Nonlinear Persistence and Partial Insurance: Income and Consumption Dynamics in the PSID

By Manuel Arellano, Richard Blundell, and Stephane Bonhomme

AEA Papers and Proceedings, May 2018

In this paper we highlight the importance of the PSID in understanding income dynamics and consumption insurance. We explore the nonlinear nature of income shocks and describe a new quantile-based panel data framework for income dynamics. In this approach...

Financial Cycles and Credit Growth across Countries

By Nuno Coimbra and Hélène Rey

AEA Papers and Proceedings, May 2018

In Coimbra and Rey (2017) we develop a dynamic macroeconomic model with heterogeneous financial intermediaries and endogenous entry. It features time-varying endogenous macroeconomic risk that arises from the risk-shifting behavior of financial intermedia...

Society and Economy: Frameworks and Principles: A Book Review

By Sanjeev Goyal

Journal of Economic Literature, September 2019

Mark Granovetter has written a deep and wide-ranging book on economy and society entitled Society and Economy: Frameworks and Principles. Economists, in particular, will find his discussion on the role of social networks in understanding the pr...

A Dialogue between a Populist and an Economist

By Tito Boeri, Prachi Mishra, Chris Papageorgiou, and Antonio Spilimbergo

AEA Papers and Proceedings, May 2018

In this imaginary dialogue, a populist and an economist discuss the role of economic shocks to explain populism. A simple correlation between economic shocks and populism is weak. However, economic shocks can explain well the phenomenon of populism in cou...

Misperceptions about Tax Audits

By Marcelo Bérgolo, Rodrigo Ceni, Guillermo Cruces, Matias Giaccobasso, and Ricardo Perez-Truglia

AEA Papers and Proceedings, May 2018

For some entities, the utility-maximizing evasion rate depends substantially on tax audit features, such as audit probabilities and penalty rates. Bergolo et al. (2017) document large misperceptions about these features. In this paper, we expand the analy...

New Evidence on Earnings Volatility in Survey and Administrative Data

By Michael D. Carr and Emily E. Wiemers

AEA Papers and Proceedings, May 2018

Despite the rise in cross-sectional inequality since the late 1990s, there is little consensus on trends in earnings volatility during this period. Using consistent samples and methods in administrative earnings data matched to the Survey of Income and Pr...

Human Judgment and AI Pricing

By Ajay Agrawal, Joshua S. Gans, and Avi Goldfarb

AEA Papers and Proceedings, May 2018

This paper examines the pricing choices of a provider of artificial intelligence (AI) services. It does so in the context of AI providing predictions to a decision-maker who also exercises what we term judgment; specifically, the discovery of payoffs from...

Carbon Pricing Induces Innovation: Evidence from China's Regional Carbon Market Pilots

By Jingbo Cui, Junjie Zhang, and Yang Zheng

AEA Papers and Proceedings, May 2018

China has launched seven regional pilots of emission trading scheme (ETS) to limit its carbon emissions. Taking advantage of the variations in the regional ETS pilots across regions and sectors and over time, we employ a difference-in-difference-in-differ...

Elasticity of Medicaid Access with Respect to State Financial Distress

By Victoria Perez, Joseph Benitez, and Eric Seiber

AEA Papers and Proceedings, May 2018

In 2016, total Medicaid spending, $574.2 billion, represented one-third of state budgets. Descriptive studies indicate that state policymakers adjust social welfare programs during times of financial distress, particularly Medicaid. The challenge of forma...

Dynamic Incentives in Wait List Mechanisms

By Nikhil Agarwal, Itai Ashlagi, Paulo Somaini, and Daniel Waldinger

AEA Papers and Proceedings, May 2018

Many scarce public resources are allocated through wait lists that use priorities for individual agents. A new priority system for allocating deceased donor kidneys was adopted in 2014. This redesign was guided by simulations that held decision-rules fixe...

Regulating Mismeasured Pollution: Implications of Firm Heterogeneity for Environmental Policy

By Eva Lyubich, Joseph Shapiro, and Reed Walker

AEA Papers and Proceedings, May 2018

This paper provides the first estimates of within-industry heterogeneity in energy and CO2 productivity for the entire US manufacturing sector. We measure energy and CO2 productivity as output per dollar energy input or per ton CO

Male Social Status and Women's Work

By Arielle Bernhardt, Erica Field, Rohini Pande, Natalia Rigol, Simone Schaner, and Charity Troyer-Moore

AEA Papers and Proceedings, May 2018

Female labor force participation varies significantly even among countries with similar levels of economic development. Recent studies have shown that gender norms can help explain these differences in women's work, but the channels through which norms im...

The Geographic Spread of a Large Devaluation

By Javier Cravino and Andrei A. Levchenko

AEA Papers and Proceedings, May 2018

Cravino and Levchenko (2017) establish that the 1994 Mexican peso devaluation raised the prices of consumption baskets of low-income households substantially more than the prices of the consumption baskets of high-income households. In this paper, we expl...

Natural Resources and Global Misallocation

By Alexander Monge-Naranjo, Juan M. Sánchez, and Raül Santaeulàlia-Llopis

American Economic Journal: Macroeconomics, April 2019

Are production factors allocated efficiently across countries? To differentiate misallocation from factor intensity differences, we provide a new methodology to estimate output shares of natural resources based solely on current rent flows data. With this...

Using Online Prices for Measuring Real Consumption across Countries

By Alberto Cavallo, W. Erwin Diewert, Robert C. Feenstra, Robert Inklaar, and Marcel P. Timmer

AEA Papers and Proceedings, May 2018

We show that online prices can be used to construct quarterly purchasing power parities (PPPs) with a closely matched set of goods and identical methodologies in a variety of developed and developing countries. Our results are close to those reported by t...

Can Information Change Personal Retirement Savings? Evidence from Social Security Benefits Statement Mailings

By Susan Payne Carter and William Skimmyhorn

AEA Papers and Proceedings, May 2018

Despite concern about the viability of public retirement programs and potential undersaving for retirement, we still know little about the impact of government provided information on individual behavior. We exploit plausibly exogenous variation in exposu...

From "Traditional" to Research-Based Instructional Strategies: An Assessment of Learning Gains

By Sarah B. Cosgrove and Neal H. Olitsky

AEA Papers and Proceedings, May 2018

The cognitive science literature provides several research based instructional strategies (RBIS) proven to be effective in student learning. Given the prevalence of lecture-based classes and instructor-led discussions, understanding the effects of switchi...

Reach for Yield and Fickle Capital Flows

By Ricardo J. Caballero and Alp Simsek

AEA Papers and Proceedings, May 2018

In Caballero and Simsek (2017), we develop a model of fickle capital flows and show that, when countries are similar, international flows create global liquidity and mitigate crises despite their fickleness. In this paper, we focus on the asymmetric situa...

Is Altruism Sensitive to Scope? The Role of Tangibility

By Alex Imas and George Loewenstein

AEA Papers and Proceedings, May 2018

Prior work has shown that people appear insensitive to the scope of their altruistic acts and prosocial behavior. While they respond positively when their choices lead to increasing rewards for themselves, people do not change their behavior when the outc...

Welfarism's Envy Problem Extends to Popular Judgments

By Matthew Weinzierl

AEA Papers and Proceedings, May 2018

Economists use a welfarist approach to policy evaluation, but doing so can lead to recommendations that violate seemingly wise non-welfarist principles. I explore one example: the proper tax policy response to envy. Using a novel survey, I find that a maj...