Template-type: ReDIF-Paper 1.0 Author-Name: Tudor Schlanger Author-Email: tudor.schlanger@yale.edu Author-Workplace-Name: Yale School of Management Author-Name: Lena Suchanek Author-Email: lsuchanek@bank-banque-canada.ca Author-Workplace-Name: Bank of Canada Author-Name: Jonathan Swarbrick Author-Email: jms48@st-andrews.ac.uk Author-Workplace-Name: University of St Andrews Author-Name: Joel Wagner Author-Email: jwagner@bank-banque-canada.ca Author-Workplace-Name: Bank of Canada Author-Name: Yang Zhang Author-Email: yangzhang@bank-banque-canada.ca Author-Workplace-Name: Bank of Canada Title: Does the sequence matter: interest rates, quantitative easing or forward guidance? Abstract: We study the role of unconventional monetary policies during a pandemic, focusing on the implementation sequencing of policies when there is a social containment period. Using the Bank of Canada's main projection model (ToTEM), we compare the efficacy of a suite of extended monetary policies (EMPs), finding that the immediate implementation of forward guidance and quantitative easing, followed by credit easing when containment measures are lifted delivers the best outcome. We also quantify the fiscal response needed to offset the gap in gross domestic product created by the effective lower bound, given operational limitations in scaling up EMPs. Classification-JEL: E3; E4; E5; E52; E58 Keywords: COVID-19; Pandemic; Monetary policy; Monetary policy sequencing; Quantitative easing; Credit easing Creation-Date: 2025-06-19 Number: 2501 File-URL: https://www.st-andrews.ac.uk/~wwwecon/repecfiles/econdp/2501.pdf File-Format: application/pdf Handle: RePEc:san:econdp:2501 Template-type: ReDIF-Paper 1.0 Author-Name: Margaret Leighton Author-Email: mal22@st-andrews.ac.uk Author-Workplace-Name: University of St Andrews Author-Name: Jamin D Speer Author-Email: jspeer@memphis.edu Author-Workplace-Name: University of Memphis Title: Driven to Achieve: 40 Years of Evidence on College Students’ Skills and Aspirations Abstract: The past half century has seen dramatic changes in college enrolment. In this paper, we document how the skills and aspirations of college students have also changed. Using over 40 years of data on incoming college freshmen, we establish three key facts. First, students’ goals have shifted away from the philosophical (e.g., finding meaning in life) towards the tangible (e.g., financial and family outcomes). Second, the share of students who are both of high ability and have high aspirations for tangible goals has risen steadily, with a particular increase in the 1970s and 1980s. Third, this rise is mirrored by a fall in students who, while quite strong academically, place low weight on life goals such as financial success, raising a family, or helping others. Classification-JEL: I21; I23; J11; J24 Keywords: College; College students; Aspirations; Skills; Goals Creation-Date: 2025-11-06 Number: 2502 File-URL: https://www.st-andrews.ac.uk/~wwwecon/repecfiles/econdp/2502.pdf File-Format: application/pdf Handle: RePEc:san:econdp:2502 Template-type: ReDIF-Paper 1.0 Author-Name: Matteo Gamalerio Author-Email: m.gamalerio@ub.edu Author-Workplace-Name: University of Barcelona Author-Name: Massimo Morelli Author-Email: massimo.morelli@unibocconi.it Author-Workplace-Name: Bocconi University Author-Name: Margherita Negri Author-Email: mn48@st-andrews.ac.uk Author-Workplace-Name: University of St Andrews Title: Electoral Systems and Immigration Policies Abstract: We show that polities using plurality rule to elect their policymakers are more likely to adopt more restrictive immigration policies than those using dual-ballot systems. Plurality rule provides stronger incentives for right-wing, anti-immigrant parties to run alone, as opposed to joining a coalition with other right-wing parties that offer a less restrictive immigration policy. We prove the result theoretically and empirically. Our theoretical results hold with sincere and strategic voters, with and without endogenous turnout, and can be extended to the comparison between plurality rule and proportional representation without majority bonuses in parliamentary elections. Empirically, we combine municipal-level data on migration-related expenditures and mayoral elections and establish causality using a regression discontinuity design. Classification-JEL: D72; J24; J61; R23 Keywords: Electoral rules; Immigration; Salience Creation-Date: 2025-11-24 Number: 2503 File-URL: https://www.st-andrews.ac.uk/~wwwecon/repecfiles/econdp/2503.pdf File-Format: application/pdf Handle: RePEc:san:econdp:2503 Template-type: ReDIF-Paper 1.0 Author-Name: Ziran Ding Author-Email: zd36@st-andrews.ac.uk Author-Workplace-Name: University of St Andrews Author-Name: Adam Hal Spencer Author-Email: spencer@uni-bonn.de Author-Workplace-Name: University of Bonn Author-Name: Zinan Wang Author-Email: wangzn@tju.edu.cn Author-Workplace-Name: Tianjin University Title: Dynamic Effects of Industrial Policies Amidst Geoeconomic Tensions Abstract: Amid ongoing geoeconomic tensions, industrial policy has emerged as a prominent tool for policymakers. What are the dynamic and welfare effects of these policies? How does the short-sightedness of policymakers influence their choice of instruments? What are the distributional consequences of these protectionist measures? We address these questions with a dynamic two-country general equilibrium framework that incorporates firm heterogeneity, trade, and