Economics Insights @ CBS

The VIX, the stock market option-based implied volatility, strongly co-moves with measures of the monetary policy stance. When decomposing the VIX into two components, a proxy for risk aversion and expected stock market volatility (“uncertainty”), we find that a lax monetary policy decreases both risk aversion and uncertainty, with the former effect being stronger.

We present a theoretical model of reappropriation — taking possession of a slur previously used exclusively by dominant groups to reinforce another group's lesser status. Ten experiments tested this model and established a reciprocal relationship between power and self-labeling with a derogatory group term. We first investigated precursors to self-labeling: Group, but not individual, power increased participants' willingness to label themselves with a derogatory term for their group. We then examined the consequences of such self-labeling for both the self and observers.

Consumer psychology faces serious issues of internal and external relevance. Most of these issues originate in seven fundamental problems with the way consumer psychologists plan and conduct their research that could be called the seven sins of consumer psychology.

We use longitudinal, disease-level data to analyze the impact of pharmaceutical innovation on longevity and medical expenditure in Sweden, where mean age at death increased by 1.88 years during the period 1997-2010. Pharmaceutical innovation is estimated to have increased mean age at death by 0.60 years during the period. The estimates indicate that longevity depends on the number of drugs to treat a disease, not the number of drug classes.