Misclassification Errors and the Underestimation of the US Unemployment Rate

By Shuaizhang Feng and Yingyao Hu

American Economic Review, April 2013

Using recent results in the measurement error literature, we show that the official US unemployment rate substantially underestimates the true level of unemployment, due to misclassification errors in the labor force status in the Current Population Surve...

Overborrowing and Systemic Externalities in the Business Cycle

By Javier Bianchi

American Economic Review, December 2011

Credit constraints linking debt to market-determined prices embody a systemic credit externality that drives a wedge between competitive and constrained socially optimal equilibria, inducing private agents to overborrow. This externality arises because pr...

Policy Watch: Did Nasdaq Market Makers Implicitly Collude?

By William G. Christie and Paul H. Schultz

Journal of Economic Perspectives, Summer 1995

This paper chronicles the research that led to the conclusion that Nasdaq marketmakers implicitly colluded to maintain supracompetitive spreads (Christie and Schultz, 1994). The paper provides a brief description of the differences between a dealer and an...

Competition in Multi-sided Markets: Divide and Conquer

By Bruno Jullien

American Economic Journal: Microeconomics, November 2011

This paper studies Stackelberg price competition in a multi-sided market. The second-mover can engage in divide-and-conquer strategies, which involve cross-subsidies between sides. The paper recovers bounds on profits, and refines the results with a selec...

News Shocks and the Slope of the Term Structure of Interest Rates

By André Kurmann and Christopher Otrok

American Economic Review, October 2013

We adopt a statistical approach to identify the shocks that explain most of the fluctuations of the slope of the term structure of interest rates. We find that one shock can explain the majority of unpredictable movements in the slope. Impulse response fu...

The Slave Trade and the Origins of Mistrust in Africa

By Nathan Nunn and Leonard Wantchekon

American Economic Review, December 2011

We show that current differences in trust levels within Africa can be traced back to the transatlantic and Indian Ocean slave trades. Combining contemporary individual-level survey data with historical data on slave shipments by ethnic group, we find that...

Why Don't the Poor Save More? Evidence from Health Savings Experiments

By Pascaline Dupas and Jonathan Robinson

American Economic Review, June 2013

Using data from a field experiment in Kenya, we document that providing individuals with simple informal savings technologies can substantially increase investment in preventative health and reduce vulnerability to health shocks. Simply providing a safe...

In Honor of Paul Krugman: Winner of the John Bates Clark Medal

By Avinash Dixit

Journal of Economic Perspectives, Spring 1993

Paul Krugman is the winner of the 1991 John Bates Clark Medal, given every two years to "that American economist under forty who is adjudged to have made a significant contribution to economic thought and knowledge." I shall attempt to convey a flavor of ...

Time for Revisionism on Rent Control?

By Richard Arnott

Journal of Economic Perspectives, Winter 1995

Economists' traditional hostility to rent contols is based on models that treat the housing market as perfectly competitive and on the experience with 'hard' controls in New York City and many European countries following World War II. The current 'soft' ...

Direct Democracy Works

By John G. Matsusaka

Journal of Economic Perspectives, Spring 2005

The purpose of this essay is to describe the practice and theory of the increasingly important political phenomenon of direct democracy and the main lessons from the scholarly literature. Many questions remain to be answered, but the emerging view is that...

Policy Watch: Developments in Antitrust Economics

By Jonathan B. Baker

Journal of Economic Perspectives, Winter 1999

This article highlights recent developments in antitrust economics that have influenced the way the federal antitrust enforcement agencies analyze five issues: efficiencies from mergers, entry conditions, practices facilitating coordination, exclusionary ...

Job Information Networks, Neighborhood Effects, and Inequality

By Yannis M. Ioannides and Linda Datcher Loury

Journal of Economic Literature, December 2004

This paper explores the theoretical and empirical literature to examine the use by different social groups of informal sources of information provided by friends, relatives, and acquaintances during job search and its consequences for the job market. It a...

Worker Betas: Five Facts about Systematic Earnings Risk

By Fatih Guvenen, Sam Schulhofer-Wohl, Jae Song, and Motohiro Yogo

American Economic Review, May 2017

The magnitude of and heterogeneity in systematic earnings risk has important implications for various theories in macro, labor, and financial economics. Using administrative data, we document how the aggregate risk exposure of individual earnings to GDP a...

Media, Education and Anti-Americanism in the Muslim World

[Symposium: Middle East]

By Matthew A. Gentzkow and Jesse M. Shapiro

Journal of Economic Perspectives, Summer 2004

Recent surveys in the United States and the Muslim world show widespread misinformation about the events of September 11, 2001. Using data from 9 predominantly Muslim countries, we study how such beliefs depend on exposure to news media and levels of educ...

Theory Ahead of Language in the Economics of Unemployment

[Symposium: The Natural Rate of Unemployment]

By Richard Rogerson

Journal of Economic Perspectives, Winter 1997

This paper discusses, from the perspective of modern theories of unemployment, several unemployment concepts that have been used over the years. It argues that many of these concepts are of limited value and are dominated by a few simple concepts that are...

Distinguished Lecture on Economics in Government: Public Policy, Values, and Consciousness

By Henry J. Aaron

Journal of Economic Perspectives, Spring 1994

Economists should pay more attention to value formation in economic analysis. First, preferences are not stable in any operationally meaningful sense. Any estimated micro behavior that does not take account of the consequences of the behavior on underlyin...

Integrated Longitudinal Employer-Employee Data for the United States

By John J. Abowd, John Haltiwanger, and Julia Lane

American Economic Review, May 2004

Regulation and the High Cost of Housing in California

By John M. Quigley and Steven Raphael

American Economic Review, May 2005

Race, Roosevelt, and Wartime Production: Fair Employment in World War II Labor Markets

By William J. Collins

American Economic Review, March 2001

The Economy of the Early Roman Empire

By Peter Temin

Journal of Economic Perspectives, Winter 2006

Many inhabitants of ancient Rome lived well. Tourists marvel at the temples, baths, roads and aqueducts that they built. Economists also want to understand the existence of a flourishing and apparently prosperous economy two millennia ago. Market institut...