Liquidity versus Wealth in Household Debt Obligations: Evidence from Housing Policy in the Great Recession

By Peter Ganong and Pascal Noel

American Economic Review, October 2020

We exploit variation in mortgage modifications to disentangle the impact of reducing long-term obligations with no change in short-term payments ("wealth"), and reducing short-term payments with no change in long-term obligations ("liquidity"). Using regr...

Patronage and Selection in Public Sector Organizations

By Emanuele Colonnelli, Mounu Prem, and Edoardo Teso

American Economic Review, October 2020

In all modern bureaucracies, politicians retain some discretion in public employment decisions, which may lead to frictions in the selection process if political connections substitute for individual competence. Relying on detailed matched employer-employ...

Artificial Intelligence, Algorithmic Pricing, and Collusion

By Emilio Calvano, Giacomo Calzolari, Vincenzo Denicolò, and Sergio Pastorello

American Economic Review, October 2020

Increasingly, algorithms are supplanting human decision-makers in pricing goods and services. To analyze the possible consequences, we study experimentally the behavior of algorithms powered by Artificial Intelligence (Q-learning) in a workhorse oligopoly...

Medical cost sharing for kids

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How much do price hikes decrease healthcare expenditures on children?

Front Matter

American Economic Journal: Applied Economics, October 2020

E-governance, Accountability, and Leakage in Public Programs: Experimental Evidence from a Financial Management Reform in India

By Abhijit Banerjee, Esther Duflo, Clément Imbert, Santhosh Mathew, and Rohini Pande

American Economic Journal: Applied Economics, October 2020

Can e-governance reforms improve government policy? By making information available on a real-time basis, information technologies may reduce the theft of public funds. We analyze a large field experiment and the nationwide scale-up of a reform to India's...

Healthcare Demand under Simple Prices: Evidence from Tiered Hospital Networks

By Elena Prager

American Economic Journal: Applied Economics, October 2020

This paper shows that consumers respond to prices for complex healthcare when they can easily assess out-of-pocket prices. Healthcare cost containment efforts increasingly incentivize price shopping despite a dearth of evidence that this steers consumers ...

The Elasticity of Science

By Kyle Myers

American Economic Journal: Applied Economics, October 2020

This paper identifies the degree to which scientists are willing to change the direction of their work in exchange for resources. Data from the National Institutes of Health are used to estimate how scientists respond to targeted funding opportunities. In...

Job Displacement, Family Dynamics, and Spousal Labor Supply

By Martin Halla, Julia Schmieder, and Andrea Weber

American Economic Journal: Applied Economics, October 2020

We study the effectiveness of intrahousehold insurance among married couples when the husband loses his job due to a mass layoff or plant closure. Empirical results based on Austrian administrative data show that husbands suffer persistent employment and ...

Rules for Recovery: Impact of Indexed Disaster Funds on Shock Coping in Mexico

By Alejandro del Valle, Alain de Janvry, and Elisabeth Sadoulet

American Economic Journal: Applied Economics, October 2020

Government provision of disaster transfers is typically hampered by liquidity constraints and by weak rules and administrative capacity to disburse reconstruction resources. We show that by easing these hurdles, Mexico's indexed disaster fund (Fonden) con...

The Impact of Insurance Expansions on the Already Insured: The Affordable Care Act and Medicare

By Colleen M. Carey, Sarah Miller, and Laura R. Wherry

American Economic Journal: Applied Economics, October 2020

Some states have not adopted the Affordable Care Act (ACA) Medicaid expansions due to concerns that the expansions may impair access to care and utilization for those who are already insured. We investigate such negative spillovers using a large panel of ...

Partisan Shocks and Financial Markets: Evidence from Close National Elections

By Daniele Girardi

American Economic Journal: Applied Economics, October 2020

This paper estimates the effect of partisan electoral victories on stock and bond markets. We employ a regression-discontinuity-based event study in a sample of 758 worldwide post-1945 national elections, using existing data on parliamentary elections and...

IDEAL Provostial Fellows for Studies in Race and Ethnicity

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Front Matter

American Economic Journal: Macroeconomics, October 2020

Beyond Competitive Devaluations: The Monetary Dimensions of Comparative Advantage

By Paul R. Bergin and Giancarlo Corsetti

American Economic Journal: Macroeconomics, October 2020

Motivated by the long-standing debate on competitive devaluation, we propose a new perspective on how monetary and exchange rate policies can contribute to a country's international competitiveness. We refocus the analysis on the implications of monetary ...

Bubbly Recessions

By Siddhartha Biswas, Andrew Hanson, and Toan Phan

American Economic Journal: Macroeconomics, October 2020

We develop a tractable bubbles model with financial friction and downward wage rigidity. Competitive speculation in risky bubbles can result in excessive investment booms that precede inefficient busts, where post- bubble aggregate economic activities col...

The Migration Accelerator: Labor Mobility, Housing, and Demand

By Greg Howard

American Economic Journal: Macroeconomics, October 2020

What is the role of migration in regional evolutions? I document that within-US migration causes a reduction in the unemployment rate of the receiving city over several years. To establish this causal effect, I construct an instrument using out-migration ...

Quantitative Easing, Collateral Constraints, and Financial Spillovers

By John Geanakoplos and Haobin Wang

American Economic Journal: Macroeconomics, October 2020

The steady application of quantitative easing (QE) has been followed by big and nonmonotonic effects on international asset prices and capital flows. We rationalize these observations in a model in which a central bank buys domestic assets that serve as t...

Shining a Light on Purchasing Power Parities

By Maxim Pinkovskiy and Xavier Sala-i-Martin

American Economic Journal: Macroeconomics, October 2020

We use satellite-recorded nighttime lights as an independent benchmark of economic activity in order to generate three findings in the study of PPP-adjusted estimates of GDP. First, PPP-adjusted estimates better describe poor economies than do market exch...

Taxing hidden wealth

[Research Highlight]

September 29, 2020

Professor Daniel Reck discusses how the US found offshore tax havens and what more it can do.