Comparative Risk Aversion in the Presence of Ambiguity

By Marie-Charlotte Guetlein

American Economic Journal: Microeconomics, August 2016

his paper suggests a characterization of increases in risk aversion within the smooth ambiguity model by Klibanoff, Marinacci, and Mukerji (2005). I show that an increase in risk aversion is qualitatively different from that under expected utility, due to...

At Least Do No Harm: The Use of Scarce Data

By Alvaro Sandroni

American Economic Journal: Microeconomics, February 2014

When data is scarce, it is difficult to screen the opinions of informed and uninformed experts. In spite of this difficulty it is possible to deliver incentives for informed experts to honestly reveal their views, and for uninformed experts to do no harm ...

International Portfolio Allocation under Model Uncertainty

By Pierpaolo Benigno and Salvatore Nisticò

American Economic Journal: Macroeconomics, January 2012

This paper revisits an old argument, hedging real exchange rate risk, as an explanation of the international home bias in equity. In a dynamic model, the relevant risk to be hedged is the long-run risk as opposed to the short-run risk. Domestic equity is ...

Harmonization and Side Payments in Political Cooperation

By Bård Harstad

American Economic Review, June 2007

For two districts or countries that try to internalize externalities, I analyze a bargaining game under private information. I derive conditions for when it is efficient with uniform policies across regions—with and without side payments— a...

Reflections on Finance and the Good Society

By Robert J. Shiller

American Economic Review, May 2013

The concept of the Good Society--grounded in principles of reciprocity and the Golden Rule--is as ancient as human civilization. To many the concept may appear in conflict with the goings-on of financial markets. This may be especially true after the fina...

Government Spending and Legislative Organization: Quasi-experimental Evidence from Germany

By Peter Egger and Marko Koethenbuerger

American Economic Journal: Applied Economics, October 2010

This paper presents empirical evidence of a positive effect of council size on government spending using a dataset of 2,056 municipalities in the German state of Bavaria over a period of 21 years. We apply a regression discontinuity design to avoid an end...

Defensive Investments and the Demand for Air Quality: Evidence from the NOx Budget Program

By Olivier Deschênes, Michael Greenstone, and Joseph S. Shapiro

American Economic Review, October 2017

The demand for air quality depends on health impacts and defensive investments, but little research assesses the empirical importance of defenses. A rich quasi-experiment suggests that the Nitrogen Oxides (NOx) Budget Program (NBP), a cap-and-trade market...

Globalization, Brain Drain, and Development

By Frédéric Docquier and Hillel Rapoport

Journal of Economic Literature, September 2012

This paper reviews four decades of economics research on the brain drain, with a focus on recent contributions and on development issues. We first assess the magnitude, intensity, and determinants of the brain drain, showing that brain drain (or high-skil...

Battle Scars? The Puzzling Decline in Employment and Rise in Disability Receipt among Vietnam Era Veterans

By David H. Autor, Mark G. Duggan, and David S. Lyle

American Economic Review, May 2011

Using Current Population Survey and US Army administrative data, we document that between 2000 and 2010, the employment rate of Vietnam era veterans fell markedly relative to non-veterans of the same cohorts while simultaneously their enrollment increased...

Mindful Economics: The Production, Consumption, and Value of Beliefs

[Symposium: Motivated Beliefs]

By Roland Bénabou and Jean Tirole

Journal of Economic Perspectives, Summer 2016

In this paper, we provide a perspective into the main ideas and findings emerging from the growing literature on motivated beliefs and reasoning. This perspective emphasizes that beliefs often fulfill important psychological and functional needs of the in...

On Testing for Speculative Bubbles

[Symposium: Bubbles]

By Robert P. Flood and Robert J. Hodrick

Journal of Economic Perspectives, Spring 1990

The possibility that movements in prices could be due to the self-fulfilling prophecies of market participants has long intrigued observers of free markets. This paper surveys the current state of the empirically-oriented literature concerning rational dy...

Shifting Mandates: The Federal Reserve's First Centennial

By Carmen M. Reinhart and Kenneth S. Rogoff

American Economic Review, May 2013

The Federal Reserve's mandate has evolved considerably over the organization's hundred-year history. It was changed from an initial focus in 1913 on financial stability, to fiscal financing in World War II and its aftermath, to a strong anti-inflation foc...

Monopoly and the Incentive to Innovate When Adoption Involves Switchover Disruptions

By Thomas J. Holmes, David K. Levine, and James A. Schmitz

American Economic Journal: Microeconomics, August 2012

Arrow (1962) argued that since a monopoly restricts output relative to a competitive industry, it would be less willing to pay a fixed cost to adopt a new technology. We develop a new theory of why a monopolistic industry innovates less. Firms often face ...

Gender Differences in Salary and Promotion in the Humanities

By Donna K. Ginther and Kathy J. Hayes

American Economic Review, May 1999

Are Biofuels the Culprit? OPEC, Food, and Fuel

By Gal Hochman, Deepak Rajagopal, and David Zilberman

American Economic Review, May 2010

Aid under Fire: Development Projects and Civil Conflict

By Benjamin Crost, Joseph Felter, and Patrick Johnston

American Economic Review, June 2014

We estimate the causal effect of a large development program on conflict in the Philippines through a regression discontinuity design that exploits an arbitrary poverty threshold used to assign eligibility for the program. We find that barely eligible m...

Environmental Health Risks and Housing Values: Evidence from 1,600 Toxic Plant Openings and Closings

By Janet Currie, Lucas Davis, Michael Greenstone, and Reed Walker

American Economic Review, February 2015

Regulatory oversight of toxic emissions from industrial plants and understanding about these emissions' impacts are in their infancy. Applying a research design based on the openings and closings of 1,600 industrial plants to rich data on housing marke...

Was Electricity a General Purpose Technology? Evidence from Historical Patent Citations

By Petra Moser and Tom Nicholas

American Economic Review, May 2004

The Most Dangerous Idea in Federal Reserve History: Monetary Policy Doesn't Matter

By Christina D. Romer and David H. Romer

American Economic Review, May 2013

Monetary policy-makers' beliefs about how the economy functions are a key determinant of the conduct of policy. That monetary policy has little impact under the prevailing circumstances is a belief which has resurfaced periodically over the Federal Reserv...

A Cautionary Tale about the Use of Administrative Data: Evidence from Age of Marriage Laws

By Rebecca M. Blank, Kerwin Kofi Charles, and James M. Sallee

American Economic Journal: Applied Economics, April 2009

This paper demonstrates that administrative data may be inferior to survey data under particular circumstances. We examine the effect of state laws governing the minimum age of marriage in the United States. The estimated effects of these laws are much...