Can We Restart the Recovery All Over Again?

By John B. Taylor

American Economic Review, May 2016

Many have argued that a deviation from good economic policy has been a cause of the poor U.S. economic performance of the past decade and that policy reforms are needed to restore strong growth. Yet others argue that the recent stagnation is secular or th...

What Is the Value of Terroir?

By Robin Cross, Andrew J. Plantinga, and Robert N. Stavins

American Economic Review, May 2011

We examine the value of terroir—the set of special characteristics of a location that impart unique qualities to the wine produced. We conduct a hedonic analysis of vineyard sales in the Willamette Valley of Oregon to ascertain whether site attribut...

Returns to Local-Area Health Care Spending: Evidence from Health Shocks to Patients Far from Home

By Joseph J. Doyle

American Economic Journal: Applied Economics, July 2011

Health care spending varies widely across markets, and previous research finds little evidence that higher spending translates into better health outcomes. The main innovation in this paper exploits this cross-sectional variation in hospital spending in a...

Why Financial Structure Matters

By Joseph E. Stiglitz

Journal of Economic Perspectives, Fall 1988

[This is a comment on "The Modigliani-Miller Propositions after Thirty Years" by Merton H. Miller in this same issue.] The 1958 paper by Franco Modigliani and Merton Miller has been justly hailed as a landmark in the modern theory of finance. What has not...

Peddling Influence through Intermediaries

By Wei Li

American Economic Review, June 2010

A sender may communicate with a decision maker through intermediaries. In this model, an objective sender and intermediary pass on information truthfully, while biased ones favor a particular agenda but also have reputational concerns. I show that the bia...

Rationality in Extensive-Form Games

[Symposium: Common Knowledge]

By Philip J. Reny

Journal of Economic Perspectives, Fall 1992

Let us adopt the classical point of view that a theory of games is a description of "rational" behavior. Consequently, equipped with a book entitled "Theory of Games," any individual in any strategic situation need only consult the book to make a "rationa...

Referrals: Peer Screening and Enforcement in a Consumer Credit Field Experiment

By Gharad Bryan, Dean Karlan, and Jonathan Zinman

American Economic Journal: Microeconomics, August 2015

Empirical evidence on peer intermediation lags behind both theory and practice in which lenders use peers to mitigate adverse selection and moral hazard. Using a referral incentive under individual liability, we develop a two-stage field experiment that p...

Consistency and Heterogeneity of Individual Behavior under Uncertainty

By Syngjoo Choi, Raymond Fisman, Douglas Gale, and Shachar Kariv

American Economic Review, December 2007

By using graphical representations of simple portfolio choice problems, we generate a very rich dataset to study behavior under uncertainty at the level of the individual subject. We test the data for consistency with the maximization hypothesis, and w...

Symposium on the Budget Deficit

[Symposium: Budget Deficit]

By Janet L. Yellen

Journal of Economic Perspectives, Spring 1989

Is the ballooning federal budget deficit a serious economic problem? The papers in this symposium provide four perspectives on this issue. Robert Barro and Robert Eisner disagree sharply with the "majority" opinion concerning deficits. In contrast, Edward...

The Institutions of Monetary Policy

By Mervyn King

American Economic Review, May 2004

Like Father, Like Son: Social Network Externalities and Parent-Child Correlation in Behavior

By Antoni Calvó-Armengol and Matthew O. Jackson

American Economic Journal: Microeconomics, February 2009

We build an overlapping generations model where an individual sees higher returns to adopting a behavior as many neighbors adopt the behavior. We show that overlap in the state of a parent and child's neighborhood can lead to correlation in parent-chil...

Profiting from Regulation: Evidence from the European Carbon Market

By James B. Bushnell, Howard Chong, and Erin T. Mansur

American Economic Journal: Economic Policy, November 2013

We investigate how cap-and-trade regulation affects profits. In late April 2006, the EU CO2 allowance price dropped 50 percent, equating to a €28 billion reduction in the value of aggregate annual allowances. We examine daily returns for 552 stocks f...

Testable Implications of Gross Substitutes in Demand for Two Goods

By Christopher P. Chambers, Federico Echenique, and Eran Shmaya

American Economic Journal: Microeconomics, February 2011

We present a nonparametric "revealed-preference test" for gross substitutes in demand for two goods. (JEL D01, D11)

The Optimal Taxation of Height: A Case Study of Utilitarian Income Redistribution

By N. Gregory Mankiw and Matthew Weinzierl

American Economic Journal: Economic Policy, February 2010

Should the income tax include a credit for short taxpayers and a surcharge for tall ones? The standard utilitarian framework for tax analysis answers this question in the affirmative. Moreover, a plausible parameterization using data on height and wage...

Does Competition Among Public Schools Benefit Students and Taxpayers? Comment

By Jesse Rothstein

American Economic Review, December 2007

Contracting in Vague Environments

By Marie-Louise Vierø

American Economic Journal: Microeconomics, May 2012

This paper shows that a new trade-off arises in the optimal contract when contracting takes place with vague information (objective ambiguity), reflecting that real-world contracting often takes place under imprecise information. The choice-theoretic fram...

Measuring Self-Control Problems

By John Ameriks, Andrew Caplin, John Leahy, and Tom Tyler

American Economic Review, June 2007

We develop a survey instrument to measure self-control problems in a sample of highly educated adults. This measure relates in the manner that theory predicts to liquid wealth accumulation and personality measures. Yet while self-control problems are typi...

Assessing the Economic Understanding of U.S. High School Students

By William B. Walstad and Ken Rebeck

American Economic Review, May 2001

Bond Risk Premia

By John H. Cochrane and Monika Piazzesi

American Economic Review, March 2005

We study time variation in expected excess bond returns. We run regressions of one-year excess returns on initial forward rates. We find that a single factor, a single tent-shaped linear combination of forward rates, predicts excess returns on one- to fiv...

Do We Have a New E-conomy?

By Martin Neil Baily and Robert Z. Lawrence

American Economic Review, May 2001