Frontiers of economic research

Lars Ivar Oppedal Berge, Kjetil Bjorvatn, Simon Galle, Edward Miguel, Daniel Posner, Bertil Tungodden, Kelly Zhang, 11 February 2016

Ethnic divisions have been shown to adversely affect economic performance and political stability, particularly in Africa. However, the underlying mechanisms remain poorly understood. Using experimental data from Kenya, this column studies whether one potential mechanism – co-ethnic bias – affects altruism. Strikingly, most tests yield no evidence of co-ethnic bias, suggesting that other mechanisms must be driving the negative association between ethnic diversity and economic and political outcomes in Africa.

Diane Coyle, 08 February 2016

Digital technologies are having dramatic impacts on consumers, businesses, and markets. These developments have reignited the debate over the definition and measurement of common economic statistics such as GDP. This column examines the measurement challenges posed by digital innovation on the economic landscape. It shows how existing approaches are unable to capture certain elements of the consumer surplus created by digital innovation. It further demonstrates how they can misrepresent market-level shifts, leading to false assessments of production and growth.

Ulrik Beck, Benedikte Bjerge, Marcel Fafchamps, 06 February 2016

There are good reasons to think that social networks can reduce barriers to the exchange of production factors. Using data from 51 villages in Gambia, this column examines whether transfers of land between rural households improve efficiency, and whether social networks help or hinder such transfers. The results suggest that social ties may indeed be able to offset the negative impact of a limited or non-existing institutional framework.

Gabriel M. Ahlfeldt, Pantelis Koutroumpis, Tommaso Valletti, 04 February 2016

Many governments are committed to promoting the roll-out of fibre optic broadband networks. Little is known, however, about the economic value of these investments. Using house prices to infer the value of high-speed internet access, this column discusses the impact of fibre optic broadband in England. A fast broadband connection is found to increase house prices sufficiently in urban areas to pass a cost-benefit test, but the case for universal delivery in rural areas is not as strong. And even in areas where people are willing to pay for a faster connection, internet providers may be unwilling to deliver it only to see house-sellers appropriate the rent from their investments.

Stephen Hansen, Michael McMahon, 03 February 2016

In addition to setting interest rates, central banks also communicate with the public about economic conditions and future actions. While it has been established that communication can drive expectations, less is known about how it does so. This column attempts to shed light on this question. Applying novel measures to the content of Federal Reserve statements, it shows that forward guidance is a more important driver of market variables than disclosure of information about economic conditions.

Other Recent Articles:

Events