How Market Design Emerged from Game Theory: A Mutual Interview

By Alvin E. Roth and Robert B. Wilson

Journal of Economic Perspectives, Summer 2019

We interview each other about how game theory and mechanism design evolved into practical market design. When we learned game theory, games were modeled either in terms of the strategies available to the players ("noncooperative games") or the outcomes ...

Islam and Economic Performance: Historical and Contemporary Links

By Timur Kuran

Journal of Economic Literature, December 2018

This essay critically evaluates the analytic literature concerned with causal connections between Islam and economic performance. It focuses on works since 1997, when this literature was last surveyed. Among the findings are the following: Ramadan fasti...

Changes in Between-Group Inequality: Computers, Occupations, and International Trade

By Ariel Burstein, Eduardo Morales, and Jonathan Vogel

American Economic Journal: Macroeconomics, April 2019

We provide a unifying framework to quantify the impact of several determinants of changes in US between-group inequality. We use an assignment framework with many labor groups, equipment types, and occupations in which changes in inequality are driven by ...

Pre-event Trends in the Panel Event-Study Design

By Simon Freyaldenhoven, Christian Hansen, and Jesse M. Shapiro

American Economic Review, September 2019

We consider a linear panel event-study design in which unobserved confounds may be related both to the outcome and to the policy variable of interest. We provide sufficient conditions to identify the causal effect of the policy by exploiting covariates re...

The Collateral Composition Channel

By Frédéric Boissay and Russell Cooper

American Economic Journal: Macroeconomics, January 2020

Wholesale financial markets reallocate deposits. Because of incentive problems, these flows are limited by endogenous collateral constraints. The composition of collateral matters. The use of inside collateral creates a "collateral pyramid": cash flows fr...

The Impact of Financial Education on Adolescents' Intertemporal Choices

By Melanie Lührmann, Marta Serra-Garcia, and Joachim Winter

American Economic Journal: Economic Policy, August 2018

We study the impact of financial education on intertemporal choice in adolescence. The educational program was randomly assigned among high school students, and choices were measured using an incentivized experiment. Students who participated in the progr...

When Britain Turned Inward: The Impact of Interwar British Protection

By Alan de Bromhead, Alan Fernihough, Markus Lampe, and Kevin Hjortshøj O'Rourke

American Economic Review, February 2019

International trade collapsed, and also became much less multilateral, during the 1930s. Previous studies, looking at aggregate trade flows, have argued that trade policies had relatively little to do with either phenomenon. Using a new dataset incorporat...

Demographic Structure and Macroeconomic Trends

By Yunus Aksoy, Henrique S. Basso, Ron P. Smith, and Tobias Grasl

American Economic Journal: Macroeconomics, January 2019

We estimate the effect of changes in demographic structure on long-term trends of key macroeconomic variables using a Panel VAR for 21 OECD economies from 1970–2014. The panel data variation assists the identification of demographic effects, while t...

Report: Job Openings for Economists

By John J. Siegfried

AEA Papers and Proceedings, May 2019

What Remains of Cross-Country Convergence?

By Paul Johnson and Chris Papageorgiou

Journal of Economic Literature, March 2020

We examine the record of cross-country growth over the past fifty years and ask if developing countries have made progress on closing the income gap between their per capita incomes and those in the advanced economies. We conclude that, as a group, they h...

Liquidity Constraint Tightness and Consumer Responses to Fiscal Stimulus Policy

By Claus Thustrup Kreiner, David Dreyer Lassen, and Søren Leth-Petersen

American Economic Journal: Economic Policy, February 2019

The marginal interest rate is the price at which a household can access additional liquidity. Consumption theory posits that variation in marginal interest rates across consumers predicts differences in the propensity to spend a stimulus payment. This hyp...

Through a Crystal Ball Darkly: The Future of Monetary Policy Communication

By Alan S. Blinder

AEA Papers and Proceedings, May 2018

I make six predictions about the future of central bank communication about monetary policy. Some are made with great confidence, like: transparency will increase over time. Others are far riskier, like: attempts to communicate with the general public, th...

Time versus State in Insurance: Experimental Evidence from Contract Farming in Kenya

By Lorenzo Casaburi and Jack Willis

American Economic Review, December 2018

The gains from insurance arise from the transfer of income across states. Yet, by requiring that the premium be paid upfront, standard insurance products also transfer income across time. We show that this intertemporal transfer can help explain low ins...

Teacher Value Added in a Low-Income Country

By Natalie Bau and Jishnu Das

American Economic Journal: Economic Policy, February 2020

Using data from Pakistan, we show that existing methods produce unbiased and reliable estimates of teacher value added (TVA) despite significant differences in context. Although effective teachers increase learning substantially, observed teacher characte...

Advertising and Environmental Stewardship: Evidence from the BP Oil Spill

By Lint Barrage, Eric Chyn, and Justine Hastings

American Economic Journal: Economic Policy, February 2020

This paper explores whether private markets can incentivize environmental stewardship. We examine the consumer response to the 2010 BP oil spill and test how BP's investment in the 2000–2008 "Beyond Petroleum" green advertising campaign affected this re...

Beyond reproach

[Research Highlight]

April 08, 2020

Can an advertising campaign act as a kind of corporate insurance in a disaster?

The Rise of NGO Activism

By Julien Daubanes and Jean-Charles Rochet

American Economic Journal: Economic Policy, November 2019

Activist nongovernmental organizations (NGOs) increasingly oppose firms' practices. We suggest this might be related to the vulnerability of public regulation to corporate influence. We examine a potentially harmful industrial project subject to regulator...

Fading Stars

By Germán Gutiérrez and Thomas Philippon

AEA Papers and Proceedings, May 2019

We study the evolution of superstar firms in the US economy over the past 60 years. Contrary to common wisdom, superstar firms have not become larger or more productive but have become more profitable. The contribution of star firms to aggregate US produc...

Consumers as Tax Auditors

By Joana Naritomi

American Economic Review, September 2019

To investigate the enforcement value of third-party information on potentially collusive taxpayers, I study an anti-tax evasion program that rewards consumers for ensuring that firms report sales and establishes a verification system to aid whistle-blowin...

Firm Sorting and Agglomeration

By Cecile Gaubert

American Economic Review, November 2018

To account for the uneven distribution of economic activity in space, I propose a theory of the location choices of heterogeneous firms in a variety of sectors across cities. In equilibrium, the distribution of city sizes and the sorting patterns of firms...