Monetary Policy in Sudden Stop-Prone Economies

By Louphou Coulibaly

American Economic Journal: Macroeconomics, October 2023

This paper proposes a parsimonious theory explaining the cyclicality of monetary policy in emerging countries in a model where access to foreign financing depends on the real exchange rate and the government lacks commitment. The discretionary monetary po...

Taxation of Consumption and Labor Income: A Quantitative Approach

By Francesca Parodi

American Economic Journal: Macroeconomics, October 2023

I quantitatively characterize optimal consumption and labor income taxes in a structural life-cycle model of household consumption, saving, and employment choices that allows for irreversibility of durable goods and preference heterogeneity. I find that d...

Disentangling COVID-19, Economic Mobility, and Containment Policy Shocks

By Annika Camehl and Malte Rieth

American Economic Journal: Macroeconomics, October 2023

We study the dynamic interaction between COVID-19, economic mobility, and containment policy. We use Bayesian panel structural vector autoregressions with daily data for 44 countries, identified through traditional and narrative sign restrictions. We find...

Information Dynamics and Macro Fluctuations

By Kyriakos Chousakos, Gary Gorton, and Guillermo Ordoñez

American Economic Journal: Macroeconomics, October 2023

The amount of information produced about firms' productivities and about the quality of collateral backing their loans varies over time. These information dynamics determine the evolution of credit, output and productivity, which feeds back into incentive...

Product Variety, the Cost of Living, and Welfare across Countries

By Alberto Cavallo, Robert C. Feenstra, and Robert Inklaar

American Economic Journal: Macroeconomics, October 2023

We use the structure of the Melitz (2003) model to compute the cost of living and welfare across 47 countries, and compare these to conventional measures of prices and real consumption from the International Comparisons Project (ICP). The cost of living i...

Trade Policies and Fiscal Devaluations

By Christopher Erceg, Andrea Prestipino, and Andrea Raffo

American Economic Journal: Macroeconomics, October 2023

Fiscal devaluations—an increase in import tariffs and export subsidies (IX) or an increase in value-added taxes and payroll subsidies (VP)—have been shown to provide as much stimulus under fixed exchange rates as a currency devaluation. We find that i...

Electricity and Firm Productivity: A General-Equilibrium Approach

By Stephie Fried and David Lagakos

American Economic Journal: Macroeconomics, October 2023

Many policymakers view power outages as a major constraint on firm productivity in developing countries. Yet empirical studies find modest short-run effects of outages on firm performance. This paper builds a dynamic macroeconomic model to study the long-...

Call for Papers: The 5th China International Forum on Finance and Policy

[News]

September 29, 2023

The submission deadline is October 20, 2023.

Robert E. Lucas Jr. (1937–2023)

[News]

May 16, 2023

The economics profession is saddened by the loss of the Nobel laureate and former AEA president.

Ending school segregation for Mexican Americans

[Research Highlight]

September 29, 2023

Francisca Antman discusses the impact of desegregating Mexican American schools on educational outcomes in California.

The Long-Run Impacts of Mexican American School Desegregation

By Francisca M. Antman and Kalena E. Cortes

Journal of Economic Literature, September 2023

We present the first quantitative analysis of the impact of ending de jure segregation of Mexican American schoolchildren in the United States by examining the effects of the 1947 Mendez v. Westminster court decision on long-run educational attai...

Call for Papers: Economic Development Quarterly Special Issue

[News]

October 03, 2023

The submission deadline is November 10, 2023.

Federal Reserve Bank of Cleveland FedTalk on wealth distribution

[News]

October 06, 2023

This free, online event is scheduled on October 17, 2023.

"Quick Response" Economic Stimulus: The Effect of Small-Value Digital Coupons on Spending

By Jianwei Xing, Eric Yongchen Zou, Zhentao Yin, Yong Wang, and Zhenhua Li

American Economic Journal: Macroeconomics, October 2023

We study a new consumption stimulus program implemented by a large Chinese city that leverages mobile payment platforms to dispense massive amounts of small-value digital coupons. Exploiting a "rush" design of the dispensing process in which over 1 millio...