Matt Spiegel nails it

for the most part in his analysis of the editorial process in finance journals (much of this also applies to economics). His experience as editor of RFS inspired him to write a little polemical piece with some sparkling insights. It seems that nowadays, every referee tells the editor how he or she would have written the paper, in a bid to seem smarter than the author... the final result is sometimes a big improvement, and often enough, no improvement at all. I can think of a paper of mine that went through N revisions in several years, before finally being published; the final version, bloated and cumbersome, isn't half as good as the original. True, another paper was so-so on submission, and then really improved through the editorial process. So it's a mixed bag overall.

What is Matt Spiegel's suggestion? Relax. The good articles, the ones that are truly important, will receive close scrutiny anyway, so don't demand robustness check no. 12345. His conclusion?

We can accomplish a lot more as a profession if we all do less as referees and editors. Referees should just read the article at hand and try to figure out if anybody else would. If the answer is yes, make at most a few suggestions. Limit them to ones that are editorial in nature. Help make the article more readable. Then sign off.

I think this is something to ponder... 

Risk in Amsterdam

Stanford B-School's website  has a pretty good (ie easy to read and clear) write-up of Peter Koudijs' and my work on risk attitudes and personal experience... 

why is there no contingent debt today?

(except by defaulting countries like Greece and Argentina). If you want to find out, you can do worse than read:

Drelichman, Mauricio and Hans-Joachim Voth, "Contingent Sovereign Debt Contracts: The Historical Perspective", CESifo DICE Report 

Punchline: Philip II managed to do it - so why can't modern-day treasury departments and investment banks do what Genoese financiers and courtiers in tights got done to perfection?

Massacre Memories and German Car Sales

Do boycotts ever work? The Euro crisis certainly made a lot of Greeks unhappy. They promptly blamed the Germans, resulting in calls for boycott. Now, the typical result in the literature is that there isn't much of a reaction -- consumers don't on average vote with their pocket books. People want what they want, and they aren't going to change their purchases much for political reasons. Most research on US consumer behavior after the US invasion of Iraq - inexplicably not supported by the French - found no clear reduction in French wine sales in the US, for example.

Together with my PhD student Vasiliki Fouka, I thought I'd try and see if there wasn't a noticeable decline in German sales in Greece. We focus on cars - these are big ticket items, and arguably very "Teutonic". Our key finding is that sales of German cars slowed, but the pattern differed by province -- in areas where German army units and the SS committed massacres during the occupation of Greece, there was a much bigger slump.

Here is the abstract of our working paper:

During the Greek debt crisis after 2010, the German government insisted on  harsh austerity measures. This led to a rapid cooling of relations between the Greek and German governments. We compile a new index of public acrimony between Germany and Greece based on newspaper reports and internet search terms. This information is combined with historical maps on German war crimes during the occupation between 1941 and 1944. During months of open conflict between German and Greek politicians,   German car sales fell markedly more than those of cars from other countries. This was especially true in areas affected by German reprisals during World War II: areas where German troops committed massacres and destroyed entire villages curtailed their purchases of German cars to a  greater extent during conflict months than other parts of Greece. We conclude that cultural aversion was a key determinant of purchasing behavior, and that memories of past conflict can affect economic choices in a time-varying fashion. These findings are compatible with behavioral models emphasizing the importance of salience for individual decision-making.

The working paper is on SSRN and at CEPR. If you happen to be in the Cambridge area - you can hear Vicky on Monday, October 18th, at the Harvard Economic History Tea.

Congratulations

to my PhD student Marc Goni Trafach, who has just won the UPF Teaching Award. Did I mention he is on the market this year?

You can watch

the testimonials accumulate for Mauricio's and my book over at the  facebook page for Lending to the Borrower of Hell (coming in early 2013 to a bookseller near you).

Inet interview

on the Spanish crisis. Keep in mind that this was taped in April of this year...