US Economy Research Articles

Does the Minimum Wage Affect Wage Inequality? A Study for the Six Largest Latin American Economies

Minimum wage (MW) policies are widespread in the developing world and yet their effects are still unclear. In this paper we explore the effect of national MW policies in Latin America’s six largest economies by exploiting the heterogeneity in the bite of the national minimum wage across local labor markets and over time. We find evidence that the MW has a compression effect on the wage distribution of formal workers. The effect was particularly large during the 2000s, a decade of sustained growth and strong labor markets. In contrast, the effect seems to vanish in the 2010s, a decade of much weaker labor markets. We also find suggestive evidence of a lighthouse effect: the MW seems to have an equalizing effect also on the wage distribution of informal workers.

The aggregate and distributional effects of fiscal stimuli

This paper compares the aggregate and distributional effects of three fiscal policy instruments: government expenditures, unemployment benefits, and transfers. To this end, the canonical model of frictional labor market is embedded into an otherwise standard incomplete markets framework where firms face price-adjustment costs. The model calibrated to match the moments characterizing the US economy successfully replicates the empirical distributions of households across: disposable income, consumption expenditures and net worth. The analysis quantifies the aggregate and distributional responses to changes in government expenditures, unemployment benefits, and transfers. Moreover, the stabilizing role of the analyzed fiscal measures is evaluated.

Volatility spillovers among leading cryptocurrencies and US energy and technology companies

This study investigates volatility spillovers and network connectedness among four cryptocurrencies (Bitcoin, Ethereum, Tether, and BNB coin), four energy companies (Exxon Mobil, Chevron, ConocoPhillips, and Nextera Energy), and four mega-technology companies (Apple, Microsoft, Alphabet, and Amazon) in the US. We analyze data for the period November 15, 2017–October 28, 2022 using methodologies in Diebold and Yilmaz (Int J Forecast 28(1):57–66, 2012) and Baruník and Křehlík (J Financ Economet 16(2):271–296 2018). Our analysis shows the COVID-19 pandemic amplified volatility spillovers, thereby intensifying the impact of financial contagion between markets. This finding indicates the impact of the pandemic on the US economy heightened risk transmission across markets. Moreover, we show that Bitcoin, Ethereum, Chevron, ConocoPhilips, Apple, and Microsoft are net volatility transmitters, while Tether, BNB, Exxon Mobil, Nextera Energy, Alphabet, and Amazon are net receivers Our results suggest that short-term volatility spillovers outweigh medium- and long-term spillovers, and that investors should be more concerned about short-term repercussions because they do not have enough time to act quickly to protect themselves from market risks when the US market is affected. Furthermore, in contrast to short-term dynamics, longer term patterns display superior hedging efficiency. The net-pairwise directional spillovers show that Alphabet and Amazon are the highest shock transmitters to other companies. The findings in this study have implications for both investors and policymakers.

Total factor productivity, transitional dynamics and endogenous growth accounting for Latin America: Evidence from two centuries’ data

AbstractThis study investigates the sources of economic growth for Latin American economies. With two centuries of data and extended growth accounting methods, the study shows that poor total factor productivity (TFP) growth is the key to understanding Latin America's low economic growth relative to other economies. Using a functional form of TFP growth, based on second‐generation growth models, furthers analyses to show some empirical evidence for growth induced by R&D, knowledge spillovers, educational attainment and the distance to the frontier. However, the magnitude effect is very small and when compared to the OECD countries, the gap between the TFP growth generating factors is very substantial. An intricate policy structure should be implemented for Latin America to foster an environment that is conducive to aid permanent TFP and economic growth.

Real exchange rates and manufacturing exports in emerging economies: the role of sectoral heterogeneity and product complexity

The empirical evidence on the relationship between the real exchange rate and export performance in emerging economies is inconclusive. In this paper, we present evidence that one reason for this inconclusiveness is the use of real exchange rate (RER) measures that do not consider the heterogeneity between economic sectors. To this end, we calculate a unique sectoral bilateral RER index (SBRER) for 12 Latin American economies, which considers the variation of producer price differentials and bilateral nominal exchange rates across 21 manufacturing sectors and 38 trade partners between 2001–2018, and to estimate the effect of SBRER movements on manufacturing exports. The regression results show that the SBRER is a significant determinant of aggregate manufacturing exports, whereas the bilateral RER is not significant. Moreover, sectoral export elasticities indicate that mainly sectors with low levels of product complexity and, to a lesser extent, those of medium complexity are affected by RER movements. These findings show that it is important to consider sectoral heterogeneity when estimating RER export elasticities from a macroeconomic perspective.

