The Cost of Reducing Greenhouse Gas Emissions

[Symposium: Climate Change]

By Kenneth Gillingham and James H. Stock

Journal of Economic Perspectives, Fall 2018

Most countries, including the United States, have an array of greenhouse gas mitigation policies, which provide subsidies or restrictions typically aimed at specific technologies or sectors. Such climate policies range from automobile fuel economy stand...

The Role of Annuitized Wealth in Post-retirement Behavior

By John Laitner, Dan Silverman, and Dmitriy Stolyarov

American Economic Journal: Macroeconomics, July 2018

This paper develops a tractable model of post-retirement behavior with health status uncertainty and state-verification difficulties. The model distinguishes between annuitized and non-annuitized wealth and features means-tested Medicaid assistance with n...

What We Have Learned about Terrorism since 9/11

By Khusrav Gaibulloev and Todd Sandler

Journal of Economic Literature, June 2019

This overview examines critically the post-9/11 empirical literature on terrorism. Major contributions by both economists and political scientists are included. We focus on five main themes: the changing nature of terrorism, the organization of terroris...

Un-Fortunate Sons: Effects of the Vietnam Draft Lottery on the Next Generation's Labor Market

By Sarena Goodman and Adam Isen

American Economic Journal: Applied Economics, January 2020

We examine whether the considerable shock generated by the Vietnam draft lottery affected the next generation's labor market. Using the universe of US federal tax returns, we link fathers from draft cohorts to their sons' adult outcomes and find that sons...

Front Matter

American Economic Review, September 2018

Do Job Destruction Shocks Matter in the Theory of Unemployment?

By Melvyn G. Coles and Ali Moghaddasi Kelishomi

American Economic Journal: Macroeconomics, July 2018

Because the data show that market tightness is not orthogonal to unemployment, this paper identifies the many empirical difficulties caused by adopting the free entry of vacancies assumption in the Diamond-Mortensen-Pissarides (DMP) framework. Relaxing th...

On DSGE Models

[Symposium: Macroeconomics a Decade after the Great Recession]

By Lawrence J. Christiano, Martin S. Eichenbaum, and Mathias Trabandt

Journal of Economic Perspectives, Summer 2018

The outcome of any important macroeconomic policy change is the net effect of forces operating on different parts of the economy. A central challenge facing policymakers is how to assess the relative strength of those forces. Economists have a range of to...

The Fall of Coal: Joint Impacts of Fuel Prices and Renewables on Generation and Emissions

By Harrison Fell and Daniel T. Kaffine

American Economic Journal: Economic Policy, May 2018

Since 2007, US coal-fired electricity generation has declined by a stunning 25 percent. Detailed daily unit-level data is used to examine the joint impact of natural gas prices and wind generation on coal-fired generation and emissions, with a focus on th...

Women in Economics: Stalled Progress

[Symposium: Women in Economics]

By Shelly Lundberg and Jenna Stearns

Journal of Economic Perspectives, Winter 2019

Women are still a minority in the economics profession. By the mid-2000s, just under 35 percent of PhD students and 30 percent of assistant professors were female, and these numbers have remained roughly constant ever since. Over the past two decades, w...

Evolution of Modern Business Cycle Models: Accounting for the Great Recession

[Symposium: Macroeconomics a Decade after the Great Recession]

By Patrick J. Kehoe, Virgiliu Midrigan, and Elena Pastorino

Journal of Economic Perspectives, Summer 2018

Modern business cycle theory focuses on the study of dynamic stochastic general equilibrium (DSGE) models that generate aggregate fluctuations similar to those experienced by actual economies. We discuss how these modern business cycle models have evolved...

How Do Firms Form Their Expectations? New Survey Evidence

By Olivier Coibion, Yuriy Gorodnichenko, and Saten Kumar

American Economic Review, September 2018

We survey New Zealand firms and document novel facts about their macroeconomic beliefs. There is widespread dispersion in beliefs about past and future macroeconomic conditions, especially inflation. This dispersion in beliefs is consistent with firms' in...

Investment Hangover and the Great Recession

By Matthew Rognlie, Andrei Shleifer, and Alp Simsek

American Economic Journal: Macroeconomics, April 2018

We present a model of investment hangover motivated by the Great Recession. Overbuilding of durable capital such as housing requires a reallocation of productive resources to other sectors, which is facilitated by a reduction in the interest rate. When mo...

Firms' Internal Networks and Local Economic Shocks

By Xavier Giroud and Holger M. Mueller

American Economic Review, October 2019

Using confidential establishment-level data from the US Census Bureau's Longitudinal Business Database, this paper documents how local shocks propagate across US regions through firms' internal networks of establishments. Consistent with a model of optima...

Endogenous Monitoring in a Partnership Game

By Anna Sanktjohanser

American Economic Review, March 2020

I consider a repeated game in which, due to imperfect monitoring, no collusion can be sustained. I add a self-interested monitor who commits to obtain private signals of firms' actions and sends a public message. The monitor makes an offer specifying the ...

The Productivity-Wage Premium: Does Size Still Matter in a Service Economy?

By Giuseppe Berlingieri, Sara Calligaris, and Chiara Criscuolo

AEA Papers and Proceedings, May 2018

The literature has established two robust stylized facts: (i) the existence of a firm size-wage premium and (ii) a positive relationship between firm size and productivity. However, the existing evidence is mainly based on manufacturing, which nowadays ac...

Report of the Editor: Journal of Economic Perspectives

By Enrico Moretti

AEA Papers and Proceedings, May 2018

Production and Welfare: Progress in Economic Measurement

By Dale W. Jorgenson

Journal of Economic Literature, September 2018

While the GDP was intended by its originators as a measure of production, the absence of a measure of welfare in the national accounts has led to widespread misuse of the GDP to proxy welfare. Measures of welfare are needed to appraise the outcomes of cha...

Large Firm Dynamics and the Business Cycle

By Vasco M. Carvalho and Basile Grassi

American Economic Review, April 2019

Do large firm dynamics drive the business cycle? We answer this question by developing a quantitative theory of aggregate fluctuations caused by firm-level disturbances alone. We show that a standard heterogeneous firm dynamics setup already contains in i...

Would Macroprudential Regulation Have Prevented the Last Crisis?

[Symposium: Financial Stability Regulation]

By David Aikman, Jonathan Bridges, Anil Kashyap, and Caspar Siegert

Journal of Economic Perspectives, Winter 2019

How well equipped are today's macroprudential regimes to deal with a rerun of the factors that led to the global financial crisis? To address the factors that made the last crisis so severe, a macroprudential regulator would need to implement policies t...

Empirical Work on Auctions of Multiple Objects

By Ali Hortaçsu and David McAdams

Journal of Economic Literature, March 2018

Abundant data has led to new opportunities for empirical auctions research in recent years, with much of the newest work on auctions of multiple objects, including: (1) auctions of ranked objects (such as sponsored search ads), (2) auctions of identical o...