Editors' Introduction

Michelle DeBlasi and Ronald L. Oaxaca

(p. viii)

Foreword

Thomas J. Sargent

(p. ix)

Articles: Richard T. Ely Lecture

Beliefs, Doubts and Learning: Valuing Macroeconomic Risk

Lars Peter Hansen

(pp. 1-30)

Articles: The Economics of Human Development

The Technology of Skill Formation

Flavio Cunha and James Heckman

(pp. 31-47)

Articles: Model Validation and Model Comparison

Ex Ante Policy Evaluation, Structural Estimation and Model Selection

Kenneth I. Wolpin

(pp. 48-52)

Testing the Mechanisms of Structural Models: The Case of the Mickey Mantle Effect

Hanming Fang, Michael Keane, Ahmed Khwaja, Martin Salm and Dan Silverman

(pp. 53-59)

Bayesian Model Comparison and Validation

John Geweke

(pp. 60-64)

Articles: Risk-Sharing and Cooperation in Social Networks

Reciprocity in Groups and the Limits to Social Capital

Francis Bloch, Garance Genicot and Debraj Ray

(pp. 65-69)

Risk Sharing Across Communities

Yann Bramoullé and Rachel Kranton

(pp. 70-74)

Risk Sharing and Network Formation

Marcel Fafchamps and Flore Gubert

(pp. 75-79)

Community Size and Network Closure

Hunt Allcott, Dean Karlan, Markus M. Möbius, Tanya S. Rosenblat and Adam Szeidl

(pp. 80-85)

Articles: Networked Interactions

Communication Networks: Knowledge and Decisions

Antoni Calvó-Armengol and Joan de Martí

(pp. 86-91)

Diffusion of Behavior and Equilibrium Properties in Network Games

Matthew O. Jackson and Leeat Yariv

(pp. 92-98)

Financial Networks

Douglas M. Gale and Shachar Kariv

(pp. 99-103)

Articles: Social Insurance Programs: Good for Workers? Good for the Labor Market?

Evaluating the Worker Profiling and Reemployment Services System Using a Regression Discontinuity Approach

Dan A. Black, Jose Galdo and Jeffrey A. Smith

(pp. 104-107)

Unemployment Benefits, Unemployment Duration, and Post-Unemployment Jobs: A Regression Discontinuity Approach

Rafael Lalive

(pp. 108-112)

The Spike at Benefit Exhaustion: Leaving the Unemployment System or Starting a New Job?

David Card, Raj Chetty and Andrea Weber

(pp. 113-118)

Distinguishing Income from Substitution Effects in Disability Insurance

David H. Autor and Mark G. Duggan

(pp. 119-124)

Articles: Developments in Dynamic Mechanism Design

An Ascending Auction for Interdependent Values: Uniqueness and Robustness to Strategic Uncertainty

Dirk Bergemann and Stephen Morris

(pp. 125-130)

Designing Efficient Mechanisms for Dynamic Bilateral Trading Games

Susan Athey and Ilya Segal

(pp. 131-136)

On Quitting Rights in Mechanism Design

Olivier Compte and Philippe Jehiel

(pp. 137-141)

Articles: Decision Theory: New Methods, New Insights

Neuroeconomic Studies of Impulsivity: Now or Just as Soon as Possible?

Paul William Glimcher, Joseph Kable and Kenway Louie

(pp. 142-147)

The Neuroeconomic Theory of Learning

Andrew Caplin and Mark Dean

(pp. 148-152)

Revealing Preferences Graphically: An Old Method Gets a New Tool Kit

Syngjoo Choi, Raymond Fisman, Douglas M. Gale and Shachar Kariv

(pp. 153-158)

Articles: Beliefs in the Utility Function

Optimal Beliefs, Asset Prices, and the Preference for Skewed Returns

Markus K. Brunnermeier, Christian Gollier and Jonathan A. Parker

(pp. 159-165)

Experimental Testing of Intrinsic Preferences for NonInstrumental Information

Kfir Eliaz and Andrew Schotter

(pp. 166-169)

Guilt in Games

Pierpaolo Battigalli and Martin Dufwenberg

(pp. 170-176)

Articles: Contracts and Fairness

Adding a Stick to the Carrot? The Interaction of Bonuses and Fines

Ernst Fehr and Klaus M. Schmidt

(pp. 177-181)

Incomplete Contracts and Ownership: Some New thoughts

Oliver Hart and John Moore

(pp. 182-186)

Can Contract Theory Explain Social Preferences?

