A Review of Michael Tomz's Reputation and International Cooperation: Sovereign Debt across Three Centuries

By Mark Gersovitz

Journal of Economic Literature, June 2009

Repudiation and expropriation pose obstacles to the international mobility of capital and thereby to efficient international allocation of resources. Tomz discusses the determinants of lending in the face of the threat of repudiation. Using history, he ...

Contagion in Financial Networks

By Paul Glasserman and H. Peyton Young

Journal of Economic Literature, September 2016

The recent financial crisis has prompted much new research on the interconnectedness of the modern financial system and the extent to which it contributes to systemic fragility. Network connections diversify firms' risk exposures, but they also create cha...

Information and Extremism in Elections

By Raphael Boleslavsky and Christopher Cotton

American Economic Journal: Microeconomics, February 2015

We model an election in which parties nominate candidates with observable policy preferences prior to a campaign that produces information about candidate quality, a characteristic independent of policy. Informative campaigns lead to greater differentiati...

The Strategic Value of Carbon Tariffs

By Christoph Böhringer, Jared C. Carbone, and Thomas F. Rutherford

American Economic Journal: Economic Policy, February 2016

We ask whether the threat of carbon tariffs might lower the cost of reductions in world carbon emissions by inducing unregulated regions to adopt emission controls. We use a numerical model to generate payoffs of a game in which a coalition regulates emis...

Roads to Prosperity? Assessing the Link between Public Capital and Productivity

By John G. Fernald

American Economic Review, June 1999

Does the positive correlation between infrastructure and productivity reflect causation? If so, in which direction? The author finds that, when growth in roads (the largest component of infrastructure) changes, productivity growth changes disproportionate...

What Do Consumers Really Pay on Their Checking and Credit Card Accounts? Explicit, Implicit, and Avoidable Costs

By Victor Stango and Jonathan Zinman

American Economic Review, May 2009

Distributional and Efficiency Impacts of Increased US Gasoline Taxes

By Antonio M. Bento, Lawrence H. Goulder, Mark R. Jacobsen, and Roger H. von Haefen

American Economic Review, June 2009

We examine the impacts of increased US gasoline taxes in a model that links the markets for new, used, and scrapped vehicles and recognizes the considerable heterogeneity among households and cars. Household choice parameters derive from an estimation ...

Microfinance Meets the Market

By Robert Cull, Asli Demirgüç-Kunt, and Jonathan Morduch

Journal of Economic Perspectives, Winter 2009

In this paper, we examine the economic logic behind microfinance institutions and consider the movement from socially oriented nonprofit microfinance institutions to for-profit microfinance. Drawing on a large dataset that includes most of the world's lea...

Deleveraging and Monetary Policy: Japan since the 1990s and the United States since 2007

By Kazuo Ueda

Journal of Economic Perspectives, Summer 2012

As the U.S. economy works through a sluggish recovery several years after the Great Recession technically came to an end in June 2009, it can only look with horror toward Japan's experience of two decades of stagnant growth since the early 1990s. In contr...

Ambiguity Aversion: Implications for the Uncovered Interest Rate Parity Puzzle

By Cosmin Ilut

American Economic Journal: Macroeconomics, July 2012

High interest rate currencies tend to appreciate in the future relative to low interest rate currencies instead of depreciating as uncovered interest parity (UIP) predicts. I construct a model of exchange rate determination in which ambiguity-averse agent...

Growth-Rate and Uncertainty Shocks in Consumption: Cross-Country Evidence

By Emi Nakamura, Dmitriy Sergeyev, and Jón Steinsson

American Economic Journal: Macroeconomics, January 2017

We provide new estimates of the importance of growth-rate shocks and uncertainty shocks for developed countries. The shocks we estimate are large and correspond to well-known macroeconomic episodes such as the Great Moderation and the productivity slowdow...

The Dynamic Behavior of the Real Exchange Rate in Sticky Price Models

By Jón Steinsson

American Economic Review, March 2008

Existing empirical evidence suggests that real exchange rates exhibit hump-shaped dynamics. I show that this is a robust fact across nine large, developed economies. This fact can help explain why sticky price business cycle models have been unable to mat...

A Model of Positive Self-Image in Subjective Assessments

By Luís Santos-Pinto and Joel Sobel

American Economic Review, December 2005

This paper suggests a mechanism that describes individuals' positive self-image in subjective assessments of their relative abilities. The mechanism assumes individuals have heterogeneous production functions that determine ability as a function of multip...

The Econometrics of Matching Models

By Pierre-André Chiappori and Bernard Salanié

Journal of Economic Literature, September 2016

Many questions in economics can be fruitfully analyzed in the framework of matching models. Until recently, empirical work has lagged far behind theory in this area. This review reports on recent developments that have considerably expanded the range of m...

The Efficacy of Information Policy: A Review of Archon Fung, Mary Graham, and David Weil's Full Disclosure: The Perils and Promise of Transparency

By Clifford Winston

Journal of Economic Literature, September 2008

The economics of information has identified an important role for government to correct situations where competition is not sufficient to reveal valuable information to consumers. Archon Fung, Mary Graham, and David Weil's Full Disclosure: The Perils a...

Okun's Law and Productivity Innovations

By Robert J. Gordon

American Economic Review, May 2010

Nobel Laureate: The Many Other Allais Paradoxes

By Bertrand R. Munier

Journal of Economic Perspectives, Spring 1991

Maurice Allais is know for the 1952 "Allais paradox," but other very important parts of his work remain virtually unknown to most economists. As Paul Samuelson (1983) wrote, "Had Allais' earliest writings been in English, a whole generation of economic th...

$1,000 Cash Back: The Pass-Through of Auto Manufacturer Promotions

By Meghan Busse, Jorge Silva-Risso, and Florian Zettelmeyer

American Economic Review, September 2006

Automobile manufacturers frequently use promotions involving cash incentives. While payments are nominally directed to either customers or dealers, the ultimate beneficiary of the promotion depends on the outcome of price negotiation. We use program ev...

The Effects of Job Corps Training on Wages of Adolescents and Young Adults

By German Blanco, Carlos A. Flores, and Alfonso Flores-Lagunes

American Economic Review, May 2013

Previous evaluations of Job Corps document disparate effects on the earnings of adolescents (aged 16-19) and young adults (aged 20-24). These are conjectured to be due to differential human capital accumulation within the program between these groups. If ...

On the Evolution of the World Income Distribution

[Symposium: Distribution of World Income]

By Charles I. Jones

Journal of Economic Perspectives, Summer 1997

The post-World War I period has seen substantial changes in the world income distribution. As a result, the shape of the distribution has changed from something that looks like a normal distribution in 1960 to a bimodal 'twin peaks' distribution in 1988. ...