Front Matter

American Economic Journal: Economic Policy, February 2017

The Principal-Agent Approach to Testing Experts

By Wojciech Olszewski and Marcin Pęski

American Economic Journal: Microeconomics, May 2011

Recent literature on testing experts shows that it is often impossible to determine whether an expert knows the stochastic process that generates data. Despite this negative result, we show that there often exist contracts that allow a decision maker to a...

Do Labor Market Rigidities Have Microeconomic Effects? Evidence from within the Firm

By Francine Lafontaine and Jagadeesh Sivadasan

American Economic Journal: Applied Economics, April 2009

We exploit a unique outlet-level dataset from a multinational chain with over 2,500 outlets in 43 countries to investigate the effects of labor regulations that protect employment. The dataset contains information on output, materials, and labor costs ...

Community Structure and Market Outcomes: A Repeated Games-in-Networks Approach

By Itay P. Fainmesser

American Economic Journal: Microeconomics, February 2012

Consider a large market with asymmetric information, in which sellers have the option to "cheat" their buyers, and buyers decide whether to repurchase from different sellers. We model active trade relationships as links in a buyer-seller network and study...

Retrospectives: The Convergence Debate between David Hume and Josiah Tucker

By Bruce Truitt Elmslie

Journal of Economic Perspectives, Fall 1995

One of the most interesting debates in modern economics centers around the question of whether integrating economies necessarily converge in terms of per capita income and technology. This debate is often believed to have been started by Thorstein Veblen ...

What Do High-Interest Borrowers Do with Their Tax Rebate?

By Marianne Bertrand and Adair Morse

American Economic Review, May 2009

Notes

Journal of Economic Perspectives, Spring 2011

Is American Pet Health Care (Also) Uniquely Inefficient?

By Liran Einav, Amy Finkelstein, and Atul Gupta

American Economic Review, May 2017

We document four similarities between American human healthcare and American pet care: (i) rapid growth in spending as a share of GDP over the last two decades; (ii) strong income-spending gradient; (iii) rapid growth in the employment of healthcare provi...

Policy Analysis in Matching Markets

By Nikhil Agarwal

American Economic Review, May 2017

Price and quantity interventions intended to affect assignments are common in many labor and education markets (e.g., financial aid, quotas). This article discusses an empirical framework, based on the theory of stable matching, that is suitable for polic...

Social Security Investment in Equities

By Peter Diamond and John Geanakoplos

American Economic Review, September 2003

This paper explores the general-equilibrium impact of social security portfolio diversification into private securities, either through the trust fund or private accounts. The analysis depends critically on heterogeneities in saving, production, assets, a...

Interactions of Commitment and Discretion in Monetary and Fiscal Policies

By Avinash Dixit and Luisa Lambertini

American Economic Review, December 2003

We consider monetary-fiscal interactions when the monetary authority is more conservative than the fiscal. With both policies discretionary, (1) Nash equilibrium yields lower output and higher price than the ideal points of both authorities, (2) of the tw...

(Un)happiness in Transition

By Sergei Guriev and Ekaterina Zhuravskaya

Journal of Economic Perspectives, Spring 2009

Despite strong growth performance in transition economies in the last decade, residents of transition countries report abnormally low levels of life satisfaction. Using data from the World Values Survey and other sources, we study various explanations of ...

Trading Tasks: A Simple Theory of Offshoring

By Gene M. Grossman and Esteban Rossi-Hansberg

American Economic Review, December 2008

We propose a theory of the global production process that focuses on tradeable tasks, and use it to study how falling costs of offshoring affect factor prices in the source country. We identify a productivity effect of task trade that benefits the fact...

Malthus to Solow

By Gary D. Hansen and Edward C. Prescott

American Economic Review, September 2002

Toward Choice-Theoretic Foundations for Behavioral Welfare Economics

By B. Douglas Bernheim and Antonio Rangel

American Economic Review, May 2007

Oil Monopoly and the Climate

By John Hassler, Per Krusell, and Conny Olovsson

American Economic Review, May 2010

Market Sentiment: A Tragedy of the Commons

By Tarek A. Hassan and Thomas M. Mertens

American Economic Review, May 2011

We present a model in which investors decide whether or to what degree they want to allow their behavior to be influenced by "market sentiment." Investors who choose to insulate their decisions from market sentiment earn higher expected returns, but incur...

In Honor of Sandy Grossman, Winner of the John Bates Clark Medal

By David M. Kreps

Journal of Economic Perspectives, Spring 1988

Sandy Grossman, Professor of Economics at Princeton University, is the winner of the John Bates Clark Medal for 1987, given to "that American economist under forty who is adjudged to have made a significant contribution to economic thought and knowledge."...

The New Role for the World Bank

[Symposium: The Bretton Woods Institutions]

By Michael A. Clemens and Michael Kremer

Journal of Economic Perspectives, Winter 2016

The World Bank was founded to address what we would today call imperfections in international capital markets. Its founders thought that countries would borrow from the Bank temporarily until they grew enough to borrow commercially. Some critiques and ana...

Providing Prescription Drug Coverage to the Elderly: America's Experiment with Medicare Part D

[Symposium: Health Care]

By Mark Duggan, Patrick Healy, and Fiona Scott Morton

Journal of Economic Perspectives, Fall 2008

The federal government's Medicare program did not provide general prescription drug coverage for the first 40 years of its existence. Thus, more than 30 percent of the 44 million elderly and disabled beneficiaries of the program lacked insurance coverage ...