W. Bentley MacLeod

(pp. 187-192)

Articles: Search-and-Matching Financial Markets

Liquidity and Risk Management

Nicolae Gârleanu and Lasse Heje Pedersen

(pp. 193-197)

Search in Asset Markets: Market Structure, Liquidity, and Welfare

Ricardo Lagos and Guillaume Rocheteau

(pp. 198-202)

Information Percolation in Large Markets

Darrell Duffie and Gustavo Manso

(pp. 203-209)

Articles: Capital Market Frictions

Market Maker Inventories and Stock Prices

Terrence Hendershott and Mark S. Seasholes

(pp. 210-214)

Slow Moving Capital

Mark Mitchell, Lasse Heje Pedersen and Todd Pulvino

(pp. 215-220)

Systemic Illiquidity in the Federal Funds Market

Adam B. Ashcraft and Darrell Duffie

(pp. 221-225)

Articles: Habit Persistence and the Macroeconomy

Increasing Income Inequality, External Habits, and Self-Reported Happiness

Karen E. Dynan and Enrichetta Ravina

(pp. 226-231)

Pricing to Habits and the Law of One Price

Morten O. Ravn, Stephanie Schmitt-Grohé and Martín Uribe

(pp. 232-238)

Explaining Asset Prices with External Habits and Wage Rigidities in a DSGE Model

Harald Uhlig

(pp. 239-243)

Articles: Inaction and Adjustment: Consequences for Households and Firms

Optimal Inattention to the Stock Market

Andrew B. Abel, Janice C. Eberly and Stavros Panageas

(pp. 244-249)

Uncertainty and the Dynamics of R&D

Nick Bloom

(pp. 250-255)

Investment under Uncertainty with Strategic Debt Service

Suresh Sundaresan and Neng Wang

(pp. 256-261)

Articles: Monetary Systems: Transitions and Experiments

The Bank of Amsterdam and the Leap to Central Bank Money

Stephen Quinn and William Roberds

(pp. 262-265)

Backing, the Quantity Theory, and the Transition to the US Dollar, 1723-1850

Peter L. Rousseau

(pp. 266-270)

The Political Economy of the US Monetary Union: The Civil War Era as a Watershed

David F. Weiman and John A. James

(pp. 271-275)

John Law's System

François R. Velde

(pp. 276-279)

Articles: Wars, Finance, and War Finance

The Net Worth of the US Federal Government, 1784-1802

Farley Grubb

(pp. 280-284)

The Great Financial Crisis of 1914: What Can We Learn from Aldrich–Vreeland Emergency Currency?

William L. Silber

(pp. 285-289)

The McKenna Rule and UK World War I Finance

James M. Nason and Shaun P. Vahey

(pp. 290-294)

How Occupied France Financed Its Own Exploitation in World War II

Filippo Occhino, Kim Oosterlinck and Eugene N. White

(pp. 295-299)

Articles: The Transparency of Political Institutions

The Perils of Transparency in Bureaucracies

Alessandro Gavazza and Alessandro Lizzeri

(pp. 300-305)

Decision–Making Procedures for Committees of Careerist Experts

Gilat Levy

(pp. 306-310)

The Transparency of Politics and the Quality of Politicians

Andrea Mattozzi and Antonio Merlo

(pp. 311-315)

Articles: Is Foreign Aid Helping?

Aid Effectiveness – Opening the Black Box

François Bourguignon and Mark Sundberg

(pp. 316-321)

Does Aid Affect Governance?

Raghuram Rajan and Arvind Subramanian

(pp. 322-327)

Was Development Assistance a Mistake?

