Revealed Attention

By Yusufcan Masatlioglu, Daisuke Nakajima, and Erkut Y. Ozbay

American Economic Review, August 2012

The standard revealed preference argument relies on an implicit assumption that a decision maker considers all feasible alternatives. The marketing and psychology literatures, however, provide well-established evidence that consumers do not consider all ...

Sharing High Growth across Generations: Pensions and Demographic Transition in China

By Zheng Song, Kjetil Storesletten, Yikai Wang, and Fabrizio Zilibotti

American Economic Journal: Macroeconomics, April 2015

We analyze intergenerational redistribution in emerging economies with the aid of an overlapping generations model with endogenous labor supply. Growth is initially high but declines over time. A version of the model calibrated to China is used to analyze...

Networks and Misallocation: Insurance, Migration, and the Rural-Urban Wage Gap

By Kaivan Munshi and Mark Rosenzweig

American Economic Review, January 2016

We provide an explanation for the large spatial wage disparities and low male migration in India based on the trade-off between consumption smoothing, provided by caste-based rural insurance networks, and the income gains from migration. Our theory genera...

Transmission of the Great Depression

[Symposium: The Great Depression]

By Peter Temin

Journal of Economic Perspectives, Spring 1993

To a first approximation, the question of how the Great Depression spread from country to country is short and straightforward: fixed exchange rates under the gold standard transmitted negative demand shocks. The first half of this paper will describe cur...

Inequality at Birth: Some Causes and Consequences

By Janet Currie

American Economic Review, May 2011

The Goals and Promise of the Sarbanes-Oxley Act

[Symposium: New Rules for Corporate Governance]

By John C. Coates IV

Journal of Economic Perspectives, Winter 2007

The primary goal of the Sarbanes-Oxley Act was to fix auditing of U.S. public companies, consistent with its full, official name: the Public Company Accounting Reform and Investor Protection Act of 2002. By consensus, auditing had been working poorly, ...

Price Ceilings as Focal Points for Tacit Collusion: Evidence from Credit Cards

By Christopher R. Knittel and Victor Stango

American Economic Review, December 2003

We test whether a nonbinding price ceiling may serve as a focal point for tacit collusion, using data from the credit card market during the 1980's. Our empirical model can distinguish instances when firms match a binding ceiling from instances when firms...

Secular Stagnation: The Long View

By Barry Eichengreen

American Economic Review, May 2015

Four explanations for secular stagnation are distinguished: a rise in global saving, slow population growth that makes investment less attractive, adverse trends in technology and productivity growth, and a decline in the relative price of investment good...

On A Political Solution to the NIMBY Conflict

By Eli Feinerman, Israel Finkelshtain, and Iddo Kan

American Economic Review, March 2004

Health Reform, Health Insurance, and Selection: Estimating Selection into Health Insurance Using the Massachusetts Health Reform

By Martin B. Hackmann, Jonathan T. Kolstad, and Amanda E. Kowalski

American Economic Review, May 2012

We implement an empirical test for selection into health insurance using changes in coverage induced by the introduction of mandated health insurance in Massachusetts. Our test examines changes in the cost of the newly insured relative to those who were i...

Historical Research on International Lending and Debt

By Barry Eichengreen

Journal of Economic Perspectives, Spring 1991

The parallels between debt crises past and present have attracted a large number of social scientists to the history of foreign lending and default. In this article, I describe the findings of the recent literature on the subject. The questions posed have...

Political Bias and War

By Matthew O. Jackson and Massimo Morelli

American Economic Review, September 2007

We examine how countries' incentives to go to war depend on the "political bias" of their pivotal decision makers. This bias is measured by a decision maker’s risk/ reward ratio from a war compared to that of the country at large. If there is no poli...

In Pursuit of Balance: Randomization in Practice in Development Field Experiments

By Miriam Bruhn and David McKenzie

American Economic Journal: Applied Economics, October 2009

We present new evidence on the randomization methods used in existing experiments, and new simulations comparing these methods. We find that many papers do not describe the randomization in detail, implying that better reporting is needed. Our simulat...

Why Do Sellers (Usually) Prefer Auctions?

By Jeremy Bulow and Paul Klemperer

American Economic Review, September 2009

We compare the most common methods for selling a company or other asset when participation is costly: a simple simultaneous auction, and a sequential process in which potential buyers decide in turn whether to enter the bidding. The sequential process ...

Modern Macroeconomics in Practice: How Theory Is Shaping Policy

[Symposium: Macroeconomic Lessons]

By V. V. Chari and Patrick J. Kehoe

Journal of Economic Perspectives, Fall 2006

Over the last three decades, macroeconomic theory and the practice of macroeconomics by economists have changed significantly -- for the better. Macroeconomics is now firmly grounded in the principles of economic theory. We focus on the role of economic t...

Social Networks and the Decision to Insure

By Jing Cai, Alain De Janvry, and Elisabeth Sadoulet

American Economic Journal: Applied Economics, April 2015

Using data from a randomized experiment in rural China, we study the influence of social networks on weather insurance adoption and the mechanisms through which they operate. To quantify network effects, the experiment provides intensive information sessi...

The Effects of the Real Oil Price on Regional Wage Dispersion

By Matthias Kehrig and Nicolas L. Ziebarth

American Economic Journal: Macroeconomics, April 2017

We find that oil supply shocks decrease average real wages, particularly skilled wages, and increase wage dispersion across regions, particularly unskilled wage dispersion. In a model with spatial energy intensity differences and nontradables, labor deman...

Lessons Learned: Generalizing Learning Across Games

By David J. Cooper and John H. Kagel

American Economic Review, May 2003

This paper synthesizes findings from an ongoing research program on learning in signaling games. The present paper focuses on crossgame learning (the ability of subjects to take what has been learned in one game and generalize it to related games), an iss...

Globalization and Innovation in Emerging Markets

By Yuriy Gorodnichenko, Jan Svejnar, and Katherine Terrell

American Economic Journal: Macroeconomics, April 2010

Globalization brings opportunities and pressures for domestic firms in emerging markets to innovate and improve their competitive position. Using data from 27 emerging market economies, we estimate the effects of foreign competition and linkages with f...

Endogenous Growth and Cross-Country Income Differences

By Peter Howitt

American Economic Review, September 2000

A multicountry Schumpeterian growth model is constructed. Because of technology transfer, R&D-performing countries converge to parallel growth paths; other countries stagnate. A parameter change that would have raised a country's growth rate in standard S...