University of Kent

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Social diversity and bridging identity

keynes collegeby María D. C. García-Alonso and Zaki Wahhaj, University of Kent. Discussion paper KDPE 1802, February 2018.

Non-technical summary:

A shared social identity is potentially an important element in ensuring cooperation and the coordination of actions among individuals when formal institutions for achieving these ends are weak. But the construction of group identity also leads to the creation of in-groups and out-groups and thus, the possibility of conflict as people born and raised with diverse identities are compelled to interact due to resource competition, market forces, etc.

These contrasting ideas lead to the following question: Under what conditions do increased social diversity within a population – e.g. due to migration, market penetration – raise the potential for conflict as opposed to harmonious social diversity? If ‘group identity’ plays a key role in shaping conflict and cooperation, a related question that requires consideration is as follows: How does increased social diversity affect identity?

Biased technological change and employment reallocation

christian siegel 120x120by Zsófia L. Bárány, Sciences Po and CEPR and Christian Siegel, University of Kent. Discussion paper KDPE 1801, February 2018.

Non-technical summary:

It is well known that technological change is not only one of the key drivers of overall economic growth, but also has implications for inequality.

Developed economies have seen a large reallocation from goods to the service sector. In the US for example, while the goods sector accounted for about 44% of total hours worked in 1960, by 2010 this was down to just 21%. The economic literature on structural transformation typically explains these changes by pointing to differences in productivity growth across sectors. As goods and services tend to be complements in consumption and labor productivity grows faster in goods than in other sectors, supply outgrows demand for goods, leading to a reduction of employment in the goods sector and a rise in service employment.

Strategic default in financial networks

nizar allouch 120x120by Nizar Allouch, University of Kent and Maya Jalloul, Queen Mary, University of London. Discussion paper KDPE 1721, December 2017.

Non-technical summary:

Financial institutions carry out various transactions with each other, including risk-sharing and insurance. The architecture of the network of transactions between institutions can support financial stability because it enables them to share funding or transfer risk. But these linkages can also facilitate the diffusion of shocks through the system, due to chains of default and the domino effect. This is referred to as systemic risk. Systemic risk is costly for individuals, institutions and economies, as demonstrated by the last financial crisis (of 2008). The obvious need for a stable financial system has led to a significant interest in policies that could reduce systemic risk and mitigate contagion.

Improving drinking water quality in South Korea: A choice experiment

Dr Adelina Gschwandtnerby Adelina Gschwandtner, University of Kent; Cheul Jang, Korea Water; and Richard McManus, Canterbury Christ Church University. Discussion paper KDPE 1720, December 2017.

Non-technical summary:

South Korea is a country with a historically polluted water supply. Water pollution has spread according to economic development worldwide. Increased discharges of untreated sewage combined with agricultural runoff and inadequately treated wastewater from industry, have resulted in the severe degradation of water quality all over the world; however, the situation appears to be especially worrying in South Korea. Several accidents of contamination in the water such as detection of trihalomethanes, heavy metal, harmful pesticides and disease germs in tap water, have made the average Korean concerned about the safety of the water supply, and very few citizens drink water directly from the tap.

Financial frictions in macroeconomic models

Dr Alfred Duncanby Alfred Duncan, University of Kent and Charles Nolan, University of Glasgow, discussion paper KDPE 1719, December 2017.

Non-technical summary:

In recent decades, macroeconomic researchers have looked to incorporate financial intermediaries explicitly in business cycle models. These modelling developments have helped us to understand the role of the financial sector in the transmission of policy and external shocks into macroeconomic dynamics. They have also helped us to better understand the consequences of financial instability for the macroeconomy.

Aggregation in networks

Professor Nizar Allouchby Nizar Allouch, discussion paper KDPE 1718, December 2017.

Non-technical summary:

Understanding, and making sense of, large economic networks is an increasingly important problem from an economic perspective, due to the ever-widening gap between technological advances in constructing such networks, and our ability to predict and estimate their properties. Throughout history, various concepts have been developed to reduce the inherent complexity found in large economic systems, thereby rendering them more amenable to economic analysis.

Taste and health benefits key reasons for buying organic food

Dr Aadelina GschwandtnerShoppers usually claim they buy organic food because it is environmentally friendly and has higher standards of animal welfare. However, research has found that in reality better taste and health benefits are key motivators for buying organic produce.

Lecturer Dr Adelina Gschwandtner from the School of Economics, analysed the organic shopping habits of consumers in Canterbury to discover their price thresholds and rationale for buying organic foods such as chicken, milk, bananas, carrots and apples.