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April 3, 2024Ìý|Ìý9:30 a.m. – 2:00 p.m. |ÌýKreeger 100

Schedule

Click the students' namesÌýto jump to abstracts below.

9:30–10:30, Kreeger 100

Session 1

Jerry Huang, Title TBD
Supervisor: Gabe Mathy, Discussant: Lin Shi
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Makar Golosheykin, "Structural Asymmetry: Unequal Exchange and Global Labor Inequality in International Trade"
Supervisor: John Willoughby, Discussant: Lin Shi
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10:30–10:45, Kreeger 100

Coffee Break
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10:45–11:45, Kreeger 100

Session 2

Paul Lapinski, "Estimating responses changes in immigrant EITC eligibility"Ìý
Supervisor: Maria Caballero, Discussant: Amy Cross
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Jeff Wheble, "Marijuana Taxation and Interstate Substitution"Ìý
Supervisor: Mary Hansen, Discussant: Amy Cross

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11:45–12:30, Kreeger 100

Lunch Break

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12:30–14:00, Kreeger 100

Session 3

Malek Owain, "OPEC Information Shock"Ìý
Supervisor: Simon Sheng, Discussant: Eduardo Rawet
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Nana Boakye Yiadom, "Unveiling the Sectoral Effects of U.S Corporate Taxation in an Input-Output Framework"
Supervisor: Gabe Mathy, Discussant: Eduardo RawetÌý
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Josh Sack, "An Agent-Based Minsky Crisis"
Supervisor: Alan Isaac, Discussant: Eduardo RawetÌý

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Abstracts

Jerry Huang

(Absract forthcoming)

Makar Golosheykin,ÌýStructural Asymmetry: Unequal Exchange and Global Labor Inequality in International Trade

The aim of this study is to demonstrate theoretically and empirically that international unequal exchange (UE) and global labor inequality are dual aspects of an uneven trade between the Global North and the Global South. Applying Ricci's model to global trade in value-added data, I show that the net transfers of value from the South to the North relate to the undervaluation of Southern labor. The results challenge prior understandings of UE as a product of differing capital intensities, instead placing greater emphasis on the role unpaid Southern labor in global value transfers.

Paul Lapinski,ÌýEstimating responses to changes in immigrant EITC eligibility

The poverty alleviating effects and behavioral responses to the earned income tax credit (EITC) are well documented, but little is known about immigrant participation in the program. Since the 1996 creation of the program requires filers have a social security number, undocumented immigrants have been fully excluded from the federal tax credit. Since 2020, 11 states that offer a supplemental EITC have enacted policies that allow tax filers with an individual taxpayer identification number (ITIN) to claim their state’s tax credit, effectively eliminating eligibility restrictions for undocumented immigrants. I exploit the multi-dimensional variation from the introduction of these policies to estimate the effects of expanding state EITC eligibility on poverty reduction and extensive marginÌýlabor supply. I use American Community Survey data to identify likely undocumented immigrants and implement double- and triple-difference methodologies, validating my findings with Current Population Survey data and NBER’s tax simulator. I find that families with newly eligible EITC filers are less likely to have household incomes below the poverty line and no evidence that changes in EITC eligibility affect labor supply responses.

Malek Owain, OPEC Information Shock

Communications from the Organization of the Petroleum Exporting Countries (OPEC) and their macroeconomic effects are the focus, particularly the impact of shocks from post-meeting releases on key macroeconomic indicators. This inquiry examines how communication-induced shocks affect the oil market and, by extension, the broader economic landscape, which is important for understanding short-term economic fluctuations. Efforts to stabilize the oil market involve analyzing OPEC's strategic decisions for effectiveness. The challenge of assessing OPEC's impact highlights the need to consider various factors that influence its decision-making, including market expectations, fluctuations in oil supply and demand, and prevailing economic uncertainties. A comprehensive analysis integrates narrative identification in macroeconomics with advanced GPT-4 models, offering insights into OPEC's narrative influence on market trends and demonstrating the synergy of traditional methods with AI-driven analysis for interpreting economic narratives more thoroughly.

Josh Sack, An Agent-Based Minsky Crisis

Following the work of Foley (2003) as an analytical base, I devise an agent-based model with forward-looking firms and backward looking credit providers that appears to visually Minsky financial instability across endogenously arising business cycles. Then, probing the results of the simulation, I explore whether it really shows financial instability, and if so, whether the Minsky moments modeled follow according to the theory. Finding evidence to suggest the simulation exhibits Minksy financial instability, the longer-term behavior of the model is examined for coherence with Minsky's broader understanding of the interaction of finance and industry. The results of this work appear to show that agent-based modeling has a role to play in the understanding of financial instability, exhibiting insights beyond the scope of what is possible with more traditional modeling paradigms.

Jeff Wheble, Marijuana Taxation and Interstate Substitution

There is significant disagreement on the optimal tax rate for marijuana, as demonstrated by the wide variation remains among states in base, rate, and remittance rules for marijuana taxation. When neighboring states select different tax systems for legal recreational marijuana, consumers may substitute across state lines in response. The extent to which this occurs is a key factor for selecting optimal marijuana tax rates; both the existence of neighboring dispensaries and differences in tax rates influence the decision to substitute between states and therefore the optimal rate. I first estimate by difference-in-differences the effect of three neighboring states opening dispensaries on Massachusetts tax revenue. I find that Massachusetts lost $21 million (about 30%) of its quarterly marijuana tax revenue. Second, I estimate the effect of marijuana tax base changes between California and Oregon with county-level public revenue data from 2016 to 2022 using a border discontinuity design. Oregon border counties lose roughly 39% of their revenue on average. These results indicate that interstate consumption ("marijuana tourism") constitutes a substantial portion of marijuana tax revenue. The implied responsiveness to out-of-state marijuana policy falls in the elastic range. If states set their tax schedules without considering this dimension of response, they risk setting taxes too high and losing revenue to their neighbors.Ìý

Nana Boakye Yiadom,Unveiling the Sectoral Effects of U.S. Corporate Taxation in an Input-Output Framework

This paper investigates the sectoral implications of U.S. corporate taxation using an input-output framework. By leveraging data from the Bureau of Economic Analysis (BEA) input-output tables and IRS Statistics of Income tax - Corporation Data by Sector or Industry, we separate the share of Flow-Through Business Entities (F-TBEs) and ascertain a unique perspective on C-corporations' net income. Our methodology employs the Leontief input-output model to examine the intricate relationships among industries and assess the impact of corporate tax adjustments on sectoral dynamics. Through decompositional analysis of legal business entities and comparative statics technique, the research reveals the effects of tax rate changes (35% pre-Trump rate and the current 21% rate) on corporate net and total returns in terms of per dollar value added of C-corporations. The findings suggest a favorable impact of reduced corporate tax on per dollar value added on sectoral output, indicating that lower tax rates correlate with increased returns or value added for the U.S. major industries. Additionally, an analysis of the relative corporate tax burden across sectors reveals variations in tax contributions per dollar of output, highlighting sectors that bear heavier or lighter tax burdens relative to their output.