Untold stories of African American women entrepreneurs: research-based strategies for becoming one's own boss

PurposeThe purpose of this research was to empirically examine the career transitions of mid-career African American women leaving traditional careers for entrepreneurship. The authors illustrate how transition theory and effectuation principles ameliorate an African American woman's transition to entrepreneurship.Design/methodology/approachThe authors conducted semi-structured interviews with nine African American woman entrepreneurs. The data collected were evaluated through the lens of transition theory and effectuation theory.FindingsThe study results show that despite being the chief officer, many African American women still face inequalities when negotiating business deals, interacting with partners and when seeking capital for their business. Effectuation theory partially supports an African American woman's career transition to entrepreneurship, but the theory does not fully address the unique experiences of this demographic.Research limitations/implicationsThe results of this study reveal that effectuation principles do not fully explain the entrepreneurial career transition experiences of African American women. Theory development and extensions of existing theories should consider the potential discriminatory practices that limit financial resources and strategic partnerships for African American women entrepreneurs. The authors also advocate for consideration of identities, particularly related to gender and race, as factors that contribute to entrepreneurial experiences.Practical implicationsThe study findings support the notion that each woman's situation will be different and unique, requiring aspiring African American woman entrepreneurs to assess their individual situation. Consistent access to minority-specific programs can help aspiring African American women entrepreneurs visualize her new identity and provide the support needed to enhance her career transition. There is no one-size-fits-all solution, so each woman will need to craft her own individualized plan.Social implicationsFindings from this study solidify the role of African American women entrepreneurs as business leaders with influence and direct impact on the US economy. Their success enables African American women to contribute to more inclusive societies through their service to diverse members of society. In addition, their attainment of success serves as a testimony to aspiring African American women that entrepreneurial success is achievable, encouraging more diversity in entrepreneurship.Originality/valueFew entrepreneurial studies exist on both women and racial minorities, resulting in a paucity of strategies to support African American women throughout their entrepreneurial journey. The results of this study revealed barriers which require specific strategies to address discriminatory lending practices and acceptance when forging new business relationships.

James Tobin on macroeconomic instability: an old Keynesian changes ground

From 1975 onwards, the American Keynesian monetary economist James Tobin changed his interpretation of the Keynesian case that active stabilisation policy is sometimes needed to restore full employment, offering a new interpretation that drew on Keynes’s General Theory (Chapter 19) and on Irving Fisher’s 1933 debt-deflation theory of depressions to argue that wage and price flexibility could be destabilizing. Tobin’s very first journal article in 1941 attributed the existence of involuntary unemployment in a Keynesian economy to money wage rigidity and money illusion, as he also did in 1947. From 1975 onwards, Tobin responded to New Classical critiques of Keynesianism by absolving Keynes from assumptions of irrational money illusion or unexplained wage rigidity, arguing instead that Keynes assumed a given money wage in the first eighteen chapters of his General Theory for simplicity of exposition and as a policy recommendation. Like Hyman Minsky and Peter Howitt, Tobin stressed the previously underappreciated Chapter 19 of The General Theory, where Keynes argued that faster adjustment of prices and money wages could be destabilising. The basis of Keynesian macroeconomics was coordination failure and instability, not irrational money illusion or an arbitrary assumption of a fixed money wage. The most important aspect of this discussion of debt-deflation and of macroeconomic instability and coordination failure came through the attention to Keynes’s Chapter 19, Fisher, Minsky, and Tobin in Ben Bernanke’s dissertation on the breakdown of financial intermediation in the US culminating in the 1933 Bank Holiday and in Mervyn King’s 1994 European Economic Association presidential address on debt-deflation. This intellectual preparation shaped the response of Bernanke and King to the Global Financial Crisis of 2007-2009, when they placed absolute priority on preventing a debt-deflation spiral that would take the economy out of its corridor of stability. Presented to the Nice workshop on “Coordination Issues in Historical Perspective,” September 9, 2022. We are grateful for helpful comments from Peter Howitt, Goulven Rubin and other participants there and at a workshop in memory of Jerome de Boyer des Roches at the University of Paris I Panthéon-Sorbonne in June 2022 and from two anonymous referees.

