The Social Cost of Near-Rational Investment

By Tarek A. Hassan and Thomas M. Mertens

American Economic Review, April 2017

We show that the stock market may fail to aggregate information even if it appears to be efficient, and that the resulting decrease in the information content of prices may drastically reduce welfare. We solve a macroeconomic model in which information ab...

A Theory of Military Dictatorships

By Daron Acemoglu, Davide Ticchi, and Andrea Vindigni

American Economic Journal: Macroeconomics, January 2010

We investigate how nondemocratic regimes use the military and how this can lead to the emergence of military dictatorships. The elite may build a strong military and make the concessions necessary for the military to behave as their perfect agent, or t...

Immigration and Inequality

By David Card

American Economic Review, May 2009

Federal Budget Policy with an Aging Population and Persistently Low Interest Rates

By Douglas W. Elmendorf and Louise M. Sheiner

Journal of Economic Perspectives, Summer 2017

Some observers have argued that the projections for high and rising debt pose a grave threat to the country's economic future and give the government less fiscal space to respond to recessions or other unexpected developments, so they urge significant cha...

Culture: An Empirical Investigation of Beliefs, Work, and Fertility

By Raquel Fernández and Alessandra Fogli

American Economic Journal: Macroeconomics, January 2009

We study culture by examining the work and fertility behavior of second-generation American women. Culture is proxied with past female labor force participation and total fertility rates from the woman's country of ancestry. The values of these variabl...

International Trade in Used Vehicles: The Environmental Consequences of NAFTA

By Lucas W. Davis and Matthew E. Kahn

American Economic Journal: Economic Policy, November 2010

Since trade restrictions were eliminated in 2005, Mexico has imported over 2.5 million used vehicles from the United States. Using a unique, vehicle-level dataset, we find that traded vehicles are dirtier than the stock of vehicles in the United States an...

Did the 2008 Tax Rebates Stimulate Spending?

By Matthew D. Shapiro and Joel Slemrod

American Economic Review, May 2009

Forced Sales and House Prices

By John Y. Campbell, Stefano Giglio, and Parag Pathak

American Economic Review, August 2011

This paper uses data on all house transactions in Massachusetts over the last 20 years to show that houses sold after foreclosure, or close in time to the death or bankruptcy of a seller, are sold at lower prices than other houses. Foreclosure discounts a...

Sluggish Institutions in a Dynamic World: Can Unions and Industrial Competition Coexist?

By Barry T. Hirsch

Journal of Economic Perspectives, Winter 2008

During the 1930s and 1940s, collective bargaining emerged as the workplace governance norm in much of the U.S. industrial sector. Following its peak in the 1950s, union density in the U.S. private sector fell steadily, to only 7.4 percent in 2006. Governa...

The Margins of US Trade

By Andrew B. Bernard, J. Bradford Jensen, Stephen J. Redding, and Peter K. Schott

American Economic Review, May 2009

Information Design, Bayesian Persuasion, and Bayes Correlated Equilibrium

By Dirk Bergemann and Stephen Morris

American Economic Review, May 2016

A set of players have preferences over a set of outcomes. We consider the problem of an "information designer" who can choose an information structure for the players to serve his ends, but has no ability to change the mechanism (or force the players to m...

Measuring Uncertainty

By Kyle Jurado, Sydney C. Ludvigson, and Serena Ng

American Economic Review, March 2015

This paper exploits a data rich environment to provide direct econometric estimates of time-varying macroeconomic uncertainty. Our estimates display significant independent variations from popular uncertainty proxies, suggesting that much of the variation...

Early Childhood Intervention and Life-Cycle Skill Development: Evidence from Head Start

By David Deming

American Economic Journal: Applied Economics, July 2009

This paper provides new evidence on the long-term benefits of Head Start using the National Longitudinal Survey of Youth. I compare siblings who differ in their participation in the program, controlling for a variety of pre-treatment covariates. I esti...

Trade and Manufacturing Jobs in Germany

By Wolfgang Dauth, Sebastian Findeisen, and Jens Suedekum

American Economic Review, May 2017

The German economy exhibits rising service and declining manufacturing employment, but this decline is much sharper in import-competing than export-oriented branches. We first document the individual-level job transitions behind those trends. They are not...

Markets for Pollution Allowances: What Are the (New) Lessons?

[Symposium: Trading Pollution Permits]

By Lawrence H. Goulder

Journal of Economic Perspectives, Winter 2013

About 45 years ago a few economists offered the novel idea of trading pollution rights as a way of meeting environmental goals. Such trading was touted as a more cost-effective alternative to traditional forms of regulation, such as specific technology r...

Search Dynamics in Consumer Choice under Time Pressure: An Eye-Tracking Study

By Elena Reutskaja, Rosemarie Nagel, Colin F. Camerer, and Antonio Rangel

American Economic Review, April 2011

We study decisions that involve choosing between different numbers of options under time pressure using eye-tracking to monitor the search process of the subjects. We find that subjects are quite adept at optimizing within the set of items that they see, ...

Retrospectives: The Lost Art of Economics

By David Colander

Journal of Economic Perspectives, Summer 1992

Economists generally divide economics into two distinct categories—positive and normative—but how applied economics fits within these categories is unclear. This paper argues that applied economics belongs in neither normative nor positive eco...

Women's Work and Economic Development

[Symposium: Women and the Labor Market]

By Kristin Mammen and Christina Paxson

Journal of Economic Perspectives, Fall 2000

Using a cross-country dataset and microdata from India and Thailand, we examine how women's work status changes with economic development. Several clear patterns emerge: women's labor force participation first declines and then rises with development; wom...

Impact of Climate Change on Rice Production in Thailand

By John Felkner, Kamilya Tazhibayeva, and Robert Townsend

American Economic Review, May 2009

The Empirical Impact of Intellectual Property Rights on Innovation: Puzzles and Clues

By Josh Lerner

American Economic Review, May 2009