Interpreting Tests of School VAM Validity

By Joshua Angrist, Peter Hull, Parag Pathak, and Christopher Walters

American Economic Review, May 2016

We develop over-identification tests that use admissions lotteries to assess the predictive value of regression-based value-added models (VAMs). These tests have degrees of freedom equal to the number of quasi-experiments available to estimate school effe...

Helping Infant Economies Grow: Foundations of Trade Policies for Developing Countries

By Bruce Greenwald and Joseph E. Stiglitz

American Economic Review, May 2006

Executive Turnover and Firm Performance in China

By Takao Kato and Cheryl Long

American Economic Review, May 2006

Urban Diversity and Economic Growth

[Symposium: Urban Agglomeration]

By John M. Quigley

Journal of Economic Perspectives, Spring 1998

This paper considers the heterogeneity and diversity of cities as sources of economic growth. It links modern notions of economic growth to the distinguishing characteristics of cities and to the external effects on consumption and production produced by ...

Are Private Markets and Filtering a Viable Source of Low-Income Housing? Estimates from a "Repeat Income" Model

By Stuart S. Rosenthal

American Economic Review, February 2014

While filtering has long been considered the primary mechanism by which markets supply low-income housing, direct estimates of that process have been absent. This has contributed to doubts about the viability of markets and to misplaced policy. I fill ...

Macroeconomics after the Crisis: Time to Deal with the Pretense-of-Knowledge Syndrome

[Symposium: Macroeconomics after the Financial Crisis]

By Ricardo J. Caballero

Journal of Economic Perspectives, Fall 2010

The recent financial crisis has damaged the reputation of macroeconomics, largely for its inability to predict the impending financial and economic crisis. To be honest, this inability to predict does not concern me much. It is almost tautological that se...

Taxing Capital? Not a Bad Idea after All!

By Juan Carlos Conesa, Sagiri Kitao, and Dirk Krueger

American Economic Review, March 2009

We quantitatively characterize the optimal capital and labor income tax in an overlapping generations model with idiosyncratic, uninsurable income shocks and permanent productivity differences of households. The optimal capital income tax rate is signi...

The Geography of Trade and Technology Shocks in the United States

By David H. Autor, David Dorn, and Gordon H. Hanson

American Economic Review, May 2013

This paper explores the geographic overlap of trade and technology shocks across local labor markets in the United States. Regional exposure to technological change, as measured by specialization in routine task-intensive production and clerical occupatio...

News, Noise, and Fluctuations: An Empirical Exploration

By Olivier J. Blanchard, Jean-Paul L'Huillier, and Guido Lorenzoni

American Economic Review, December 2013

We explore empirically models of aggregate fluctuations in which consumers form anticipations about the future based on noisy sources of information and these anticipations affect output in the short run. Our objective is to separate fluctuations due to...

Bankruptcy: Is It Enough to Forgive or Must We Also Forget?

By Ronel Elul and Piero Gottardi

American Economic Journal: Microeconomics, November 2015

In many countries, lenders are restricted in their access to information about borrowers' past defaults. We study this provision in a model of repeated borrowing and lending with moral hazard and adverse selection. We analyze its effects on borrowers' inc...

The Impacts of Microcredit: Evidence from Bosnia and Herzegovina

By Britta Augsburg, Ralph De Haas, Heike Harmgart, and Costas Meghir

American Economic Journal: Applied Economics, January 2015

We use an RCT to analyze the impacts of microcredit. The study population consists of loan applicants who were marginally rejected by an MFI in Bosnia. A random subset of these were offered a loan. We provide evidence of higher self-employment, increases ...

Margins of Multinational Labor Substitution

By Marc-Andreas Muendler and Sascha O. Becker

American Economic Review, December 2010

Employment at a multinational enterprise (MNE) responds to wages at the extensive margin, when an MNE enters a foreign location, and at the intensive margin, when an MNE operates existing affiliates. We present an MNE model and conditions for parametric a...

Consumption Taxes and Redistribution

By Isabel Correia

American Economic Review, September 2010

This study considers replacing the current US tax system with only a flat tax consumption tax, showing, in contrast to the literature, that such a reform leads to a decline in inequality and increase in welfare for the welfare-poor. The results are obtain...

Default Risk and Income Fluctuations in Emerging Economies

By Cristina Arellano

American Economic Review, June 2008

Recent sovereign defaults are accompanied by interest rate spikes and deep recessions. This paper develops a small open economy model to study default risk and its interaction with output and foreign debt. Default probabilities and interest rates depen...

Dividends and Expropriation

By Mara Faccio, Larry H. P. Lang, and Leslie Young

American Economic Review, March 2001

Whereas most U.S. corporations are widely held, the predominant form of ownership in East Asia is control by a family, which often supplies a top manager. These features of "crony capitalism" are actually more pronounced in Western Europe. In both regions...

Bureaucrats or Politicians? Comment

By Fuhito Kojima

American Economic Review, March 2008

Alesina and Tabellini (2007) investigate the normative criteria for allocating policy tasks to bureaucrats versus politicians. While they establish criteria with respect to a number of parameters, they do not give a criterion with respect to the degree of...

Adam Smith, Behavioral Economist

[Symposium: The Moral Sentiments]

By Nava Ashraf, Colin F. Camerer, and George Loewenstein

Journal of Economic Perspectives, Summer 2005

Adam Smith's psychological perspective in The Theory of Moral Sentiments is remarkably similar to "dual-process" frameworks advanced by psychologists, neuroscientists, and more recently by behavioral economists, based on behavioral data and detailed obser...

The Enduring Impact of the American Dust Bowl: Short- and Long-Run Adjustments to Environmental Catastrophe

By Richard Hornbeck

American Economic Review, June 2012

The 1930s American Dust Bowl was an environmental catastrophe that greatly eroded sections of the Plains. The Dust Bowl is estimated to have immediately, substantially, and persistently reduced agricultural land values and revenues in more-eroded counties...

The Agricultural Origins of Time Preference

By Oded Galor and Ömer Özak

American Economic Review, October 2016

This research explores the origins of observed differences in time preference across countries and regions. Exploiting a natural experiment associated with the expansion of suitable crops for cultivation in the course of the Columbian Exchange, the resear...

Pricing Payment Cards

By Özlem Bedre-Defolie and Emilio Calvano

American Economic Journal: Microeconomics, August 2013

Payment card networks, such as Visa, require merchants' banks to pay substantial "interchange" fees to cardholders' banks, on a per transaction basis. This paper shows that a network's profit-maximizing fee induces an inefficient price structure, over...