The Role of Firms in Gender Earnings Inequality: Evidence from the United States

By Isaac Sorkin

American Economic Review, May 2017

This paper documents that in the US, men are more likely than women to work in both high-wage firms and high-wage industries. I then ask why this sorting occurs. I consider two main explanations: men and women have different preferences, and men and women...

Reputations, Relationships, and Contract Enforcement

By W. Bentley MacLeod

Journal of Economic Literature, September 2007

When the quality of a good is at the discretion of the seller, how can buyers assure that the seller provides the mutually efficient level of quality? Contracts that provide a bonus to the seller if the quality is acceptable or impose a penalty on the s...

The Core Matchings of Markets with Transfers

By Christopher P. Chambers and Federico Echenique

American Economic Journal: Microeconomics, February 2015

We characterize the structure of the set of core matchings of an assignment game (a two-sided market with transfers). Such a set satisfies a property we call consistency. Consistency of a set of matchings states that, for any matching v, if, for each agen...

The Economics Major as Part of a Liberal Education: The Teagle Report: Comment

By Catharine Hill

American Economic Review, May 2009

Markets: The Credit Rating Agencies

By Lawrence J. White

Journal of Economic Perspectives, Spring 2010

This paper will explore how the financial regulatory structure propelled three credit rating agencies -- Moody's, Standard & Poor's (S&P), and Fitch -- to the center of the U.S. bond markets -- and thereby virtually guaranteed that when these rating agenc...

Leveling the Playing Field: Sincere and Sophisticated Players in the Boston Mechanism

By Parag A. Pathak and Tayfun Sönmez

American Economic Review, September 2008

Empirical and experimental evidence suggests different levels of sophistication among families in the Boston Public School student assignment plan. We analyze the preference revelation game induced by the Boston mechanism with sincere players who report t...

People Flows in Globalization

By Richard B. Freeman

Journal of Economic Perspectives, Spring 2006

The policy debate over globalization in the past decade has largely bypassed the international mobility of labor. Restrict trade and cries of protectionism resound. Suggest linking labor standards to trade and it's protectionism in disguise. Limit capital...

Capturing Knowledge within and across Firm Boundaries: Evidence from Clinical Development

By Pierre Azoulay

American Economic Review, December 2004

How do firm boundaries influence employees' acquisition of information? Using detailed project-level data and qualitative evidence, I document that pharmaceutical firms are more likely to outsource the coordination of data-intensive clinical trials, while...

Does School Integration Generate Peer Effects? Evidence from Boston's Metco Program

By Joshua D. Angrist and Kevin Lang

American Economic Review, December 2004

The Metropolitan Council for Educational Opportunity (Metco) is a desegregation program that sends students from Boston schools to more affluent suburbs. Metco increases the number of blacks and reduces test scores in receiving districts. School-level dat...

International Protection of Intellectual Property

By Gene M. Grossman and Edwin L.-C. Lai

American Economic Review, December 2004

We study the incentives that governments have to protect intellectual property in a trading world economy. We consider a world economy with ongoing innovation in two countries that differ in market size and in their capacity for innovation. After describi...

Why Parents Play Favorites: Explanations for Unequal Bequests

By Audrey Light and Kathleen McGarry

American Economic Review, December 2004

Partnership Firms, Reputation, and Human Capital

By Alan D. Morrison and William J. Wilhelm Jr

American Economic Review, December 2004

The Cyclical Behavior of Equilibrium Unemployment and Vacancies

By Robert Shimer

American Economic Review, March 2005

This paper argues that the textbook search and matching model cannot generate the observed business-cycle-frequency fluctuations in unemployment and job vacancies in response to shocks of a plausible magnitude. In the United States, the standard deviation...

Financial Reform: What Shakes It? What Shapes It?

By Abdul Abiad and Ashoka Mody

American Economic Review, March 2005

What accounts for the worldwide advance of financial reforms in the last quarter century? Using a new index of financial liberalization, we find that influential events shook the policy status quo. Balance-of-payments crises spurred reforms, but banking c...

Optimal Monetary Policy with Relative Price Distortions

By Tack Yun

American Economic Review, March 2005

This paper analyzes optimal monetary policy in a sticky price model with Calvo-type staggered price-setting. In the paper, the optimal monetary policy maximizes the expected utility of a representative household without having to rely on a set of linearly...

The Case for Open-Market Purchases in a Liquidity Trap

By Alan J. Auerbach and Maurice Obstfeld

American Economic Review, March 2005

Prevalent thinking about liquidity traps suggests that the perfect substitutability of money and bonds at a zero short-term nominal interest rate renders open-market operations ineffective for achieving macroeconomic stabilization goals. We show that even...

Wealth as a Determinant of Comparative Advantage

By José Wynne

American Economic Review, March 2005

This paper shows that a country's wealth can be an important determinant of comparative advantage when access to credit differs across sectors of the economy. Wealthier nations exhibit a comparative advantage toward goods produced in sectors facing more s...

Extracting Inflation from Stock Returns to Test Purchasing Power Parity

By Bhagwan Chowdhry, Richard Roll, and Yihong Xia

American Economic Review, March 2005

Relative purchasing power parity (PPP) holds for pure price inflations, which affect prices of all goods and services by the same proportion, while leaving relative prices unchanged. Pure price inflations also affect nominal returns of all traded financia...

The Quantity and Quality of Life and the Evolution of World Inequality

By Gary S. Becker, Tomas J. Philipson, and Rodrigo R. Soares

American Economic Review, March 2005

GDP per capita is usually used to proxy for the quality of life of individuals living in different countries. Welfare is also affected by quantity of life, however, as represented by longevity. This paper incorporates longevity into an overall assessment ...

Distance, Time, and Specialization: Lean Retailing in General Equilibrium

By Carolyn L. Evans and James Harrigan

American Economic Review, March 2005

Transport time increases with distance traveled, and time is valuable. We show the implications of these facts for global specialization and trade: products where timely delivery is important will be produced near the source of final demand, where wages w...