China's Lagging Poor Areas

By Martin Ravallion and Jyotsna Jalan

American Economic Review, May 1999

Growth in Transition: What We Know, What We Don't, and What We Should

By Nauro F. Campos and Abrizio Coricelli

Journal of Economic Literature, September 2002

This essay surveys macroeconomic issues that marked the transition from planned to market economy in Central and Eastern European and former Soviet Union countries. We first establish stylized facts of the transition so far. We then critically survey the ...

Perspectives on the U.S. Current Account Deficit and Sustainability

By Catherine L. Mann

Journal of Economic Perspectives, Summer 2002

This essay considers the underpinnings of the large U.S. current account deficit. It then tackles the question of whether the U.S. current account deficit is sustainable. A current account deficit is "sustainable" at a point in time if neither it, nor the...

Measuring Tax Multipliers: The Narrative Method in Fiscal VARs

By Carlo Favero and Francesco Giavazzi

American Economic Journal: Economic Policy, May 2012

This paper argues in favor of empirical models built by including in fiscal VAR models structural shocks identified via the narrative method. We first show that "narrative" shocks are orthogonal to the relevant information set a fiscal VAR. We then derive...

A Bright Idea for Measuring Economic Growth

By Vernon Henderson, Adam Storeygard, and David N. Weil

American Economic Review, May 2011

The quantity of human-generated light visible from outer space reflects variation in both population density and income per capita. In this paper we explore the usefulness of the change in visible light as a measure of GDP growth. We discuss the data, and...

Endogenous Verifiability and Relational Contracting

By Ola Kvaløy and Trond E. Olsen

American Economic Review, December 2009

Principal-agent models usually invoke the strong assumption that the parties know for sure ex ante whether a variable is verifiable or not. This paper assumes that only the probability of verification is known, and that this probability is endogenously de...

Ethnic Attrition and the Observed Health of Later-Generation Mexican Americans

By Francisca Antman, Brian Duncan, and Stephen J. Trejo

American Economic Review, May 2016

Numerous studies find that U.S.-born Hispanics differ significantly from non-Hispanic whites on important measures of human capital, including health. Nevertheless, almost all studies rely on subjective measures of ethnic self-identification to identify i...

Durable Consumption and Asset Management with Transaction and Observation Costs

By Fernando Alvarez, Luigi Guiso, and Francesco Lippi

American Economic Review, August 2012

The empirical evidence on rational inattention lags the theoretical developments: micro evidence on one of the most immediate consequences of observation costs—the infrequent observation of state variables—is not available in standard datasets...

Hardnose the Dictator

By Todd L. Cherry, Peter Frykblom, and Jason F. Shogren

American Economic Review, September 2002

Preferences for Flexibility and Randomization under Uncertainty

By Kota Saito

American Economic Review, March 2015

An uncertainty-averse agent prefers betting on an event whose probability is known, to betting on an event whose probability is unknown. Such an agent may randomize his choices to eliminate the effects of uncertainty. For what sort of preferences does a r...

Deferred Compensation in Multiperiod Labor Contracts: An Experimental Test of Lazear's Model

By Steffen Huck, Andrew J. Seltzer, and Brian Wallace

American Economic Review, April 2011

This paper provides the first experimental test of Edward Lazear's (1979) model of deferred compensation. We examine the relationship between firms' wage offers and workers' effort supply in a multi-period environment. If firms can ex ante commit to a wa...

The Demand for Energy-Using Assets among the World's Rising Middle Classes

By Paul J. Gertler, Orie Shelef, Catherine D. Wolfram, and Alan Fuchs

American Economic Review, June 2016

We study household decisions to acquire energy-using assets in the presence of rising incomes. We develop a theoretical framework to characterize the effect of income growth on asset purchases when consumers face credit constraints. We use large and plaus...

Formal Measures in Informal Management: Can a Balanced Scorecard Change a Culture?

By Robert Gibbons and Robert S. Kaplan

American Economic Review, May 2015

We extend traditional agency theory by exploring the roles for formal measures when managerial behavior is not governed by rules, formulas, or contracts. Part I describes relational incentive contracts with informal weights on formal performance measures....

Convergence in Adaptation to Climate Change: Evidence from High Temperatures and Mortality, 1900-2004

By Alan Barreca, Karen Clay, Olivier Deschênes, Michael Greenstone, and Joseph S. Shapiro

American Economic Review, May 2015

This paper combines panel data on monthly mortality rates of US states and daily temperature variables for over a century (1900-2004) to explore the regional evolution of the temperature-mortality relationship and documents two key findings. First, the im...

Annotated Listing of New Books

Journal of Economic Literature, June 2016

Biological Gender Differences, Absenteeism, and the Earnings Gap

By Andrea Ichino and Enrico Moretti

American Economic Journal: Applied Economics, January 2009

In most countries, women are absent from work more frequently than men. Using personnel data, we find that the absences of women below the age of 45 follow a 28-day cycle, while the absences of men and of women over the age of 45 do not. We interpret t...

Notes

Journal of Economic Perspectives, Fall 2012

Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion

By Susan M. Dynarski

American Economic Review, March 2003

Robustness and Linear Contracts

By Gabriel Carroll

American Economic Review, February 2015

We consider a moral hazard problem where the principal is uncertain as to what the agent can and cannot do: she knows some actions available to the agent, but other, unknown actions may also exist. The principal demands robustness, evaluating possible ...

Obvious Ex Post Equilibrium

By Shengwu Li

American Economic Review, May 2017

I propose a new solution concept, obvious ex post (OXP) equilibrium. This is a formal standard of cognitive simplicity for mechanisms, in settings with interdependent values. Under some standard assumptions, the ascending auction has an efficient OXP equi...