Friday, 07 Mar 2014
- Fri, Mar 7, 2014 3:40 pm - 5:00 pm368A Heady Hall
"Grasp the Large, Let Go of the Small: The Transformation of the State Sector in China," with Zheng Michael Song, University of Chicago Booth School of Business.
Abstract: Starting in the late 1990s, China undertook a dramatic transformation of the large number of firms under state control. Most small state-owned enterprises (SOEs) were privatized or closed. In contrast, large SOEs were corporatized and merged into large industrial groups under the control of the Chinese state. Detailed firm level data shows that from 1998 to 2007, (i) exit SOEs had smaller size and lower labor and capital productivity than the corporatized SOEs; (ii) labor productivity of SOEs were quickly converging to that of privately owned firms, while the convergence of capital productivity was less dramatic; (iii) total factor productivity (TFP) growth of SOEs was substantially faster than that of private firms. We find suggestive evidence that competition within SOEs and reduction of redundant workers are important for the convergence of TFP and labor productivity. The overall welfare gain of the reforms turns out to be subtle. Despite its great achievement in growing TFP and reducing labor distortions, "Grasp the Large" has surprisingly small or even negative effects on aggregate output.
Zheng (Michael) Song is an associate professor of economics at Booth. Prior to joining Booth he served as an assistant professor in the department of economics at the Chinese University of Hong Kong, and as a research fellow in the school of economics at Fudan University in Shanghai, China. Song studies macroeconomics, Chinese economy, and political economy. He has published papers in leading journals including American Economic Review and Econometrica. He is an associate editor of Journal of European Economic Association, and serves as a guess editor of China Economic Review. Song earned his PhD in economics from the Institute for International Economic Studies, Stockholm University. He also holds an MPhil in economics from the University College London, an MA in economics from Fudan University, and a BA in economics from Shanghai Institute for Foreign Trade.
Monday, 10 Mar 2014
- Mon, Mar 10, 2014 4:10 pm - 5:30 pm368A Heady Hall
"Expectations vs. fundamentals: Does the cause of banking panics matter for prudential policy?" Todd Keister, Rutgers University.
Abstract: There is a long-standing debate about whether banking panics and other financial crises always have fundamental causes or are sometimes the result of self-fulfilling beliefs. Disagreement on this point would seem to present a serious obstacle to designing policies that promote financial stability. We show that in some cases the appropriate choice of policy is invariant to the underlying cause of banking panics. We study an environment in which the anticipation of being bailed out in the event of a crisis distorts the incentives of financial institutions and their investors. We compare two policies that aim to correct this distortion: restricting policy makers from engaging in bailouts, and allowing bailouts but taxing the short-term liabilities of financial institutions. We show that the latter policy yields higher equilibrium welfare regardless of whether or not panics are sometimes caused by self-fulfilling beliefs.
Todd Keister joined the economics department at Rutgers in 2012 after working for six years as a research economist in the Federal Reserve Bank of New York. He has also been a professor at the Instituto Tecnológico Autónomo de México (ITAM) in Mexico City and held visiting positions at the University of Texas in Austin, the European University Institute, and New York University (NYU). Much of his research has focused on developing models of financial fragility and macroeconomic volatility that can be used to evaluate government and central banks policies. He holds a B.S. from Duke University and a Ph.D. in Economics from Cornell University.
Wednesday, 26 Mar 2014
- Wed, Mar 26, 2014 4:10 pm - 5:30 pm368A Heady Hall
Thursday, 27 Mar 2014
- Thu, Mar 27, 2014 3:40 pm - 5:00 pm368A Heady Hall