William Easterly

(pp. 328-332)

Articles: Exchange Rate Puzzles

The Returns to Currency Speculation in Emerging Markets

Craig Burnside, Martin Eichenbaum and Sergio Rebelo

(pp. 333-338)

If Exchange Rates are Random Walks, Then Almost Everything We Say About Monetary Policy is Wrong

Fernando Alvarez, Andrew Atkeson and Patrick J. Kehoe

(pp. 339-345)

Random Walk Expectations and the Forward Discount Puzzle

Philippe Bacchetta and Eric van Wincoop

(pp. 346-350)

Articles: New Approaches to International Trade

Unbalanced Trade

Robert Dekle, Jonathan Eaton and Samuel Kortum

(pp. 351-355)

Trade Flow Dynamics with Heterogeneous Firms

Fabio Ghironi and Marc J. Melitz

(pp. 356-361)

Pricing-to-Market in a Ricardian Model of International Trade

Andrew Atkeson and Ariel Burstein

(pp. 362-367)

Articles: Globalization and Economic Outcomes for Minority Groups

The Effect of Globalization on the Performance of Small- and Medium-Sized Enterprises in the United States: Does Owners' Race/Ethnicity Matter?

Elizabeth Asiedu and James A. Freeman

(pp. 368-372)

The Effects of Recent Immigration on Racial/Ethnic Labor Market Differentials

Deborah Reed and Sheldon Danziger

(pp. 373-377)

Inward Foreign Direct Investment and Racial Employment Patterns in US Manufacturing

Abera Gelan, Kaye Husbands Fealing and James Peoples

(pp. 378-382)

Differential Impacts of Immigrants on Native Black and White Workers

Paul Ong and Don Mar

(pp. 383-387)

Articles: Growth, Education, and Investment in Children

Nonlinearities and Robustness in Growth Regressions

Jenny Minier

(pp. 388-392)

Public Education Expenditures, Taxation, and Growth: Linking Data to Theory

William F. Blankenau, Nicole B. Simpson and Marc Tomljanovich

(pp. 393-397)

Why Do Poor Children Lose Health Insurance in the SCHIP Era? The Role of Family Health

Anne Carroll, Hope Corman, Kelly Noonan and Nancy E. Reichman

(pp. 398-401)

The Effect of Child Gender on Parents' Labor Supply: An Examination of Natives, Immigrants, and their Children

Sabrina Wulff Pabilonia and Jennifer Ward-Batts

(pp. 402-406)

Articles: Gender and Labor Market Outcomes

Reaching Equilibrium in the Market for Obstetricians and Gynecologists

Jessica Wolpaw Reyes

(pp. 407-411)

Gender Differences in the Labor Market: Impact of IRCA

Catalina Amuedo-Dorantes, Cynthia Bansak and Steven Raphael

(pp. 412-416)

The Role of Labor Market Intermittency in Explaining Gender Wage Differentials

Julie L. Hotchkiss and M. Melinda Pitts

(pp. 417-421)

Women Helping Women, Men Helping Women? Same-Gender Mentoring, Initial Job Placements, and Early Career Publishing Success for Economics PhDs

Christiana Hilmer and Michael Hilmer

(pp. 422-426)

Articles: Medical Innovation and the Social Value of Health Progress

Integrated Insurance Design in the Presence of Multiple Medical Technologies

Dana Goldman and Tomas J. Philipson

(pp. 427-432)

Social Value and the Speed of Innovation

Kevin M. Murphy and Robert H. Topel

(pp. 433-437)

The Impact of New Drugs on US Longevity and Medical Expenditure, 1990–2003: Evidence from Longitudinal, Disease-Level Data

Frank R. Lichtenberg

(pp. 438-443)

Articles: Empirical Industrial Organization

Identification and Estimation of Bidders' Risk Aversion in First-Price Auctions

Isabelle Perrigne and Quang Vuong

(pp. 444-448)

An Estimate Dynamic Model of Entry, Exit, and Growth in Oligopoly Retail Markets

Victor Aguirregabiria, Pedro Mira and Hernan Roman

(pp. 449-454)

