Applications of Generalized Method of Moments Estimation

[Symposium: Econometric Tools]

By Jeffrey M. Wooldridge

Journal of Economic Perspectives, Fall 2001

I describe how the method of moments approach to estimation, including the more recent generalized method of moments (GMM) theory, can be applied to problems using cross section, time series, and panel data. Method of moments estimators can be attractive ...

A Dual-Self Model of Impulse Control

By Drew Fudenberg and David K. Levine

American Economic Review, December 2006

We propose that a simple “dual-self” model gives a unified explanation for several empirical regularities, including the apparent time inconsistency that has motivated models of quasi-hyperbolic discounting and Rabin’s paradox of risk aversion in the...

Political Pressures on Monetary Policy during the US Great Inflation

By Charles L. Weise

American Economic Journal: Macroeconomics, April 2012

Drawing on an analysis of Federal Open Market Committee (FOMC) documents, this paper argues that political pressures on the Federal Reserve were an important contributor to the rise in inflation in the United States in the 1970s. Members of the FOMC under...

To Buy or Not to Buy: Consumer Constraints in the Housing Market

By Andreas Fuster and Basit Zafar

American Economic Review, May 2016

We use a strategic household survey to study the sensitivity of intended homeownership decisions to financing constraints. We find that the average stated likelihood of buying a home is strongly sensitive to the size of the required down payment, which we...

Marijuana on Main Street? Estimating Demand in Markets with Limited Access

By Liana Jacobi and Michelle Sovinsky

American Economic Review, August 2016

Marijuana is the most common illicit drug with vocal advocates for legalization. Among other things, legalization would increase access and remove the stigma of illegality. Our model disentangles the role of access from preferences and shows that selectio...

Sources of Bias and Solutions to Bias in the Consumer Price Index

[Symposium: Consumer Price Index]

By Jerry Hausman

Journal of Economic Perspectives, Winter 2003

Four sources of bias in the Consumer Prices Index (CPI) have been identified. The most discussed is substitution bias, which creates a second order bias in the CPI. Three other changes besides prices changes create first order effects on a correctly measu...

Different Approaches for Dealing with Social Security

[Symposium: Social security]

By Edward M. Gramlich

Journal of Economic Perspectives, Summer 1996

This paper discusses the report of the 1994 Quadrennial Advisory Council on Social Security, of which the author was chair. The system is out of long-term actuarial balance and, as a maturing defined benefit pay-as-you-go system, is giving younger cohorts...

Public Finance Principles and National Health Care Reform

[Symposium: Health Care Reform]

By Richard Zeckhauser

Journal of Economic Perspectives, Summer 1994

Public finance principles, though usually treated as a minor consideration, lie at the heart of effective national health care reform. Four principles are discussed: charge for a service where its cost is created; distinguish rents, resources, and transfe...

Tackling the European Migration Problems

[Symposium: Immigration]

By Klaus F. Zimmermann

Journal of Economic Perspectives, Spring 1995

A fortress Europe immigration policy is currently observed throughout the European Union. The European migration problem seems to be that, in the face of high and persistent unemployment rates, additional immigration implies further unemployment. This mig...

Markets with Search Friction and the DMP Model

By Dale T. Mortensen

American Economic Review, June 2011

Is the Obesity Epidemic a Public Health Problem? A Review of Zoltan J. Acs and Alan Lyles's Obesity, Business and Public Policy

By Tomas J. Philipson and Richard A. Posner

Journal of Economic Literature, December 2008

We review the recent but growing economic literature on the worldwide growth of obesity, relating the review to a recent anthology of articles—Obesity, Business and Public Policy. We discuss the competing explanations for the growth of obes...

Shades of Discrimination: Skin Tone and Wages

By Arthur H. Goldsmith, Darrick Hamilton, and William Darity Jr

American Economic Review, May 2006

The Gorbachev Anti-Alcohol Campaign and Russia's Mortality Crisis

By Jay Bhattacharya, Christina Gathmann, and Grant Miller

American Economic Journal: Applied Economics, April 2013

Political and economic transition is often blamed for Russia's 40 percent surge in deaths between 1990 and 1994. Highlighting that increases in mortality occurred primarily among alcohol-related causes and among working-age men (the heaviest drinkers), th...

A Review of Richard Layard, Stephen Nickell, and Richard Jackman's Unemployment: Macroeconomic Performance and the Labour Market

By Olivier Blanchard

Journal of Economic Literature, June 2007

Unemployment: Macroeconomic Performance and the Labour Market by Richard Layard, Stephen Nickell, and Richard Jackman (Oxford University Press 2005) is the second edition of a book first published in 1991. The second edition is identical to the fi...

Earnings Inequality and Other Determinants of Wealth Inequality

By Jess Benhabib, Alberto Bisin, and Mi Luo

American Economic Review, May 2017

We study the relation between the distribution of labor earnings and the distribution of wealth. We show, theoretically as well as empirically, that while labor earnings and precautionary savings are important determinants of wealth inequality factors, th...

Large Firms and International Business Cycle Comovement

By Julian di Giovanni, Andrei A. Levchenko, and Isabelle Mejean

American Economic Review, May 2017

This paper investigates the role of the top 100 firms in France in aggregate business cycle comovement. We establish that the top 100 firms (i) are important in aggregate; (ii) exhibit stronger international linkages than the rest of the economy; and (iii...

Government-Academic Partnerships in Randomized Evaluations: The Case of Inappropriate Prescribing

By Adam Sacarny, David Yokum, and Shantanu Agrawal

American Economic Review, May 2017

There is growing evidence that inappropriate prescribing is harming patients and raising costs in the US health care system. Through a partnership between the federal government and academics, we seek to develop evidence on reducing this prescribing. We c...

Capitalization of School Quality in Housing Prices: Evidence from Boundary Changes in Shelby County, Tennessee

By Courtney A. Collins and Erin K. Kaplan

American Economic Review, May 2017

In 2013 Memphis City Schools and Shelby County Schools consolidated into a unified system, creating one of the largest districts in the nation. Six Memphis suburbs subsequently voted to create separate municipal districts. Many school zoning changes resul...

How Children with Mental Disabilities Affect Household Investment Decisions

By Vicki L. Bogan and Jose M. Fernandez

American Economic Review, May 2017

We analyze how children with mental disabilities influence parental portfolio allocation. We find that risky asset holding decreases among households with special needs children. However, conditional on participating in financial markets, households with ...

Tying the Double-Knot: The Role of Assets in Marriage Commitment

By Jeanne Lafortune and Corinne Low

American Economic Review, May 2017

What explains the growing gap in marriage rates between socioeconomic groups? We present a robust stylized fact not previously documented: marriage rates are higher for individuals with more assets. We argue this may be driven by marriage and cohabitation...