How Financial Literacy Affects Household Wealth Accumulation

By Jere R. Behrman, Olivia S. Mitchell, Cindy K. Soo, and David Bravo

American Economic Review, May 2012

This study isolates the causal effects of financial literacy and schooling on wealth accumulation using a new household dataset and an instrumental variables (IV) approach. Financial literacy and schooling attainment are both strongly positively associate...

Is It Whom You Know or What You Know? An Empirical Assessment of the Lobbying Process

By Marianne Bertrand, Matilde Bombardini, and Francesco Trebbi

American Economic Review, December 2014

Do lobbyists provide issue-specific information to members of Congress? Or do they provide special interests access to politicians? We present evidence to assess the role of issue expertise versus connections in the US Federal lobbying process and illus...

Trade Liberalization, Exports, and Technology Upgrading: Evidence on the Impact of MERCOSUR on Argentinian Firms

By Paula Bustos

American Economic Review, February 2011

This paper studies the impact of a regional free trade agreement, MERCOSUR, on technology upgrading by Argentinean firms. To guide empirical work, I introduce technology choice in a model of trade with heterogeneous firms. The joint treatment of the techn...

Equity Aversion: Social Norms and the Desire to Be Ahead

By Chaim Fershtman, Uri Gneezy, and John A. List

American Economic Journal: Microeconomics, November 2012

Inequity aversion models have dominated the behavioral economics landscape in the last decade. This study uses variants of dictator and trust games to provide empirical content to these models. We manipulate market features—such as competition over ...

Political Economy of Redistribution in the United States in the Aftermath of World War II--Evidence and Theory

By Roel Beetsma, Alex Cukierman, and Massimo Giuliodori

American Economic Journal: Economic Policy, November 2016

We present legislative, historical and statistical evidence of a substantial upward ratchet in transfers and taxes in the US due to World War II. This finding is explained within a political-economy framework with defense spending responding to a war thre...

Economies of Scale and Constant Returns to Capital: A Neglected Early Contribution to the Theory of Economic Growth

By Edmund S. Cannon

American Economic Review, March 2000

The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?

By Glenn Ellison and Edward L. Glaeser

American Economic Review, May 1999

The Behavioralist Goes to School: Leveraging Behavioral Economics to Improve Educational Performance

By Steven D. Levitt, John A. List, Susanne Neckermann, and Sally Sadoff

American Economic Journal: Economic Policy, November 2016

We explore the power of behavioral economics to influence the level of effort exerted by students in a low stakes testing environment. We find a substantial impact on test scores from incentives when the rewards are delivered immediately. There is suggest...

Resolving the Global Imbalance: The Dollar and the U.S. Saving Rate

[Symposium: U.S. Trade Deficit]

By Martin Feldstein

Journal of Economic Perspectives, Summer 2008

The massive deficit in the U.S. trade and current accounts is one of the most striking features of the current global economy and, to some observers, one of the most worrying. Although the current account deficit finally began to shrink in 2007, it remain...

Estimating Marginal Returns to Education

By Pedro Carneiro, James J. Heckman, and Edward J. Vytlacil

American Economic Review, October 2011

This paper estimates marginal returns to college for individuals induced to enroll in college by different marginal policy changes. The recent instrumental variables literature seeks to estimate this parameter, but in general it does so only under strong ...

Human Capital and the Wealth of Nations

By Rodolfo E. Manuelli and Ananth Seshadri

American Economic Review, September 2014

We reevaluate the role of human capital in determining the wealth of nations. We use standard human capital theory to estimate stocks of human capital and allow the quality of human capital to vary across countries. Our model can explain differences in sc...

Competition and Truth in the Market for News

[Symposium: Economics of Persuasion]

By Matthew Gentzkow and Jesse M. Shapiro

Journal of Economic Perspectives, Spring 2008

In this essay, we evaluate the case for competition in news markets from the perspective of economics. First, we consider the simple proposition that when more points of view are heard and defended, beliefs will converge to the truth. This concept of "com...

Analyzing the Airwaves Auction

By R. Preston McAfee and John McMillan

Journal of Economic Perspectives, Winter 1996

The design of the Federal Communications Commission spectrum license auction is a case study in the application of economic theory. Auction theory helped address policy questions such as whether an open auction or a sealed-bid auction should be used; whet...

Prediction Markets

[Symposium: Event Markets]

By Justin Wolfers and Eric Zitzewitz

Journal of Economic Perspectives, Spring 2004

We analyze the extent to which simple markets can be used to aggregate disperse information into efficient forecasts of uncertain future events. Drawing together data from a range of prediction contexts, we show that market-generated forecasts are typical...

In the Wrong Hands: Complementarities, Resource Allocation, and TFP

By Simeon D. Alder

American Economic Journal: Macroeconomics, January 2016

I explore mismatch between firms and their managers as a source of variation in aggregate output and total factor productivity (TFP). The model is calibrated to match observations on the size distribution of US manufacturing firms, managerial compensation...

The Impact of Disability Benefits on Labor Supply: Evidence from the VA's Disability Compensation Program

By David H. Autor, Mark Duggan, Kyle Greenberg, and David S. Lyle

American Economic Journal: Applied Economics, July 2016

Combining administrative data from the US Army, Department of Veterans Affairs, and Social Security Administration, we analyze the effect of the VA's Disability Compensation (DC) program on veterans' labor force participation and earnings. We study the 20...

Employment Fluctuations with Equilibrium Wage Stickiness

By Robert E. Hall

American Economic Review, March 2005

Following a recession, the aggregate labor market is slack–employment remains below normal and recruiting efforts of employers, as measured by help-wanted advertising and vacancies, are low. A model of matching friction explains the qualitative response...

Forecasting Volatility in Financial Markets: A Review

By Ser-Huang Poon and Clive W.J. Granger

Journal of Economic Literature, June 2003

Financial market volatility is an important input for investment, option pricing, and financial market regulation. The emphasis of this review article is on forecasting instead of modelling; it compares the volatility forecasting findings in 93 papers pub...

Anchoring Effects: Evidence from Art Auctions

By Alan Beggs and Kathryn Graddy

American Economic Review, June 2009

This paper shows that the price of a painting sold at an art auction and the experts' pre-sale valuations are anchored on the price at which the painting previously sold at auction. We are able to separate anchoring from rational learning by using the id...

Estimating Dynamic Games of Electoral Competition to Evaluate Term Limits in US Gubernatorial Elections

By Holger Sieg and Chamna Yoon

American Economic Review, July 2017

This paper shows how to identify and estimate, using standard semi-parametric techniques, a class of dynamic games with perfect monitoring, that have been at the frontier of recent research in political economy. The empirical analysis provides novel quant...