Robert MacCulloch’s research while affiliated with University of Auckland and other places

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Publications (6)


How Does Monetary Policy Affect Welfare? Some New Estimates Using Data on Life Evaluation and Emotional Well‐Being
  • Article

December 2022

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13 Reads

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6 Citations

Journal of Money Credit and Banking

LINA EL‐JAHEL

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ROBERT MACCULLOCH

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HAMED SHAFIEE

Models on the optimal design of monetary policy typically rely on a welfare loss function defined over unemployment and inflation. We estimate such a function using two different dimensions of well‐being. The first evaluates how close one is to “the best possible life” on a ladder scale. The second captures the emotional quality of everyday experiences. Our Gallup World Poll sample covers 1.5 million people in 141 nations from 2005 to 2019. Unemployment and inflation reduce well‐being across all measures. The ratio of the unemployment‐to‐inflation effect is 6.2 for the “Ladder‐of‐Life.” It is lower for positive day‐to‐day experiences and higher for negative ones.



Trading in the housing market: A model with transaction costs

May 2021

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8 Reads

Mathematical Social Sciences

High predictability of returns on housing suggests pervasive irrationality on the part of market participants. In this paper, we show that with small transactions costs, returns may remain highly predictable even if the market contains substantial numbers of risk neutral, rational speculators. The reason is that option values associated with the transactions costs substantially delay arbitrage transactions. Our model can generate positive short-run and negative long-run autocorrelation in returns on housing similar to those identified by past empirical studies.



A welfare reform for New Zealand: mandatory savings not taxation

September 2019

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21 Reads

New Zealand Economic Papers

Many nations are seeking to reform their welfare states so that costs to the government can be reduced and the quality of outcomes improved. In this paper we show how mandatory savings accounts can be established in order to turn a publicly funded welfare system into one that relies more heavily on individuals funding welfare payments out of their own accounts. To our knowledge, showing how a tax and welfare reform can be jointly designed to enable this transition to occur in a way that minimizes any effect on the current disposable incomes of workers has not been done before. The paper takes a new unified approach to the funding of health, retirement and risk-cover, using New Zealand as a case study. Our proposed reform relieves the fiscal pressures which an ageing population is forecast to place on the government budget in the coming decades.


Citations (2)


... While neoclassical economics predicts that inflation is not substantively harmful to individuals, evidence suggests that people strongly dislike inflation (Shiller, 1997), giving rise to a splintered view among economists about the actual economic, cognitive, and social costs 1 Social trust is at the core of financial transactions and economic exchange (Arrow, 1972) and is linked with economic growth and prosperity (Akçomak and Ter Weel, 2009;Algan and Cahuc, 2010;Knack and Keefer, 1997;Tabellini, 2010). The determinants of social trust include genetic diversity, governance status, political affiliations, conflicts, and repressions, among others (Ashraf and Galor, 2013;Bai and Wu, 2020;Conzo and Salustri, 2019;Guiso et al., 2016;Nikolova, Popova, and Otrachshenko, 2022;Nunn and Wantchekon, 2011;Otrachshenko, Nikolova, and Popova, 2023). of inflation (Blanchflower et al., 2014;Di Tella, MacCulloch, and Oswald, 2001;El-Jahel, MacCulloch, and Shafiee, 2022;Otrachshenko, Popova, and Tavares, 2016;Wolfers, 2003). ...

Reference:

The Societal Costs of Inflation and Unemployment
How Does Monetary Policy Affect Welfare? Some New Estimates Using Data on Life Evaluation and Emotional Well‐Being
  • Citing Article
  • December 2022

Journal of Money Credit and Banking

... While (for-or non-profit) health insurance (HI) schemes offer the coverage of health care costs beyond the sum of individual contributions, MSA covers costs only up to the sum of individual savings, meaning that individuals relying on MSA cover their health expenses solely from their savings. [19][20][21] MSAs provide a quick and easy solution to prepayment in countries with less financial inequalities, especially for households that can afford to save enough in the present to fully cover their future healthcare expenses. [21] MSAs are flexible to link with for-or non-profit HI schemes (e.g. by using the savings to pay into a health insurance scheme); hence they can support the introduction and evolution of non-governmental HI schemes. ...

Welfare: Savings Not Taxation
  • Citing Article
  • December 2018

Cato Journal