Methodology for Monitoring Border Crossing Delays with Connected Vehicle Data: United States and Mexico Land Crossings Case Study

International trade is a critical part of the United States economy. Land border crossings between the United States and Mexico accounts for a large proportion of the USD 779 billion in trade between these two countries. Monitoring and managing the operations of these land border crossings is critical for ensuring efficient trade and providing appropriate security. This paper examines the opportunity to use connected vehicle data to monitor the travel time delay of passenger vehicles crossing the border for system level assessment across 26 border crossing locations over an analysis period of 25 days in August 2020. A sample size of 51,341 trips from the US to Mexico and 41,708 trips from Mexico to the US were used in this study. Furthermore, 97% trips to the US and 76% trips to Mexico experienced delays. The average delay was 34 min for trips to the US compared to only 2 min for trips to Mexico. In terms of the predictability of border crossing times, there was also substantial variation by direction. The interquartile range of vehicle delay from the US to Mexico was 2 min, while the interquartile range of delay for vehicles travelling from Mexico to the US was 46 min. Border crossings were also ranked using four performance metrics—trip counts, median delay, delayed trip counts and total delays in vehicle hours. Methods for summarizing delay trends by time of the day and day of the week to identify time windows of interest are also presented. Land border crossing operations have a significant influence on security and economic efficiency. We believe the techniques presented in this paper provide a scalable methodology for providing near real-time factual data on border crossing delays that provide important information for land border transport-managing stakeholders to make informed management decisions that balance security and economic efficiency.

Exploring the Geospatial Relationship Between COVID-19 Positivity and Income in Mixed Urban-Rural Population.

The COVID-19 pandemic has had a deep influence on American life in general and on the American economy in particular. However, the burden of the pandemic has not been distributed equally among members of a population based on their social-determinants-of-health. The purpose of this study was to investigate whether the median income was associated with COVID-19 total number of tests and positivity rate in Boone County, Missouri during the pandemic. We analyzed the geospatial data using three heat maps showing the Census tract-wise COVID-19 positivity rate, Census tract-wise median income, and Census tract-wise total number of COVID-19 tests to highlight our study findings. Our study results support the hypothesis that individuals with lower median income tend to have a lower total number of COVID-19 tests and higher COVID-19 positivity rates in Boone County, Missouri. The Pearson correlation coefficient between the positivity rate and median income is -0.324.

Evaluation of Estonia’s enhanced care management program: protocol for a cluster randomized trial

Background: Estonia’s aging population faces an increasing burden of non-communicable diseases (NCDs) and a growing population suffers with multiple chronic conditions. These changes have reduced well-being and quality of life for many older Estonians, while increasing the use of high cost specialist and emergency care. In response, the Estonia Health Insurance Fund (EHIF) is working to support primary care physicians to improve care for complex patients with multiple chronic conditions. A new EHIF program, Enhanced Care Management (ECM), trains family physicians to identify complex patients, co-develop proactive care plans with them, and conduct more active outreach and management of these patients. Methods: In this protocol we describe a randomized controlled trial, developed in partnership with EHIF, to evaluate the impact of ECM training for physicians. The RCT enrolled a randomly selected 97 family physicians out of the 786 family physicians practicing in Estonia. Among those physicians’ 6,739 ECM-eligible patients, 2,389 patients were randomly selected for enrolment into the ECM program. Results: Using administrative records, we evaluated the effects of ECM enrolment on: (1) health care utilization; (2) provider management of tracer conditions; and (3) markers of quality of care such as hospital admission for primary health care-sensitive conditions. Conclusions: This protocol presents a pre-specified analysis plan for this evaluation of Estonia’s ECM program. Trial registration: First registered with the American Economics Association, AEARCTR-0003661. Registered May 1, 2019. Retrospective secondary registration with www.clinicaltrials.gov P169891. Registered April 26, 2023.

