Should We Tax Capital Income or Wealth?

By Corina Boar and Virgiliu Midrigan

American Economic Review: Insights, June 2023

We study optimal capital income and wealth taxation in an economy that reproduces the importance of private businesses for output and inequality. If entrepreneurs are subject to collateral constraints, they face heterogeneous rates of return, which genera...

Front Matter

American Economic Review: Insights, June 2023

AEASP: Class Schedule

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Presidential Address: Does Monetary Policy Matter? The Narrative Approach after 35 Years

By Christina D. Romer and David H. Romer

American Economic Review, June 2023

The narrative approach to macroeconomic identification uses qualitative sources, such as newspapers or government records, to provide information that can help establish causal relationships. This paper discusses the requirements for rigorous narrative ...

Report of Independent Auditor

American Economic Review, June 2023

Front Matter

American Economic Review, June 2023

When Losses Turn into Loans: The Cost of Weak Banks

By Laura Blattner, Luisa Farinha, and Francisca Rebelo

American Economic Review, June 2023

We provide evidence that banks distort the composition of credit supply in order to comply with ratio-based capital requirements in times of economic distress. An unexpected intervention by the European Banking Authority provides a natural experiment to s...

The Birth of a Nation: Media and Racial Hate

By Desmond Ang

American Economic Review, June 2023

This paper documents the impact of popular media on racial hate by examining the first American blockbuster: 1915's The Birth of a Nation, a fictional portrayal of the KKK's founding rife with racist stereotypes. Exploiting the film's five-year "...

Optimal Contracting with Altruistic Agents: Medicare Payments for Dialysis Drugs

By Martin Gaynor, Nirav Mehta, and Seth Richards-Shubik

American Economic Review, June 2023

We study health-care provider agency and optimal payments, considering an expensive medication for dialysis patients. Using Medicare claims data we estimate a structural model of treatment decisions, in which providers differ in their altruism and margina...

Optimal Procurement with Quality Concerns

By Giuseppe Lopomo, Nicola Persico, and Alessandro T. Villa

American Economic Review, June 2023

Adverse selection in procurement arises when low-cost bidders are also low-quality suppliers. We propose a mechanism called LoLA (lowball lottery auction) which, under some conditions, maximizes any combination of buyer's and social surplus, subject to in...

Occupational Exposure to Capital-Embodied Technical Change

By Julieta Caunedo, David Jaume, and Elisa Keller

American Economic Review, June 2023

We study differences in exposure to factor-biased technical change among occupations by providing the first measures of capital-embodied technical change (CETC) and of the elasticity of substitution between capital and labor at the occupational level. We ...

Reconciliation Narratives: The Birth of a Nation after the US Civil War

By Elena Esposito, Tiziano Rotesi, Alessandro Saia, and Mathias Thoenig

American Economic Review, June 2023

We study how the spread of the Lost Cause narrative—a revisionist and racist retelling of the US Civil War—shifted opinions and behaviors toward national reunification and racial discrimination against African Americans. Looking at screenings of T...

Colleges and local economic growth

[Research Highlight]

May 30, 2023

What drives local innovation?

The Common-Probability Auction Puzzle

By M. Kathleen Ngangoué and Andrew Schotter

American Economic Review, June 2023

This paper presents a puzzle in the behavior of experimental subjects in what we call common-probability auctions. In common-value auctions, uncertainty is defined over values, while in common-probability auctions, uncertainty is defined over probabilitie...

How Experiments with Children Inform Economics

By John A. List, Ragan Petrie, and Anya Samek

Journal of Economic Literature, June 2023

In the past several decades, the experimental method has lent deep insights into economics. One area that has contributed is the experimental study of children, where advances as varied as the evolution of human behaviors that shape markets and institut...

Encouraging Desistance from Crime

By Jennifer L. Doleac

Journal of Economic Literature, June 2023

Half of individuals released from prison in the United States will be re-incarcerated within three years, creating an incarceration cycle that is detrimental to individuals, families, and communities. There is tremendous public interest in ending this cyc...

From Micro to Macro Development

By Francisco J. Buera, Joseph P. Kaboski, and Robert M. Townsend

Journal of Economic Literature, June 2023

Macroeconomic development remains an important policy goal because of its ability to lift entire populations out of poverty. In our review of the literature, we emphasize that the best way to achieve this objective is to embrace a synthesis of methods and...

Game Theory and the First World War

By Roger B. Myerson

Journal of Economic Literature, June 2023

Books by Scott Wolford and Roger Ransom show how economic theories of games and decisions can be fruitfully applied to problems in World War I. This vital application offers fundamental insights into the analytical methods of game theory. Public random va...

What Is Certain about Uncertainty?

By Danilo Cascaldi-Garcia, Cisil Sarisoy, Juan M. Londono, Bo Sun, Deepa D. Datta, Thiago Ferreira, Olesya Grishchenko, Mohammad R. Jahan-Parvar, Francesca Loria, Sai Ma, Marius Rodriguez, Ilknur Zer, and John Rogers

Journal of Economic Literature, June 2023

This paper provides a comprehensive survey of existing measures of uncertainty, risk, and volatility, noting their conceptual distinctions. It summarizes how they are constructed, their relative advantages in usage, and their effects on financial market a...

Front Matter

Journal of Economic Literature, June 2023