The Interest Rate, Learning, and Inventory Investment

By Louis J. Maccini, Bartholomew J. Moore, and Huntley Schaller

American Economic Review, December 2004

This paper presents a model that provides an explanation, based on regime switching in the real interest rate and learning, of why tests based on stock adjustment models, Euler equations, or decision rules—which emphasize short-run fluctuations in inven...

Capturing Knowledge within and across Firm Boundaries: Evidence from Clinical Development

By Pierre Azoulay

American Economic Review, December 2004

How do firm boundaries influence employees' acquisition of information? Using detailed project-level data and qualitative evidence, I document that pharmaceutical firms are more likely to outsource the coordination of data-intensive clinical trials, while...

Does School Integration Generate Peer Effects? Evidence from Boston's Metco Program

By Joshua D. Angrist and Kevin Lang

American Economic Review, December 2004

The Metropolitan Council for Educational Opportunity (Metco) is a desegregation program that sends students from Boston schools to more affluent suburbs. Metco increases the number of blacks and reduces test scores in receiving districts. School-level dat...

International Protection of Intellectual Property

By Gene M. Grossman and Edwin L.-C. Lai

American Economic Review, December 2004

We study the incentives that governments have to protect intellectual property in a trading world economy. We consider a world economy with ongoing innovation in two countries that differ in market size and in their capacity for innovation. After describi...

The Cyclical Behavior of Equilibrium Unemployment and Vacancies

By Robert Shimer

American Economic Review, March 2005

This paper argues that the textbook search and matching model cannot generate the observed business-cycle-frequency fluctuations in unemployment and job vacancies in response to shocks of a plausible magnitude. In the United States, the standard deviation...

Employment Fluctuations with Equilibrium Wage Stickiness

By Robert E. Hall

American Economic Review, March 2005

Following a recession, the aggregate labor market is slack–employment remains below normal and recruiting efforts of employers, as measured by help-wanted advertising and vacancies, are low. A model of matching friction explains the qualitative response...

Does Monetary Policy Affect Relative Educational Unemployment Rates?

By Philip N. Jefferson

American Economic Review, May 2005

A Teacher Like Me: Does Race, Ethnicity, or Gender Matter?

By Thomas S. Dee

American Economic Review, May 2005

Does Teaching Enhance Research in Economics?

By William E. Becker and Peter E. Kennedy

American Economic Review, May 2005

Health and Wealth among the Poor: India and South Africa Compared

By Anne Case and Angus Deaton

American Economic Review, May 2005

Uncertainty and Hyperbolic Discounting

By Partha Dasgupta and Eric Maskin

American Economic Review, September 2005

Using Experimental Economics to Measure Social Capital and Predict Financial Decisions

By Dean S. Karlan

American Economic Review, December 2005

Questions remain as to whether results from experimental economics are generalizable to real decisions in nonlaboratory settings. Furthermore, questions persist about whether social capital helps mitigate information asymmetries in credit markets. I exami...

The Caring Hand that Cripples: The East German Labor Market after Reunification

By Dennis J. Snower and Christian Merkl

American Economic Review, May 2006

History Lessons: The Birth of Impersonal Exchange: The Community Responsibility System and Impartial Justice

By Avner Greif

Journal of Economic Perspectives, Spring 2006

This paper describes the premodern European institution that supported impersonal exchange, in which a merchant's decision to exchange is independent either of expectations of future exchange with the same partner or of knowledge of that partner's past co...

The Flow Approach to Labor Markets: New Data Sources and Micro-Macro Links

[Symposium: American Employment]

By Steven J. Davis, R. Jason Faberman, and John Haltiwanger

Journal of Economic Perspectives, Summer 2006

New data sources and products developed by the Bureau of Labor Statistics and the Bureau of the Census highlight the fluid character of U.S. labor markets. Private sector job creation and destruction rates average nearly 8 percent of employment per quarte...

Shocks and Government Beliefs: The Rise and Fall of American Inflation

By Thomas Sargent, Noah Williams, and Tao Zha

American Economic Review, September 2006

We use a Bayesian Markov Chain Monte Carlo algorithm to estimate the parameters of a “true” data-generating mechanism and those of a sequence of approximating models that a monetary authority uses to guide its decisions. Gaps between a true expectati...

Modern Macroeconomics in Practice: How Theory Is Shaping Policy

[Symposium: Macroeconomic Lessons]

By V. V. Chari and Patrick J. Kehoe

Journal of Economic Perspectives, Fall 2006

Over the last three decades, macroeconomic theory and the practice of macroeconomics by economists have changed significantly -- for the better. Macroeconomics is now firmly grounded in the principles of economic theory. We focus on the role of economic t...

Does European Unemployment Prop Up American Wages? National Labor Markets and Global Trade: Comment

By Jürgen Meckl

American Economic Review, December 2006

Declining Volatility in the U.S. Automobile Industry

By Valerie A. Ramey and Daniel J. Vine

American Economic Review, December 2006

Dramatic changes in the volatility of output occurred in the U.S. auto industry in the early 1980s. Namely, output volatility declined, the covariance of inventory investment and sales grew more negative, and adjustments to production schedules, which in ...

Competence Implies Credibility

By Giuseppe Moscarini

American Economic Review, March 2007

The (reputation for) competence of a central bank at doing its job makes monetary policy under discretion credible and transparent. Based on its reading of the state of the economy, the central bank announces its policy intentions to the public in a ch...