The Benefits of Asymmetric Markets

By Tibor Scitovsky

Journal of Economic Perspectives, Winter 1990

Economists are often so mesmerized by the magic of perfect competition that they neglect or fail to notice other, equally important achievements of the real market economy around us, most of which seem to result from monopoly tempered by competition and c...

The Impact of Affirmative Action Regulation and Equal Employment Law on Black Employment

[Symposium: The Economic Status of African-Americans]

By Jonathan S. Leonard

Journal of Economic Perspectives, Fall 1990

Was affirmative action successful in increasing employment opportunities for blacks? In this paper, affirmative action will refer to the provisions of Lyndon Johnson's Executive Order 11246 in 1965, as amended by Richard Nixon's Executive Order 11375 [3 C...

The Case for Trade Liberalization in Developing Countries

[Symposium: Trade Liberalization and Development]

By Rudiger Dornbusch

Journal of Economic Perspectives, Winter 1992

This paper reviews the actual situation of protection in developing countries, and then discusses the prospective gains from liberalization. Three experiences with liberalization, from three different parts of the world, are sketched: Turkey, Korea, and M...

Access, Sorting, and Achievement: The Short-Run Effects of Free Primary Education in Kenya

By Adrienne M. Lucas and Isaac M. Mbiti

American Economic Journal: Applied Economics, October 2012

We examine the impact of the Kenyan Free Primary Education program on student participation, sorting, and achievement on the primary school exit examination. Exploiting variation in pre-program dropout rates between districts, we find that the program inc...

The Contribution of Large and Small Employers to Job Creation in Times of High and Low Unemployment

By Giuseppe Moscarini and Fabien Postel-Vinay

American Economic Review, October 2012

We document a negative correlation, at business cycle frequencies, between the net job creation rate of large employers and the level of aggregate unemployment that is much stronger than for small employers. The differential growth rate of employment betw...

The Rise of the Service Economy

By Francisco J. Buera and Joseph P. Kaboski

American Economic Review, October 2012

This paper analyzes the role of specialized high-skilled labor in the disproportionate growth of the service sector. Empirically, the importance of skill-intensive services has risen during a period of increasing relative wages and quantities of high-skil...

Trade Costs, Asset Market Frictions, and Risk Sharing

By Doireann Fitzgerald

American Economic Review, October 2012

I use bilateral import data to test for and quantify the importance of trade costs and asset market frictions in explaining the failure of perfect international consumption risk sharing. I find that while frictions in international asset markets significa...

Disaster Risk and Business Cycles

By François Gourio

American Economic Review, October 2012

Motivated by the evidence that risk premia are large and countercyclical, this paper studies a tractable real business cycle model with a small risk of economic disaster, such as the Great Depression. An increase in disaster risk leads to a decline of em...

Happiness on Tap: Piped Water Adoption in Urban Morocco

By Florencia Devoto, Esther Duflo, Pascaline Dupas, William Parienté, and Vincent Pons

American Economic Journal: Economic Policy, November 2012

Connecting private dwellings to the water main is expensive and typically cannot be publicly financed. We show that households' willingness to pay for a private connection is high when it can be purchased on credit, not because a connection improves healt...

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...

Pricing and Welfare in Health Plan Choice

By M. Kate Bundorf, Jonathan Levin, and Neale Mahoney

American Economic Review, December 2012

Premiums in health insurance markets frequently do not reflect individual differences in costs, either because consumers have private information or because prices are not risk rated. This creates inefficiencies when consumers self-select into plans. We ...

Loss Leading as an Exploitative Practice

By Zhijun Chen and Patrick Rey

American Economic Review, December 2012

We show that large retailers, competing with smaller stores that carry a narrower range, can exercise market power by pricing below cost some of the products also offered by the smaller rivals, in order to discriminate multistop shoppers from one-stop ...

Human Capital Prices, Productivity, and Growth

By Audra J. Bowlus and Chris Robinson

American Economic Review, December 2012

Separate identification of the price and quantity of human capital has important implications for understanding key issues in economics. Price and quantity series are derived for four education levels. The price series are highly correlated and they ex...

Marginal Jobs, Heterogeneous Firms, and Unemployment Flows

By Michael W. L. Elsby and Ryan Michaels

American Economic Journal: Macroeconomics, January 2013

This paper introduces a notion of firm size into a search and matching model with endogenous job destruction. The outcome is a rich, yet analytically tractable framework that can be used to analyze a broad set of features of both the cross-section and ...

Hedging against the Government: A Solution to the Home Asset Bias Puzzle

By Tiago C. Berriel and Saroj Bhattarai

American Economic Journal: Macroeconomics, January 2013

We explain why international nominal bonds and equity portfolios are biased domestically. In our model, holding domestic government nominal debt provides a hedge against shocks to bond returns and the impact on taxes they induce. For this result, only ...

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...

The Cyclical Volatility of Labor Markets under Frictional Financial Markets

By Nicolas Petrosky-Nadeau and Etienne Wasmer

American Economic Journal: Macroeconomics, January 2013

We provide a dynamic extension of an economy with search on credit and labor markets (Wasmer and Weil 2004). Financial frictions create volatility. They add an additional, almost acyclical, entry cost to procyclical job creation costs, thus increasing ...

Unemployment in an Interdependent World

By Gabriel J. Felbermayr, Mario Larch, and Wolfgang Lechthaler

American Economic Journal: Economic Policy, February 2013

How do changes in labor market institutions, like more generous unemployment benefits in one country, affect labor market outcomes in other countries? We set up a two-country Armingtonian trade model with frictions on the goods and labor markets. Contr...

Fairness and Redistribution: Reply

By Alberto Alesina, George-Marios Angeletos, and Guido Cozzi

American Economic Review, February 2013

This paper responds to the comment of Di Tella and Dubra (2013). We first clarify that the model of Alesina and Angeletos (2005) admits two distinct types of multiplicity: one that is at the core of their contribution, and a separate one that is at work i...

Is There a Trade-Off between Inflation and Output Stabilization?

By Alejandro Justiniano, Giorgio E. Primiceri, and Andrea Tambalotti

American Economic Journal: Macroeconomics, April 2013

We find that the answer is no in an estimated DSGE model of the US economy in which exogenous movements in workers' market power are not a major driver of observed economic fluctuations. If they are, the tension between the conflicting stabilization ob...