VIENNA JOINT ECONOMICS SEMINAR	INVITATION
The University of Vienna and the Department of Economics and Finance at the Institute for Advanced Studies cordially invite you to the following Vienna Joint Economics Seminar Thursday, December 3, 2015 Attention – New Address Institute for Advanced Studies Josefstädter Straße 39, 1080 Vienna Lecture Room E02, ground floor 4:00 pm Esther Hauk and                 Stefan Ruenzi IAE                                                             University of Mannheim                                             Optimal Policy with Endogenous Signal Extraction (Esther Hauk) Abstract: This paper studies optimal policy in a setup with hidden information and observed signals that are endogenous to policy chosen in the same period. In this case the signal extraction problem about the state of the economy cannot be separated from the determination of the optimal policy. We derive a nonstandard first order condition of optimality from first principles and we use it to find numerical solutions. We show how available results where separation obtains arise as special cases. We use as an example an optimal fiscal policy problem. We find that the policy response can be quite non-linear, calling for tax smoothing in normal times, but for a strong fiscal adjustment during a slump that protracts the downturn. This can provide a rationale for the austerity programs followed by some European countries in the Great Recession. Applying the separation principle and a linear approximation would miss this potential non-linearity and could thus be a poor approximation to the correct solution. paper jointly with Andrea Lanteri and Albert Marcet and A Friendly Turn: Advertising Bias in the News Media (Stefan Ruenzi) Abstract: This paper investigates whether newspapers report more favorably about advertising corporate clients than about other firms. Our identification strategy based on highdimensional fixed effects and high frequency advertising data shows that advertising leads to more positive press coverage. This advertising bias in reporting is found to be mitigated but not eliminated by newspapers' reputational concerns. Advertising bias manifests particularly in less negative reporting of a newspaper about bad news events of its advertising clients as compared to firms not advertising in this newspaper. Our findings cast doubt on the independence of the press from corporate pressure. paper jointly with with Florens Focke and Alexandra Niessen-Ruenzi We are looking forward to seeing you! Institute for Advanced Studies Department of Economics and Finance Josefstädter Straße 39, 1080 Vienna, Austria Tel.: +43 1 599 91 145 e-Mail: economics@ihs.ac.at http://economics.ihs.ac.at		LINKS DIRECTIONS TO IHS on Google maps VIENNA JOINT ECONOMICS SEMINAR on Google calendar ECONOMICS SEMINARS IN VIENNA on Google calendar
Diese Zusendung erfolgt entsprechend den Bestimmungen des TKG 247107. Sollten Sie keine weiteren Zusendungen wuenschen, senden Sie uns bitte eine kurze Mitteilung an: economics@ihs.ac.at. If you do not want to receive our mailings please send an e-mail to: economics@ihs.ac.at. Also sent to noeg-l@wu.ac.at (https://mailman.wu.ac.at/mailman/listinfo/noeg-l).