Holiday Reading 2019: VoxEu and VoxDev roundup

Researchers in the Barcelona GSE community have written several widely-read articles on CEPR’s policy portals, VoxEU and VoxDev. In case you missed them, here is a roundup of articles from Fall 2019.

(Articles are listed in chronological order. Work already featured in Barcelona GSE Focus articles has not been included in this list.)

Voters’ sophisticated response to abstention fines

Mariella Gonzales (University of Chicago), Gianmarco León-Ciliotta (UPF and BSE), Luis R. Martinez (University of Chicago)

To counter the worldwide fall in electoral participation over the last 30 years, some governments have introduced compulsory voting, with ten countries currently punishing abstainers with a fine. This column examines the question of whether and how voter turnout is affected by changes to the value of the fine, drawing on the experience of Peru, where voting has been compulsory since 1933 and the abstention fine was reformed after 2006. The study finds that compulsory voting with low fines helps reduce the burden on those that pay them without fundamentally undermining the effectiveness of the system.

Monetary policy for a bubbly world

Vladimir Asriyan, Luca Fornaro, Alberto Martin, and Jaume Ventura (CREI, UPF and BSE)

We live in a world of low interest rates and volatile asset values. This column argues that in such a bubbly world, we can no longer disregard the role of money as a store of value, and the role of monetary policy as a supplier of stores of value. Indeed, monetary policy plays a key role by expanding and stabilising the supply of unbacked assets at an optimal level.

To adjust or not to adjust: The optimal inflation target in the face of a lower r-star

Philippe Andrade (US Federal Reserve Bank of Boston), Jordi Galí (CREI, UPF and BSE), Hervé Le Bihan (Banque de France), Julien Matheron (Banque de France)

How to adjust to structurally lower real natural rates of interest is a challenging but inescapable issue for central bankers. Using simulation and US data, this column studies how changes in the steady-state natural interest rate affect the optimal inflation target. It finds that starting from pre-crisis values, a 1 percentage point decline in the natural rate should be accommodated by an increase in the optimal inflation target of about 0.9 to 1 percentage point. It also discusses alternatives to adjusting the target, such as non-conventional monetary policies.

The politics of distraction: Evidence from presidential executive orders

Milena Djourelova (PhD Candidate, UPF and BSE) and Ruben Durante (UPF and BSE)

It is often suspected that politicians time announcements of controversial policies strategically to avoid public scrutiny. This column reports evidence from a systematic analysis of executive orders issued by US presidents, showing that their timing is consistent with strategic behaviour. Presidents tend to issue executive orders, and specifically ones that are likely to generate negative publicity, in coincidence with other important events that distract the media and the public.