Tomas Havranek

Cross-Country Heterogeneity in Intertemporal Substitution

We collect 2,735 estimates of the elasticity of intertemporal substitution in consumption from 169 published studies that cover 104 countries during different time periods. The estimates vary substantially from country to country, even after controlling for 30 aspects of study design. Our results suggest that income and asset market participation are the most effective factors in explaining the heterogeneity: households in developing countries and countries with low stock market participation substitute a smaller fraction of consumption intertemporally in response to changes in expected asset returns. Micro-level studies that focus on sub-samples of poor households or households not participating in asset markets also find systematically smaller values of the elasticity.

Financial development and economic growth: A meta-analysis

We analyze 1334 estimates from 67 studies that examine the effect of financial development on economic growth. Taken together, the studies imply a positive and statistically significant effect, but the individual estimates vary widely. We find that both research design and heterogeneity in the underlying effect play a role in explaining the differences in results. Studies that do not address endogeneity tend to overstate the effect of finance on growth. While the effect seems to be weaker in less developed countries, the effect decreases worldwide after the 1980s. Our results also suggest that stock markets support faster economic growth than other financial intermediaries.

How to Solve the Price Puzzle? A Meta-Analysis

The short-run increase in prices following an unexpected tightening of monetary policy represents a frequently reported puzzle. Yet the puzzle is easy to explain away when all published models are quantitatively reviewed. We collect and examine about 1,000 point estimates of impulse responses from 70 articles using vector autoregressive models to study monetary transmission in various countries. We find some evidence of publication selection against the price puzzle in the literature, but our results also suggest that the reported puzzle is mostly caused by model misspecifications. Finally, the long-run response of prices to monetary policy shocks depends on the characteristics of the economy.

Survey Article: Publication Bias in the Literature on Foreign Direct Investment Spillovers

Abstract In this article we conduct a large quantitative survey of the literature on horizontal and vertical spillovers from foreign direct investment (FDI). We create a unique database of spillover estimates for each country examined in the literature. Next, we estimate the average effect corrected for publication selection bias (the preferential selection of positive and significant estimates for publication). Our results suggest that an average reported estimate of backward spillovers is statistically significant. Publication selection is evident only among studies published in peer-reviewed journals, and only among the estimates that authors consider most important. Authors with small data sets engage in more publication selection. The intensity of selection in the literature decreases over time, which supports the economics-research-cycle hypothesis.

Transmission Lags of Monetary Policy: A Meta-Analysis

The transmission of monetary policy to the economy is generally thought to have long and variable lags. In this paper we quantitatively review the modern literature on monetary transmission to provide stylized facts on the average lag length and the sources of variability. We collect sixty-seven published studies and examine when prices bottom out after a monetary contraction. The average transmission lag is twenty-nine months, and the maximum decrease in prices reaches 0.9 percent on average after a 1-percentage-point hike in the policy rate. Transmission lags are longer in developed economies (twenty-five to fifty months) than in post-transition economies (ten to twenty months). We find that the factor most effective in explaining this heterogeneity is financial development: greater financial development is associated with slower transmission.

Meta-Analysis of Intra-Industry FDI Spillovers: Updated Evidence

Using 67 published and unpublished studies, we conduct a meta-analysis of the literature on intra-industry productivity spillovers from foreign direct investment. The combined significance test of individual t-statistics is inconclusive, but it is apparent that papers published in leading journals tend to report insignificant results. Meta-regression analysis confirms that cross-sectional and industry-level studies are likely to find relatively strong spillover effects and that the choice of the proxy for foreign presence is important. The pattern, however, seems to weaken over time. Evidence for publication selection bias was detected employing the funnel asymmetry test, and the spillover effect corrected for publication bias is not significantly different from zero.

Which Foreigners are Worth Wooing? A Meta-Analysis of Vertical Spillovers from FDI

The principal argument for subsidizing foreign investment, especially in developing and transition economies, is the assumed spillover of technology to local firms. Yet researchers report mixed results on spillovers. To examine the phenomenon in a systematic way, we collected 3,626 estimates from 57 empirical studies on between-sector spillovers and reviewed the literature quantitatively. Our results indicate that model misspecifications reduce the reported estimates, but that journals select relatively large estimates for publication. The underlying spillover to suppliers is positive and economically significant, whereas the spillover to buyers is insignificant. Greater spillovers are generated by investors that come from distant countries and that have only slight technological advantages over local firms. In addition, greater spillovers are received by countries that have underdeveloped financial systems and that are open to international trade.

Structural reforms and growth in transition

The present fiscal difficulties of many countries amplify the call for structural reforms. To provide stylized facts on how reforms worked in the past, we quantitatively review 60 studies estimating the relationship between reforms and growth. These studies examine structural reforms carried out in 26 transition countries around the world. Our results show that an average reform caused substantial costs in the short run, but had strong positive effects on long‐run growth. Reforms focused on external liberalization proved to be more beneficial than others in both the short and long run. The findings hold even after correction for publication bias and misspecifications present in some primary studies.

Structural Reforms and Growth in Transition: A Meta-Analysis

The present fiscal difficulties of many countries amplify the call for structural reforms. To provide stylized facts on how reforms worked in the past, we quantitatively review 60 studies estimating the relation between reforms and growth. These studies examine structural reforms carried out in 26 transition countries around the world. Our results show that an average reform caused substantial costs in the short run, but had strong positive effects on long-run growth. Reforms focused on external liberalization proved to be more beneficial than others in both the short and long run. The findings hold even after correction for publication bias and misspecifications present in some primary studies.

Selective Reporting and the Social Cost of Carbon

We examine potential selective reporting (publication bias) in the literature on the social cost of carbon (SCC) by conducting a meta-analysis of 809 estimates of the SCC reported in 101 studies. Our results indicate that estimates for which the 95% confidence interval includes zero are less likely to be reported than estimates excluding negative values of the SCC, which might create an upward bias in the literature. The evidence for selective reporting is stronger for studies published in peer-reviewed journals than for unpublished papers. We show that the findings are not driven by the asymmetry of the confidence intervals surrounding the SCC and are robust to controlling for various characteristics of study design and to alternative definitions of confidence intervals. Our estimates of the mean reported SCC corrected for the selective reporting bias range between USD 0 and 134 per ton of carbon at 2010 prices for emission year 2015.