Positive Long-Run Capital Taxation: Chamley-Judd Revisited

By Ludwig Straub and Iván Werning

American Economic Review, January 2020

According to the Chamley-Judd result, capital should not be taxed in the long run. In this paper, we overturn this conclusion, showing that it does not follow from the very models used to derive it. For the main model in Judd (1985), we prove that the l...

A Macroeconomic Framework for Quantifying Systemic Risk

By Zhiguo He and Arvind Krishnamurthy

American Economic Journal: Macroeconomics, October 2019

Systemic risk arises when shocks lead to states where a disruption in financial intermediation adversely affects the economy and feeds back into further disrupting financial intermediation. We present a macroeconomic model with a financial intermediary se...

Report: Committee on the Status of Women in the Economics Profession (CSWEP)

By Shelly Lundberg

AEA Papers and Proceedings, May 2019

Fixing the Leaky Pipeline: Strategies for Making Economics Work for Women at Every Stage

[Symposium: Women in Economics]

By Kasey Buckles

Journal of Economic Perspectives, Winter 2019

While women comprise over half of all undergraduate students in the United States, they account for less than one-third of economics majors. From there, the proportion of women at each stage of the academic tenure track continues to decrease, creating a...

Homeownership and the American Dream

[Symposium: Housing]

By Laurie S. Goodman and Christopher Mayer

Journal of Economic Perspectives, Winter 2018

For decades, it was taken as a given that an increased homeownership rate was a desirable goal. But after the financial crises and Great Recession, in which roughly eight million homes were foreclosed on and about $7 trillion in home equity was erased, ...

Divest, Disregard, or Double Down? Philanthropic Endowment Investments in Objectionable Firms

By Brigitte Roth Tran

American Economic Review: Insights, September 2019

How much, if at all, should an endowment invest in a firm whose activities run counter to the charitable missions the endowment funds? I offer the first model characterizing this type of investment decision. I introduce a strategy called "mission hedging,...

Identification of and Correction for Publication Bias

By Isaiah Andrews and Maximilian Kasy

American Economic Review, August 2019

Some empirical results are more likely to be published than others. Selective publication leads to biased estimates and distorted inference. We propose two approaches for identifying the conditional probability of publication as a function of a study's re...

Failure to Launch: Housing, Debt Overhang, and the Inflation Option

By Aaron Hedlund

American Economic Journal: Macroeconomics, April 2019

Can inflating away nominal mortgage liabilities effectively combat recessions? I address this question using a model of illiquid housing, endogenous credit supply, and equilibrium default. I show that, in an ordinary recession, temporarily raising the inf...

The Economic Implications of Housing Supply

[Symposium: Housing]

By Edward Glaeser and Joseph Gyourko

Journal of Economic Perspectives, Winter 2018

In this essay, we review the basic economics of housing supply and the functioning of US housing markets to better understand the distribution of home prices, household wealth, and the spatial distribution of people across markets. We employ a cost-base...

Minimum Wages and the Distribution of Family Incomes

By Arindrajit Dube

American Economic Journal: Applied Economics, October 2019

There is robust evidence that higher minimum wages increase family incomes at the bottom of the distribution. The long-run (3 or more years) minimum wage elasticity of the non-elderly poverty rate with respect to the minimum wage ranges between −0.220 a...

Parag Pathak: Winner of the 2018 Clark Medal

By Ariel Pakes and Joel Sobel

Journal of Economic Perspectives, Winter 2019

The American Economic Association awarded Parag Pathak the 2018 John Bates Clark Medal for his research on the impacts of educational policies. Both the theory and the empirical research take the constraints facing administrators seriously. As a result,...

The Consequences of Treating Electricity as a Right

[Symposium: Electricity in Developing Countries]

By Robin Burgess, Michael Greenstone, Nicholas Ryan, and Anant Sudarshan

Journal of Economic Perspectives, Winter 2020

This paper seeks to explain why billions of people in developing countries either have no access to electricity or lack a reliable supply. We present evidence that these shortfalls are a consequence of electricity being treated as a right and that this ...

Endogenous Disasters

By Nicolas Petrosky-Nadeau, Lu Zhang, and Lars-Alexander Kuehn

American Economic Review, August 2018

Market economies are intrinsically unstable. The standard search model of equilibrium unemployment, once solved accurately with a globally nonlinear algorithm, gives rise endogenously to rare disasters. Intuitively, in the presence of cumulatively large n...

Front Matter

American Economic Journal: Macroeconomics, April 2020

Bid Shading and Bidder Surplus in the US Treasury Auction System

By Ali Hortaçsu, Jakub Kastl, and Allen Zhang

American Economic Review, January 2018

We analyze bidding data from uniform price auctions of US Treasury bills and notes between July 2009 and October 2013. Primary dealers consistently bid higher yields compared to direct and indirect bidders. We estimate a structural model of bidding that t...

Risk Preference: A View from Psychology

[Symposium: Risk in Economics and Psychology]

By Rui Mata, Renato Frey, David Richter, Jürgen Schupp, and Ralph Hertwig

Journal of Economic Perspectives, Spring 2018

Psychology offers conceptual and analytic tools that can advance the discussion on the nature of risk preference and its measurement in the behavioral sciences. We discuss the revealed and stated preference measurement traditions, which have coexisted...

Speed, Accuracy, and the Optimal Timing of Choices

By Drew Fudenberg, Philipp Strack, and Tomasz Strzalecki

American Economic Review, December 2018

We model the joint distribution of choice probabilities and decision times in binary decisions as the solution to a problem of optimal sequential sampling, where the agent is uncertain of the utility of each action and pays a constant cost per unit time f...

Front Matter

American Economic Review, November 2019

Neighborhood Sanitation and Infant Mortality

By Michael Geruso and Dean Spears

American Economic Journal: Applied Economics, April 2018

In this paper, we shed new light on a long-standing puzzle: in India, Muslim children are substantially more likely than Hindu children to survive to their first birthday, even though Indian Muslims have lower wealth, consumption, educational attainment, ...

Constrained Efficiency in a Human Capital Model

By Yena Park

American Economic Journal: Macroeconomics, July 2018

This paper investigates whether capital and human capital are over-accumulated in an incomplete market economy. As in Davila et al. (2012), whether capital is over-accumulated depends on how the pecuniary externalities affect insurance and redistribution....