Bounding Revenue Comparisons across Multi-Unit Auction Formats under ε-Best Response

James T. E. Chapman, David McAdams and Harry J. Paarsch

(pp. 455-458)

Linear Regression Estimation of Discrete Choice Models with Nonparametric Distributions of Random Coefficients

Patrick Bajari, Jeremy T. Fox and Stephen P. Ryan

(pp. 459-463)

Articles: Behavioral Welfare Economics

Toward Choice-Theoretic Foundations for Behavioral Welfare Economics

B. Douglas Bernheim and Antonio Rangel

(pp. 464-470)

Welfare without Happiness

Faruk Gul and Wolfgang Pesendorfer

(pp. 471-476)

Mistakes in Choice-Based Welfare Analysis

Botond Kőszegi and Matthew Rabin

(pp. 477-481)

Articles: Biological Evolution and Economics

Some Evolutionary Economics of Family Partnerships

Theodore C. Bergstrom

(pp. 482-486)

Habits, Peers, and Happiness: An Evolutionary Perspective

Luis Rayo and Gary S. Becker

(pp. 487-491)

Why do We Die? Economics, Biology and Aging

Arthur J. Robson and Hillard S. Kaplan

(pp. 492-495)

The Evolution of Intertemporal Preferences

Arthur J. Robson and Larry Samuelson

(pp. 496-500)

Articles: The Market and Pre-Market for Graduate Students in Economics

Is There An Insider Advantage in Getting Tenure?

Paul Oyer

(pp. 501-505)

The Search for Economics Talent: Doctoral Completion and Research Productivity

Wayne A. Grove and Stephen Wu

(pp. 506-511)

What Does Performance in Graduate School Predict? Graduate Economics Education and Student Outcomes

Susan Athey, Lawrence F. Katz, Alan B. Krueger, Steven Levitt and James Poterba

(pp. 512-520)

Awards: Awards

John Bates Clark Award

(pp. 521-522)

Proceedings: Reports

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American Economic Review

Vol. 97 No. 2 May 2007

Find articles in this issue

Editors' Introduction Michelle DeBlasi and Ronald L. Oaxaca (p. viii)

Foreword Thomas J. Sargent (p. ix)

Beliefs, Doubts and Learning: Valuing Macroeconomic Risk Lars Peter Hansen (pp. 1-30)

The Technology of Skill Formation Flavio Cunha and James Heckman (pp. 31-47)

Ex Ante Policy Evaluation, Structural Estimation and Model Selection Kenneth I. Wolpin (pp. 48-52)

Testing the Mechanisms of Structural Models: The Case of the Mickey Mantle Effect Hanming Fang, Michael Keane, Ahmed Khwaja, Martin Salm and Dan Silverman (pp. 53-59)

Bayesian Model Comparison and Validation John Geweke (pp. 60-64)

Reciprocity in Groups and the Limits to Social Capital Francis Bloch, Garance Genicot and Debraj Ray (pp. 65-69)

Risk Sharing Across Communities Yann Bramoullé and Rachel Kranton (pp. 70-74)

Risk Sharing and Network Formation Marcel Fafchamps and Flore Gubert (pp. 75-79)

Community Size and Network Closure Hunt Allcott, Dean Karlan, Markus M. Möbius, Tanya S. Rosenblat and Adam Szeidl (pp. 80-85)

Communication Networks: Knowledge and Decisions Antoni Calvó-Armengol and Joan de Martí (pp. 86-91)

Diffusion of Behavior and Equilibrium Properties in Network Games Matthew O. Jackson and Leeat Yariv (pp. 92-98)

Financial Networks Douglas M. Gale and Shachar Kariv (pp. 99-103)

Evaluating the Worker Profiling and Reemployment Services System Using a Regression Discontinuity Approach Dan A. Black, Jose Galdo and Jeffrey A. Smith (pp. 104-107)

Unemployment Benefits, Unemployment Duration, and Post-Unemployment Jobs: A Regression Discontinuity Approach Rafael Lalive (pp. 108-112)

