The School of Economics faculty have strengths in a variety of fields including international economics, macroeconomics, industrial organization, behavioral economics, international money and finance, banking, public finance, health economics, and labor economics. Their research has appeared in many of the top journals in the profession including:
- American Economic Review
- Review of Economic Studies
- American Economic Journal: Policy
- Journal of Economic Theory
- Journal of International Economics
- European Economic Review
- Review of Economics and Statistics
- Economic Journal
- Management Science
- Journal of Accounting and Economics
The faculty also regularly organizes conferences such as the Midwest Economic Theory and International Trade Conference and the Drexel PFED Conference on Credit Markets and the Macroeconomy.
Drexel University is a member of Philadelphia Federal Statistical Research Data Center (FSRDC), allowing its faculty and selected students access to a wide range of data from the Bureau of the Census and other federal statistical agencies.
For a list of current projects, please see the School of Economics Working Paper Series. The Working Paper series is current but as of yet unpublished work.
We use data from Homebase to construct weekly estimates of the impact of the COVID-19 pandemic on small business dynamics and employment. Different from concurrent research, we match the Homebase establishment records to information on business activity from Google, Facebook, and Safegraph to distinguish business closings and new openings from sample churn. This distinction turns out to be critical to properly quantify the important role played by business closings and new openings. We find four key results:
employment of small businesses in four of the hardest hit service sectors contracted much more severely in the beginning of the pandemic than employment of larger businesses, but small business employment also rebounded more strongly and has recovered as much as employment of larger businesses;
closings account for more than half of the initial decline in small business employment, but many closed businesses have re-opened and cumulative closings are not higher than prior to the pandemic;
new openings of small businesses have been almost as high as before the pandemic, constituting the main driver of the recovery since mid-June;
employment growth, closing rates and new opening rates of small businesses were affected more negatively in localities with large Covid case and death rates, large declines in visits to elementary and secondary schools, high household incomes, delayed access to loans from the Paycheck Protection Program, and low unemployment insurance replacement rates.
Our results dispel the popular notion that small businesses have on average been hurt harder by the pandemic than larger businesses. At the same time, our analysis suggests that the local health situation, school closings, and the differential impact of federal economic policies aimed at mitigating the negative effects of the pandemic significantly affected small business activity.
Technological advances in the insurance industry mean that insurers may be better informed about underlying risks than consumers. We evaluate the impact of these information frictions by combining demand elicitation surveys with insurance claim data. We find an ‘information premium’ - i.e., consumers are willing to pay more for insurance when risks are uncertain. Importantly, we find that the information premium is negatively correlated with risk aversion. This leads to a selection effect: individuals who purchase insurance are not necessarily the most risk averse. The resulting misallocation of insurance can lead to large welfare losses and biased risk preference estimates.
Olivero, Maria & Dvalishvili, Mikheil. “What Do Stimulus Packages Mean for Consumer Credit Markets?”
We study the links between fiscal stimulus packages during times of crisis and households’ access to consumer credit. We do so by using household-level data on income and liabilities from the Consumer Expenditure Survey and estimating an empirical model along those in the literature on the consumption effects of these packages. We find that receiving a check from the government consistently translates into a reduction in both outstanding liabilities and the household’s share of aggregate credit. This effect is present for each credit type as well as for the total, and it is robust to controlling for income levels and demographic characteristics correlated with consumers’ access to credit.
Larch, Mario & Shikher, Serge & Syropoulos, Costas & Yotov, Yoto. “Quantifying the Impact of Economic Sanctions on International Trade in the Energy and Mining Sectors”
Capitalizing on the latest developments in the gravity literature, we utilize two new datasets on sanctions and trade to study the impact of economic sanctions on international trade in the mining sector, which includes oil and natural gas. We demonstrate that the gravity equation is well suited to model bilateral trade in mining and find that sanctions have been effective in impeding mining trade. Our analysis reveals that complete trade sanctions have reduced bilateral mining trade by about 44 percent on average. We also document the presence of significant heterogeneity in the effects of sanctions on mining trade across mining industries and across sanction episodes/cases, depending on the sanctioning and sanctioned countries, the type of sanctions used, and the direction of trade flows. We take a close look at the impact of recent sanctions on Iran and Russia.