The Cyclical Behavior of Unemployment and Wages under Information Frictions

By Camilo Morales-Jiménez

American Economic Journal: Macroeconomics, January 2022

I propose a new mechanism for sluggish wages based on workers' noisy information about the state of the economy. Wages do not respond immediately to a positive aggregate shock because workers do not (yet) have enough information to demand higher wages. Th...

Collateral Shocks

By Yvan Becard and David Gauthier

American Economic Journal: Macroeconomics, January 2022

We estimate a macroeconomic model on US data where banks lend to households and businesses and simultaneously adjust lending requirements on the two types of loans. We find that the collateral shock, a change in the ability of the financial sector to rede...

Slow Debt, Deep Recessions

By Joachim Jungherr and Immo Schott

American Economic Journal: Macroeconomics, January 2022

Business credit lags GDP growth by about one year. This contributes to high leverage during recessions and slow deleveraging. We show that a model in which firms use risky long-term debt replicates this slow adjustment of firm debt. In the model, slow-mov...

How Sticky Wages in Existing Jobs Can Affect Hiring

By Mark Bils, Yongsung Chang, and Sun-Bin Kim

American Economic Journal: Macroeconomics, January 2022

We consider a matching model of employment with flexible wages for new hires but sticky wages within matches. Unlike most models of sticky wages, we allow effort to respond if wages are too high or too low. In the Mortensen-Pissarides model, employment is...

Capital Controls for Crisis Management Policy in a Global Economy

By J. Scott Davis and Michael B. Devereux

American Economic Journal: Macroeconomics, January 2022

Capital controls may be justified as a policy to combat a financial crisis. But for large economies, capital controls may have substantial spillovers to the rest of the world. We investigate the case for capital controls in a large open economy, when dome...

Knowledge Diffusion, Trade, and Innovation across Countries and Sectors

By Jie Cai, Nan Li, and Ana Maria Santacreu

American Economic Journal: Macroeconomics, January 2022

This paper provides a unified framework for quantifying the cross-country and cross-sector interactions among trade, innovation, and knowledge diffusion. This framework is used to study the effect of trade liberalization in an endogenous growth model in w...

The Rise and Fall of India's Relative Investment Price: A Tale of Policy Error and Reform

By Alok Johri and Md Mahbubur Rahman

American Economic Journal: Macroeconomics, January 2022

India's relative price of investment rose 44 percent from 1981 to 1991 and fell 26 percent from 1991 to 2006. We build a simple DGE model, calibrated to Indian data, in order to explore the impact of capital import substitution policies and their reform p...

2021 in Research Highlights

[Research Highlight]

December 14, 2021

Economists addressed the recovery of Southern wealth after the Civil War, why the United States has the best research universities, Facebook filters, and more.

Assistant Professor of Economics

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Making healthy practices habitual

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An experiment in rural India boosted handwashing through social and financial rewards.

Assistant Professor

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Call for Papers: Stanford Institute for Theoretical Economics (SITE) 2022 Conference

[News]

January 04, 2022

The conference will be held July 1 - September 16, 2022.

CSWEP Board: Marionette Holmes

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CSWEP Board: Anna Paulson

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Assistant Professor of Economics

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Inoculating adolescents, protecting the public

[Research Highlight]

February 26, 2019

The AEA interviews Emily Lawler about vaccination mandates and their spillover effects.

Assistant Professor of Economics

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CSMGEP Profile: Alberto Dávila

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ASSA 2021 Webcasts of Select AEA Sessions

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View Webcasts of select AEA sessions from the ASSA 2021 Virtual Annual Meeting.