Gérard Roland, David Yang, 05 August 2017

Studies have shown that there is strong inertia in culture because values and beliefs are formed through intergenerational transmission. Much less is known about how culture changes, and which aspects of the changes in values and beliefs are permanent or temporary. This column examines the effects of the Cultural Revolution in China on urban elites, and reveals that the lack of access to higher education affected people’s beliefs throughout their life. Also, while the ‘lost generation’ passed down their greater mistrust in the government to their children, their changed beliefs on the roles of effort versus luck were transmitted to a much lesser degree.

Nathan Nunn, Raul Sanchez de la Sierra, 25 June 2017

Beliefs about origins, life after death, and rituals that activate supernatural processes to help people navigate life, despite being almost certainly incorrect, are common in developing countries. This column examines the role of ‘magical’ beliefs in warfare in the context of the Democratic Republic of the Congo. Belief in a spell that offers protection from bullets helped villagers liberate their village, and others in the area, from militias, providing an example of how the ‘right’ amount of ‘wrong’ beliefs can achieve a socially efficient outcome.

Julian Kozlowski, Laura Veldkamp, Venky Venkateswaran, 11 September 2016

The Great Recession has had long-lasting effects on credit markets, employment, and output. This column combines a model with macroeconomic data to measure how the recession has changed beliefs about the possibility of future crises. According to the model, the estimated change in sentiment correlates with economic activity. A short-lived financial crisis can trigger long-lived shifts in expectations, which in turn can trigger secular stagnation.

Francesco D'Acunto, 20 September 2015

Research consistently finds that men are more risk tolerant, or even risk loving, than women. This column argues that social identity, next to biology, helps explain the stark difference in risk attitudes and beliefs across genders. Men to whom identity is salient become more risk tolerant and invest more often and with more money. Identity makes men overconfident but its effects decrease with age. This is consistent with the notion that gender stereotypes have become less stark over the last decades.

Roland Bénabou, Davide Ticchi , Andrea Vindigni, 19 April 2015

History offers many examples of the recurring tensions between science and organized religion, but as part of the paper’s motivating evidence we also uncover a new fact: in both international and cross-state U.S. data, there is a significant and robust negative relationship between religiosity and patents per capita. Three long-term outcomes emerge. First, a "Secularization" or "Western-European" regime with declining religiosity, unimpeded science, a passive Church and high levels of taxes and transfers. Second, a "Theocratic" regime with knowledge stagnation, extreme religiosity with no modernization effort, and high public spending on religious public goods. In-between is a third, "American" regime that generally (not always) combines scientific progress and stable religiosity within a range where religious institutions engage in doctrinal adaptation.

Alberto Cavallo, Guillermo Crucas, Ricardo Perez-Truglia, 10 November 2014

Although central banks have a natural desire to influence household inflation expectations, there is no consensus on how these expectations are formed or the best ways to influence them. This column presents evidence from a series of survey experiments conducted in a low-inflation context (the US) and a high-inflation context (Argentina). The authors find that dispersion in household expectations can be explained by the cost of acquiring and interpreting inflation statistics, and by the use of inaccurate memories about price changes of specific products. They also provide recommendations for central bank communication strategies. 

Francesco Giavazzi, Ivan Petkov, Fabio Schiantarelli, 16 June 2014

The persistence of cultural attitudes is an important determinant of the success of institutional reforms, and of the impact of immigration on a country’s culture. This column presents evidence from a study of European immigrants to the US. Some cultural traits – such as deep religious values – are highly persistent, whereas others – such as attitudes towards cooperation and redistribution – change more quickly. Many cultural attitudes evolve significantly between the second and fourth generations, and the persistence of different attitudes varies across countries of origin.