Sinking, Swimming, or Learning to Swim in Medicare Part D

By Jonathan D. Ketcham, Claudio Lucarelli, Eugenio J. Miravete, and M. Christopher Roebuck

American Economic Review, October 2012

Under Medicare Part D, senior citizens choose prescription drug insurance offered by numerous private insurers. We examine nonpoor enrollees- actions in 2006 and 2007 using panel data. Our sample reduced overspending by $298 on average, with gains by 81 p...

Welfare Reversals in a Monetary Union

By Stéphane Auray and Aurélien Eyquem

American Economic Journal: Macroeconomics, October 2014

We show that welfare can be lower under complete financial markets than under autarky in a monetary union with home bias, sticky prices, and asymmetric shocks. Such a monetary union is a second- best environment in which the structure of financial mark...

The Economics of Temporary Migrations

By Christian Dustmann and Joseph-Simon Görlach

Journal of Economic Literature, March 2016

Many migrations are temporary -- a fact that has often been ignored in the economic literature on migration. Such omission may be serious in that expected migration temporariness can impart a distinct dynamic element to immigrants' economic behavior, gene...

Open Skies: Estimating Travelers' Benefits from Free Trade in Airline Services

By Clifford Winston and Jia Yan

American Economic Journal: Economic Policy, May 2015

The United States has negotiated bilateral open skies agreements to deregulate airline competition on US international routes, but little is known about their effects on travelers' welfare and the gains from the US negotiating agreements with more countri...

Social Media and Fake News in the 2016 Election

By Hunt Allcott and Matthew Gentzkow

Journal of Economic Perspectives, Spring 2017

Following the 2016 US presidential election, many have expressed concern about the effects of false stories ("fake news"), circulated largely through social media. We discuss the economics of fake news and present new data on its consumption prior to the ...

The IMF's Unmet Challenges

[Symposium: The Bretton Woods Institutions]

By Barry Eichengreen and Ngaire Woods

Journal of Economic Perspectives, Winter 2016

The International Monetary Fund is a controversial institution whose interventions regularly provoke passionate reactions. We will argue that there is an important role for the IMF in helping to solve information, commitment, and coordination problems wit...

Monopolistic Competition and Optimum Product Selection

By Antonella Nocco, Gianmarco I. P. Ottaviano, and Matteo Salto

American Economic Review, May 2014

We provide novel insights on the decentralization of optimal outcomes under monopolistic competition with nonseparable utility, variable demand elasticity, and endogenous firm heterogeneity. Relative to the unconstrained optimum, equilibrium firm selectio...

Mirage of Floating Exchange Rates

By Carmen M. Reinhart

American Economic Review, May 2000

Recommendations for Further Reading

By Timothy Taylor

Journal of Economic Perspectives, Fall 2010

Investor Sentiment in the Stock Market

[Symposium: Behavioral Finance]

By Malcolm Baker and Jeffrey Wurgler

Journal of Economic Perspectives, Spring 2007

Investor sentiment, defined broadly, is a belief about future cash flows and investment risks that is not justified by the facts at hand. The question is no longer whether investor sentiment affects stock prices, but how to measure investor sentiment and ...

Theory and History behind Business Cycles: Are the 1990s the Onset of a Golden Age?

[Symposium: Business Cycles]

By Victor Zarnowitz

Journal of Economic Perspectives, Spring 1999

The theory presented in this paper ties together profits, investment, credit, stock prices, inflation, and interest rates. The author discusses new estimates of profit and investment functions with important roles for growth and demand and productivity, p...

The Decentralized Central Bank: A Review Essay on The Power and Independence of the Federal Reserve by Peter Conti-Brown

By Narayana R. Kocherlakota

Journal of Economic Literature, June 2017

This essay discusses the structure and governance of the Federal Reserve System in light of the many changes in its activities over the past thirty years. Based on this analysis, it argues in favor of four specific reforms: clarification of Congressional ...

Imports "Я" Us: Retail Chains as Platforms for Developing-Country Imports

By Emek Basker and Pham Hoang Van

American Economic Review, May 2010

Cognition and Behavior in Two-Person Guessing Games: An Experimental Study

By Miguel A. Costa-Gomes and Vincent P. Crawford

American Economic Review, December 2006

This paper reports an experiment that elicits subjects’ initial responses to 16 dominance-solvable two-person guessing games. The structure is publicly announced except for varying payoff parameters, to which subjects are given free access. Varying th...

Face Value

By Catherine C. Eckel and Ragan Petrie

American Economic Review, June 2011

People pay attention to the appearance of others, and personal characteristics can affect many types of decisions. We ask, is there informational value in a face in a situation where trust and reciprocity can increase earnings? We use a laboratory trust g...

Cellular Service Demand: Biased Beliefs, Learning, and Bill Shock

By Michael D. Grubb and Matthew Osborne

American Economic Review, January 2015

Following FCC pressure to end bill shock, cellular carriers now alert customers when they exceed usage allowances. We estimate a model of plan choice, usage, and learning using a 2002-2004 panel of cellular bills. Accounting for firm price adjustment, we ...

Is Gifted Education a Bright Idea? Assessing the Impact of Gifted and Talented Programs on Students

By Sa A. Bui, Steven G. Craig, and Scott A. Imberman

American Economic Journal: Economic Policy, August 2014

We evaluate the impact of Gifted and Talented (GT) programs on students through a regression discontinuity (RD) design, and by analyzing a randomized lottery for elite magnet GT schools. We show that GT students in each analysis are exposed to higher achi...

The Consequences of Teenage Childbearing before Roe v. Wade

By Kevin Lang and Russell Weinstein

American Economic Journal: Applied Economics, October 2015

Using five cycles of the National Survey of Family Growth, we estimate the effect of teen motherhood on education, labor market, and marriage outcomes for teens conceiving from 1940 through 1968. Effects vary by marital status at conception, socioeconomic...

Watch Your Step: Optimal Policy in a Tipping Climate

By Derek Lemoine and Christian Traeger

American Economic Journal: Economic Policy, February 2014

We investigate the optimal policy response to the possibility of abrupt, irreversible shifts in system dynamics. The welfare cost of a tipping point emerges from the policymaker's response to altered system dynamics. Our policymaker also learns about a...

Trade, FDI, and the Organization of Firms

By Elhanan Helpman

Journal of Economic Literature, September 2006

New developments in the world economy have triggered research designed to better understand the changes in trade and investment patterns, and the reorganization of production across national borders. Although traditional trade theory has much to offer ...