Ex Post (In) Efficient Negotiation and Breakdown of Trade

By Rajkamal Iyer and Antoinette Schoar

American Economic Review, May 2015

This paper examines frictions in contract renegotiation and its implications for allocative efficiency of contracts. Using a novel audit study methodology, we find that contracting parties in general are reluctant to engage in hold up. However, many effic...

Demand Spillovers, Combative Advertising, and Celebrity Endorsements

By Craig L. Garthwaite

American Economic Journal: Applied Economics, April 2014

This paper studies the economic effects of endorsements. In the publishing sector, endorsements are found to be a business stealing form of advertising that raises title level sales without expanding the market size. If anything, the endorsements decre...

A Road Map for Efficiently Taxing Heterogeneous Agents

By Marios Karabarbounis

American Economic Journal: Macroeconomics, April 2016

This paper characterizes optimal labor income taxes that depend on age, household assets, and filing status (one or two earners) within a life-cycle model with heterogeneous, two-member households. The key innovation is a labor supply elasticity that vari...

Integration and Independent Innovation on a Network

By Joseph Farrell

American Economic Review, May 2003

How Economists Allocate Time to Teaching and Research

By Sam Allgood and William B. Walstad

American Economic Review, May 2013

This study investigates three questions: (i) are there differences in teaching and research behavior between economists and other professors; (ii) do economists in the top 100 research departments allocate time differently than faculty in other discipline...

When Do More Patents Reduce R&D?

By Robert M. Hunt

American Economic Review, May 2006

Charity Care, Risk Pooling, and the Decline in Private Health Insurance

By Michael Chernew, David Cutler, and Patricia Seliger Keenan

American Economic Review, May 2005

Financial Networks

By Douglas M. Gale and Shachar Kariv

American Economic Review, May 2007

Violence and Risk Preference: Experimental Evidence from Afghanistan

By Michael Callen, Mohammad Isaqzadeh, James D. Long, and Charles Sprenger

American Economic Review, January 2014

We investigate the relationship between violence and economic risk preferences in Afghanistan combining: (i) a two-part experimental procedure identifying risk preferences, violations of Expected Utility, and specific preferences for certainty; (ii) co...

What Goes Up Must Come Down? Experimental Evidence on Intuitive Forecasting

By John Beshears, James J. Choi, Andreas Fuster, David Laibson, and Brigitte C. Madrian

American Economic Review, May 2013

Do laboratory subjects correctly perceive the dynamics of a mean-reverting time series? In our experiment, subjects receive historical data and make forecasts at different horizons. The time series process that we use features short-run momentum and long-...

The Exchange Rate Response to Monetary Policy Innovations

By Viktoria Hnatkovska, Amartya Lahiri, and Carlos A. Vegh

American Economic Journal: Macroeconomics, April 2016

We present a new data fact: in response to a monetary tightening, the domestic currency tends to appreciate in developed countries but depreciate in developing countries. A model is developed to rationalize this contrasting pattern. It has three key chann...

Thar She Blows: Can Bubbles Be Rekindled with Experienced Subjects?

By Reshmaan N. Hussam, David Porter, and Vernon L. Smith

American Economic Review, June 2008

We report 28 new experiment sessions consisting of up to three experience levels to examine the robustness of learning and "error" elimination among participants in a laboratory asset market and its effect on price bubbles. Our answer to the title ques...

Quantitative Aggregate Economics

By Finn E. Kydland

American Economic Review, December 2006

On the Need for an International Lender of Last Resort

By Stanley Fischer

Journal of Economic Perspectives, Fall 1999

Is there a useful function for an international lender of last resort (ILLR)--defined as crisis lender and crisis manager? Yes for international capital flows are excessively volatile and contagious, and because an ILLR can help mitigate the effects of th...

Can Asia Overcome the IMF Stigma?

By Takatoshi Ito

American Economic Review, May 2012

Asian countries still have the IMF stigma, which originates from the experiences of the Asian crisis of 1997-98. The feeling of being unfairly treated grew even stronger afterward. The Asian countries built large foreign reserves, carried out structural r...

The Case for a New Fiscal Constitution

[Symposium: Bias in the Budget]

By William A. Niskanen

Journal of Economic Perspectives, Spring 1992

For the first 140 years of U.S. history, the federal budget was effectively constrained by two fiscal rules: the formal limits within the Constitution on the enumerated spending powers and an informal rule that the government could borrow only during rece...

Systemic Illiquidity in the Federal Funds Market

By Adam B. Ashcraft and Darrell Duffie

American Economic Review, May 2007

Individual Risk in an Investment-Based Social Security System

By Martin Feldstein and Elena Ranguelova

American Economic Review, September 2001

War, Inflation, and Social Capital

By Sergei Guriev and Nikita Melnikov

American Economic Review, May 2016

We use weekly data from 79 Russian regions to measure the impact of economic shocks and proximity to war in Ukraine on social capital in Russian regions. We proxy social capital by the relative intensity of internet searches for the most salient dimension...

The Anatomy of a Credit Crisis: The Boom and Bust in Farm Land Prices in the United States in the 1920s

By Raghuram Rajan and Rodney Ramcharan

American Economic Review, April 2015

Does credit availability exacerbate asset price inflation? Are there long run consequences? During the farm land price boom and bust before the Great Depression, we find that credit availability directly inflated land prices. Credit also amplified the rel...