the offshoring of tasks. By calibrating the model to the contexts of the US and China, we explore the effects of three popular industrial policies: import tariffs, domestic production subsidies, and entry subsidies. Our findings indicate that, from an initial state free of interventions, myopic policymakers are incentivized to subsidize production, while more forward-looking ones favor imposing import tariffs. Although all of these policies initially reduce wage inequality, some result in aggregate welfare losses, either in the short run or the long run. Classification-JEL: F23; F41; F51; F62; L51 Keywords: Macroeconomic dynamics; Firm heterogeneity; Trade; Trade-in-tasks; Industrial policies; Welfare; Global value chains Creation-Date: 2024-11-26 Revision-Date: 2025-12-07 Number: 2504 File-URL: https://www.st-andrews.ac.uk/~wwwecon/repecfiles/econdp/2504.pdf File-Format: application/pdf Handle: RePEc:san:econdp:2504 Template-type: ReDIF-Paper 1.0 Author-Name: Margaret Leighton Author-Email: mal22@st-andrews.ac.uk Author-Workplace-Name: University of St Andrews Author-Name: Irina Merkurieva Author-Email: i.merkurieva@st-andrews.ac.uk Author-Workplace-Name: University of St Andrews Title: Childhood Aspirations and Adult Outcomes Abstract: This paper extracts aspirations from texts written in childhood by members of a British longitudinal cohort and explores how these relate to later life outcomes. Applying Natural Language Processing (NLP) tools to short essays collected at age 11, we identify four aspiration themes: family, hobbies, financial success, and career. The weight of these four themes varies substantially across respondents, with girls on average placing more weight on family, and boys on financial success. Aspirations extracted using our method are strongly predictive of later life outcomes, even when controlling for detailed measures of early life environment, ability, and family background. These associations are often highly heterogeneous by gender; for example, family-related aspirations are associated with higher educational attainment for men, but lower educational attainment for women. Classification-JEL: J24; J26; Z13 Keywords: Aspirations; Education; Natural Language Processing; NCDS Creation-Date: 2025-12-17 Number: 2505 File-URL: https://www.st-andrews.ac.uk/~wwwecon/repecfiles/econdp/2505.pdf File-Format: application/pdf Handle: RePEc:san:econdp:2505 Template-type: ReDIF-Paper 1.0 Author-Name: Jonathan Swarbrick Author-Email: jswarbrick@pm.me Author-Workplace-Name: University of St Andrews Title: Monetary Policy and the Credit Rationing Effects of Liquidity Abstract: This paper studies monetary policy in a New Keynesian economy with frictional bank lending, rationalising evidence that lending conditions can remain tight despite liquidity injections. The model features a policy trade-off in which increases in banking sector liquidity can incentivise more lending by lowering the overnight rate and the marginal cost of funds, but can also incentivise less lending by compressing bank margins as interest rates approach the policy floor, worsening adverse selection and credit rationing. As a result, quantitative easing can exert a contractionary effect when the economy is away from the effective lower bound, with outcomes depending on borrower risk and the size of the programme. However, both channels raise inflation expectations, and so liquidity policies are always expansionary at the lower bound. Optimal policy features a deflation bias under credit rationing, while commitment to future accommodation eases current credit conditions and implies gradualism in quantitative tightening. Classification-JEL: E5; E44; G21 Keywords: Monetary policy; quantitative easing; small business lending; credit rationing; bank liquidity Creation-Date: 2026-03-25 Number: 2601 File-URL: https://www.st-andrews.ac.uk/~wwwecon/repecfiles/econdp/2601.pdf File-Format: application/pdf Handle: RePEc:san:econdp:2601 Template-type: ReDIF-Paper 1.0 Author-Name: Radoslaw Stefanski Author-Email: rls7@st-andrews.ac.uk Author-Workplace-Name: University of St Andrews Author-Workplace-Name: University of Stavanger Title: Cultural Capital and the Productivity of Ideas: Evidence from Historical Texts Abstract: Long-run growth is driven by new ideas, yet the cultural environment shaping their production is difficult to measure over time. We use large language models to read 23,000 books from the Western canon and score whether each endorses, rejects, or merely depicts six dimensions of culture. We accumulate the scores into inherited stocks and summarize them with an Innovation Wedge measuring cultural resistance to new ideas. Between 1000 and 1920 the wedge falls by 51 percent. Blinded expert readings and modern surveys validate the measure. An independent 5,000-book archive reproduces the decline. In a calibrated semi-endogenous growth model, the falling wedge raises 1920 productivity to 1.78 times its counterfactual level, explains two-thirds of the first sustained acceleration in productivity growth between 1500 and 1700, and accounts for 38.7 percent of productivity growth in 1920. Classification-JEL: O41; O31; N13; Z10 Keywords: culture and growth; ideas production; growth accounting; innovation barriers; text as data Creation-Date: 2026-07-23 Number: 2602 File-URL: https://www.st-andrews.ac.uk/~wwwecon/repecfiles/econdp/2602.pdf File-Format: application/pdf Handle: RePEc:san:econdp:2602