Banking, Liquidity, and Bank Runs in an Infinite Horizon Economy

By Mark Gertler and Nobuhiro Kiyotaki

American Economic Review, July 2015

We develop an infinite horizon macroeconomic model of banking that allows for liquidity mismatch and bank runs. Whether a bank run equilibrium exists depends on bank balance sheets and an endogenous liquidation price for bank assets. While in normal times...

Report Cards: The Impact of Providing School and Child Test Scores on Educational Markets

By Tahir Andrabi, Jishnu Das, and Asim Ijaz Khwaja

American Economic Review, June 2017

We study the impact of providing school report cards with test scores on subsequent test scores, prices, and enrollment in markets with multiple public and private providers. A randomly selected half of our sample villages (markets) received report cards....

Understanding the Mechanisms through Which an Influential Early Childhood Program Boosted Adult Outcomes

By James Heckman, Rodrigo Pinto, and Peter Savelyev

American Economic Review, October 2013

A growing literature establishes that high quality early childhood interventions targeted toward disadvantaged children have substantial impacts on later life outcomes. Little is known about the mechanisms producing these impacts. This paper uses longi...

The Role of Labor Market Intermittency in Explaining Gender Wage Differentials

By Julie L. Hotchkiss and M. Melinda Pitts

American Economic Review, May 2007

Information Technology and Growth

By Dale W. Jorgenson and Kevin J. Stiroh

American Economic Review, May 1999

The Economic Cost of Global Fuel Subsidies

By Lucas W. Davis

American Economic Review, May 2014

By 2015, global oil consumption will reach 90 million barrels per day. In part, this high level of consumption reflects the fact that many countries provide subsidies for gasoline and diesel. This paper examines global fuel subsidies using the latest avai...

Sovereign Debt Booms in Monetary Unions

By Mark Aguiar, Manuel Amador, Emmanuel Farhi, and Gita Gopinath

American Economic Review, May 2014

We propose a continuous time model to investigate the impact of inflation credibility on sovereign debt dynamics. At every point in time, an impatient government decides fiscal surplus and inflation, without commitment. Inflation is costly, but reduces th...

Economic Interpretations of Intergenerational Correlations

[Symposium: Intergenerational Mobility]

By Nathan D. Grawe and Casey B. Mulligan

Journal of Economic Perspectives, Summer 2002

Since accurate prediction ultimately determines the usefulness of theory, our paper gives the reader a taste of some predictions derived from economic theory and some empirical successes and failures. We provide only a taste, because there are a great man...

Fat Tails and the Social Cost of Carbon

By Martin L. Weitzman

American Economic Review, May 2014

At high enough greenhouse gas concentrations, climate change might conceivably cause catastrophic damages with small but non-negligible probabilities. If the bad tail of climate damages is sufficiently fat, and if the coefficient of relative risk aversion...

The Arbitrage Principle in Financial Economics

[Symposium: Arbitrage]

By Hal R. Varian

Journal of Economic Perspectives, Fall 1987

The importance of arbitrage conditions in financial economics has been recognized since Modigliani and Miller's classic work on the financial structure of the firm. They showed that if a firm could change its market value by purely financial operations su...

The Social Multiplier and Labor Market Participation of Mothers

By Eric Maurin and Julie Moschion

American Economic Journal: Applied Economics, January 2009

In France, as in the US, a mother's labor market participation is influenced by the sex composition of her two eldest siblings. This paper shows that it is also affected by the sex composition of the eldest siblings of the other mothers living in the s...

How Do Providers Respond to Changes in Public Health Insurance Coverage? Evidence from Adult Medicaid Dental Benefits

By Thomas Buchmueller, Sarah Miller, and Marko Vujicic

American Economic Journal: Economic Policy, November 2016

This study evaluates how large changes in public health insurance coverage affect provider behavior and patient wait times by analyzing a common type of primary care: dental services. When states expand coverage of dental services to adult Medicaid benefi...

Confronting the Environmental Kuznets Curve

By Susmita Dasgupta, Benoit Laplante, Hua Wang, and David Wheeler

Journal of Economic Perspectives, Winter 2002

The environmental Kuznets curve posits an inverted-U relationship between pollution and economic development. Pessimistic critics of empirically estimated curves have argued that their declining portions are illusory, either because they are cross-section...

Meetings with Costly Participation

By Martin J. Osborne, Jeffrey S. Rosenthal, and Matthew A. Turner

American Economic Review, September 2000

We study a collective decision-making process in which people interested in an issue may participate, at a cost, in a meeting, and the resulting decision is a compromise among the participants' preferences. We show that the equilibrium number of participa...

Dictating the Risk: Experimental Evidence on Giving in Risky Environments: Comment

By Michal Krawczyk and Fabrice Le Lec

American Economic Review, March 2016

Based on experimental dictator games with probabilistic prospects, Brock, Lange, and Ozbay (2013) conclude that neither ex post nor ex ante comparisons can fully account for observed behavior. We argue that their conclusion that ex ante comparisons can...

Resource Constraints and the Criminal Justice System: Evidence from Judicial Vacancies

By Crystal S. Yang

American Economic Journal: Economic Policy, November 2016

Ten percent of federal judgeships are currently vacant, yet little is known on the impact of these vacancies on criminal justice outcomes. Using judge deaths and pension eligibility as instruments for vacancies, I find that prosecutors dismiss more cases ...

Entry, Exit, and Investment-Specific Technical Change

By Roberto M. Samaniego

American Economic Review, March 2010

Using European data, this paper finds that (i) industry entry and exit rates are positively related to industry rates of investment-specific technical change (ISTC); and (ii) the sensitivity of industry entry and exit rates to cross-country differences...

Do Colleges Shortchange Women? Gender Differences in the Transition from College to Work

By Lois Joy

American Economic Review, May 2000

Sudden Stops, Financial Crises, and Leverage

By Enrique G. Mendoza

American Economic Review, December 2010

Financial crashes were followed by deep recessions in the Sudden Stops of emerging economies. An equilibrium business cycle model with a collateral constraint explains this phenomenon as a result of the amplification and asymmetry that the constraint ind...

An Economic Evaluation of the Moneyball Hypothesis

By Jahn K. Hakes and Raymond D. Sauer

Journal of Economic Perspectives, Summer 2006

Michael Lewis's book, Moneyball, describes how an innovative manager working for the Oakland Athletics successfully exploited an inefficiency in baseball's labor market over a prolonged period of time. We evaluate Lewis's claims by applying standar...