Implications of the U.S. Current Account Deficit

By David H. Howard

Journal of Economic Perspectives, Fall 1989

In 1988, the United States recorded a deficit of about $135 billion on the current account of its balance of payments with the rest of the world. This paper presents an analytical framework for thinking about the current account deficit, explores causes o...

Discrepancies in International Data: An Application to China-Hong Kong Entrepot Trade

By Robert C. Feenstra, Wen Hai, Wing T. Woo, and Shunli Yao

American Economic Review, May 1999

Overlapping Generations: The First Jubilee

By Philippe Weil

Journal of Economic Perspectives, Fall 2008

Paul Samuelson's (1958) overlapping generations model has turned 50. Seldom has so simple a model been so influential. The paper, in spite of its ripe age, still elicits wonder. Starting from the uncontroversial observation that "we live in a world where ...

Market Impacts of a Nuclear Power Plant Closure

By Lucas Davis and Catherine Hausman

American Economic Journal: Applied Economics, April 2016

Falling revenues and rising costs have put US nuclear plants in financial trouble, and some threaten to close. To understand the potential private and social consequences, we examine the abrupt closure of the San Onofre Nuclear Generating Station (SONGS) ...

The Economics of Rights: Does the Right to Counsel Increase Crime?

By Itai Ater, Yehonatan Givati, and Oren Rigbi

American Economic Journal: Economic Policy, May 2017

We examine the broad consequences of the right to counsel by exploiting a legal reform in Israel that extended the right to publicly provided legal counsel to suspects in arrest proceedings. Using the staggered regional rollout of the reform, we find that...

Recovery from Financial Crises: Evidence from 100 Episodes

By Carmen M. Reinhart and Kenneth S. Rogoff

American Economic Review, May 2014

We examine the evolution of real per capita GDP around 100 systemic banking crises. Part of the costs of these crises owes to the protracted nature of recovery. On average, it takes about 8 years to reach the pre-crisis level of income; the median is abou...

Survey Measures of Expected U.S. Inflation

By Lloyd B. Thomas

Journal of Economic Perspectives, Fall 1999

The forecasting performance of widely accessible surveys of expected inflation are evaluated against naive and financial market benchmark forecasts. In the period of rising inflation (1960-80), the Michigan household consensus forecasts exhibited smaller ...

Can Tracking Raise the Test Scores of High-Ability Minority Students?

By David Card and Laura Giuliano

American Economic Review, October 2016

We evaluate a tracking program in a large urban district where schools with at least one gifted fourth grader create a separate "gifted/high achiever" classroom. Most seats are filled by non-gifted high achievers, ranked by previous-year test scores. We s...

The Limits of Price Discrimination

By Dirk Bergemann, Benjamin Brooks, and Stephen Morris

American Economic Review, March 2015

We analyze the welfare consequences of a monopolist having additional information about consumers' tastes, beyond the prior distribution; the additional information can be used to charge different prices to different segments of the market, i.e., carry ou...

Social Psychology, Unemployment and Macroeconomics

By William A. Darity and Arthur H. Goldsmith

Journal of Economic Perspectives, Winter 1996

In a conventional macroeconomic model, following a policy change, as nominal wages adjust the economy returns to its original real levels of employment, output, and unemployment. This description of events ignores the social psychological consequences of ...

Herd Behavior and Investment: Reply

By David S. Scharfstein and Jeremy C. Stein

American Economic Review, June 2000

The Role of Economics in Climate Change Policy

By Warwick J. McKibbin and Peter J. Wilcoxen

Journal of Economic Perspectives, Spring 2002

The most important characteristic of climate change as a policy problem is uncertainty. From climatology to economics, uncertainties are pervasive, large and difficult to resolve. However, the economic theory of environmental policy under uncertainty prov...

What Makes US Government Bonds Safe Assets?

By Zhiguo He, Arvind Krishnamurthy, and Konstantin Milbradt

American Economic Review, May 2016

US government bonds are considered to be the world's safe store of value, especially during periods of economic turmoil such as the events of 2008. But what makes US government bonds "safe assets"? We highlight coordination among investors, and build a mo...

Notes

Journal of Economic Perspectives, Fall 2003

Education, Poverty and Terrorism: Is There a Causal Connection?

By Alan B. Krueger and Jitka Malečková

Journal of Economic Perspectives, Fall 2003

The paper investigates whether there is a connection between poverty or low education and terrorism. We review evidence on hate crimes, which are closely related to terrorism; the occurrence of hate crimes is largely independent of economic conditions. We...

Policy Watch: The Economics of Fuel Economy Standards

By Paul R. Portney, Ian W.H. Parry, Howard K. Gruenspecht, and Winston Harrington

Journal of Economic Perspectives, Fall 2003

One of the most hotly contested of all energy policy issues involves Corporate Average Fuel Economy (or CAFE) standards for new cars and light-duty trucks. Tighter standards would reduce gasoline consumption, and hence both greenhouse gas emissions as wel...

Escaping from a Liquidity Trap and Deflation: The Foolproof Way and Others

By Lars E.O. Svensson

Journal of Economic Perspectives, Fall 2003

Existing proposals to escape from a liquidity trap and deflation, including my "Foolproof Way," are discussed in the light of the optimal way to escape. The optimal way involves three elements: (1) an explicit central-bank commitment to a higher future pr...

The Unholy Trinity of Financial Contagion

[Symposium: International Financial Architecture]

By Graciela L. Kaminsky, Carmen M. Reinhart, and Carlos A. Végh

Journal of Economic Perspectives, Fall 2003

Over the last 20 years, some financial events, such as devaluations or defaults, have triggered an immediate adverse chain reaction in other countries--which we call fast and furious contagion. Yet, on other occasions, similar events have failed to trigge...

Anomalies: The Law of One Price in Financial Markets

By Owen A. Lamont and Richard H. Thaler

Journal of Economic Perspectives, Fall 2003

The Law of One price states that identical goods (or securities) should sell for identical prices. In financial markets the law of one price is thought to hold almost exactly, and is the basis for much of financial economic theory. We present evidence on ...

Restructuring Sovereign Debt

[Symposium: International Financial Architecture]

By Barry Eichengreen

Journal of Economic Perspectives, Fall 2003

This paper provides new empirical evidence relevant to the debate over the desirability of reforms to the way that financial markets and the international community deal with sovereign debt crises. In particular, given the ongoing opposition of investors ...