Optimal Contract under Moral Hazard with Soft Information

By Guillaume Roger

American Economic Journal: Microeconomics, November 2013

I study a model of moral hazard with soft information: the agent alone observes the stochastic outcome of her action; hence the principal faces a problem of ex post adverse selection. With limited instruments the principal cannot solve these two proble...

Currency Misalignments and Optimal Monetary Policy: A Reexamination

By Charles Engel

American Economic Review, October 2011

This paper examines optimal monetary policy in an open-economy two-country world with sticky prices under pricing to market. We show that currency misalignments are inefficient and lower world welfare. We find that optimal policy must target consumer pric...

Why Do Poor Children Lose Health Insurance in the SCHIP Era? The Role of Family Health

By Anne Carroll, Hope Corman, Kelly Noonan, and Nancy E. Reichman

American Economic Review, May 2007

Interest Rate Pass-Through: Mortgage Rates, Household Consumption, and Voluntary Deleveraging

By Marco Di Maggio, Amir Kermani, Benjamin J. Keys, Tomasz Piskorski, Rodney Ramcharan, Amit Seru, and Vincent Yao

American Economic Review, November 2017

Exploiting variation in the timing of resets of adjustable-rate mortgages (ARMs), we find that a sizable decline in mortgage payments (up to 50 percent) induces a significant increase in car purchases (up to 35 percent). This effect is attenuated by vol...

Financial Openness, Sudden Stops, and Current-Account Reversals

By Sebastian Edwards

American Economic Review, May 2004

Nominal Wage Rigidity and Industry Characteristics in the Downturns of 1893, 1929, and 1981

By Christopher Hanes

American Economic Review, December 2000

Why Not a Global Currency?

By Kenneth Rogoff

American Economic Review, May 2001

The Influence of the Financial Revolution on the Nature of Firms

By Raghuram G. Rajan and Luigi Zingales

American Economic Review, May 2001

Communication Networks: Knowledge and Decisions

By Antoni Calvó-Armengol and Joan de Martí

American Economic Review, May 2007

Rock and Roll Bands, (In)complete Contracts, and Creativity

By Cédric Ceulemans, Victor Ginsburgh, and Patrick Legros

American Economic Review, May 2011

Members of a rock and roll band are endowed with different amounts of creativity. They match, compose songs, and share credit. The presence of more creative members increases the probability of success, but those more creative members may also claim a lar...

Accounting for Saving and Capital Formation in the United States, 1947-1991

By Richard Ruggles

Journal of Economic Perspectives, Spring 1993

This paper is concerned with accounting for the saving and capital formation taking place in different sectors of the U.S. economy. In brief, where does saving arise and where is it used? Do some sectors save more than they spend for capital formation and...

The Miracle of Microfinance? Evidence from a Randomized Evaluation

By Abhijit Banerjee, Esther Duflo, Rachel Glennerster, and Cynthia Kinnan

American Economic Journal: Applied Economics, January 2015

This paper reports results from the randomized evaluation of a group-lending microcredit program in Hyderabad, India. A lender worked in 52 randomly selected neighborhoods, leading to an 8.4 percentage point increase in takeup of microcredit. Small busine...

Rules of Thumb versus Dynamic Programming

By Martin Lettau and Harald Uhlig

American Economic Review, March 1999

This paper studies decisionmaking with rules of thumb in the context of dynamic decision problems and compares it to dynamic programming. A rule is a fixed mapping from a subset of states into actions. Rules are compared by averaging over past experiences...

A Biological Model of Unions

By Michael Kremer and Benjamin A. Olken

American Economic Journal: Applied Economics, April 2009

This paper applies principles from evolutionary biology to the study of unions. We show that unions that implement the preferred wage and organizing policies of workers will be displaced in evolutionary competition by unions that either extract less fr...

The Importance of Information Targeting for School Choice

By Kehinde F. Ajayi, Willa H. Friedman, and Adrienne M. Lucas

American Economic Review, May 2017

Although school choice programs are common, we know little about the underlying decision-making processes. In this study, we randomly assigned 900 junior high schools in Ghana, a country with universal secondary school choice, to 1 of 3 treatment arms: (1...

The Political Geography of Tax H(e)avens and Tax Hells

By Nico A. Hansen and Anke S. Kessler

American Economic Review, September 2001

A Spatial Theory of Trade

By Esteban Rossi-Hansberg

American Economic Review, December 2005

The equilibrium relationship between trade and the spatial distribution of economic activity is fundamental to the analysis of national and regional trade patterns, as well as to the effect of trade frictions. We study this relationship using a trade mode...

The Performance of Forecast-Based Monetary Policy Rules Under Model Uncertainty

By Andrew Levin, Volker Wieland, and John C. Williams

American Economic Review, June 2003

We investigate the performance of forecast-based monetary policy rules using five macroeconomic models that reflect a wide range of views on aggregate dynamics. We identify the key characteristics of rules that are robust to model uncertainty; such rules ...

The Gastroenterology Fellowship Market: Should There Be a Match?

By Muriel Niederle and Alvin E. Roth

American Economic Review, May 2005

The Neoclassical Advent: American Economics at the Dawn of the 20th Century

[Symposium: Looking Backward at Economics and the Economy]

By Joseph Persky

Journal of Economic Perspectives, Winter 2000

For the U.S. economy, the last quarter of the 19th century brought the closing of the Western frontier, agricultural hardship in the South, the rise of large corporations and trusts, and the emergence of a serious labor movement. The fledgling American ec...