Stealth Consolidation: Evidence from an Amendment to the Hart-Scott-Rodino Act

By Thomas G. Wollmann

American Economic Review: Insights, June 2019

Prospective merger review is the most frequent application of antitrust law. It exempts transactions on the basis of size, though small deals can have large anticompetitive effects in segmented industries. I examine its impact on antitrust enforcement and...

Rationalizing Choice: A Review Essay on Peter Leeson's WTF?!: An Economic Tour of the Weird

By Rajiv Sethi

Journal of Economic Literature, December 2019

The methodology of economics has been applied with increasing frequency to nonmarket behavior and interactions. Peter Leeson's book WTF?!: An Economic Tour of the Weird illustrates both the promise and the perils of this practice. When applied ju...

Finance and Business Cycles: The Credit-Driven Household Demand Channel

[Symposium: Macroeconomics a Decade after the Great Recession]

By Atif Mian and Amir Sufi

Journal of Economic Perspectives, Summer 2018

What is the role of the financial sector in explaining business cycles? This question is as old as the field of macroeconomics, and an extensive body of research conducted since the Global Financial Crisis of 2008 has offered new answers. The specific ide...

An Estimable Model of Income Redistribution in a Federation: Musgrave Meets Oates

By Kevin Milligan and Michael Smart

American Economic Journal: Economic Policy, February 2019

We develop a theory of cross-border income shifting in response to subnational personal taxation in a federation and examine its implications for the excess burden of personal taxes. We show how a properly chosen federal tax rate can offset the fiscal ext...

Does Household Finance Matter? Small Financial Errors with Large Social Costs

By Harjoat S. Bhamra and Raman Uppal

American Economic Review, March 2019

Households with familiarity biases tilt their portfolios toward a few risky assets. The resulting mean-variance loss from portfolio underdiversification is equivalent to only a modest reduction of about 1 percent per year in a household's portfolio return...

Strategic Performance of Deferred Acceptance in Dynamic Matching Problems

By John Kennes, Daniel Monte, and Norovsambuu Tumennasan

American Economic Journal: Microeconomics, May 2019

In dynamic matching problems, priorities often depend on previous allocations and create opportunities for manipulations that are absent in static problems. In the dynamic school choice problem, students can manipulate the period-by-period deferred accept...

Housing Supply Dynamics under Rent Control: What Can Evictions Tell Us?

By Brian J. Asquith

AEA Papers and Proceedings, May 2019

Measuring how rent-controlled landlords change their housing supply in response to rent increases is difficult, because new construction is automatically exempt. This paper explores evictions as a barometer for landlords' willingness to return their units...

Information Design

By Ina Taneva

American Economic Journal: Microeconomics, November 2019

A designer commits to a signal distribution that is informative about a payoff-relevant state. Conditional upon the privately observed signals, agents take actions that affect their payoffs as well as those of the designer. We show how to derive the (desi...

Private Provision of Social Insurance: Drug-Specific Price Elasticities and Cost Sharing in Medicare Part D

By Liran Einav, Amy Finkelstein, and Maria Polyakova

American Economic Journal: Economic Policy, August 2018

We explore how private drug plans set cost sharing in the context of Medicare Part D. While publicly provided drug coverage typically involves uniform cost sharing across drugs, we document substantial heterogeneity in the cost sharing for different drugs...

Strategic Formulary Design in Medicare Part D Plans

By Kurt Lavetti and Kosali Simon

American Economic Journal: Economic Policy, August 2018

The design of Medicare Part D causes most beneficiaries to receive fragmented health insurance, with drug and medical coverage separated. Fragmentation is potentially inefficient since separate insurers optimize over only one component of healthcare spend...

Testing Efficient Risk Sharing with Heterogeneous Risk Preferences: Reply

By Maurizio Mazzocco and Shiv Saini

American Economic Review, October 2018

Review of Books on Student Loans

By Christopher Avery

Journal of Economic Literature, June 2019

This essay reviews three recent books on the causes and consequences of student debt. In addition to increases in college tuition and fees, supply and resource constraints both contribute to the growing phenomenon of default: degree completion rates are r...

Tax Compliance and Enforcement

By Joel Slemrod

Journal of Economic Literature, December 2019

This paper reviews recent economic research in tax compliance and enforcement. After briefly laying out the economics of tax evasion, it focuses on recent empirical contributions. It first discusses what methodologies and data have facilitated these con...

The Effects of Second-Generation Rent Control on Land Values

By Andreas Mense, Claus Michelsen, and Konstantin A. Kholodilin

AEA Papers and Proceedings, May 2019

Second generation rent control seeks to prevent negative quantity effects by exempting newly built units. The artificially lowered rent in the controlled segment makes renting attractive for households that would otherwise not have rented in the market, r...

Incidental Bequests and the Choice to Self-Insure Late-Life Risks

By Lee M. Lockwood

American Economic Review, September 2018

Despite facing significant uncertainty about their lifespans and health care costs, most retirees do not buy annuities or long-term care insurance. In this paper, I find that retirees' saving and insurance choices are highly inconsistent with standard lif...

Peer Effects in Legislative Voting

By Nikolaj Harmon, Raymond Fisman, and Emir Kamenica

American Economic Journal: Applied Economics, October 2019

We exploit seating rules in the European Parliament to identify peer effects in legislative voting. Sitting adjacently leads to a 7 percent reduction in the overall likelihood that two members of the European Parliament (MEPs) from the same party differ i...

Who Pays for Rent Control? Heterogeneous Landlord Response to San Francisco's Rent Control Expansion

By Rebecca Diamond, Tim McQuade, and Franklin Qian

AEA Papers and Proceedings, May 2019

Using a 1994 law change, we exploit quasi-experimental variation in the assignment of rent control in San Francisco to study which types of landlords bear the burden of decreased rental payments versus substitute away from supplying rent-controlled housin...

Competition in Treasury Auctions

By Helmut Elsinger, Philipp Schmidt-Dengler, and Christine Zulehner

American Economic Journal: Microeconomics, February 2019

We investigate the role of competition on the outcome of Austrian Treasury auctions. Austria's EU accession led to an increase in the number of banks participating in treasury auctions. We use structural estimates of bidders' private values to examine t...

Forward Guidance without Common Knowledge

By George-Marios Angeletos and Chen Lian

American Economic Review, September 2018

How does the economy respond to news about future policies or future fundamentals? Standard practice assumes that agents have common knowledge of such news and face no uncertainty about how others will respond. Relaxing this assumption attenuates the gene...

Unconventional Fiscal Policy

By Francesco D'Acunto, Daniel Hoang, and Michael Weber

AEA Papers and Proceedings, May 2018

Unconventional fiscal policy uses announcements of future increases in consumption taxes to generate inflation expectations and accelerate consumption expenditure. It is budget neutral and time consistent. We provide preliminary evidence for the effective...