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Working Paper
On the Need for a Replication Journal
There is very little replication of research in economics, particularly compared with other sciences. This paper argues that there is a dire need for studies that replicate research, that their scarcity is due to poor or negative rewards for replicators, and that this could be improved with a journal that exclusively publishes replication studies. I then discuss how such a journal could be organized, in particular in the face of some negative rewards some replication studies may elicit.
Working Paper
The Poverty of Macroeconomics --- What the Chemical Revolution Tells Us about Neoclassical Production Function
Quantitative macroeconomics is often portrayed as a science—because of its intensive use of high-powered mathematics—with the possible limitation of being unable to conduct controlled experiments. To qualify as a science, however, theories in that discipline must meet a minimum number of criteria: (i) It has explanatory power to explain phenomena; (ii) it has predictive power to yield quantifiable and falsifiable statements about new phenomenon; and (iii) it has operational power to change the world. A scientific theory consists of axioms and working hypotheses that facilitate the ...
Working Paper
Revisiting the Great Ratios Hypothesis
The idea that certain economic variables are roughly constant in the long run is an old one. Kaldor described them as stylized facts, whereas Klein and Kosobud labelled them great ratios. While such ratios are widely adopted in theoretical models in economics as conditions for balanced growth, arbitrage or solvency, the empirical literature has tended to find little evidence for them. We argue that this outcome could be due to episodic failure of cointegration, possible two-way causality between the variables in the ratios and cross-country error dependence due to latent factors. We propose a ...
Working Paper
Measuring unfamiliar economic concepts: the case of prepaid card adoption
Recent evidence suggests that the use of prepaid cards is growing in the United States. The study of how prepaid cards fit into the existing payments market requires accurate data about the adoption of prepaid cards among consumers. This paper describes several experiments conducted by the Consumer Payments Research Center that compare the efficacy of various question forms regarding reported adoption rates. A primary focus is on the effect of "disaggregation" or asking about adoption of a number of prepaid card categories sequentially rather than asking about adoption of prepaid cards as a ...
Working Paper
Revisiting the Great Ratios Hypothesis
Kaldor called the constancy of certain ratios stylized facts, whereas Klein and Kosobud called them great ratios. While they often appear in theoretical models, the empirical literature finds little evidence for them, perhaps because the procedures used cannot deal with lack of cointegration, two-way causality and cross-country error dependence. We propose a new system pooled mean group estimator that can deal with these features. Monte Carlo results show it performs well compared with other estimators, and using it on a dataset over 150 years and 17 countries, we find support for five of the ...