Health economics

Donato Masciandaro, Davide Romelli, 26 April 2015

In the aftermath of the Global Crisis, many countries increased their central banks’ involvement in financial supervision. This column uses a novel dataset to argue that financial crises episodes significantly increase the probability of reforms in the financial structure. More interestingly, the authors find evidence of a ‘bandwagon effect’ by showing that politicians are more likely to undertake reforms when their peers do so. 

Jon Danielsson, Chen Zhou, 25 April 2015

Regulators and financial institutions increasingly depend on statistical risk forecasting. This column argues that most risk modelling approaches are highly inaccurate and confidence intervals should be provided along with point estimates. Two major approaches, value-at-risk and expected shortfall are compared, and while the former is found to be superior in practice, it is also easier to be manipulated by forecasters. 

Luca Flabbi, Mario Macis, Andrea Moro, Fabiano Schivardi, 24 April 2015

Despite the convergence between men and women in many labour market indicators, women are still vastly underrepresented at the boardroom level. Using Italian data, this column presents new evidence on the impact of having a female CEO on the distribution of wages for male and female workers within firms. Female CEOs are shown to reduce the gender wage gap at the top of the wage distribution but widen it at the bottom. The authors also show that firms with female CEOs perform better, the higher the fraction of women in the firm’s workforce.

Giovanni Favara, Mariassunta Giannetti , 24 April 2015

During financial crises, fire sales (or forced asset sales) could further aggravate the financial fragility. However, evidence on why agents do not take actions to avoid collateral liquidation is scant. This column uses data on foreclosures and house prices from the US housing crisis to present new evidence on the issue. The authors argue that lenders with a large share of outstanding mortgages internalise the negative spillovers of liquidation. Thus, they might be more likely to renegotiate and avoid price-default spirals. 

Sylvester Eijffinger, Ronald Mahieu, Louis Raes, 23 April 2015

Classifying the preferences of members of policy committees has been a topic of intense debate and research. This column presents spatial analysis of the preferences of the Federal Open Market Committee (FOMC) members using transcripts from meetings. The results indicate that a political appointment channel was not active or effective, and there is little effect of career experiences. The overall lack of systemic preference among FOMC members is a reassuring with regard to the institutional design of the FOMC.

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