Thinking Small: Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty: Review Essay

By Mark R. Rosenzweig

Journal of Economic Literature, March 2012

In Poor Economics, Abhijit Banerjee and Esther Duflo eschew grand theorizing about poverty reduction in favor of an approach in which intelligently designed and tested small interventions, based on a scientific understanding of the lives of the p...

How Business Is Done in the Developing World: Deals versus Rules

[Symposium: Doing Business]

By Mary Hallward-Driemeier and Lant Pritchett

Journal of Economic Perspectives, Summer 2015

What happens in the developing world when stringent regulations characterizing the investment climate meet weak government willingness or capability to enforce those regulations? How is business actually done? The Doing Business project surveys expert...

Forensic Economics

By Eric Zitzewitz

Journal of Economic Literature, September 2012

A new meta-field of "forensic economics" has begun to emerge, uncovering evidence of hidden behavior in a variety of domains. Examples include teachers cheating on exams, road builders skimping on materials, violations of U.N. sanctions, unnecessary heart...

Understanding Markups in the Open Economy

By Beatriz de Blas and Katheryn N. Russ

American Economic Journal: Macroeconomics, April 2015

This paper presents a new model of Bertrand competition between heterogeneous firms in the open economy where the macroeconomic distribution of markups responds to the degree of trade openness and the underlying level of technology in each trading partner...

R&D Investment, Exporting, and Productivity Dynamics

By Bee Yan Aw, Mark J. Roberts, and Daniel Yi Xu

American Economic Review, June 2011

This paper estimates a dynamic structural model of a producer's decision to invest in R&D and export, allowing both choices to endogenously affect the future path of productivity. Using plant-level data for the Taiwanese electronics industry, both acti...

Consumer Inertia and Firm Pricing in the Medicare Part D Prescription Drug Insurance Exchange

By Keith M. Marzilli Ericson

American Economic Journal: Economic Policy, February 2014

I use the Medicare Part D prescription drug insurance market to examine the dynamics of firm interaction with consumers on an insurance exchange. Enrollment data show that consumers face switching frictions leading to inertia in plan choice, and a regr...

Institutions: Top Down or Bottom Up?

By William Easterly

American Economic Review, May 2008

Preferential Trade Agreements as Stumbling Blocks for Multilateral Trade Liberalization: Evidence for the United States

By Nuno Limao

American Economic Review, June 2006

Most countries are members of preferential trade agreements (PTAs). The effect of these agreements has attracted much interest and raised the question of whether PTAs promote or slow multilateral trade liberalization, i.e., whether they are a "building bl...

A Review of The Age of Sustainable Development by Jeffrey Sachs

By Matthew E. Kahn

Journal of Economic Literature, September 2015

How does economic science inform the study of sustainable development? In his new book, Jeffrey D. Sachs analyzes the challenges of achieving economic growth while protecting the environment and achieving an equitable distribution of resources. This revie...

The Cost of Financial Frictions for Life Insurers

By Ralph S. J. Koijen and Motohiro Yogo

American Economic Review, January 2015

During the financial crisis, life insurers sold long-term policies at deep discounts relative to actuarial value. The average markup was as low as -19 percent for annuities and -57 percent for life insurance. This extraordinary pricing behavior was due to...

Behavioral Foundations of Microcredit: Experimental and Survey Evidence from Rural India

By Michal Bauer, Julie Chytilová, and Jonathan Morduch

American Economic Review, April 2012

We use experimental measures of time discounting and risk aversion for villagers in south India to highlight behavioral features of microcredit, a financial tool designed to reduce poverty and fix credit market imperfections. The evidence suggests that mi...

Diversity in the Workplace

By John Morgan and Felix Várdy

American Economic Review, March 2009

We study minority representation in the workplace when employers engage in optimal sequential search and minorities convey noisier signals of ability than mainstream job candidates. The greater signal noise makes it harder for minorities to change employe...

Watta Satta: Bride Exchange and Women's Welfare in Rural Pakistan

By Hanan G. Jacoby and Ghazala Mansuri

American Economic Review, September 2010

Can marriage institutions limit marital inefficiency? We study the pervasive custom of watta satta in rural Pakistan, a bride exchange between families coupled with a mutual threat of retaliation. Watta satta can be seen as a mechanism for coordinating th...

Stable and Strategy-Proof Matching with Flexible Allotments

By John William Hatfield, Scott Duke Kominers, and Alexander Westkamp

American Economic Review, May 2017

We introduce a framework of matching with flexible allotments that can be used to model firms with cross-division hiring restrictions. Our framework also allows us to nest some prior models of matching with distributional constraints. Building upon our re...

Village and Larger Economies: The Theory and Measurement of the Townsend Thai Project

By Robert M. Townsend

Journal of Economic Perspectives, Fall 2016

I have spent close to 20 years cataloging transactions between households in Thai villages, along with a research team. Just this past summer, we documented a number of ways in which even relatively poor villages have money markets not dissimilar in some ...

The Role of Multilateral Institutions in International Trade Cooperation

By Giovanni Maggi

American Economic Review, March 1999

The World Trade Organization (WFO) lacks the power to directly enforce agreements. It is, therefore, important to understand what role the WTO can play to facilitate international cooperation and whether a multilateral institution can offer distinct advan...

Endogenous Appropriability

By Joshua S. Gans and Scott Stern

American Economic Review, May 2017

Most approaches to entrepreneurship assume that entrepreneurial control over their inventions is critical for success and, in turn, for incentives. Such control is usually supported by regulations that protect intellectual property including patents, copy...

Disagreement and the Stock Market

[Symposium: Behavioral Finance]

By Harrison Hong and Jeremy C. Stein

Journal of Economic Perspectives, Spring 2007

A large catalog of variables with no apparent connection to risk has been shown to forecast stock returns, both in the time series and the cross-section. For instance, we see medium-term momentum and post-earnings drift in returns -- the tendency for stoc...

Measuring the Impacts of Teachers II: Teacher Value-Added and Student Outcomes in Adulthood

By Raj Chetty, John N. Friedman, and Jonah E. Rockoff

American Economic Review, September 2014

Are teachers' impacts on students' test scores ("value-added") a good measure of their quality? This question has sparked debate partly because of a lack of evidence on whether high value-added (VA) teachers improve students' long-term outcomes. Using sch...

Free Labour for Costly Journals?

By Theodore C. Bergstrom

Journal of Economic Perspectives, Fall 2001