Attention Management

By Elliot Lipnowski, Laurent Mathevet, and Dong Wei

American Economic Review: Insights, March 2020

Attention costs can cause some information to be ignored and decisions to be imperfect. Can we improve the material welfare of a rationally inattentive agent by restricting his information in the first place? In our model, a well-intentioned principal pro...

A Macroeconomic Model of Price Swings in the Housing Market

By Carlos Garriga, Rodolfo Manuelli, and Adrian Peralta-Alva

American Economic Review, June 2019

This paper shows that a macro model with segmented financial markets can generate sizable movements in housing prices in response to changes in credit conditions. We establish theoretically that reductions in mortgage rates always have a positive effect o...

The Persistence of Local Joblessness

By Michael Amior and Alan Manning

American Economic Review, July 2018

Differences in employment-population ratios across US commuting zones have persisted for many decades. We claim these disparities represent real gaps in economic opportunity for individuals of fixed characteristics. These gaps persist despite a strong mig...

The Welfare Effects of Social Media

By Hunt Allcott, Luca Braghieri, Sarah Eichmeyer, and Matthew Gentzkow

American Economic Review, March 2020

The rise of social media has provoked both optimism about potential societal benefits and concern about harms such as addiction, depression, and political polarization. In a randomized experiment, we find that deactivating Facebook for the four weeks befo...

Walk on the Wild Side: Temporarily Unstable Paths and Multiplicative Sunspots

By Guido Ascari, Paolo Bonomolo, and Hedibert F. Lopes

American Economic Review, May 2019

We propose a generalization of the rational expectations framework to allow for temporarily unstable paths. Our approach introduces multiplicative sunspot shocks and it yields drifting parameters and stochastic volatility. Then, we provide an econometric ...

A Review on Basic Income: A Radical Proposal for a Free Society and a Sane Economy by Philippe Van Parijs and Yannick Vanderborght

By Caterina Calsamiglia and Sabine Flamand

Journal of Economic Literature, September 2019

In order to clarify the potential impact of a basic income, we argue that any discussion on whether to adopt a basic income policy should be framed within the greater context of the transfer system as a whole. In particular, such discussion should conside...

Front Matter

American Economic Journal: Macroeconomics, July 2018

Monetary Policy and the Redistribution Channel

By Adrien Auclert

American Economic Review, June 2019

This paper evaluates the role of redistribution in the transmission mechanism of monetary policy to consumption. Three channels affect aggregate spending when winners and losers have different marginal propensities to consume: an earnings heterogeneity ch...

The Urban Mortality Transition and Poor-Country Urbanization

By Remi Jedwab and Dietrich Vollrath

American Economic Journal: Macroeconomics, January 2019

Today the world's fastest-growing cities lie in low-income countries, unlike the historical norm. Also unlike the "killer cities" of history, cities in low-income countries grow not just through in-migration but also through their own natural increase. ...

Do Kidney Exchanges Improve Patient Outcomes?

By Keith F. Teltser

American Economic Journal: Economic Policy, August 2019

In this paper, I estimate the number of additional transplants generated by kidney exchanges. To do this, I analyze substitution patterns between exchange transplants and other transplant outcomes. Exploiting variation in patients' exposure to exchange ac...

"Whatever It Takes" Is All You Need: Monetary Policy and Debt Fragility

By Antoine Camous and Russell Cooper

American Economic Journal: Macroeconomics, October 2019

The valuation of government debt is subject to strategic uncertainty. Pessimistic lenders, fearing default, bid down the price of debt, leaving a government with a higher debt burden. This increases the likelihood of default, thus confirming the pessimism...

BKK the EZ Way: International Long-Run Growth News and Capital Flows

By Ric Colacito, Max Croce, Steven Ho, and Philip Howard

American Economic Review, November 2018

We study the response of international investment flows to short- and long-run growth news. Among developed G7 countries, positive long-run news for domestic productivity induces a net outflow of investments, in contrast to the effects of short-run growth...

New Evidence on Information Disclosure through Restaurant Hygiene Grading

By Daniel E. Ho, Zoe C. Ashwood, and Cassandra Handan-Nader

American Economic Journal: Economic Policy, November 2019

The case of restaurant hygiene grading occupies a central role in information disclosure scholarship. Comparing Los Angeles, which enacted grading in 1998, with California from 1995–1999, Jin and Leslie (2003) found that grading reduced foodborne illnes...

Behavioral Economics and the Atheoretical Style

By Ran Spiegler

American Economic Journal: Microeconomics, May 2019

Behavioral economics is widely perceived to be part of the profession's shift away from a culture that places abstract theory at its center. I present a critical discussion of the atheoretical style with which "behavioral" themes are often disseminated: a...

Tipping and the Effects of Segregation

By Anders Böhlmark and Alexander Willén

American Economic Journal: Applied Economics, January 2020

We analyze how neighborhood ethnic population composition affects the short- and long-run education and labor market outcomes of natives and immigrants. To overcome the problem of nonrandom sorting across neighborhoods, we borrow theoretical insights from...

Diabetes and Diet: Purchasing Behavior Change in Response to Health Information

By Emily Oster

American Economic Journal: Applied Economics, October 2018

Individuals with obesity and related conditions are often reluctant to change their diet. Evaluating the details of this reluctance is hampered by limited data. I use household scanner data to estimate food purchase response to a diagnosis of diabetes. I ...

Economic Drivers of Populism

By Sergei Guriev

AEA Papers and Proceedings, May 2018

The recent wave of populism is different from the previous ones, thus generating the demand for noneconomic explanations, such as identity politics and cultural factors. In this paper, I discuss several pieces of evidence that show that economic factors, ...

Inference in Regression Discontinuity Designs with a Discrete Running Variable

By Michal Kolesár and Christoph Rothe

American Economic Review, August 2018

We consider inference in regression discontinuity designs when the running variable only takes a moderate number of distinct values. In particular, we study the common practice of using confidence intervals (CIs) based on standard errors that are clustere...

Transparency, Reproducibility, and the Credibility of Economics Research

By Garret Christensen and Edward Miguel

Journal of Economic Literature, September 2018

There is growing interest in enhancing research transparency and reproducibility in economics and other scientific fields. We survey existing work on these topics within economics, and discuss the evidence suggesting that publication bias, inability to re...

Friedman's Presidential Address in the Evolution of Macroeconomic Thought

[Symposium: Friedman's Natural Rate Hypothesis after 50 Years]

By N. Gregory Mankiw and Ricardo Reis

Journal of Economic Perspectives, Winter 2018

Milton Friedman's presidential address, "The Role of Monetary Policy," which was delivered 50 years ago in December 1967 and published in the March 1968 issue of the American Economic Review, is unusual in the outsized role it has played. What ex...