Fiscal Policy and Economic Recovery: The Case of the 1936 Veterans' Bonus

By Joshua K. Hausman

American Economic Review, April 2016

Conventional wisdom has it that in the 1930s fiscal policy did not work because it was not tried. This paper shows that fiscal policy was tried in 1936. The veterans' bonus of 1936 paid 2 percent of GDP to 3.2 million veterans; the typical veteran rece...

Too-Systemic-to-Fail: What Option Markets Imply about Sector-Wide Government Guarantees

By Bryan Kelly, Hanno Lustig, and Stijn Van Nieuwerburgh

American Economic Review, June 2016

We examine the pricing of financial crash insurance during the 2007-2009 financial crisis in US option markets, and we show that a large amount of aggregate tail risk is missing from the cost of financial sector crash insurance during the crisis. The diff...

Are Preferential Trading Arrangements Trade-Liberalizing or Protectionist?

By Anne O. Krueger

Journal of Economic Perspectives, Fall 1999

Preferential trade arrangements, and especially free trade agreements, have mushroomed in importance in the 1990s. This has revived research on the effects of these arrangements, both on the welfare of the member countries and those excluded, and on the m...

Immigration Policy and Immigrant Quality: The Australian Points System

By Paul W. Miller

American Economic Review, May 1999

Efficient Retail Pricing in Electricity and Natural Gas Markets

By Steven L. Puller and Jeremy West

American Economic Review, May 2013

A long line of research investigates whether the retail prices of electricity and natural gas send proper signals about scarcity in order to induce efficient consumption. Historically, regulated utilities have not designed tariffs that set marginal price...

Minimax Estimation and Forecasting in a Stationary Autoregression Model

By Gary Chamberlain

American Economic Review, May 2001

Regional Labor Markets, Network Externalities and Migration: The Case of German Reunification

By Harald Uhlig

American Economic Review, May 2006

Bias in the Consumer Price Index: What Is the Evidence?

By Brent R. Moulton

Journal of Economic Perspectives, Fall 1996

Recent research has suggested that the upward bias of the U.S. consumer price index may be significant, and correcting the biases would have important long-run effects on the federal budget deficit. The author describes the sampling procedures used in con...

Efficiency Gains from Team-Based Coordination—Large-Scale Experimental Evidence

By Francesco Feri, Bernd Irlenbusch, and Matthias Sutter

American Economic Review, September 2010

The need for efficient coordination is ubiquitous in organizations and industries. The literature on the determinants of efficient coordination has focused on individual decision making so far. In reality, however, teams often have to coordinate with othe...

Together at Last: Trade Costs, Demand Structure, and Welfare

By Monika Mrázová and J. Peter Neary

American Economic Review, May 2014

We show that relaxing the assumption of CES preferences in monopolistic competition has surprising implications when trade is restricted. Integrated and segmented markets behave differently, the latter typically exhibiting reciprocal dumping. Globalizatio...

Cleaning Up Third World Debt without Getting Taken to the Cleaners

[Symposium: New Institutions for Developing Country Debt]

By Jeremy Bulow and Kenneth Rogoff

Journal of Economic Perspectives, Winter 1990

Should taxpayers of wealthy countries finance a leveraged buyout of third world debt? The case for establishing an international debt discount facility rests on the belief that the overhang of foreign commercial bank debt is stifling growth in the Highly ...

Three Sides of Harberger Triangles

By James R. Hines

Journal of Economic Perspectives, Spring 1999

Harberger triangles are used to calculate the efficiency costs of taxes, government regulations, monopolistic practices, and various other market distortions. This paper considers the historical development of Harberger triangles, the associated theoretic...

Kinship, Incentives, and Evolution

By Ingela Alger and Jörgen W. Weibull

American Economic Review, September 2010

We analyze how family ties affect incentives, with focus on the strategic interaction between two mutually altruistic siblings. The siblings exert effort to produce output under uncertainty, and they may transfer output to each other. With equally altruis...

Economic Foundations of the Current Regulatory Reform Efforts

By W. Kip Viscusi

Journal of Economic Perspectives, Summer 1996

Regulatory reform proposals before Congress would potentially increase the role of economics in regulatory policymaking. These reforms seek to override existing legislative mandates, which usually prohibit economic trade-offs and have often led to ineffic...

Bonus Payments versus Efficiency Wages in the Repeated Principal-Agent Model with Subjective Evaluations

By Lucas Maestri

American Economic Journal: Microeconomics, August 2012

We study an infinitely repeated principal-agent model with subjective evaluations. We compare the surplus in efficiency-wage equilibria and in bonus-payments equilibria. The agent receives a constant wage and is motivated by the threat of dismissal in ef...

The National Assessment of Educational Progress in Economics: Findings for General Economics

By William B. Walstad and Stephen Buckles

American Economic Review, May 2008

To Review or Not to Review? Limited Strategic Thinking at the Movie Box Office

By Alexander L. Brown, Colin F. Camerer, and Dan Lovallo

American Economic Journal: Microeconomics, May 2012

Film studios occasionally withhold movies from critics before their release. These cold openings provide a natural setting to apply laboratory-developed models of limited strategic thinking to the field. In a set of 1,303 widely released movies, cold op...

Cliometrics and the Nobel

By Claudia Goldin

Journal of Economic Perspectives, Spring 1995

In October 1993, the Royal Swedish Academy of Sciences awarded the Nobel Prize in Economics to Robert William Fogel and Douglass Cecil North 'for having renewed research in economic history.' The Academy noted that 'they were pioneers in the branch of eco...

Report of the Editor: American Economic Journal: Economic Policy

By Alan J. Auerbach

American Economic Review, May 2010

Enterprise Reform in Chinese Industry

[Symposium: China]

By Gary H. Jefferson and Thomas G. Rawski

Journal of Economic Perspectives, Spring 1994

This paper begins by using a structure-conduct-performance perspective to show that partial reform improved the operation of China's state industries during the 1980s. The authors review the achievements of industries outside the state sector, emphasizing...