classes exist? When do they increase social efficiency and individual effectiveness? What is the role of social exclusion? From a methodological perspective, the model extends the pie-sharing game to include a network of interactions and classes, social mobility, and evolving wealth. The results show that flatter societies tend to lead to higher average individual effectiveness, however social inequality emerges even in round-table societies. In flatter societies inequality decreases to the levels observed, at equilibrium, in round-table societies. In vertical societies wealth inequality persists. Furthermore, the analysis extends the network model to include the possibility of individuals changing social class (i.e., to consider social mobility), studying how it affects individual effectiveness: it increases the perceived wealth differences between classes and, in the long run, supports the status quo. Finally, the article studies societies in which social mobility seldom occurs between the upper and lower classes are a Nash equilibrium, even in the long-term. This analysis is illustrated using the process of wealth accumulation and social exclusion in New Zealand.”