The Substitution Elasticity, Factor Shares, and the Low-Frequency Panel Model

By Robert S. Chirinko and Debdulal Mallick

American Economic Journal: Macroeconomics, October 2017

The value of the elasticity of substitution between labor and capital (σ) is a crucial assumption in understanding the secular decline in the labor share of income. This paper develops and implements a new strategy for estimating this crucial parame...

Promoting Recycling: Private Values, Social Norms, and Economic Incentives

By W. Kip Viscusi, Joel Huber, and Jason Bell

American Economic Review, May 2011

Evidence from a nationally representative sample of households illuminates the determinants of recycling behavior for plastic water bottles. Private values of the environment are influential in promoting recycling, as are personal norms for pro-environmen...

US Manufacturing: Understanding Its Past and Its Potential Future

[Symposium: Manufacturing]

By Martin Neil Baily and Barry P. Bosworth

Journal of Economic Perspectives, Winter 2014

The development of the US manufacturing sector over the last half-century displays two striking and somewhat contradictory features: 1) the growth of real output in the US manufacturing sector, measured by real value added, has equaled or exceeded that ...

Can Development Aid Contribute to Social Cohesion after Civil War? Evidence from a Field Experiment in Post-conflict Liberia

By James D. Fearon, Macartan Humphreys, and Jeremy M. Weinstein

American Economic Review, May 2009

A Rational Expectations Approach to Hedonic Price Regressions with Time-Varying Unobserved Product Attributes: The Price of Pollution

By Patrick Bajari, Jane Cooley Fruehwirth, Kyoo il Kim, and Christopher Timmins

American Economic Review, August 2012

We propose a new strategy for a pervasive problem in the hedonics literature: recovering hedonic prices in the presence of time-varying correlated unobservables. Our approach relies on an assumption about home buyer rationality, under which prior sales pr...

Services as Experience Goods: An Empirical Examination of Consumer Learning in Automobile Insurance

By Mark Israel

American Economic Review, December 2005

Theoretical work on experience goods sets out three empirical questions. How accurate is information at initial purchase? How rapidly do consumers learn from product experiences? And how much impact does learning have on purchase decisions? I answer these...

The Rise and Decay of the Socialist Economy in Bulgaria

By Marvin Jackson

Journal of Economic Perspectives, Fall 1991

The political reconstruction of Bulgaria has gone on more slowly than in Central Europe, but the role of the former communists is weaker than in neighboring Romania or Serbia and, of course, much more so than in the Soviet Union (except for the Baltic Rep...

The TIPS Yield Curve and Inflation Compensation

By Refet S. Gürkaynak, Brian Sack, and Jonathan H. Wright

American Economic Journal: Macroeconomics, January 2010

For over ten years, the Treasury has issued index-linked debt. This paper describes the methodology for fitting a smoothed yield curve to these securities that is used at the Federal Reserve Board every day, and makes the estimates public. Comparison with...

Efficient Pollution Regulation: Getting the Prices Right

By Nicholas Z. Muller and Robert Mendelsohn

American Economic Review, December 2009

This paper argues for efficient environmental regulations that equate the marginal damage of pollution to marginal abatement costs across space. The paper estimates the source-specific marginal damages of air pollution and calculates the welfare gain f...

Symposium on Econometric Tools

[Symposium: Econometric Tools]

By Alan B. Krueger

Journal of Economic Perspectives, Fall 2001

Tax Reforms and Intertemporal Shifting of Wage Income: Evidence from Danish Monthly Payroll Records

By Claus Thustrup Kreiner, Søren Leth-Petersen, and Peer Ebbesen Skov

American Economic Journal: Economic Policy, August 2016

This paper uses monthly payroll records for all Danish employees to identify widespread intertemporal shifting of labor income in response to a tax reform that significantly reduced the marginal tax rates for one-fourth of all employees. When ignoring shi...

Trends in Aggregate Concentration in the United States

By Lawrence J. White

Journal of Economic Perspectives, Fall 2002

I assemble two rarely used data sets to measure aggregate concentration in the U.S. in the 1980s and 1990s. Despite the merger waves of those decades, aggregate concentration declined in the 1980s and the early 1990s, but rose modestly in the late 1990s. ...

Lessons from Schumpeterian Growth Theory

By Philippe Aghion, Ufuk Akcigit, and Peter Howitt

American Economic Review, May 2015

By operationalizing the notion of creative destruction, Schumpeterian growth theory generates distinctive predictions on important microeconomic aspects of the growth process (competition, firm dynamics, firm size distribution, cross-firm and cross-sector...

The Impact of Credit on Village Economies

By Joseph P. Kaboski and Robert M. Townsend

American Economic Journal: Applied Economics, April 2012

This paper evaluates the short- and longer term impact of Thailand's "Million Baht Village Fund" program, among the largest scale government microfinance iniatives in the world, using pre- and post-program panel data and quasi-experimental cross-village v...

Big Banks, Idiosyncratic Volatility, and Systemic Risk

By Ricardo T. Fernholz and Christoffer Koch

American Economic Review, May 2017

Starting in the 1990s, US bank assets grew more concentrated among a few large institutions. We explore the changing role of idiosyncratic volatility as a shaping force of the bank asset power law distribution. Our results reveal that idiosyncratic asset ...

Who Suffers during Recessions?

[Symposium: Labor Markets and Unemployment]

By Hilary Hoynes, Douglas L. Miller, and Jessamyn Schaller

Journal of Economic Perspectives, Summer 2012

In this paper, we examine how business cycles affect labor market outcomes in the United States. We conduct a detailed analysis of how cycles affect outcomes differentially across persons of differing age, education, race, and gender, and we compare the c...

The Housing Market Impacts of Shale Gas Development

By Lucija Muehlenbachs, Elisheba Spiller, and Christopher Timmins

American Economic Review, December 2015

Using data from Pennsylvania and an array of empirical techniques to control for confounding factors, we recover hedonic estimates of property value impacts from nearby shale gas development that vary with water source, well productivity, and visibility. ...

Long-Term Neighborhood Effects on Low-Income Families: Evidence from Moving to Opportunity

By Jens Ludwig, Greg J. Duncan, Lisa A. Gennetian, Lawrence F. Katz, Ronald C. Kessler, Jeffrey R. Kling, and Lisa Sanbonmatsu

American Economic Review, May 2013

We examine long-term neighborhood effects on low-income families using data from the Moving to Opportunity (MTO) randomized housing-mobility experiment. This experiment offered to some public-housing families but not to others the chance to move to less-d...

Retrospectives: How Economists Came to Accept Expected Utility Theory: The Case of Samuelson and Savage

By Ivan Moscati

Journal of Economic Perspectives, Spring 2016

Expected utility theory dominated the economic analysis of individual decision-making under risk from the early 1950s to the 1990. Among the early supporters of the expected utility hypothesis in the von Neumann–Morgenstern version were Milton Friedman ...

Self-Confirming Equilibrium and Model Uncertainty

By Pierpaolo Battigalli, Simone Cerreia-Vioglio, Fabio Maccheroni, and Massimo Marinacci

American Economic Review, February 2015

We analyze a notion of self-confirming equilibrium with non-neutral ambiguity attitudes that generalizes the traditional concept. We show that the set of equilibria expands as ambiguity aversion increases. The intuition is quite simple: by playing the ...