The Fundamental Surplus

By Lars Ljungqvist and Thomas J. Sargent

American Economic Review, September 2017

To generate big responses of unemployment to productivity changes, researchers have reconfigured matching models in various ways: by elevating the utility of leisure, by making wages sticky, by assuming alternating-offer wage bargaining, by introducing co...

Decentralized Exchange

By Semyon Malamud and Marzena Rostek

American Economic Review, November 2017

Most assets are traded in multiple interconnected trading venues. This paper develops an equilibrium model of decentralized markets that accommodates general market structures with coexisting exchanges. Decentralized markets can allocate risk among trad...

Capital Flows: Expansionary or Contractionary?

By Olivier Blanchard, Jonathan D. Ostry, Atish R. Ghosh, and Marcos Chamon

American Economic Review, May 2016

The workhorse open-economy macro model suggests that capital inflows are contractionary because they appreciate the currency and reduce net exports. Emerging market policy makers, however, believe that inflows lead to credit booms and rising output; the e...

Do Consumers Exploit Commitment Opportunities? Evidence from Natural Experiments Involving Liquor Consumption

By B. Douglas Bernheim, Jonathan Meer, and Neva K. Novarro

American Economic Journal: Economic Policy, November 2016

This paper provides evidence concerning the extent to which consumers of liquor employ commitment devices. One widely recommended commitment strategy is to regulate alcohol consumption by deliberately manipulating availability. The paper assesses the prev...

Forging Ahead and Falling Behind: The Rise and Relative Decline of the First Industrial Nation

By Nicholas Crafts

Journal of Economic Perspectives, Spring 1998

This paper considers Britain's failure to maintain its lead in economic growth in the face of overtaking by the United States. Recent cliometric research is reviewed and it is argued that early nineteenth century Britain had a low growth potential by twen...

Unemployment in an Interdependent World

By Gabriel J. Felbermayr, Mario Larch, and Wolfgang Lechthaler

American Economic Journal: Economic Policy, February 2013

How do changes in labor market institutions, like more generous unemployment benefits in one country, affect labor market outcomes in other countries? We set up a two-country Armingtonian trade model with frictions on the goods and labor markets. Contr...

The Evolution of Strategic Sophistication

By Nikolaus Robalino and Arthur Robson

American Economic Review, April 2016

This paper investigates the evolutionary foundation for our ability to attribute preferences to others, an ability that is central to conventional game theory. We argue here that learning others' preferences allows individuals to efficiently modify their...

The Power of Eye Tracking in Economics Experiments

By Joanna N. Lahey and Douglas Oxley

American Economic Review, May 2016

Eye tracking is a technology that tracks eye activity including how long and where a participant is looking. As eye tracking technology has improved and become more affordable its use has expanded. We discuss how to design, implement, and analyze an exper...

The Boundaries of Multinational Enterprises and the Theory of International Trade

By James R. Markusen

Journal of Economic Perspectives, Spring 1995

This paper begins with a review of empirical evidence on multinational firms. Conceptual underpinnings of a theory are developed, relying in particular on the notion of knowledge capital as a mobile, joint input into geographically separated production fa...

Understanding China's Urban Pollution Dynamics

By Siqi Zheng and Matthew E. Kahn

Journal of Economic Literature, September 2013

China's ongoing urban economic growth has sharply increased the population's per capita income, lowered the count of people living below the poverty line, and caused major environmental problems. We survey the growing literature investigating the cause...

Report of the Committee on the Status of Women in the Economics Profession 2009

By Barbara M. Fraumeni

American Economic Review, May 2010

A Pitfall with Estimated DSGE-Based Government Spending Multipliers

By Patrick Fève, Julien Matheron, and Jean-Guillaume Sahuc

American Economic Journal: Macroeconomics, October 2013

This paper examines issues related to the estimation of the government spending multiplier (GSM) in a DSGE context. We stress a source of bias in the GSM arising from the combination of endogenous government expenditures and Edgeworth complementarity ...

Efficient Matching under Distributional Constraints: Theory and Applications

By Yuichiro Kamada and Fuhito Kojima

American Economic Review, January 2015

Many real matching markets are subject to distributional constraints. These constraints often take the form of restrictions on the numbers of agents on one side of the market matched to certain subsets on the other side. Real-life examples include restric...

The Effect of Labor Migration on the Diffusion of Democracy: Evidence from a Former Soviet Republic

By Toman Barsbai, Hillel Rapoport, Andreas Steinmayr, and Christoph Trebesch

American Economic Journal: Applied Economics, July 2017

Migration contributes to the circulation of goods, knowledge, and ideas. Using community and individual-level data from Moldova, we show that the emigration wave that started in the aftermath of the Russian crisis of 1998 strongly affected electoral outco...

Growth, Pollution, and Life Expectancy: China from 1991-2012

By Avraham Ebenstein, Maoyong Fan, Michael Greenstone, Guojun He, Peng Yin, and Maigeng Zhou

American Economic Review, May 2015

This paper examines the relationship between income, pollution, and mortality in China from 1991-2012. Using first-difference models, we document a robust positive association between city-level GDP and life expectancy. We also find a negative association...

Recommendations for Further Reading

By Timothy Taylor

Journal of Economic Perspectives, Spring 2009

The Convergence in Black-White Infant Mortality Rates during the 1960's

By Kenneth Y. Chay and Michael Greenstone

American Economic Review, May 2000

Immigration and Globalization: A Review Essay

By George J. Borjas

Journal of Economic Literature, December 2015

This essay revisits the argument that the removal of worldwide immigration restrictions would induce a very large increase in world GDP. The recent books Exodus: How Migration is Changing Our World by Paul Collier and The Price of Rights: Reg...

Bankruptcy Rates among NFL Players with Short-Lived Income Spikes

By Kyle Carlson, Joshua Kim, Annamaria Lusardi, and Colin F. Camerer

American Economic Review, May 2015

We test for consumption smoothing using bankruptcy data on players in the National Football League (NFL), who typically earn several million dollars during an income spike that lasts a few years. The life-cycle hypothesis predicts that players should save...

Credibility of Optimal Monetary Delegation: Comment

By John Driffill and Zeno Rotondi

American Economic Review, September 2006