Dissertation Seminar APPLIED ECONOMICS: ANSWERING MACRO QUESTIONS AND SOLVING SOCIAL PROBLEMS USING MICRO DATA Academic Year: 2019/2020 Semester: 1st Instructor: Joana Silva Max. Number of Students: 6 Seminar Description: The dissertation seminar is designed to help students write their Master thesis on a topic related to Applied Micro and Macroeconomics. It comprises a mix of group and individual mandatory sessions. During the course, students will be asked to present their current work and to comment on the work of others. The scientific project may be either empirical or combine theoretical with empirical work. The seminar begins with group sections showing how micro data from Government programs or firms’ transactions combined with quantitative methods can be used to solve important social problems, answer long-standing questions in macroeconomics and improve public policies. Examples provided will also show how this type of data and methods can be applied to assess the drivers and implications of firm behavior. The second part of the seminar consists of in-depth discussions of empirical papers and class presentations. Students are encouraged and expected to actively participate. Prerequisites: Understanding of Micro Econometrics and/or Time Series Econometrics, and basic knowledge of Stata and/or R. _____________________________________________________________________________ Seminar Content: Students will select a topic from the list below (or propose others) in the field of applied economics. Students are expected to develop their skills around the selected topics, develop an original idea and apply it using existing micro data. Please contact the instructor if you want to work in an area related to applied economics that is not mentioned in the list below. 1. Poverty and Inequality: Inequality Trends and Drivers, (Intended and Unintended) Economic Consequences of Social Programs 2. Macroeconomics: Studying Macro Shocks Using (More Disaggregated or Higher Frequency) Micro Data, Transmission of Shocks and Crisis across Countries, and Workers and Firms Adjustment 3. Labor economics: Gender Wage Gap, Labor Market Adjustment to Globalization, firms' investment in human capital/training 4. Education: Causal Effects of Teachers and Education Quality on Students’ Employability and Wages 5. International Economics: Dynamics of Business Formation, Growth, and Productivity and How they are Affected by Globalization; Causal effects of the China (and Other Trade) Shocks on Employment and Productivity 6. Policy Evaluation: Impact of Public Policies on Welfare, Employment Fluctuations, and Long-Term Growth ____________________________________________________________________________ Seminar Objectives: Students are expected to review the literature, develop their skills to write on their topic of selection, and implement an innovative idea. They are expected to work with the data, perform statistical and economic analysis, make a meaningful contribution to the literature and, if applicable, make policy recommendations. Writing a thesis proposal will require students to put serious effort and to work independently. Upon successful completion of this project, students should have improved the following generic skills: - Oral communication including presentation skills - Written Communication - Problem solving - Statistical reasoning - Application of theory to practice - Interpretation and analysis - Critical thinking - Evaluation of data and other information - Using the necessary computer software ____________________________________________________________________________ Bibliography / Recommended Textbook(s) / Additional Readings: Textbooks: **Angrist, J.D. and Pischke, J.S., 2014. Mastering metrics: The path from cause to effect. Princeton University Press. Duflo, E., Glennerster, R. and Kremer, M., 2007. Using randomization in development economics research: A toolkit. Handbook of development economics, 4, pp.3895-3962. Muralidharan, K. and Niehaus, P., 2017. Experimentation at scale. Journal of Economic Perspectives, 31(4), pp.103-24. Podcast: Planet Money, NPR. What Causes What?; How Many Jobs Has Scott Walker Created?; How Much Should We Trust Economics?; Cash, Cows And The Rise Of Nerd Philanthropy Academic papers and summary blogs: The reading list is preliminary and may be amended throughout the term. There will be suggestions for podcasts and news articles that will be important to illustrate the main concepts we will discuss. 