Are Incentives for R&D Effective? Evidence from a Regression Discontinuity Approach

By Raffaello Bronzini and Eleonora Iachini

American Economic Journal: Economic Policy, November 2014

This paper evaluates a unique R&D subsidy program implemented in northern Italy. Firms were invited to submit proposals for new projects and only those which scored above a certain threshold received the subsidy. We use a sharp regression discontinuity...

The Distributional Consequences of Large Devaluations

By Javier Cravino and Andrei A. Levchenko

American Economic Review, November 2017

We study the impact of large exchange rate devaluations on the cost of living at different points on the income distribution. Poor households spend relatively more on tradeable product categories and consume lower-priced varieties within categories. Cha...

Technical Change, Wage Inequality, and Taxes

By Laurence Ales, Musab Kurnaz, and Christopher Sleet

American Economic Review, October 2015

This paper considers the normative implications of technical change for tax policy design. A task-to-talent assignment model of the labor market is embedded into an optimal tax problem. Technical change modifies equilibrium wage growth across talents and ...

Evaluating Microfoundations for Aggregate Price Rigidities: Evidence from Matched Firm-Level Data on Product Prices and Unit Labor Cost

By Mikael Carlsson and Oskar Nordström Skans

American Economic Review, June 2012

Using matched data on product-level prices and the producing firm's unit labor cost, we find a moderate pass-through of current idiosyncratic marginal-cost changes. Also, the response does not vary across firms facing very different idiosyncratic shock v...

Increasing Returns versus National Product Differentiation as an Explanation for the Pattern of U.S.-Canada Trade

By Keith Head and John Ries

American Economic Review, September 2001

We evaluate two alternative models of international trade in differentiated products. An increasing returns model where varieties are linked to firms predicts home market effects: increases in a country's share of demand cause disproportionate increases i...

Optimal Sales Schemes against Interdependent Buyers

By Masaki Aoyagi

American Economic Journal: Microeconomics, February 2010

This paper studies a monopoly pricing problem when the seller can choose the timing of a trade with each buyer, and a buyer's valuation of the seller's good is the weighted sum of his and other buyers' private signals. We show that it is optimal for th...

An Economic Theory of the Evolutionary Emergence of Property Rights

By Mukesh Eswaran and Hugh M. Neary

American Economic Journal: Microeconomics, August 2014

We model the emergence of an innate, biological sense of property rights where resource scarcity and output contestability reign. Preferences evolve such that, in evolutionarily stable equilibrium, an object is valued more by an individual who possesses i...

Public-Place Smoking Laws and Exposure to Environmental Tobacco Smoke (ETS)

By Christopher Carpenter, Sabina Postolek, and Casey Warman

American Economic Journal: Economic Policy, August 2011

Public-place smoking restrictions are the most important non-price tobacco control measures worldwide, yet surprisingly little is known about their effects on exposure to environmental tobacco smoke (ETS). We study these laws in Canada using data with que...

Unintended Effects of Anonymous Résumés

By Luc Behaghel, Bruno Crépon, and Thomas Le Barbanchon

American Economic Journal: Applied Economics, July 2015

We evaluate an experimental program in which the French public employment service anonymized résumés for firms that were hiring. Firms were free to participate or not; participating firms were then randomly assigned to receive either anonymous résumés...

Comment on Poirier: Dogma or Doubt?

By Adrian Pagan

Journal of Economic Perspectives, Winter 1988

[This paper responds to "Frequentist and Subjectivist Perspectives on the Problems of Model Building in Economics," by Dale J. Poirier, in this same issue.] Poirier appeals to the latent statistician that he hopes is lurking behind every economist. Like a...

Detecting Discrimination

[Symposium: Discrimination in Product, Credit and Labor Markets]

By James J. Heckman

Journal of Economic Perspectives, Spring 1998

The evidence on discrimination produced from the audit method is examined. Audits survey the average firm and not the marginal firm which determines the level of market discrimination. Taken on its own terms, there is little evidence of labor market discr...

Anomalies: Weekend, Holiday, Turn of the Month, and Intraday Effects

By Richard H. Thaler

Journal of Economic Perspectives, Fall 1987

This feature will report successful searches for disconfirming evidence -- economic anomalies. As suggested by Thomas Kuhn, an economic anomaly is a result inconsistent with the economics paradigm. Economics is distinguished from other social sciences by ...

The Community College: Educating Students at the Margin between College and Work

[Symposium: The Economics of Higher Education]

By Thomas J. Kane and Cecilia Elena Rouse

Journal of Economic Perspectives, Winter 1999

The authors provide background on the history and development of community colleges in the United States in the last half century and survey available evidence on the impacts of community colleges on educational attainment and earnings. They also weigh th...

Estimating Models with Dispersed Information

By Leonardo Melosi

American Economic Journal: Macroeconomics, January 2014

We conduct likelihood evaluation of a DSGE model in which firms have imperfect common knowledge. Imperfect common knowledge is found to be more successful than price stickiness á la Calvo to account for the highly persistent effects of nominal shocks...

Optimal Contracts, Aggregate Risk, and the Financial Accelerator

By Charles T. Carlstrom, Timothy S. Fuerst, and Matthias Paustian

American Economic Journal: Macroeconomics, January 2016

This paper derives the optimal lending contract in the financial accelerator model of Bernanke, Gertler, and Gilchrist (1999), henceforth, BGG. The optimal contract includes indexation to the aggregate return on capital, household consumption, and the ret...

Iceland's Natural Experiment in Supply-Side Economics

By Marco Bianchi, Bjorn R. Gudmundsson, and Gylfi Zoega

American Economic Review, December 2001

Accounting for Growth: Comparing China and India

[Symposium: Productivity]

By Barry Bosworth and Susan M. Collins

Journal of Economic Perspectives, Winter 2008

Since 1980, China and India have achieved remarkable rates of economic growth and poverty reduction. The emergence of China and India as major forces in the global economy has been one of the most significant economic developments of the past quarter cent...

Advances in Routing Technologies and Internet Peering Agreements

By Stanley Besen, Paul Milgrom, Bridger Mitchell, and Padmanabhan Srinagesh

American Economic Review, May 2001

Vertical Bargaining and Countervailing Power

By Alberto Iozzi and Tommaso Valletti

American Economic Journal: Microeconomics, August 2014

We study a set of bilateral Nash bargaining problems between an upstream input supplier and several differentiated but competing retailers. If one bilateral bargain fails, the supplier can sell to the other retailers. We show that, in a disagreement, the ...

Report: Committee on the Status of Minority Groups in the Economics Profession

By Cecilia Rouse

American Economic Review, May 2013