Medicaid Insurance in Old Age

By Mariacristina De Nardi, Eric French, and John Bailey Jones

American Economic Review, November 2016

The old age provisions of the Medicaid program were designed to insure retirees against medical expenses. We estimate a structural model of savings and medical spending and use it to compute the distribution of lifetime Medicaid transfers and Medicaid val...

Financial Contracts and the Political Economy of Investor Protection

By Pavel Ševčík

American Economic Journal: Macroeconomics, October 2012

This paper studies the joint dynamics of investor protection and economic development in a political economy model with capital accumulation and occupational choice. Less investor protection implies higher costs of external financing for entrepreneurs. T...

Trade and the Global Recession

By Jonathan Eaton, Samuel Kortum, Brent Neiman, and John Romalis

American Economic Review, November 2016

We develop a dynamic multicountry general equilibrium model to investigate forces acting on the global economy during the Great Recession and ensuing recovery. Our multisector framework accounts completely for countries' trade, investment, production, and...

Information, Preferences, and Public Benefit Participation: Experimental Evidence from the Advance EITC and 401(k) Savings

By Damon Jones

American Economic Journal: Applied Economics, April 2010

Within a field experiment, I present a treatment group with reductions in information, administrative, stigma, and procrastination costs associated with the Advance EITC. The treatment increases Advance participation from 0.3 to 1.2 percent. Another tr...

Agricultural Productivity and Structural Transformation: Evidence from Brazil

By Paula Bustos, Bruno Caprettini, and Jacopo Ponticelli

American Economic Review, June 2016

We study the effects of the adoption of new agricultural technologies on structural transformation. To guide empirical work, we present a simple model where the effect of agricultural productivity on industrial development depends on the factor-bias of te...

Testing Game Theory in the Field: Swedish LUPI Lottery Games

By Robert Östling, Joseph Tao-yi Wang, Eileen Y. Chou, and Colin F. Camerer

American Economic Journal: Microeconomics, August 2011

Game theory is usually difficult to test in the field because predictions typically depend sensitively on features that are not controlled or observed. We conduct one such test using both laboratory and field data from the Swedish lowest unique positive ...

Amplification and Asymmetric Effects without Collateral Constraints

By Dan Cao and Guangyu Nie

American Economic Journal: Macroeconomics, July 2017

The seminal contribution by Kiyotaki and Moore (1997) has spurred a vast literature on the importance of collateral constraints in propagating and amplifying shocks to the economy. However, most papers in the literature using collateral constraints assume...

Truth in Consequentiality: Theory and Field Evidence on Discrete Choice Experiments

By Christian A. Vossler, Maurice Doyon, and Daniel Rondeau

American Economic Journal: Microeconomics, November 2012

This paper explores methodological issues surrounding the use of discrete choice experiments to elicit values for public goods. We develop an explicit game theoretic model of individual decisions, providing conditions under which surveys with a single bi...

Ontology, Methodological Individualism, and the Foundations of the Social Sciences

By Robert Sugden

Journal of Economic Literature, December 2016

This is a review essay based on a critical assessment of The Ant Trap: Rebuilding the Foundations of the Social Sciences by Brian Epstein. Epstein argues that models in the social sciences are inadequate because they are based on a false ontology o...

The Lengthening of Childhood

[Symposium: Investment in Children]

By David Deming and Susan Dynarski

Journal of Economic Perspectives, Summer 2008

Over the past 40 years, the age at which children enter first grade has slowly drifted upward. In the fall of 1968, 96 percent of six-year-old children were enrolled in first grade or above. By 2005, the proportion had dropped to 84 percent, mainly becaus...

Global Financial Instability: Framework, Events, Issues

[Symposium: Global Financial Instability]

By Frederic S. Mishkin

Journal of Economic Perspectives, Fall 1999

Two of the key questions facing policymakers today are how to reduce the risk of global financial instability and how to cope with it when it occurs. This paper starts by defining financial instability and then showing how it harms economic activity. It t...

Risk-Taking and Risk-Sharing Incentives under Moral Hazard

By Mohamed Belhaj, Renaud Bourlès, and Frédéric Deroïan

American Economic Journal: Microeconomics, February 2014

This paper explores the effect of moral hazard on both risk-taking and informal risk-sharing incentives. Two agents invest in their own project, each choosing a level of risk and effort, and share risk through transfers. This can correspond to farmers in...

Competition and the Use of Foggy Pricing

By Eugenio J. Miravete

American Economic Journal: Microeconomics, February 2013

Firms engage in foggy pricing when the menu of tariff options aims at profiting from consumer mistakes. The analysis of this paper concludes that the transition from monopoly to competition in the early US cellular telephone industry does not generally...

A Theory of Occupational Choice with Endogenous Fertility

By Dilip Mookherjee, Silvia Prina, and Debraj Ray

American Economic Journal: Microeconomics, November 2012

Theories based on partial equilibrium reasoning alone cannot explain the widespread negative cross-sectional correlation between parental wages and fertility, without restrictive assumptions on preferences and childcare costs. We argue that incorporating ...

Endogenous Lobby Formation and Endogenous Protection: A Long-Run Model of Trade Policy Determination

By Devashish Mitra

American Economic Review, December 1999

This paper provides a theory of lobby formation within a framework in which trade policy is determined through political contributions. Under certain conditions, free trade turns out to be an equilibrium outcome either when the government has a high affin...

Legal Reform and Loan Repayment: The Microeconomic Impact of Debt Recovery Tribunals in India

By Sujata Visaria

American Economic Journal: Applied Economics, July 2009

In 1993, the Indian government introduced debt recovery tribunals to speed up the resolution of debt recovery claims larger than a threshold. This paper exploits the staggered introduction of tribunals across states and the link between overdues and cl...

Recommendations for Further Reading

By Bernard Saffran

Journal of Economic Perspectives, Summer 1989

Behavioral CEOs: The Role of Managerial Overconfidence

[Symposium: Overconfidence]

By Ulrike Malmendier and Geoffrey Tate

Journal of Economic Perspectives, Fall 2015

In this paper, we provide a theoretical and empirical framework that allows us to synthesize and assess the burgeoning literature on CEO overconfidence. We also provide novel empirical evidence that overconfidence matters for corporate investment de...

Time Allocation and Task Juggling

By Decio Coviello, Andrea Ichino, and Nicola Persico

American Economic Review, February 2014

A single worker allocates her time among different projects which are progressively assigned. When the worker works on too many projects at the same time, the output rate decreases and completion time increases according to a law which we derive. We call...

Secession and the Limits of Taxation: Toward a Theory of Internal Exit: Comment

By Grégoire Rota Graziosi

American Economic Review, March 2007