Exchange Rate Regimes in the Modern Era: Fixed, Floating, and Flaky

By Andrew K. Rose

Journal of Economic Literature, September 2011

This paper provides a selective survey of the incidence, causes, and consequences of a country's choice of its exchange rate regime. I begin with a critical review of Michael Klein and Jay C. Shambaugh's (2010) book Exchange Rate Regimes in the Modern Era...

Retirement Contribution Rate Nudges and Plan Participation: Evidence from a Field Experiment

By Jacob Goldin, Tatiana Homonoff, and Will Tucker-Ray

American Economic Review, May 2017

Simple interventions like changing the default or sending a short message can induce individuals to save more for retirement. However, messages that emphasize high savings rates may increase the amount that savings plan participants save while reducing th...

Social Norms and Economic Theory

[Symposium: Social Norms]

By Jon Elster

Journal of Economic Perspectives, Fall 1989

One of the most persistent cleavages in the social sciences is the opposition between two lines of thought conveniently associated with Adam Smith and Emile Durkheim, between homo economicus and homo sociologicus. Of these, the former is supposed to be gu...

How Important Is Technology Capital for the United States?

By Marek Kapička

American Economic Journal: Macroeconomics, April 2012

I construct measures of technology capital and country openness for the US economy and the rest of the world for 1982-2007. The key identifying assumption is that firms equalize returns on tangible and technology capital. For the US economy, technology ca...

Identifying and Spurring High-Growth Entrepreneurship: Experimental Evidence from a Business Plan Competition

By David McKenzie

American Economic Review, August 2017

Almost all firms in developing countries have fewer than ten workers, with a modal size of one. Are there potential high-growth entrepreneurs, and can public policy help identify them and facilitate their growth? A large-scale national business plan compe...

Does State Fiscal Relief during Recessions Increase Employment? Evidence from the American Recovery and Reinvestment Act

By Gabriel Chodorow-Reich, Laura Feiveson, Zachary Liscow, and William Gui Woolston

American Economic Journal: Economic Policy, August 2012

The American Recovery and Reinvestment Act (ARRA) of 2009 included $88 billion of aid to state governments administered through the Medicaid reimbursement process. We examine the effect of these transfers on states' employment. Because state fiscal relief...

American Farms Keep Growing: Size, Productivity, and Policy

[Symposium: Agriculture]

By Daniel A. Sumner

Journal of Economic Perspectives, Winter 2014

Commercial agriculture in the United States is comprised of several hundred thousand farms, and these farms continue to become larger and fewer. The size of commercial farms is sometimes best-measured by sales, in other cases by acreage, and in still ot...

Financial Intermediation, Leverage, and Macroeconomic Instability

By Gregory Phelan

American Economic Journal: Macroeconomics, October 2016

This paper investigates how financial sector leverage affects macroeconomic instability and welfare. In the model, banks borrow (use leverage) to allocate resources to productive projects and provide liquidity. When banks do not actively issue new equity,...

Interview with Robert A. Mundell

By Howard R. Vane and Chris Mulhearn

Journal of Economic Perspectives, Fall 2006

Robert A. Mundell has been Professor of Economics at Columbia University in New York City, New York, since 1974 and University Professor since 2001. In 1999, he was awarded the Nobel Memorial Prize in Economic Science "for his analysis of monetary and fis...

Human Capital and Imperfectly Informed Financial Markets

By Isaac Ehrlich and Jong Kook Shin

American Economic Review, May 2010

Information Avoidance

By Russell Golman, David Hagmann, and George Loewenstein

Journal of Economic Literature, March 2017

We commonly think of information as a means to an end. However, a growing theoretical and experimental literature suggests that information may directly enter the agent's utility function. This can create an incentive to avoid information, even when it is...

Natural "Natural Experiments" in Economics

By Mark R. Rosenzweig and Kenneth I. Wolpin

Journal of Economic Literature, December 2000

The recent literature exploiting natural events as "natural experiment" instruments is reviewed to assess to what extent it has advanced empirical knowledge. A weakness of the studies that adopt this approach is that the necessary set of behavioral, marke...

Minutes of the Meeting of the Executive Committee: San Francisco, CA, January 2, 2016

By Peter L. Rousseau

American Economic Review, May 2016

What Determines Productivity?

By Chad Syverson

Journal of Economic Literature, June 2011

Economists have shown that large and persistent differences in productivity levels across businesses are ubiquitous. This finding has shaped research agendas in a number of fields, including (but not limited to) macroeconomics, industrial organization, l...

Contracts versus Salaries in Matching

By Federico Echenique

American Economic Review, February 2012

Firms and workers may sign complex contracts that govern many aspects of their interactions. I show that when firms regard contracts as substitutes, bargaining over contracts can be understood as bargaining only over wages. Substitutes is the assumption c...

Monetary Policy Analysis with Potentially Misspecified Models

By Marco Del Negro and Frank Schorfheide

American Economic Review, September 2009

Policy analysis with potentially misspecified dynamic stochastic general equilibrium (DSGE) models faces two challenges: estimation of parameters that are relevant for policy trade-offs, and treatment of the deviations from the cross-equation restricti...

Liberalized Trade and Worker-Firm Matching

By Carl Davidson, Fredrik Heyman, Steven Matusz, Fredrik Sjöholm, and Susan Chun Zhu

American Economic Review, May 2012

Recent theoretical analysis suggests that a reduction in the cost of exporting increases the degree of assortative matching between workers and firms in export-oriented industries. Changes that reduce the cost of imports have an ambiguous impact on matchi...

Optimal Progressive Labor Income Taxation and Education Subsidies When Education Decisions and Intergenerational Transfers Are Endogenous

By Dirk Krueger and Alexander Ludwig

American Economic Review, May 2013

We quantitatively characterize the optimal mix of progressive income taxes and education subsidies in a model with endogenous human capital formation, borrowing constraints, income risk and incomplete financial markets. In addition to the distortions of l...

Informal Employment in a Growing and Globalizing Low-Income Country

By Brian McCaig and Nina Pavcnik

American Economic Review, May 2015

We document several facts about workforce transitions from the informal to the formal sector in Vietnam, a fast growing, industrializing, and low-income country. First, younger workers, particularly migrants, are more likely to work in the formal sector a...

Revealed Preference, Rational Inattention, and Costly Information Acquisition

By Andrew Caplin and Mark Dean

American Economic Review, July 2015

Apparently mistaken decisions are ubiquitous. To what extent does this reflect irrationality, as opposed to a rational trade-off between the costs of information acquisition and the expected benefits of learning? We develop a revealed preference test that...