The Spike at Benefit Exhaustion: Leaving the Unemployment System or Starting a New Job? David Card, Raj Chetty and Andrea Weber (pp. 113-118)

Distinguishing Income from Substitution Effects in Disability Insurance David H. Autor and Mark G. Duggan (pp. 119-124)

An Ascending Auction for Interdependent Values: Uniqueness and Robustness to Strategic Uncertainty Dirk Bergemann and Stephen Morris (pp. 125-130)

Designing Efficient Mechanisms for Dynamic Bilateral Trading Games Susan Athey and Ilya Segal (pp. 131-136)

On Quitting Rights in Mechanism Design Olivier Compte and Philippe Jehiel (pp. 137-141)

Neuroeconomic Studies of Impulsivity: Now or Just as Soon as Possible? Paul William Glimcher, Joseph Kable and Kenway Louie (pp. 142-147)

The Neuroeconomic Theory of Learning Andrew Caplin and Mark Dean (pp. 148-152)

Revealing Preferences Graphically: An Old Method Gets a New Tool Kit Syngjoo Choi, Raymond Fisman, Douglas M. Gale and Shachar Kariv (pp. 153-158)

Optimal Beliefs, Asset Prices, and the Preference for Skewed Returns Markus K. Brunnermeier, Christian Gollier and Jonathan A. Parker (pp. 159-165)

Experimental Testing of Intrinsic Preferences for NonInstrumental Information Kfir Eliaz and Andrew Schotter (pp. 166-169)

Guilt in Games Pierpaolo Battigalli and Martin Dufwenberg (pp. 170-176)

Adding a Stick to the Carrot? The Interaction of Bonuses and Fines Ernst Fehr and Klaus M. Schmidt (pp. 177-181)

Incomplete Contracts and Ownership: Some New thoughts Oliver Hart and John Moore (pp. 182-186)

Can Contract Theory Explain Social Preferences? W. Bentley MacLeod (pp. 187-192)

Liquidity and Risk Management Nicolae Gârleanu and Lasse Heje Pedersen (pp. 193-197)

Search in Asset Markets: Market Structure, Liquidity, and Welfare Ricardo Lagos and Guillaume Rocheteau (pp. 198-202)

Information Percolation in Large Markets Darrell Duffie and Gustavo Manso (pp. 203-209)

Market Maker Inventories and Stock Prices Terrence Hendershott and Mark S. Seasholes (pp. 210-214)

Slow Moving Capital Mark Mitchell, Lasse Heje Pedersen and Todd Pulvino (pp. 215-220)

Systemic Illiquidity in the Federal Funds Market Adam B. Ashcraft and Darrell Duffie (pp. 221-225)

Increasing Income Inequality, External Habits, and Self-Reported Happiness Karen E. Dynan and Enrichetta Ravina (pp. 226-231)

Pricing to Habits and the Law of One Price Morten O. Ravn, Stephanie Schmitt-Grohé and Martín Uribe (pp. 232-238)

Explaining Asset Prices with External Habits and Wage Rigidities in a DSGE Model Harald Uhlig (pp. 239-243)

Optimal Inattention to the Stock Market Andrew B. Abel, Janice C. Eberly and Stavros Panageas (pp. 244-249)

Uncertainty and the Dynamics of R&D Nick Bloom (pp. 250-255)

Investment under Uncertainty with Strategic Debt Service Suresh Sundaresan and Neng Wang (pp. 256-261)

The Bank of Amsterdam and the Leap to Central Bank Money Stephen Quinn and William Roberds (pp. 262-265)

Backing, the Quantity Theory, and the Transition to the US Dollar, 1723-1850 Peter L. Rousseau (pp. 266-270)

The Political Economy of the US Monetary Union: The Civil War Era as a Watershed David F. Weiman and John A. James (pp. 271-275)

John Law's System François R. Velde (pp. 276-279)

The Net Worth of the US Federal Government, 1784-1802 Farley Grubb (pp. 280-284)

