Industry Evidence on the Effects of Government Spending

By Christopher J. Nekarda and Valerie A. Ramey

American Economic Journal: Macroeconomics, January 2011

This paper investigates the effects of government purchases at the industry level in order to shed light on the transmission mechanism for government spending on the aggregate economy. We create a new panel dataset that matches output and labor variables ...

Information and the Coase Theorem

By Joseph Farrell

Journal of Economic Perspectives, Fall 1987

Some economists think the Coase theorem implies a lot about the proper scope of government intervention in the economy and about the welfare consequences of laissez-faire. Others see it as a mere tautology: that if people negotiate efficiently then every ...

New Evidence on the Returns to Job Skills

By Katharine G. Abraham and James R. Spletzer

American Economic Review, May 2009

What Accounts for the Variation in Retirement Wealth among U.S. Households?

By B. Douglas Bernheim, Jonathan Skinner, and Steven Weinberg

American Economic Review, September 2001

Even among households with similar socioeconomic characteristics, saving and wealth vary considerably. Life-cycle models attribute this variation to differences in time preference rates, risk tolerance, exposure to uncertainty, relative tastes for work an...

The Promise and Pitfalls of Using Imprecise School Accountability Measures

By Thomas J. Kane and Douglas O. Staiger

Journal of Economic Perspectives, Fall 2002

In recent years, most states have constructed elaborate accountability systems using school-level test scores. However, because the median elementary school contains only 69 children per grade level, such measures are quite imprecise. We evaluate the impl...

Another Look at the Impacts of Health Reform in Massachusetts: Evidence Using New Data and a Stronger Model

By Sharon K. Long, Karen Stockley, and Alshadye Yemane

American Economic Review, May 2009

Falsifiability

By Wojciech Olszewski and Alvaro Sandroni

American Economic Review, April 2011

We examine Popper's falsifiability within an economic model in which a tester hires a potential expert to produce a theory. Payments are contingent on the performance of the theory vis-à-vis data. We show that if experts are strategic, falsifiabili...

Assessing the Impact of a School Subsidy Program in Mexico: Using a Social Experiment to Validate a Dynamic Behavioral Model of Child Schooling and Fertility

By Petra E. Todd and Kenneth I. Wolpin

American Economic Review, December 2006

This paper uses data from a randomized social experiment in Mexico to estimate and validate a dynamic behavioral model of parental decisions about fertility and child schooling, to evaluate the effects of the PROGRESA school subsidy program, and to per...

The American Mortgage in Historical and International Context

[Symposium: Housing Markets]

By Richard K. Green and Susan M. Wachter

Journal of Economic Perspectives, Fall 2005

The U.S. mortgage before the 1930s would be nearly unrecognizable today: it featured variable interest rates, high down payments and short maturities. The authors compare the form of U.S. home mortgages today with those in other countries. The U.S. mortga...

Has Government Investment Crowded Out Private Investment in India?

By Pritha Mitra

American Economic Review, May 2006

Retrospectives: American Economists in the Progressive Era on the Minimum Wage

By Robert E. Prasch

Journal of Economic Perspectives, Spring 1999

Beginning in 1912, a number of states passed minimum wage legislation that applied exclusively to women and minors. These tentative experiments in economic legislation ended in 1923 when the Supreme Court overturned the District of Columbia's minimum wage...

Trade Shocks and Labor Adjustment: A Structural Empirical Approach

By Erhan Artuç, Shubham Chaudhuri, and John McLaren

American Economic Review, June 2010

The welfare effects of trade shocks turn on the nature and magnitude of the costs workers face in moving between sectors. Using an Euler-type equilibrium condition derived from a rational expectations model of dynamic labor adjustment, we estimate the m...

Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization

By Paul A. Samuelson

Journal of Economic Perspectives, Summer 2004

Autarky real per capita well being, does not deny that new technical Chinese progress in goods that America previously had competitive advantage in can, ceteris paribus, lower permanently measurable per capita U.S. real income. Nor does it deny that techn...

Agriculture in the Global Economy

[Symposium: Agriculture]

By Julian M. Alston and Philip G. Pardey

Journal of Economic Perspectives, Winter 2014

The past 50-100 years have witnessed dramatic changes in agricultural production and productivity, driven to a great extent by public and private investments in agricultural research, with profound implications especially for the world's poor. In this a...

Compulsory Education and the Benefits of Schooling

By Melvin Stephens Jr. and Dou-Yan Yang

American Economic Review, June 2014

Causal estimates of the benefits of increased schooling using U.S. state schooling laws as instruments typically rely on specifications which assume common trends across states in the factors affecting different birth cohorts. Differential changes acro...

"We Thinking" and Its Consequences

By Robert Akerlof

American Economic Review, May 2016

Increasingly, economists are drawing on concepts from outside economics--such as "norms," "esteem," and "identity"--to model agents' social natures. A key reason for studying such social motivation is to shed light on the conditions that facilitate--or de...

The SO₂ Allowance Trading System: The Ironic History of a Grand Policy Experiment

[Symposium: Trading Pollution Permits]

By Richard Schmalensee and Robert N. Stavins

Journal of Economic Perspectives, Winter 2013

Two decades have passed since the Clean Air Act Amendments of 1990 launched a grand experiment in market-based environmental policy: the SO2 cap-and-trade system. That system performed well but created four striking ironies: First, by creating ...

Exchange Rates, Interest Rates, and the Risk Premium

By Charles Engel

American Economic Review, February 2016

The uncovered interest parity puzzle concerns the empirical regularity that high interest rate countries tend to have high expected returns on short term deposits. A separate puzzle is that high real interest rate countries tend to have currencies that ar...

The Role of Social Capital in Financial Development

By Luigi Guiso, Paola Sapienza, and Luigi Zingales

American Economic Review, June 2004

To identify the effect of social capital on financial development, we exploit social capital differences within Italy. In high-social-capital areas, households are more likely to use checks, invest less in cash and more in stock, have higher access to ins...

The Econometrics of Kinked Budget Constraints

By Robert Moffitt

Journal of Economic Perspectives, Spring 1990

In the last several years, a branch of applied econometrics has developed that is devoted to the development of techniques for the estimation of demand and other functions when the budget constraint is "piecewise-linear,+ or "kinky"—that is, when th...