Persuasion in Politics

By Kevin M. Murphy and Andrei Shleifer

American Economic Review, May 2004

Identifying the Effects of the Americans with Disabilities Act Using State-Law Variation: Preliminary Evidence on Educational Participation Effects

By Christine Jolls

American Economic Review, May 2004

Why Barriers to Entry Are Barriers to Understanding

By Dennis W. Carlton

American Economic Review, May 2004

Risk and Volatility: Econometric Models and Financial Practice

By Robert Engle

American Economic Review, June 2004

Liquidity, Efficiency, and Bank Bailouts

By Gary Gorton and Lixin Huang

American Economic Review, June 2004

Governments can efficiently provide liquidity, as when the banking system is bailed out. We study a model in which not all assets can be used to purchase all other assets at every date. Agents sometimes want to sell projects. The market price of the proje...

Irreversible Decisions and Record-Setting News Principles

By Svetlana Boyarchenko

American Economic Review, June 2004

In the now-classical real options theory, the price of an underlying asset is modeled as a geometric Brownian motion, and optimal exercise strategies are described by simple explicit formulas. This paper extends the classical theory to allow any geometric...

Labor and the Market Value of the Firm

By Monika Merz and Eran Yashiv

American Economic Review, September 2007

What role does labor play in firms' market value? We use a production-based asset pricing model with factor adjustment costs and forward-looking agents to explore this question. We posit that the hiring of labor is akin to investment in capital and that t...

Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages

By Beata Smarzynska Javorcik

American Economic Review, June 2004

Many countries strive to attract foreign direct investment (FDI) hoping that knowledge brought by multinationals will spill over to domestic industries and increase their productivity. In contrast with earlier literature that failed to find positive intra...

Pareto-Improving Campaign Finance Policy

By Stephen Coate

American Economic Review, June 2004

This paper argues that campaign finance policy, in the form of contribution limits and matching public financing, can be Pareto improving even under very optimistic assumptions concerning the role of campaign advertising and the rationality of voters. The...

Workers' Education, Spillovers, and Productivity: Evidence from Plant-Level Production Functions

By Enrico Moretti

American Economic Review, June 2004

I assess the magnitude of human capital spillovers by estimating production functions using a unique firm-worker matched data set. Productivity of plants in cities that experience large increases in the share of college graduates rises more than the produ...

Is There a Politically Optimal Level of Judicial Independence?

By F. Andrew Hanssen

American Economic Review, June 2004

Independent courts render current policy more durable (by raising the cost of future policy changes) but may also engage in policy-making of their own. This paper asks: Is there an optimal level of judicial independence from the perspective of incumbent o...

Money Does Matter! Evidence from Increasing Real Income and Life Satisfaction in East Germany Following Reunification

By Paul Frijters, John P. Haisken-DeNew, and Michael A. Shields

American Economic Review, June 2004

Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty: Comment

By Antonio Ciccone

American Economic Review, June 2004

Opportunism in Multilateral Vertical Contracting: Nondiscrimination, Exclusivity, and Uniformity: Comment

By Leslie M. Marx and Greg Shaffer

American Economic Review, June 2004

Opportunism in Multilateral Vertical Contracting: Nondiscrimination, Exclusivity, and Uniformity: Reply

By R. Preston McAfee and Marius Schwartz

American Economic Review, June 2004

Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach

By Xavier Sala-I-Martin, Gernot Doppelhofer, and Ronald I. Miller

American Economic Review, September 2004

This paper examines the robustness of explanatory variables in cross-country economic growth regressions. It introduces and employs a novel approach, Bayesian Averaging of Classical Estimates (BACE), which constructs estimates by averaging OLS coefficient...

Why Does the Cyclical Behavior of Real Wages Change Over Time?

By Kevin X.D. Huang, Zheng Liu, and Louis Phaneuf

American Economic Review, September 2004

The cyclical behavior of real wages has evolved from mildly countercyclical during the interwar period to modestly procyclical in the postwar era. This paper presents a general-equilibrium business-cycle model that helps explain the evolution. In the mode...

Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments

By Dirk Engelmann and Martin Strobel

American Economic Review, September 2004

We present simple one-shot distribution experiments comparing the relative importance of efficiency concerns, maximin preferences, and inequality aversion, as well as the relative performance of the fairness theories by Gary E Bolton and Axel Ockenfels an...

The Long and Short of the Canada-U. S. Free Trade Agreement

By Daniel Trefler

American Economic Review, September 2004

The Canada-U. S. Free Trade Agreement provides a unique window onto the effects of a reciprocal trade agreement on an industrialized economy (Canada). For industries that experienced the deepest Canadian tariff cuts, the contraction of low-productivity pl...

Desegregation and Black Dropout Rates

By Jonathan Guryan

American Economic Review, September 2004

In 1954 the United States Supreme Court ruled that separate schools for black and white children were "inherently unequal." This paper studies whether the desegregation plans of the next 30 years benefited black and white students in desegregated school d...