The Science of Monetary Policy: An Imperfect Knowledge Perspective

By Stefano Eusepi and Bruce Preston

Journal of Economic Literature, March 2018

This paper reevaluates the basic prescriptions of monetary policy design in the new Keynesian paradigm through the lens of imperfect knowledge. We show that while the basic logic of monetary policy design under rational expectations continues to obtain, p...

From Communism to Capitalism: Private versus Public Property and Inequality in China and Russia

By Filip Novokmet, Thomas Piketty, Li Yang, and Gabriel Zucman

AEA Papers and Proceedings, May 2018

This paper combines national accounts, survey, wealth, and fiscal data (including recently released tax data on high-income taxpayers) in order to provide consistent series on the accumulation and distribution of income and wealth in China and Russia over...

Report of the Editor: American Economic Journal: Applied Economics

By Alex Mas

AEA Papers and Proceedings, May 2019

Unhappiness and Pain in Modern America: A Review Essay, and Further Evidence, on Carol Graham's Happiness for All?

By David G. Blanchflower and Andrew J. Oswald

Journal of Economic Literature, June 2019

In Happiness for All? Unequal Hopes and Lives in the Pursuit of the American Dream, Carol Graham raises disquieting ideas about today's United States. The challenge she puts forward is an important one. Here we review the intellectual case and of...

On Measuring Multidimensional Deprivation

By Prasanta K. Pattanaik and Yongsheng Xu

Journal of Economic Literature, June 2018

This essay presents a critical review of the recent book by Alkire et al. entitled Multidimensional Poverty Measurement and Analysis, and, in the course of doing so, it also discusses some general issues that come up in this context. We outli...

The Costs of Patronage: Evidence from the British Empire

By Guo Xu

American Economic Review, November 2018

I combine newly digitized personnel and public finance data from the British colonial administration for the period 1854-1966 to study how patronage affects the promotion and incentives of governors. Governors are more likely to be promoted to higher sala...

Asymmetric Information and Remittances: Evidence from Matched Administrative Data

By Thomas Joseph, Yaw Nyarko, and Shing-Yi Wang

American Economic Journal: Applied Economics, April 2018

Using new large-scale, administrative data matching remittances and monthly payroll disbursals, we demonstrate how migrants' earnings in the United Arab Emirates affect their remittances. We consider several types of income changes: Ramadan, weather shock...

Information Design: A Unified Perspective

By Dirk Bergemann and Stephen Morris

Journal of Economic Literature, March 2019

Given a game with uncertain payoffs, information design analyzes the extent to which the provision of information alone can influence the behavior of the players. Information design has a literal interpretation, under which there is a real information des...

The Quanto Theory of Exchange Rates

By Lukas Kremens and Ian Martin

American Economic Review, March 2019

We present a new identity that relates expected exchange rate appreciation to a risk-neutral covariance term, and use it to motivate a currency forecasting variable based on the prices of quanto index contracts. We show via panel regressions that the quan...

Space, the Final Economic Frontier

By Matthew Weinzierl

Journal of Economic Perspectives, Spring 2018

After decades of centralized control of economic activity in space, NASA and US policymakers have begun to cede the direction of human activities in space to commercial companies. NASA garnered more than 0.7 percent of GDP in the mid-1960s, but is only ...

The Impact of Monitoring in Infinitely Repeated Games: Perfect, Public, and Private

By Masaki Aoyagi, V. Bhaskar, and Guillaume R. Fréchette

American Economic Journal: Microeconomics, February 2019

This paper uses a laboratory experiment to study the effect of the monitoring structure on the play of the infinitely repeated prisoner's dilemma. Keeping the strategic form of the stage game fixed, we examine the behavior of subjects when information abo...

A Spatial Knowledge Economy

By Donald R. Davis and Jonathan I. Dingel

American Economic Review, January 2019

Leading empiricists and theorists of cities have recently argued that the generation and exchange of ideas must play a more central role in the analysis of cities. This paper develops the first system of cities model with costly idea exchange as the agglo...

Railroads of the Raj: Estimating the Impact of Transportation Infrastructure

By Dave Donaldson

American Economic Review, April 2018

How large are the benefits of transportation infrastructure projects, and what explains these benefits? This paper uses archival data from colonial India to investigate the impact of India's vast railroad network. Guided by four results from a general equ...

Does Teacher Training Actually Work? Evidence from a Large-Scale Randomized Evaluation of a National Teacher Training Program

By Prashant Loyalka, Anna Popova, Guirong Li, and Zhaolei Shi

American Economic Journal: Applied Economics, July 2019

Despite massive investments in teacher professional development (PD) programs in developing countries, there is little evidence on their effectiveness. We present results of a large-scale, randomized evaluation of a national PD program in China in which t...

Structural Interpretation of Vector Autoregressions with Incomplete Identification: Revisiting the Role of Oil Supply and Demand Shocks

By Christiane Baumeister and James D. Hamilton

American Economic Review, May 2019

Traditional approaches to structural vector autoregressions (VARs) can be viewed as special cases of Bayesian inference arising from very strong prior beliefs. These methods can be generalized with a less restrictive formulation that incorporates uncertai...

Front Matter

Journal of Economic Literature, June 2009

The Declining Labor Market Prospects of Less-Educated Men

[Symposium: The Problems of Men]

By Ariel J. Binder and John Bound

Journal of Economic Perspectives, Spring 2019

Over the last half century, US wage growth stagnated, wage inequality rose, and the labor-force participation rate of prime-age men steadily declined. In this article, we examine these worrying labor market trends, focusing on outcomes for males without...

Innovation and Production in the Global Economy

By Costas Arkolakis, Natalia Ramondo, Andrés Rodríguez-Clare, and Stephen Yeaple

American Economic Review, August 2018

We develop a quantifiable general equilibrium model of trade and multinational production (MP) in which countries can specialize in innovation or production. Home market effects or comparative advantage leads some countries to specialize in innovation and...

Public Spillovers from Private Insurance Contracting: Physician Responses to Managed Care

By Michael R. Richards and D. Sebastian Tello-Trillo

American Economic Journal: Economic Policy, November 2019

Managed care is rebounding as more emphasis is placed on cost containment. These efforts may benefit consumers but challenge providers; however, empirical evidence on how supply-side managed care influences physicians is incomplete. We leverage a quasi-ex...

Why Has Urban Inequality Increased?

By Nathaniel Baum-Snow, Matthew Freedman, and Ronni Pavan

American Economic Journal: Applied Economics, October 2018

This paper examines mechanisms driving the more rapid increases in wage inequality in larger cities between 1980 and 2007. Production function estimates indicate strong evidence of capital-skill complementarity and increases in the skill bias of agglomera...