Do Firms Underinvest in Long-Term Research? Evidence from Cancer Clinical Trials

By Eric Budish, Benjamin N. Roin, and Heidi Williams

American Economic Review, July 2015

We investigate whether private research investments are distorted away from long-term projects. Our theoretical model highlights two potential sources of this distortion: short-termism and the fixed patent term. Our empirical context is cancer research, w...

Giving Credit Where It Is Due

[Symposium: The Agenda for Development Economics]

By Abhijit V. Banerjee and Esther Duflo

Journal of Economic Perspectives, Summer 2010

In the last few years, field experiments have emerged as an attractive new tool in the effort to elaborate our understanding of economic issues relevant to poor countries and poor people. By enabling the researcher to precisely control the variation in th...

Long-Run Impacts of Childhood Access to the Safety Net

By Hilary Hoynes, Diane Whitmore Schanzenbach, and Douglas Almond

American Economic Review, April 2016

We examine the impact of a positive and policy-driven change in economic resources available in utero and during childhood. We focus on the introduction of the Food Stamp Program, which was rolled out across counties between 1961 and 1975. We use the P...

Making Sense of Nonbinding Retail-Price Recommendations

By Stefan Buehler and Dennis L. Gärtner

American Economic Review, February 2013

We model retail-price recommendations (RPRs) as a communication device in vertical supply relations with private manufacturer information on production costs and consumer demand. With static trade, RPRs are irrelevant, and the equilibrium outcome is inef...

Financial Intermediation without Exclusivity

By Tano Santos and Jose A. Scheinkman

American Economic Review, May 2001

Efficiency and Redistribution: An Evaluative Review of Louis Kaplow's The Theory of Taxation and Public Economics

By Robin Boadway

Journal of Economic Literature, December 2010

Louis Kaplow proposes a two-step methodology for normative policy analysis and illustrates it using various policy reforms. The first step is to identify efficiency gains when hypothetical lump-sum taxes can undo redistributive consequences. The second s...

Revealed Preference in a Discrete Consumption Space

By Matthew Polisson and John K.-H. Quah

American Economic Journal: Microeconomics, February 2013

We show that an agent maximizing some utility function on a discrete (as opposed to continuous) consumption space will obey the generalized axiom of revealed preference (GARP), so long as the agent obeys cost efficiency. Cost efficiency will hold if th...

Nominal Exchange Rate Determinacy under the Threat of Currency Counterfeiting

By Pedro Gomis-Porqueras, Timothy Kam, and Christopher Waller

American Economic Journal: Macroeconomics, April 2017

We study the endogenous choice to accept fiat objects as media of exchange and their implications for nominal exchange rate determination. We consider a two-country environment with two currencies that can be used to settle any transactions. However, curr...

Borrowing on the Wrong Credit Card? Evidence from Mexico

By Alejandro Ponce, Enrique Seira, and Guillermo Zamarripa

American Economic Review, April 2017

We establish new facts about the way consumers allocate debt among their credit cards using data for a representative sample of cardholders in Mexico. We find that relative prices are weak predictors of the allocation of debt, purchases, and payments. Con...

Many Children Left Behind? Textbooks and Test Scores in Kenya

By Paul Glewwe, Michael Kremer, and Sylvie Moulin

American Economic Journal: Applied Economics, January 2009

A randomized evaluation in rural Kenya finds, contrary to the previous literature, that providing textbooks did not raise average test scores. Textbooks did increase the scores of the best students (those with high pretest scores) but had little effect...

Keeping Secrets: The Economics of Access Deterrence

By Emeric Henry and Francisco Ruiz-Aliseda

American Economic Journal: Microeconomics, August 2016

Keeping valuable secrets requires costly protection efforts. Breaking them requires costly search efforts. In a dynamic model in which the value of the secret decreases with the number of those holding it, we examine the secret holders' protection decisio...

Does Tax-Collection Invariance Hold? Evasion and the Pass-Through of State Diesel Taxes

By Wojciech Kopczuk, Justin Marion, Erich Muehlegger, and Joel Slemrod

American Economic Journal: Economic Policy, May 2016

In simple models, the incidence of a tax is independent of the identity of the remitting party. We illustrate that this prediction fails to hold if opportunities for evasion differ across economic agents. Second, we estimate how the incidence of state ...

The Difference That CEOs Make: An Assignment Model Approach

By Marko Tervio

American Economic Review, June 2008

This paper presents an assignment model of CEOs and firms. The distributions of CEO pay levels and firms' market values are analyzed as the competitive equilibrium of a matching market where talents, as well as CEO positions, are scarce. It is shown ho...

Emotions in Economic Theory and Economic Behavior

By George Loewenstein

American Economic Review, May 2000

An Interview with Zvi Griliches

By Alan B. Krueger and Timothy Taylor

Journal of Economic Perspectives, Spring 2000

Alan Krueger and Timothy Taylor interviewed Zvi Griliches, Paul M. Warburg Professor of Economics at Harvard University, at his home near the Harvard campus on June 21, 1999. The interview touches on his harrowing journey from Lithuania to Chicago; year...

In Honor of Andrei Shleifer: Winner of the John Bates Clark Medal

By Olivier Blanchard

Journal of Economic Perspectives, Winter 2001

Firm Entry and Macroeconomic Dynamics: A State-Level Analysis

By François Gourio, Todd Messer, and Michael Siemer

American Economic Review, May 2016

Using an annual panel of US states over the period 1982-2014, we estimate the response of macroeconomic variables to a shock to the number of new firms (startups). We find that these shocks have significant effects that persist for many years on real GDP,...

Are Female Supervisors More Female-Friendly?

By Steven Bednar and Dora Gicheva

American Economic Review, May 2014

We introduce the idea that easily inferable demographic characteristics such as gender may not be sufficient to define type in the supervisor-employee mentoring relationship. We use longitudinal data on athletic directors at NCAA Division I programs to id...

The Growth in the Social Security Disability Rolls: A Fiscal Crisis Unfolding

[Symposium: American Employment]

By David H. Autor and Mark G. Duggan

Journal of Economic Perspectives, Summer 2006

The U.S. Social Security Disability Insurance (DI) program has grown dramatically over the last 20 years in size and expense. This growth poses significant risks to the finances of the DI program and the broader Social Security system, and raises troublin...

The Aftermath of Financial Crises

By Carmen M. Reinhart and Kenneth S. Rogoff

American Economic Review, May 2009