How Did China Take Off?

[Symposium: China's Economy]

By Yasheng Huang

Journal of Economic Perspectives, Fall 2012

There are two prevailing perspectives on how China took off. One emphasizes the role of globalization—foreign trade and investments and special economic zones; the other emphasizes the role of internal reforms, especially rural reforms. Detailed docume...

The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather: Reply

By Olivier Deschênes and Michael Greenstone

American Economic Review, December 2012

Fisher et al. (2012) (henceforth, FHRS) have uncovered coding and data errors in our paper, Deschênes and Greenstone (2007), henceforth, DG. We acknowledge and are embarrassed by these mistakes. We are grateful to FHRS for uncovering them. We hope t...

On the Real Effects of Bank Bailouts: Micro Evidence from Japan

By Mariassunta Giannetti and Andrei Simonov

American Economic Journal: Macroeconomics, January 2013

Exploiting the Japanese banking crisis of the 1990s as a laboratory, we investigate the effects of bank bailouts on the supply of credit and the performance of banks' clients. Our findings indicate that the size of capital injections relative to the in...

Labor Market Outcomes and Reforms in China

[Symposium: China's Economy]

By Xin Meng

Journal of Economic Perspectives, Fall 2012

Over the past few decades of economic reform, China's labor markets have been transformed to an increasingly market-driven system. China has two segregated economies: the rural and urban. Understanding the shifting nature of this divide is probably the k...

Cross-Country Differences in Productivity: The Role of Allocation and Selection

By Eric Bartelsman, John Haltiwanger, and Stefano Scarpetta

American Economic Review, February 2013

This paper investigates the effect of idiosyncratic (firm-level) policy distortions on aggregate outcomes. Exploiting harmonized firm-level data for a number of countries, we show that there is substantial and systematic cross-country variation in the ...

Cultural Change as Learning: The Evolution of Female Labor Force Participation over a Century

By Raquel Fernández

American Economic Review, February 2013

This paper develops a learning model of cultural change to investigate why women's labor force participation (LFP) and attitudes toward women's work both changed dramatically. In the model, women's beliefs about the long-run payoff from working evolve end...

Young Adult Obesity and Household Income: Effects of Unconditional Cash Transfers

By Randall Akee, Emilia Simeonova, William Copeland, Adrian Angold, and E. Jane Costello

American Economic Journal: Applied Economics, April 2013

We investigate the effect of household cash transfers during childhood on young adult body mass indexes (BMI). The effects of extra income differ depending on the household's initial socioeconomic status (SES). Children from the initially poorest househ...

Natural Resources and Local Communities: Evidence from a Peruvian Gold Mine

By Fernando M. Aragón and Juan Pablo Rud

American Economic Journal: Economic Policy, May 2013

This paper examines the local economic impact of Yanacocha, a large gold mine in Northern Peru. Using annual household data from 1997 to 2006, we find evidence of a positive effect of the mine's demand for local inputs on real income. The effects are o...

Feeling the Florida Heat? How Low-Performing Schools Respond to Voucher and Accountability Pressure

By Cecilia Elena Rouse, Jane Hannaway, Dan Goldhaber, and David Figlio

American Economic Journal: Economic Policy, May 2013

While numerous studies have found that school accountability boosts test scores, it is uncertain whether estimated test score gains reflect genuine improvements or merely "gaming" behaviors. This paper brings to bear new evidence from a unique five-yea...

The Contagion Effect of Neighboring Foreclosures

By Charles Towe and Chad Lawley

American Economic Journal: Economic Policy, May 2013

We examine the contagion effect of residential foreclosures and find strong evidence of a social interactions influence on default decisions where the interaction is based on neighbors' behavior in a previous period. Using a unique spatially explicit p...

Finance: Function Matters, Not Size

[Symposium: The Growth of the Financial Sector]

By John H. Cochrane

Journal of Economic Perspectives, Spring 2013

It's fun to pass judgment on waste, size, usefulness, complexity, and excessive compensation. But as economists, we have an analytical structure for thinking about these questions. "I don't understand it" doesn't mean "it's bad," or "regulation will impro...

Investing in Preschool Programs

[Symposium: Early and Later Interventions]

By Greg J. Duncan and Katherine Magnuson

Journal of Economic Perspectives, Spring 2013

We summarize the available evidence on the extent to which expenditures on early childhood education programs constitute worthy social investments in the human capital of children. We provide an overview of existing early childhood education programs, an...

Skill Remoteness and Post-Layoff Labor Market Outcomes

By Claudia Macaluso

American Economic Journal: Macroeconomics

Local skill remoteness captures the dissimilarity between the skill profiles of a worker’s last job and other jobs in a local labor market. Higher skill remoteness at layoff is associated with persistently lower earnings after layoff, a higher probab...

Intergenerational Occupational Mobility in Great Britain and the United States since 1850

By Jason Long and Joseph Ferrie

American Economic Review, June 2013

The US tolerates more inequality than Europe and believes its economic mobility is greater than Europe's, though they had roughly equal rates of intergenerational occupational mobility in the late twentieth century. We extend this comparison into the n...

The Lure of Authority: Motivation and Incentive Effects of Power

By Ernst Fehr, Holger Herz, and Tom Wilkening

American Economic Review, June 2013

Authority and power permeate political, social, and economic life, but empirical knowledge about the motivational origins and consequences of authority is limited. We study the motivation and incentive effects of authority experimentally in an authorit...

The Gravity of Knowledge

By Wolfgang Keller and Stephen Ross Yeaple

American Economic Review, June 2013

We analyze the international operations of multinational firms to measure the spatial barriers to transferring knowledge. We model firms that can transfer bits of knowledge to their foreign affiliates in either embodied (traded intermediates) or disemb...

Discretionary Tax Changes and the Macroeconomy: New Narrative Evidence from the United Kingdom

By James Cloyne

American Economic Review, June 2013

This paper provides new estimates of the macroeconomic effects of tax changes using a new narrative dataset for the United Kingdom. Identification is achieved by isolating "exogenous" tax policy changes using the Romer and Romer narrative strategy. I find...

Even (Mixed) Risk Lovers Are Prudent

By David Crainich, Louis Eeckhoudt, and Alain Trannoy

American Economic Review, June 2013

The purpose of this note is to analyze properties of the risk lovers' utility function beyond the positive sign of its second order derivative. We show that—contrarily to a priori beliefs—risk lovers are prudent and are willing to accumulate precautio...

Even (Mixed) Risk Lovers Are Prudent: Comment

By Sebastian Ebert

American Economic Review, June 2013

Crainich, Eeckhoudt, and Trannoy (2013) show that mixed risk lovers are prudent. I show that common risk loving utility functions may not exhibit mixed risk loving—as is typical for risk aversion and mixed risk aversion—and thus these traits should be...

U.S. High School Graduation Rates: Patterns and Explanations

By Richard J. Murnane

Journal of Economic Literature, June 2013

I survey the evidence on patterns in U.S. high school graduation rates over the period 1970–2010 and report the results of new research conducted to fill in holes in the evidence. I begin by pointing out the strengths and limitations of existing data ...