The Great Financial Crisis of 1914: What Can We Learn from Aldrich–Vreeland Emergency Currency? William L. Silber (pp. 285-289)

The McKenna Rule and UK World War I Finance James M. Nason and Shaun P. Vahey (pp. 290-294)

How Occupied France Financed Its Own Exploitation in World War II Filippo Occhino, Kim Oosterlinck and Eugene N. White (pp. 295-299)

The Perils of Transparency in Bureaucracies Alessandro Gavazza and Alessandro Lizzeri (pp. 300-305)

Decision–Making Procedures for Committees of Careerist Experts Gilat Levy (pp. 306-310)

The Transparency of Politics and the Quality of Politicians Andrea Mattozzi and Antonio Merlo (pp. 311-315)

Aid Effectiveness – Opening the Black Box François Bourguignon and Mark Sundberg (pp. 316-321)

Does Aid Affect Governance? Raghuram Rajan and Arvind Subramanian (pp. 322-327)

Was Development Assistance a Mistake? William Easterly (pp. 328-332)

The Returns to Currency Speculation in Emerging Markets Craig Burnside, Martin Eichenbaum and Sergio Rebelo (pp. 333-338)

If Exchange Rates are Random Walks, Then Almost Everything We Say About Monetary Policy is Wrong Fernando Alvarez, Andrew Atkeson and Patrick J. Kehoe (pp. 339-345)

Random Walk Expectations and the Forward Discount Puzzle Philippe Bacchetta and Eric van Wincoop (pp. 346-350)

Unbalanced Trade Robert Dekle, Jonathan Eaton and Samuel Kortum (pp. 351-355)

Trade Flow Dynamics with Heterogeneous Firms Fabio Ghironi and Marc J. Melitz (pp. 356-361)

Pricing-to-Market in a Ricardian Model of International Trade Andrew Atkeson and Ariel Burstein (pp. 362-367)

The Effect of Globalization on the Performance of Small- and Medium-Sized Enterprises in the United States: Does Owners' Race/Ethnicity Matter? Elizabeth Asiedu and James A. Freeman (pp. 368-372)

The Effects of Recent Immigration on Racial/Ethnic Labor Market Differentials Deborah Reed and Sheldon Danziger (pp. 373-377)

Inward Foreign Direct Investment and Racial Employment Patterns in US Manufacturing Abera Gelan, Kaye Husbands Fealing and James Peoples (pp. 378-382)

Differential Impacts of Immigrants on Native Black and White Workers Paul Ong and Don Mar (pp. 383-387)

Nonlinearities and Robustness in Growth Regressions Jenny Minier (pp. 388-392)

Public Education Expenditures, Taxation, and Growth: Linking Data to Theory William F. Blankenau, Nicole B. Simpson and Marc Tomljanovich (pp. 393-397)

Why Do Poor Children Lose Health Insurance in the SCHIP Era? The Role of Family Health Anne Carroll, Hope Corman, Kelly Noonan and Nancy E. Reichman (pp. 398-401)

The Effect of Child Gender on Parents' Labor Supply: An Examination of Natives, Immigrants, and their Children Sabrina Wulff Pabilonia and Jennifer Ward-Batts (pp. 402-406)

Reaching Equilibrium in the Market for Obstetricians and Gynecologists Jessica Wolpaw Reyes (pp. 407-411)

Gender Differences in the Labor Market: Impact of IRCA Catalina Amuedo-Dorantes, Cynthia Bansak and Steven Raphael (pp. 412-416)

The Role of Labor Market Intermittency in Explaining Gender Wage Differentials Julie L. Hotchkiss and M. Melinda Pitts (pp. 417-421)

Women Helping Women, Men Helping Women? Same-Gender Mentoring, Initial Job Placements, and Early Career Publishing Success for Economics PhDs Christiana Hilmer and Michael Hilmer (pp. 422-426)

Integrated Insurance Design in the Presence of Multiple Medical Technologies Dana Goldman and Tomas J. Philipson (pp. 427-432)

Social Value and the Speed of Innovation Kevin M. Murphy and Robert H. Topel (pp. 433-437)