1. Poverty and inequality **David, H., 2014. Skills, education, and the rise of earnings inequality among the" other 99 percent". Science, 23: 344 (6186), 843-851. Banerjee, A.V. and Duflo, E., 2007. The economic lives of the poor. Journal of economic perspectives, 21(1), pp.141-168. Banerjee, A.V., Banerjee, A. and Duflo, E., 2011. Poor economics: A radical rethinking of the way to fight global poverty. Public Affairs. Card, D., Heining, J. and Kline, P., 2013. Workplace heterogeneity and the rise of West German wage inequality. The Quarterly journal of economics, 128(3), pp.967-1015. Chetty, R., Hendren, N., Kline, P. and Saez, E., 2014. Where is the land of opportunity? The geography of intergenerational mobility in the United States. The Quarterly Journal of Economics, 129(4), pp.1553-1623. **Chetty, R., Friedman, J.N., Olsen, T. and Pistaferri, L., 2011. Adjustment costs, firm responses, and micro vs. macro labor supply elasticities: Evidence from Danish tax records. The Quarterly Journal of Economics, 126(2), pp.749-804. Websites: Using big data solve economic and social problems and Equality of Opportunities Project by Raj Chetty Podcast. The BBC Inquire. How Much Inequality Is Too Much? **Blog: Silva, J. and Messina, J. 2018. Wage Inequality in Latin America: Understanding the Past to Prepare for the Future **Blog: Piketty, T., Saez, E. and Stantcheva, S. 2011 Taxing the 1%: Why the top tax rate could be over 80% News: How Norwegians and Americans See Inequality Differently (The Atlantic), World's eight richest people have same wealth as poorest 50% (The Guardian) 2. Applied macroeconomics Pritzker, P., Doms, M. and Moyer, B., 2014. Measuring the economy: A primer on GDP and the national income and product accounts. Bureau of Economic Analysis, US Department of Commerce. (https://www.bea.gov/resources/methodologies/measuring-the-economy) **Di Giovanni, J., Levchenko, A.A. and Mejean, I., 2018. The micro origins of international business- cycle comovement. American Economic Review, 108(1), pp.82-108. **Nakamura, E. and Steinsson, J., 2008. Five facts about prices: A reevaluation of menu cost models. The Quarterly Journal of Economics, 123(4), pp.1415-1464. **Blog: Broadberry, S. and Wallis, J. 2017. “Growing, shrinking, and long run economic performance.” VoxEU **Blog: Lagarde, C. and Ostry, J. 2018. “The macroeconomic benefits of gender diversity” VoxEU **Blog: American Economic Association 2019. “Emi Nakamura, Clark Medalist 2019” 3. Labor economics **Bastos, P., Proenca, R. and Silva, J. 2018. Exports and Job Training. Review of International Economics, 24(4), 737-756, 2016. Cook, C., Diamond, R., Hall, J., List, J.A. and Oyer, P., 2018. The gender earnings gap in the gig economy: Evidence from over a million rideshare drivers (No. w24732). National Bureau of Economic Research. **Dix-Carneiro, R. and Kovak, B.K., 2019. Margins of labor market adjustment to trade. Journal of International Economics, 117, pp.125-142. McCaig, B. and Pavcnik, N., 2015. Informal employment in a growing and globalizing low-income country. American Economic Review, 105(5), pp.545-50. **Blog: Wren-Lewis, Simon. 2019. “Views on the minimum wage show economics to be an inexact science,” VoxEU. 4. Education **Chetty, R., Friedman, J.N. and Rockoff, J.E., 2014. Measuring the impacts of teachers I: Evaluating bias in teacher value-added estimates. American Economic Review, 104(9), pp.2593- 2632. Chetty, R., Friedman, J.N. and Rockoff, J.E., 2014. Measuring the impacts of teachers II: Teacher value-added and student outcomes in adulthood. American economic review, 104(9), pp.2633-79. Duflo, E., Hanna, R. and Ryan, S.P., 2012. Incentives work: Getting teachers to come to school. American Economic Review, 102(4), pp.1241-78. **Lavy, V., 2009. Performance pay and teachers' effort, productivity, and grading ethics. American Economic Review, 99(5), pp.1979-2011. 5. International economics **Autor, D.H., Dorn, D., Hanson, G.H. and Song, J., 2014. Trade adjustment: Worker-level evidence. The Quarterly Journal of Economics, 129(4), pp.1799-1860. **Bastos, Paulo & Silva, Joana, 2012. Networks, firms, and trade. Journal of International Economics, Elsevier, vol. 87(2), pages 352-364. **Bastos, P. and Silva, J., 2010. The quality of a firm's exports: where you export to matters. Journal of International Economics, 82(2), pp.99-111. Goldberg, P.K., Khandelwal, A.K., Pavcnik, N. and Topalova, P., 2010. Imported intermediate inputs and domestic product growth: Evidence from India. The Quarterly journal of economics, 125(4), pp.1727-1767. McCaig, B. and Pavcnik, N., 2018. Export markets and labor allocation in a low-income country. American Economic Review, 108(7), pp.1899-1941. **Bastos, P., Silva, J. and Verhoogen, E., 2018. Export destinations and input prices. American Economic Review, 108(2), pp.353-92. **Blog: Acemoğlu, Autor, Dorn, Hanson, and Price (2014). “The rise of China and the future of US manufacturing.” Voxeu **Blog: Wood (2017). “How globalization affected manufacturing around the world.” Voxeu **Blog: Verhoogen,