Author: Karthick Arunachalam

Commentary, Macroeconomics

LONG-FORM COMMENTARY: Meeting the Fed’s Mandate: The Recent Past and a Look Into the Future

Karthick Arunachalam

Rutvij Thakkar, Claremont McKenna -- The Federal Reserve’s dual mandate is as simple as holding unemployment below 4% and inflation below 2%. Unemployment should ideally be at the “natural rate” or the lowest unemployment rate possible without creating inflation. According to the Federal Reserve Economic Database, it’s the rate of unemployment arising from all sources except fluctuations in aggregate demand. Since the Baby Boomer generation has chosen to leave the workforce and retire, the Natural Rate—now called the Noncyclical Rate—of unemployment has consistently declined since 1980 to approximately 4%.

Commentary

LONG-FORM COMMENTARY: Why Stanford Needs Unions

Karthick Arunachalam

Gabriel Frank-McPheter, Stanford University -- In less than two days, the Stanford Graduate Workers Union (SGWU) got over 2,500 signed cards expressing support for unionization, well over the threshold of 30% of workers required to trigger a unionization vote. Since then, 3,600 of approximately 5,000 eligible graduate workers have signed cards, and the SGWU has officially petitioned the National Labor Relations Board for a unionization election. The SGWU’s mobilization efforts are impressive and represent a significant political moment at Stanford.

Commentary, Health Economics

LONG-FORM COMMENTARY: Saving the Lungs of 1.4 Billion: India and the Need for Air Pollution Control

Karthick Arunachalam

Raina Talwar Bhatia, Stanford University -- Air pollution has become one of the most pressing issues of our time, both from a health and economic perspective. According to the WHO, air pollution is responsible for approximately seven million deaths globally. Nine out of ten humans currently breathe ‘polluted air’ (as per WHO guidelines), with inhabitants of low and middle-income countries feeling the greatest consequences. Although the health effects of air pollution are well-documented, much less attention is given to its economic consequences. The total global cost of air pollution in 2015 was $330 billion and is expected to rise to $3.3 trillion by 2060 based on the current trajectory. Alongside the healthcare costs, air pollution decreases agricultural productivity, increases absenteeism and reduces productivity in the workplace, and creates greater resident interest in emigration and immigration. While all low and middle-income countries are disproportionately impacted by air pollution, none draw the concern and attention of the international community and health experts like India.

Commentary

COMMENTARY: What is a Digital Nomad? Introducing the New Nomadic Workforce

Karthick Arunachalam

Alma Andino Frydman, Stanford University -- The COVID-19 pandemic drastically transformed how people work. Before the pandemic, only 5% of American workdays were WFH (“working from home”); as the pandemic engulfed the world, this number rose to a staggering 50%. For many, the pandemic forced a natural divergence from the “9 to 5” work structure. Many workers realized they were just as, if not more, productive working at their own pace, and for many, there was no going back to the office.

Health Economics

The Effect of Primary Care Provider Supply on Downstream Emergency Department Visits for Pediatric Asthma in California

Karthick Arunachalam

Jashdeep Dhillon, University of California, Berkeley -- California is facing a primary care workforce shortage. Although this has been studied at the state level, it is important to understand the downstream health implications: how will this affect the management of chronic illnesses or how will this affect access to primary care? Due to the significance of investing in childhood health, I exploit different healthcare access features (i.e. the number of primary care physicians) across California’s counties with a variety of socioeconomic variables to investigate the effect of the supply of primary care providers on emergency department visits for pediatric asthma.

Uncategorized

My way or the riot way: (Markov) Equilibrium in almost-Rubinstein Bargaining with Costly Deferral

Karthick Arunachalam

Daniel Luo, Northwestern University -- This paper studies “two-stage” perfect information dynamic bargaining. In the first stage, players cannot split surplus, but only agree whether or not to proceed to the second stage, where canonical Rubinstein bargaining occurs. Bargaining power is realized both through an exogenously evolving state variable and an endogenous choice of one player (the activist) to destroy some share of the other player’s (the government) surplus in a costly fashion. This second-order framework formalizes the intuition offered by activists during interviews that rioting is a justified response to repeated state ignorance of their movements and demands as a way to force engagement and secure a “seat at the table.”

Uncategorized

Loss Aversion in Dictator Games

Karthick Arunachalam

Anthony Khaiat, Camille Burton, Gabe Moos, and Kimberly Stafford, University of Chicago -- Dictator Games consist of two players, an allocator and a recipient, in which the allocator governs the distribution of an endowment between themselves and the recipient. Widely replicated Dictator Game studies by Kahneman et al. (1986) and Kuang et al. (2006), among others, reveal that altruistic behavior among allocators can be influenced by variables that regulate models of human inequity aversion. This study presents a randomized, modified Dictator Game experiment with loss aversion and transparency manipulations.