Monetary Policy, Bounded Rationality, and Incomplete Markets

By Emmanuel Farhi and Iván Werning

American Economic Review, November 2019

This paper extends the benchmark New-Keynesian model by introducing two frictions: (i) agent heterogeneity with incomplete markets, uninsurable idiosyncratic risk, and occasionally-binding borrowing constraints; and (ii) bounded rationality in the form of...

Violence and Risk Preference: Experimental Evidence from Afghanistan: Comment

By Ferdinand M. Vieider

American Economic Review, August 2018

In this comment on Callen et al. (2014), I revisit recent evidence uncovering a "preference for certainty" in violation of dominant normative and descriptive theories of decision-making under risk. I show that the empirical findings are potentially confou...

Was the First Public Health Campaign Successful?

By D. Mark Anderson, Kerwin Kofi Charles, Claudio Las Heras Olivares, and Daniel I. Rees

American Economic Journal: Applied Economics, April 2019

The US tuberculosis (TB) movement pioneered many of the strategies of modern public health campaigns. Using newly transcribed mortality data at the municipal level for the period 1900–1917, we explore the effectiveness of public health measures champion...

Skewed Wealth Distributions: Theory and Empirics

By Jess Benhabib and Alberto Bisin

Journal of Economic Literature, December 2018

Invariably across a cross-section of countries and time periods, wealth distributions are skewed to the right displaying thick upper tails, that is, large and slowly declining top wealth shares. In this survey we categorize the theoretical studies on th...

Certified Random: A New Order for Coauthorship

By Debraj Ray ⓡ Arthur Robson

American Economic Review, February 2018

Alphabetical name order is the norm for joint publications in economics. However, alphabetical order confers greater benefits on the first author. In a two-author model, we introduce and study certified random order: the uniform randomization of names mad...

A Model of Safe Asset Determination

By Zhiguo He, Arvind Krishnamurthy, and Konstantin Milbradt

American Economic Review, April 2019

What makes an asset a "safe" asset? We study a model where two countries each issue sovereign bonds to satisfy investors' safe asset demands. The countries differ in the float of their bonds and the fundamental resources available to rollover debts. A sov...

Front Matter

American Economic Review, July 2019

Helping moms be happier

[Research Highlight]

February 27, 2020

Providing cognitive behavioral therapy to depressed new mothers yielded benefits seven years later.

Risk and Return in Village Economies

By Krislert Samphantharak and Robert M. Townsend

American Economic Journal: Microeconomics, February 2018

This paper provides a theory-based empirical framework for understanding the risk and return on productive capital assets and their allocation across activities in an economy characterized by idiosyncratic and aggregate risk and thin formal markets for re...

Multidimensional Skill Mismatch

By Fatih Guvenen, Burhan Kuruscu, Satoshi Tanaka, and David Wiczer

American Economic Journal: Macroeconomics, January 2020

What determines the earnings of a worker relative to his peers in the same occupation? What makes a worker fail in one occupation but succeed in another? More broadly, what are the factors that determine the productivity of a worker-occupation match? To...

One Markup to Rule Them All: Taxation by Liquor Pricing Regulation

By Eugenio J. Miravete, Katja Seim, and Jeff Thurk

American Economic Journal: Microeconomics, February 2020

Commodity taxation often involves uniform tax rates. We use alcohol laws that tax differentiated spirits with a comprehensive uniform markup to evaluate redistribution generated by such simple tax policy. We document preference heterogeneity among consume...

Corporate Cash and Employment

By Philippe Bacchetta, Kenza Benhima, and Céline Poilly

American Economic Journal: Macroeconomics, July 2019

In the aftermath of the US financial crisis, both a sharp drop in employment and a surge in corporate cash have been observed. In this paper, based on US data, we argue that the negative relationship between the corporate cash ratio and employment is syst...

Book Reviews

Journal of Economic Literature, March 2020

Editor's Note

By Esther Duflo

American Economic Journal: Applied Economics, January 2009

The Race between Man and Machine: Implications of Technology for Growth, Factor Shares, and Employment

By Daron Acemoglu and Pascual Restrepo

American Economic Review, June 2018

We examine the concerns that new technologies will render labor redundant in a framework in which tasks previously performed by labor can be automated and new versions of existing tasks, in which labor has a comparative advantage, can be created. In a s...

Front Matter

Journal of Economic Literature, March 2020

Effectiveness of Fiscal Incentives for R&D: Quasi-experimental Evidence

By Irem Guceri and Li Liu

American Economic Journal: Economic Policy, February 2019

We exploit a 2008 UK policy reform that increased the tax incentives for R&D in medium-sized enterprises relative to large ones, to overcome the endogeneity of exposure to such tax credits. We estimate a difference-in-difference design on the universe of ...

Markets with Multidimensional Private Information

By Veronica Guerrieri and Robert Shimer

American Economic Journal: Microeconomics, May 2018

This paper explores price formation when sellers are privately informed about their preferences and the quality of their asset. There are many equilibria, including a semi-separating one in which each seller's price depends on a one-dimensional index of h...

The Long-Run Effects of Disruptive Peers

By Scott E. Carrell, Mark Hoekstra, and Elira Kuka

American Economic Review, November 2018

A large and growing literature has documented the importance of peer effects in education. However, there is relatively little evidence on the long-run educational and labor market consequences of childhood peers. We examine this question by linking admin...

Rural Roads and Local Economic Development

By Sam Asher and Paul Novosad

American Economic Review, March 2020

Nearly one billion people worldwide live in rural areas without access to national paved road networks. We estimate the impacts of India's 40 billion USD national rural road construction program using a fuzzy regression discontinuity design and comprehens...