Impact of quantitative easing on the U.S. economy

The US economy is facing instability due to high inflation and high credit card debt. Central banks have adopted quantitative easing (QE) as a monetary policy tool to promote economic growth and reduce the risk of deflation. QE measures originated from the 2008 global financial crisis to counter the threat of recession and deflation. This paper examines the impact of quantitative easing on the U.S. economy in four stages through data, image analysis and collection of related literature. Quantitative easing is a high-risk monetary policy. However, while quantitative easing stimulates the economy by lowering interest rates, it can also lead to inflation and borrowing pressures. This paper applies a combination of qualitative analysis and quantitative analysis, has been about the theory of monetary policy on the basis of the process of successive QE is summarized, and the Federal Reserve's aggressive interest rate hikes in the past two years to review. Finally, this paper analyzes the impact of QE, an unconventional monetary policy on the economy, and analyzes the future forecast. The research in this paper can be a certain reference for the monetary policy to cope with the crisis and unconventional situations.

Changes and Impact of Monetary Policy in the United States: Quantitative Easing and Federal rate hikes

In response to the 2008 financial crisis, marked by the collapse of Wall Street giants like Bear Stearns and Lehman Brothers, the U.S. faced significant economic challenges. Traditional monetary policy tools proved ineffective as interest rates neared the Zero Lower Bound. Consequently, the Federal Reserve implemented Quantitative Easing (QE) as an unconventional measure to stimulate financial markets. This policy was executed in four phases, and by the end of the fourth round, U.S. inflation rates surpassed the 2022 target. Elevated inflation impacted living standards, prompting the FED to introduce interest rate hikes in 2022 to control it. Supply chain disruptions were a major contributor to this inflation spike. This paper uses qualitative and statistical methods to explore QE and the subsequent FED rate hikes. It emphasizes that QE essentially expanded the FED's Balance Sheet and uses visual data like graphs to illustrate the FED's actions since 2022. The article provides a comprehensive view of U.S. monetary policy adaptations during and after the financial crisis. The first three QE rounds addressed the 2008 crisis aftermath, while QE4 combated the economic fallout of COVID-19. The 4 rounds of QE and the last 2 years of Fed rate hikes have been generally successful. Both monetary policies have had some proven effect on the US economy. However, by critical thinking, QE has potential downsides, like fostering economic bubbles and inflation. And the Fed's repeated interest rate hikes have led to the problem of bank failure. Therefore, the Fed's monetary policy choices, especially unconventional ones like QE, require weighing benefits against potential risks.

Navigating Economic Recovery in the Post-COVID Era: Lessons and Implications from the New Deal

The COVID-19 pandemics, have sparked unprecedent crises worldwide, reminding the governments of the economic turmoil of the 1930s Great Depression. Effective government interventions are required urgently to combat the severe volatility and initiate recovery. How could the lessons from the historical policies provide crucial insights for the contemporary challenge of the US economy? This paper examines the efficacy of the New Deal and fiscal and monetary responses of the US government following the COVID-19 pandemic through comparative analysis of several macroeconomic variables including GDP growth, Unemployment rate and Consumer Price Index. By assessing the successes, limitations and long-term implications between the stimulus measures for addressing distinct challenges of the two periods, this research emphasizes the significance of New Deal’s ideas in promoting the comprehensive, flexible and equitable initiatives under the contemporary context. Furthermore, this study attempts to convey informative policy recommendations for addressing the subsequent concerns arising in the post-covid economy, as well as provide feasible guidance for future policy improvements.

Analysis of Sino US Economic Development Based on the Russia-Ukraine Conflict

Since the Russia-Ukraine conflict escalated in 2022, signs of peace have not yet emerged. The economic recovery in the post epidemic era has become complicated due to the emergence of the Russia-Ukraine conflict. As the two most important economies in the world today, studying the economic trends of China and the United States can reveal the development trends of the world economy. This article mainly uses a series of data from the World Bank on the economy of China and the United States to analyze the economic changes in the two countries, and identifies some substantive issues through comparison and provides opinions. Research has found that China is more affected by economic shocks compared to the United States, which is similar to the situation in the vast majority of countries in the world. The research in this article roughly analyzes the forms of the two countries and provides some guidance for future economic construction.

