The "Standard Error" of Event Studies: Lessons from the 2016 Election

By Justin Wolfers and Eric Zitzewitz

AEA Papers and Proceedings, May 2018

The 2016 Election offers an unusually stark warning about the limitations of event studies. In four separate pre-election event windows, financial market responses to shifts in electoral probabilities were consistent with expectations that a surprise Trum...

Measuring Welfare with Massive Online Choice Experiments: A Brief Introduction

By Erik Brynjolfsson, Felix Eggers, and Avinash Gannamaneni

AEA Papers and Proceedings, May 2018

GDP is a measure of production, and yet it is widely used as a proxy for well-being. It is particularly ill-suited for assessing the contributions of digital goods which are free to consumers and thus excluded from GDP measures. This underscores the need ...

International Recessions

By Fabrizio Perri and Vincenzo Quadrini

American Economic Review, April 2018

Macro developments leading up to the 2008 crisis displayed an unprecedented degree of international synchronization. Before the crisis, all G7 countries experienced credit growth and, around the time of the Lehman bankruptcy, they all faced sharp and larg...

Low Real Interest Rates, Collateral Misrepresentation, and Monetary Policy

By Stephen D. Williamson

American Economic Journal: Macroeconomics, October 2018

A model is constructed in which households and banks have incentives to fake the quality of collateral. These incentive problems matter when collateral is scarce in the aggregate—when real interest rates are low. Conventional monetary easing can exacerb...

Bargaining and News

By Brendan Daley and Brett Green

American Economic Review, February 2020

We study a bargaining model in which a buyer makes frequent offers to a privately informed seller, while gradually learning about the seller's type from "news." We show that the buyer's ability to leverage this information to extract more surplus from the...

Slow Moving Debt Crises

By Guido Lorenzoni and Iván Werning

American Economic Review, September 2019

We study slow moving debt crises: self-fulfilling equilibria in which high interest rates, due to the fear of a future default, lead to a gradual but faster accumulation of debt, ultimately validating investors' fear. We show that slow moving crises arise...

Factory Productivity and the Concession System of Incorporation in Late Imperial Russia, 1894–1908

By Amanda G. Gregg

American Economic Review, February 2020

In Imperial Russia, incorporation required an expensive special concession, yet over 4,000 Russian firms incorporated before 1914. I identify the characteristics of incorporating firms and measure the productivity gains and growth in machine power enjoyed...

Oil and Macroeconomic (In)stability

By Hilde C. Bjørnland, Vegard H. Larsen, and Junior Maih

American Economic Journal: Macroeconomics, October 2018

We analyze the role of oil price volatility in reducing U.S. macroeconomic instability. Using a Markov Switching Rational Expectation New-Keynesian model we revisit the timing of the Great Moderation and the sources of changes in the volatility of macroec...

An Economist's Guide to Climate Change Science

[Symposium: Climate Change]

By Solomon Hsiang and Robert E. Kopp

Journal of Economic Perspectives, Fall 2018

This article provides a brief introduction to the physical science of climate change, aimed towards economists. We begin by describing the physics that controls global climate, how scientists measure and model the climate system, and the magnitude of huma...

Partial Vertical Integration, Ownership Structure, and Foreclosure

By Nadav Levy, Yossi Spiegel, and David Gilo

American Economic Journal: Microeconomics, February 2018

We study the incentive to acquire a partial stake in a vertically related firm and then foreclose rivals. We show that whether such partial acquisitions are profitable depends crucially on the initial ownership structure of the target firm and on corporat...

Front Matter

Journal of Economic Perspectives, Fall 2018

Outsourcing Education: Experimental Evidence from Liberia

By Mauricio Romero, Justin Sandefur, and Wayne Aaron Sandholtz

American Economic Review, February 2020

In 2016, the Liberian government delegated management of 93 randomly selected public schools to private providers. Providers received US$50 per pupil, on top of US$50 per pupil annual expenditure in control schools. After one academic year, students in ou...

Entry and Exit, Multiproduct Firms, and Allocative Distortions

By Roberto N. Fattal Jaef

American Economic Journal: Macroeconomics, April 2018

Most studies quantifying the gains from reversing allocative distortions are static in nature. We propose a model of firm dynamics featuring entry, exit, and multiproduct firms to understand the contribution of these dynamic factors in shaping the welfare...

A Letter and Encouragement: Does Information Increase Postsecondary Enrollment of UI Recipients?

By Andrew Barr and Sarah Turner

American Economic Journal: Economic Policy, August 2018

For individuals who experience job loss, enrollment in postsecondary programs may provide an opportunity to improve future employment outcomes. However, decisions to enroll may be hampered by insufficient information about the benefits and costs and the n...

Monetary Policy, Real Activity, and Credit Spreads: Evidence from Bayesian Proxy SVARs

By Dario Caldara and Edward Herbst

American Economic Journal: Macroeconomics, January 2019

In this paper we develop a Bayesian framework to estimate a proxy structural vector autoregression to identify monetary policy shocks. We find that during the Great Moderation period, monetary policy shocks induce a persistent decline in real activity and...

The trade-offs of logging off

[Research Highlight]

March 03, 2020

Would quitting Facebook result in a happier and less polarized society?

Report of the Editor: American Economic Journal: Macroeconomics

By Simon Gilchrist

AEA Papers and Proceedings, May 2019

Reducing Inequality through Dynamic Complementarity: Evidence from Head Start and Public School Spending

By Rucker C. Johnson and C. Kirabo Jackson

American Economic Journal: Economic Policy, November 2019

We compare the adult outcomes of cohorts who were differentially exposed to policy-induced changes in Head Start and K–12 spending, depending on place and year of birth. IV and sibling-difference estimates indicate that, for poor children, these policie...

Minutes of the Meeting of the Executive Committee: Chicago, IL, April 14, 2017

By Peter L. Rousseau

AEA Papers and Proceedings, May 2018

Brands in Motion: How Frictions Shape Multinational Production

By Keith Head and Thierry Mayer

American Economic Review, September 2019

Following the 2016 Leave vote in the referendum on UK membership in the EU and the election of Donald Trump, trade agreements have entered a period of great instability. To predict the impact of possible disruptions to existing arrangements requires count...