Short of Euphoria

[Symposium: Tax Reform]

By Richard A. Musgrave

Journal of Economic Perspectives, Summer 1987

The Tax Reform Act of 1986 is the most sweeping reform since the early 1940s when the pressures of war finance forced the transformation of the income tax into a mass tax, and made it the core of the federal tax system. Since then many adjustments have be...

Running to Keep in the Same Place: Consumer Choice as a Game of Status

By Ed Hopkins and Tatiana Kornienko

American Economic Review, September 2004

If individuals care about their status, defined as their rank in the distribution of consumption of one "positional" good, then the consumer's problem is strategic as her utility depends on the consumption choices of others. In the symmetric Nash equilibr...

Institutions and Behavior: Experimental Evidence on the Effects of Democracy

By Pedro Dal Bó, Andrew Foster, and Louis Putterman

American Economic Review, December 2010

A novel experiment is used to show that the effect of a policy on the level of cooperation is greater when it is chosen democratically by the subjects than when it is exogenously imposed. In contrast to the previous literature, our experimental design all...

After Kyoto: Alternative Mechanisms to Control Global Warming

By William D. Nordhaus

American Economic Review, May 2006

Fiscal Policy and MPC Heterogeneity

By Tullio Jappelli and Luigi Pistaferri

American Economic Journal: Macroeconomics, October 2014

We use responses to survey questions in the 2010 Italian Survey of Household Income and Wealth that ask consumers how much of an unexpected transitory income change they would consume. The marginal propensity to consume (MPC) is 48 percent on average. W...

Anomalies: Preference Reversals

By Amos Tversky and Richard H. Thaler

Journal of Economic Perspectives, Spring 1990

The preference reversal phenomenon has been established in numerous studies during the last two decades, but its causes have only recently been uncovered. This phenomenon, or cluster of phenomena, challenges the traditional assumption that the decisionmak...

Power Laws in Economics: An Introduction

By Xavier Gabaix

Journal of Economic Perspectives, Winter 2016

Many of the insights of economics seem to be qualitative, with many fewer reliable quantitative laws. However a series of power laws in economics do count as true and nontrivial quantitative laws—and they are not only established empirically, but al...

The Rise and Fall of American Growth: Exploring the Numbers

By Nicholas Crafts

American Economic Review, May 2016

This paper reviews some of the major claims in Robert Gordon's Rise and Fall of American Growth. His argument that growth of conventional real GDP per person is well below that of real living standards is accepted. It is shown that adding an impu...

EMU: Why and How It Might Happen

[Symposium: EMU]

By Charles Wyplosz

Journal of Economic Perspectives, Fall 1997

This paper reviews the history, economic rationale, and main components of the project of establishing a monetary union in Europe by 1999. The adoption of a single currency is shown to be the best available option following the liberalization of capital m...

Socialist Economics: The Disequilibrium School and the Shortage Economy

By Jozef M. van Brabant

Journal of Economic Perspectives, Spring 1990

This article focuses on the debate between Richard Portes and Janos Kornai as the respective exponents of two interpretations of economic behavior in centrally planned economies: the disequilibrium school, and the theory of the shortage economy. My object...

Secular Stagnation: A Supply-Side View

By Robert J. Gordon

American Economic Review, May 2015

Secular stagnation on the supply side takes the form of a slow 1.6 percent annual growth rate of US potential real GDP, roughly half the 3.1 percent annual growth rate of actual real GDP realized from 1972 to 2004. This slowdown stems from a sharp decline...

The Economic Impact of Syrian Refugees on Host Countries: Quasi-experimental Evidence from Turkey

By Semih Tumen

American Economic Review, May 2016

The Syrian Conflict generated forced immigration from northern Syria to southeastern Turkey. Arrival of refugees resembles a natural experiment, which offers good opportunities to study the economic impact of immigration. I study three main outcomes: labo...

Measuring and Understanding Behavior, Welfare, and Poverty

By Angus Deaton

American Economic Review, June 2016

What Does Japanese Trade Structure Tell Us about Japanese Trade Policy?

[Symposium: Is Japan's Trade Regime Different?]

By Gary R. Saxonhouse

Journal of Economic Perspectives, Summer 1993

Some argue foreign access to Japanese markets remains tightly controlled and that if Japan is to be a member in good standing of the international economic system, Japan must do more than just adhere to the formal rules of the GATT; Japan must show by the...

Relational Knowledge Transfers

By Luis Garicano and Luis Rayo

American Economic Review, September 2017

We study how relational contracts mitigate Becker's classic problem of providing general human capital when training contracts are incomplete. The firm's profit-maximizing agreement is a multiperiod apprenticeship in which the novice is trained gradually ...

Do Explicit Warnings Eliminate the Hypothetical Bias in Elicitation Procedures? Evidence from Field Auctions for Sportscards

By John A. List

American Economic Review, December 2001

How Widespread Was Late Trading in Mutual Funds?

By Eric Zitzewitz

American Economic Review, May 2006

Excellence in Refereeing Award

American Economic Review, March 2010

Government Policy with Time Inconsistent Voters

By Alberto Bisin, Alessandro Lizzeri, and Leeat Yariv

American Economic Review, June 2015

Behavioral economics presents a "paternalistic" rationale for benevolent government intervention. This paper presents a model of public debt where voters have self-control problems and attempt to commit using illiquid assets. In equilibrium, government ac...

Why Don’t People Insure Late-Life Consumption? A Framing Explanation of the Under-Annuitization Puzzle

By Jeffrey R. Brown, Jeffrey R. Kling, Sendhil Mullainathan, and Marian V. Wrobel

American Economic Review, May 2008