Economics serving society

(July 2019) 5 articles... in 5 minutes !

How ethical choices shape policies in the context of climate risks?

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Marc Fleurbaey Aurélie Méjean, Antonin Pottier and Stéphane Zuber

The most recent work in the climate sciences stresses the risk of abrupt and irreversible climate change that would endanger numerous species, including human beings. Such changes can be described as climate catastrophes. They are deeply uncertain, which makes it difficult to assess the probability of their occurring. They are, however, receiving growing attention from ...

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How to score a multiple choice test?

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Alexis Direr

Multiple-choice tests are a popular form of assessment in education. They have several advantages, including quick and easy scoring, wide sampling of content, and grading exempt from marker bias. A major drawback is the difficulty of dealing with candidates guessing the answers. Those not sure which answer is correct may still select one and reap a point if they make a lucky guess. Guessing adds ...

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When is spending a useful fiscal policy?

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Axelle Ferriere and Gaston Navarro

Government spending is frequently used to mitigate the effects of recessions. However, economists largely disagree on the size of spending multipliers, that is, on the response of output to a one-dollar increase in spending. Empirical work estimate multipliers ranging from well below to well above unity. Theoretical results dissent just as much, with ...

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What optimal taxation for the polluting goods? The principle of targeting in the presence of local externalities

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Stéphane Gauthier and Fanny Henriet

Fuel combustion generates not only a global externality linked to climate change, but also local ones linked to air pollution in the vicinity of the combustion site. Thus, combustion of a litre of fuel has a greater negative impact if it takes place in a densely populated area in town than in a rural area. Other examples of such externalities, which vary with...

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Can there be optimal strategies for sequential decision makers in games with discontinuous payoffs ?

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Philippe Bich and Waël Saker

Games theory aims to model as accurately as possible the ways in which individuals make decisions in a context in which actors’ choices are interdependent. The theory applies in numerous domains, including trade and politics. Choice sequences are modelled up to the final outcome, such as ...