Estimating the Market-Perceived Monetary Policy Rule

By James D. Hamilton, Seth Pruitt, and Scott Borger

American Economic Journal: Macroeconomics, July 2011

We introduce a novel method for estimating a monetary policy rule using macroeconomic news. We estimate directly the policy rule agents use to form their expectations by linking news' effects on forecasts of both economic conditions and monetary policy. E...

The Motivation and Bias of Bureaucrats

By Canice Prendergast

American Economic Review, March 2007

Many individuals are motivated to exert effort because they care about their jobs, rather than because there are monetary consequences to their actions. The intrinsic motivation of bureaucrats is the focus of this paper, and three primary results are s...

Do Value-Added Estimates Add Value? Accounting for Learning Dynamics

By Tahir Andrabi, Jishnu Das, Asim Ijaz Khwaja, and Tristan Zajonc

American Economic Journal: Applied Economics, July 2011

This paper illustrates the central role of persistence in estimating and interpreting value-added models of learning. Using data from Pakistani public and private schools, we apply dynamic panel methods that address three key empirical challenges: imperfe...

Financial Decision-Making: Are Women Really More Risk-Averse?

By Renate Schubert, Martin Brown, Matthias Gysler, and Hans Wolfgang Brachinger

American Economic Review, May 1999

De Facto Political Power and Institutional Persistence

By Daron Acemoglu and James A. Robinson

American Economic Review, May 2006

The Impact of Global Warming on Agriculture: A Ricardian Analysis: Reply

By Robert Mendelsohn and William D. Nordhaus

American Economic Review, September 1999

Women and Affirmative Action

[Symposium: Women in the Labor Market]

By Jonathan S. Leonard

Journal of Economic Perspectives, Winter 1989

This paper reviews evidence indicating that, as it has been enforced so far, affirmative action has contributed negligibly to women's progress in the workplace. Affirmative action can be modeled as a tax on employers whose female employment growth falls b...

Credit Relationships and Business Bankruptcy during the Great Depression

By Mary Eschelbach Hansen and Nicolas L. Ziebarth

American Economic Journal: Macroeconomics, April 2017

Credit relationships are sticky. Stickiness makes relationships beneficial to borrowers in times of their own distress but makes them potentially problematic when lenders themselves face hardship. To examine the role of credit relationships during a finan...

Exclusive Dealing and Entry, when Buyers Compete

By Chiara Fumagalli and Massimo Motta

American Economic Review, June 2006

Rasmusen et al. (1991) and Segal and Whinston (2000) show that an incumbent monopolist might prevent entry of a more efficient competitor by exploiting externalities among buyers. We show that their results hold only when downstream competition among buye...

Intertemporal Consumption and Credit Constraints: Does Total Expenditure Respond to an Exogenous Shock to Credit?

By Søren Leth-Petersen

American Economic Review, June 2010

There is continuing controversy over the importance of credit constraints. This paper investigates whether total household expenditure and debt is affected by an exogenous increase in access to credit provided by a credit market reform that enabled Danish...

Conclusions Regarding Cross-Group Differences in Happiness Depend on Difficulty of Reaching Respondents

By Ori Heffetz and Matthew Rabin

American Economic Review, December 2013

A growing literature explores differences in subjective well-being across demographic groups, often relying on surveys with high nonresponse rates. By using the reported number of call attempts made to participants in the University of Michigan's Surve...

Output and Welfare Effects of Inflation with Costly Price and Quantity Adjustments

By Leif Danziger

American Economic Review, December 2001

The Welfare Effects of Use-or-Lose Provisions in Markets with Dominant Firms

By Ian Gale and Daniel P. O'Brien

American Economic Journal: Microeconomics, February 2013

A use-or-lose provision requires that firms employ a certain minimum fraction of their productive capacity. Variants have been used by regulators in the airline and wireless communications industries, among others. A typical stated objective is to limi...

An Empirical Model of the Medical Match

By Nikhil Agarwal

American Economic Review, July 2015

This paper develops a framework for estimating preferences in a many-to-one matching market using only observed matches. I use pairwise stability and a vertical preference restriction on one side to identify preferences on both sides of the market. Counte...

Heuristic Thinking and Limited Attention in the Car Market

By Nicola Lacetera, Devin G. Pope, and Justin R. Sydnor

American Economic Review, August 2012

Can heuristic information processing affect important product markets? Analyzing over 22 million wholesale used-car transactions, we find evidence of left-digit bias in the processing of odometer values, whereby individuals focus on the number's leftmost ...

Inefficiency in Legislative Policymaking: A Dynamic Analysis

By Marco Battaglini and Stephen Coate

American Economic Review, March 2007

This paper develops an infinite horizon model of public spending and taxation in which policy decisions are determined by legislative bargaining. The policy space incorporates both productive and distributive public spending and distortionary taxation....

(Good and Bad) Reputation for a Servant of Two Masters

By Heski Bar-Isaac and Joyee Deb

American Economic Journal: Microeconomics, November 2014

We present a model in which an agent takes actions to affect her reputation with two audiences with diverse preferences. This contrasts with standard reputation models that consider a homogeneous audience. A new aspect that arises is that different audie...

Optimal Executive Compensation versus Managerial Power: A Review of Lucian Bebchuk and Jesse Fried's Pay without Performance: The Unfulfilled Promise of Executive Compensation

By Michael S. Weisbach

Journal of Economic Literature, June 2007

This essay reviews Lucian A. Bebchuk and Jesse M. Fried's Pay without Performance: The Unfulfilled Promise of Executive Compensation. Bebchuk and Fried criticize the standard view of executive compensation, in which executives negotiate contracts w...

Contracting with Third Parties

By Sandeep Baliga and Tomas Sjöström

American Economic Journal: Microeconomics, February 2009

In bilateral holdup and moral hazard in teams models, introducing a third party allows implementation of the first best, even if renegotiation is possible. Fines paid to the third party provide incentives for truth-telling and investment. This result h...

The History of Technological Anxiety and the Future of Economic Growth: Is This Time Different?

[Symposium: Automation and Labor Markets]

By Joel Mokyr, Chris Vickers, and Nicolas L. Ziebarth

Journal of Economic Perspectives, Summer 2015

Technology is widely considered the main source of economic progress, but it has also generated cultural anxiety throughout history. The developed world is now suffering from another bout of such angst. Anxieties over technology can take on several fo...