A puzzling development

[Page]

India has grown a lot in the past three decades, but it’s been uneven. Can that continue?

Legal Origins and Female HIV

By Siwan Anderson

American Economic Review, June 2018

More than one-half of all people living with HIV are women, and 80 percent of all HIV-positive women in the world live in sub-Saharan Africa. This paper demonstrates that the legal origins of these formerly colonized countries significantly determine cu...

Marketplaces, Markets, and Market Design

By Alvin E. Roth

American Economic Review, July 2018

Marketplaces are often small parts of large markets, and both markets and marketplaces come in many varieties. Market design seeks to understand what marketplaces must accomplish to enable different kinds of markets. Marketplaces can have varying degrees ...

Asset Bubbles and Global Imbalances

By Daisuke Ikeda and Toan Phan

American Economic Journal: Macroeconomics, July 2019

We analyze the relationships between bubbles, capital flows, and economic activities in a rational bubble model with two large open economies. We establish a reinforcing relationship between global imbalances and bubbles. Capital flows from South to North...

Putting the Cycle Back into Business Cycle Analysis

By Paul Beaudry, Dana Galizia, and Franck Portier

American Economic Review, January 2020

Are business cycles mainly a response to persistent exogenous shocks, or do they instead reflect a strong endogenous mechanism which produces recurrent boom-bust phenomena? In this paper we present evidence in favor of the second interpretation and we hig...

Liquidity Constraints of the Middle Class

By Jeffrey R. Campbell and Zvi Hercowitz

American Economic Journal: Economic Policy, August 2019

Existing evidence from US middle class households shows that their MPCs out of tax rebates greatly exceed the PIH's prediction and are weakly related to their liquid assets. The standard precautionary-saving model predicts the first fact but counterfactua...

Experience counts

[Research Highlight]

February 21, 2020

The AEA interviews Ben Jones about why successful entrepreneurs tend to be older than we think.

The Role of Information in Disability Insurance Application: An Analysis of the Social Security Statement Phase-In

By Philip Armour

American Economic Journal: Economic Policy, August 2018

This paper exploits a natural experiment in information provision on US Disability Insurance (DI) applications: the Social Security statement. Although the effect of the statement on DI application was negligible in the general health and retirement study...

Tourism and Economic Development: Evidence from Mexico's Coastline

By Benjamin Faber and Cecile Gaubert

American Economic Review, June 2019

Tourism is a fast-growing services sector in developing countries. This paper combines a rich collection of Mexican microdata with a quantitative spatial equilibrium model and a new empirical strategy to study the long-term economic consequences of touris...

The Effect of Corporate Taxation on Investment and Financial Policy: Evidence from the DPAD

By Eric Ohrn

American Economic Journal: Economic Policy, May 2018

This study estimates the investment, financing, and payout responses to variation in a firm's effective corporate income tax rate in the United States. I exploit quasi-experimental variation created by the Domestic Production Activities Deduction, a corpo...

An Efficient Ascending-Bid Auction for Multiple Objects: Reply

By Lawrence M. Ausubel

American Economic Review, February 2018

In a comment, Okamoto (2018) identifies and corrects a misspecification of the rationing rule in Ausubel (2004). This reply elaborates on the observation that the optimality of truthful bidding in dynamic auctions may be sensitive to the fine details of t...

The Effect of Prescription Drug Monitoring Programs on Opioid Utilization in Medicare

By Thomas C. Buchmueller and Colleen Carey

American Economic Journal: Economic Policy, February 2018

The misuse of prescription opioids has become a serious epidemic in the United States. In response, states have implemented Prescription Drug Monitoring Programs (PDMPs), which record a patient's opioid prescribing history. While few providers participate...

The Agricultural Wage Gap: Evidence from Brazilian Micro-data

By Jorge A. Alvarez

American Economic Journal: Macroeconomics, January 2020

A key feature of developing economies is that wages in agriculture are below those of other sectors. Using Brazilian household surveys and administrative panel data, I use information on workers who switch sectors and workers with multiple jobs to assess ...

Real Effects of Information Frictions: When the States and the Kingdom Became United

By Claudia Steinwender

American Economic Review, March 2018

This paper exploits a unique historical experiment to estimate how information frictions distort international trade: the establishment of the transatlantic telegraph in 1866. I use newly collected data on cotton prices, trade, and information flows from ...

Front Matter

American Economic Review, January 2020

Option-Based Credit Spreads

By Christopher L. Culp, Yoshio Nozawa, and Pietro Veronesi

American Economic Review, February 2018

We present a novel empirical benchmark for analyzing credit risk using "pseudo firms" that purchase traded assets financed with equity and zero-coupon bonds. By no-arbitrage, pseudo bonds are equivalent to Treasuries minus put options on pseudo firm asset...

Exploiting Externalities to Estimate the Long-Term Effects of Early Childhood Deworming

By Owen Ozier

American Economic Journal: Applied Economics, July 2018

I investigate whether a school-based deworming intervention in Kenya had long-term effects on young children. I exploit positive externalities from the program to estimate impacts on younger children who were not directly treated. Ten years after the inte...

Socializing at Work: Evidence from a Field Experiment with Manufacturing Workers

By Sangyoon Park

American Economic Journal: Applied Economics, July 2019

Through a field experiment at a seafood-processing plant, I examine how working alongside friends affects employee productivity and how this effect is heterogeneous with respect to an employee's personality. This paper presents two main findings. First, w...

Foreign Rivals Are Coming to Town: Responding to the Threat of Foreign Multinational Entry

By Cathy Ge Bao and Maggie Xiaoyang Chen

American Economic Journal: Applied Economics, October 2018

How do domestic firms respond to the threat of foreign competition? This paper quantifies foreign competition threats by exploiting news of potential multinational investments from over 35,000 media outlets around the world. Using firm-specific measures o...

Fiscal Rules, Bailouts, and Reputation in Federal Governments

By Alessandro Dovis and Rishabh Kirpalani

American Economic Review, March 2020

Expectations of transfers by central governments incentivize overborrowing by local governments. In this paper, we ask if fiscal rules can reduce overborrowing if central governments cannot commit to enforce penalties when rules are violated. We study a m...