Nagore Iriberri, Pedro Rey Biel, 24 October 2016

The underrepresentation of women in top positions within firms is well documented. One potential contributing factor could be that men and women respond differently to the competitive pressure inherent in firm hierarchies. This column investigates this idea in the context of a two-stage maths competition for students in Spain. Despite male and female students achieving similar grades at school, male students perform better in both stages of the contest. Importantly, the gender gap increases in the second stage, when the competitive pressure is greater.

Joshua Aizenman, Yothin Jinjarak, Huanhuan Zheng, 24 October 2016

The booms and busts of real estate prices echo those of the real business cycle. This column looks at the relationship between house price valuations and economic growth in an international context. Taking account of heterogeneity in housing policies across countries, large house price depreciations are found to be positively associated with economic growth. This positive relationship is more pronounced in countries with civil law legal systems.

Lilia Mukhlynina, Kjell G. Nyborg, 23 October 2016

The valuation of firms, projects, and transactions directly affects investment decisions and the allocation of resources in the economy. But practitioners often dismiss 'academic' valuation techniques. This column uses a survey of valuation professionals to argue that the real-world choice of valuation methods is often arbitrary, and influenced more by professional subgroup than educational background. In which case, we should ask whether finance education beyond bachelor's degrees is merely a sideshow.

Kevin Bryan, 23 October 2016

Bengt Holmström has been jointly awarded the 2016 Nobel Prize in Economic Sciences with Oliver Hart “for their contributions to contract theory”. This column outlines his key contributions.

Julián Messina, Oskar Nordström Skans, Mikael Carlsson, 23 October 2016

While standard microeconomic theory suggests that firms have no power over setting wages when markets are perfectly competitive, this view obviously clashes with the perceptions of the casual observer. This column uses data from Sweden to investigate the extent to which differences in firms’ pay are related to differences in physical productivity. It finds that firms that benefit from positive productivity shocks increase the wages of incumbent workers, and in particular firms among which there is substantial labour mobility. The evolution of productivity among such firms appears to be a crucial determinant of workers’ wages.

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