The Cross Section of Foreign Currency Risk Premia and Consumption Growth Risk

By Hanno Lustig and Adrien Verdelhan

American Economic Review, March 2007

Aggregate consumption growth risk explains why low interest rate currencies do not appreciate as much as the interest rate differential and why high interest rate currencies do not depreciate as much as the interest rate differential. Domestic investor...

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

By Fernando Alvarez, Andrew Atkeson, and Patrick J. Kehoe

American Economic Review, May 2007

The Returns to Currency Speculation in Emerging Markets

By Craig Burnside, Martin Eichenbaum, and Sergio Rebelo

American Economic Review, May 2007

Random Walk Expectations and the Forward Discount Puzzle

By Philippe Bacchetta and Eric van Wincoop

American Economic Review, May 2007

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

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

American Economic Review, May 2007

The Obstinate Passion of Foreign Exchange Professionals: Technical Analysis

By Lukas Menkhoff and Mark P. Taylor

Journal of Economic Literature, December 2007

Technical analysis involves the prediction of asset price movements from inductive analysis of past movements. We establish a number of stylized facts, including that technical analysis is widespread in the foreign exchange market and that it may be pr...

An Equilibrium Model of "Global Imbalances" and Low Interest Rates

By Ricardo J. Caballero, Emmanuel Farhi, and Pierre-Olivier Gourinchas

American Economic Review, March 2008

The sustained rise in US current account deficits, the stubborn decline in long-run real rates, and the rise in US assets in global portfolios appear as anomalies from the perspective of conventional models. This paper rationalizes these facts as an eq...

The Dynamic Behavior of the Real Exchange Rate in Sticky Price Models

By Jón Steinsson

American Economic Review, March 2008

Existing empirical evidence suggests that real exchange rates exhibit hump-shaped dynamics. I show that this is a robust fact across nine large, developed economies. This fact can help explain why sticky price business cycle models have been unable to mat...

Nash Equilibrium and the History of Economic Theory

By Roger B. Myerson

Journal of Economic Literature, September 1999

John Nash's formulation of noncooperative game theory was one of the great breakthroughs in the history of social science. Nash's work in this area is reviewed in its historical context to better understand how the fundamental ideas of noncooperative game...

MM--Past, Present, Future

By Franco Modigliani

Journal of Economic Perspectives, Fall 1988

[This is a comment on "The Modigliani-Miller Propositions after Thirty Years" by Merton H. Miller in this same issue.] Before getting serious about the MM theorem's past and future, I would like to say a few words about its more personal history, includin...

The Lessons of Limited Market-Oriented Reform

[Symposium: Economic Transition in the Soviet Union and Eastern Europe]

By Thomas A. Wolf

Journal of Economic Perspectives, Fall 1991

The waves of reform and restructuring now engulfing most of Eastern Europe did not begin from the same starting point in each country. While they all share a common economic legacy—the traditional Soviet-type centrally planned economy—some cou...

Economics in the Former Soviet Union

By Michael Alexeev, Clifford Gaddy, and Jim Leitzel

Journal of Economic Perspectives, Spring 1992

One of the most notable, but least discussed, aspects of the halting attempts during the past six years to reform the economies of the Soviet Union, and now those of its successor states, has been the prominent role played by professional economists. Not ...

Correspondence: Are Economists Different?

By Ralph Lattimore

Journal of Economic Perspectives, Spring 1992

Front Matter

Journal of Economic Perspectives, Spring 1992

Limited Insurance within the Household: Evidence from a Field Experiment in Kenya

By Jonathan Robinson

American Economic Journal: Applied Economics, October 2012

In developing countries, unexpected income shocks are common but informal insurance is typically incomplete. An important question is therefore whether risk-sharing within the household is effective. This paper presents results from a field experiment wit...

Lost in Transit: Product Replacement Bias and Pricing to Market

By Emi Nakamura and Jón Steinsson

American Economic Review, December 2012

In the microdata underlying US trade price indexes, 40 percent of products are replaced before a single price change is observed and 70 percent are replaced after two price changes or fewer. A price index that focuses on price changes for identical ite...

On the Relationship between Preferential and Multilateral Trade Liberalization: The Case of Customs Unions

By Kamal Saggi, Alan Woodland, and Halis Murat Yildiz

American Economic Journal: Microeconomics, February 2013

This paper compares equilibrium outcomes of two games of trade liberalization. In the Bilateralism game, countries choose whether to liberalize trade preferentially via a customs union (CU ), multilaterally, or not at all. The Multilateralism game is a...

Pandering to Persuade

By Yeon-Koo Che, Wouter Dessein, and Navin Kartik

American Economic Review, February 2013

An agent advises a principal on selecting one of multiple projects or an outside option. The agent is privately informed about the projects' benefits and shares the principal's preferences except for not internalizing her value from the outside option. ...

Coercive Contract Enforcement: Law and the Labor Market in Nineteenth Century Industrial Britain

By Suresh Naidu and Noam Yuchtman

American Economic Review, February 2013

British Master and Servant law made employee contract breach a criminal offense until 1875. We develop a contracting model generating equilibrium contract breach and prosecutions, then exploit exogenous changes in output prices to examine the effects of...

Price Discrimination and Bargaining: Empirical Evidence from Medical Devices

By Matthew Grennan

American Economic Review, February 2013

Many important issues in business-to-business markets involve price discrimination and negotiated prices, situations where theoretical predictions are ambiguous. This paper uses new panel data on buyer-supplier transfers and a structural model to empiri...