The Michael Szenberg Prize for the Best Article Published by The American Economist

The Michael Szenberg Prize for the Best Article Published by <i>The American Economist</i>

A Delphi study on the state and future of hispanic public relations in the United States

The Hispanic or Latina/o community is an important and growing part of the economy, culture, and politics of the United States. As such, public relations professionals need to be knowledgeable about and responsive to the needs of Hispanic or Latina/o publics. Despite a growing emphasis on diversity and inclusion in the field of public relations, research on Hispanic public relations (HPR) remains largely unexplored. To address this gap, the present study conducted a Delphi panel with 17 experts in HPR in the U.S. The panel used a multi-iteration and consensus-building approach to evaluate different aspects of HPR, including the state of the profession, the competencies required to practice HPR effectively, the value of incorporating HPR courses into academic curricula, and strategies for recruiting and retaining HPR students. The findings of this study provide valuable insights for public relations scholars, educators, and industry leaders. By examining the current state of HPR and identifying key issues and challenges, this study contributes to a better understanding of the profession and its potential for growth and development. By highlighting the importance of HPR education and training, this study also offers practical guidance for those interested in advancing the field of HPR.

New Methodologies for a Latin American Economic History on the 19th Century: The South-Central Andes

The economic literature of nineteenth-century Latin America has been dominated by its focus on the import-export complex and by comparisons with the United States and Western Europe, discussing why Latin America did not develop like the former regions. The use of import-export data is deficient in un- derstanding economic development of the region; comparisons about what Latin America is not does not help understanding how development occurred. Instead, the essay develops new concepts such as the internal economy, as well as methodologies and categories to analyze the changes in the Latin American economy from 1830 to 1920, using as a case study the south-central Andes.

New Methodologies for a Latin American Economic History on the 19th Century: The South-Central Andes

The economic literature of nineteenth-century Latin America has been dominated by its focus on the import-export complex and by comparisons with the United States and Western Europe, discussing why Latin America did not develop like the former regions. The use of import-export data is deficient in un- derstanding economic development of the region; comparisons about what Latin America is not does not help understanding how development occurred. Instead, the essay develops new concepts such as the internal economy, as well as methodologies and categories to analyze the changes in the Latin American economy from 1830 to 1920, using as a case study the south-central Andes.

On the brink: Examining preemptive indicators of preparedness inequity and social vulnerability to climate change hazards in Connecticut, USA

The current study is part of an ongoing effort to combine environmental, infrastructural, and socioeconomic data tied to specific locations to identify sites of preparedness-inequity, and generate information for crisis communication practitioners, emergency services, and state level disaster management. A cross-sectional survey was administered to a sample of 519 residents in four counties in Connecticut identified as vulnerable to climate-related hazard events using projected climate risk data from the US Climate and Economic Justice Screening Tool (CJEST) (Justice40.gov) and socially vulnerable per the Social Vulnerability Index (SoVI). Geospatial analysis was used to map SoVI data and identify the Justice 40 risk factors of individual municipalities. These data were triangulated with participant data concerning risk awareness, information needs, preferred information sources, and trust in local emergency services. The results reveal racial and socioeconomic disparities in information sufficiency, self-identified preparedness, risk awareness, and trust and underline the need for emergency management to identify the sources of information sought by underprivileged residents and residents of color at the local level. While past studies have taken a variable-analytic approach to examining risk communication, this study aimed to inform our knowledge of the most underserved individuals when it comes to emergency messages and planning. The results have implications for developing effective and equitable messaging concerning environmental risks that consider vulnerability and audience behaviors within and across municipalities; and highlight the utility of combining social and geospatial data to develop new insights into best practices to improve crisis and risk communication in advance of disaster scenarios.

COVID-19 Supply Chain Disruptions

In the early phase of the COVID-19 crisis, China imposed widespread lockdowns to contain the virus. We study the spillovers from the lockdowns to the US economy. We find that sectors with a high exposure to intermediate goods imports from China experienced significantly larger declines in production, employment, imports, and exports. In addition, relative input and output prices increased in these sectors. At the peak of the recession in April 2020, output was 16% lower in sectors with a one standard deviation higher China exposure. The estimated effects on output, input, and inflation are short-lived and dissipate by summer 2020.