Career Concerns and the Nature of Skills

By Gonzalo Cisternas

American Economic Journal: Microeconomics, May 2018

I examine how career concerns are shaped by the nature of productive actions taken by workers. A worker's skills follow a Gaussian process with an endogenous component reflecting human-capital accumulation. Effort and skills are substitutes both in th...

Measuring and Bounding Experimenter Demand

By Jonathan de Quidt, Johannes Haushofer, and Christopher Roth

American Economic Review, November 2018

We propose a technique for assessing robustness to demand effects of findings from experiments and surveys. The core idea is that by deliberately inducing demand in a structured way we can bound its influence. We present a model in which participants resp...

Supply-Side Drug Policy in the Presence of Substitutes: Evidence from the Introduction of Abuse-Deterrent Opioids

By Abby Alpert, David Powell, and Rosalie Liccardo Pacula

American Economic Journal: Economic Policy, November 2018

Overdose deaths from prescription opioid pain relievers nearly quadrupled between 1999 and 2010. We study the consequences of one of the largest supply disruptions to date to abusable opioids—the introduction of an abuse-deterrent version of OxyContin i...

Educational Investment Responses to Economic Opportunity: Evidence from Indian Road Construction

By Anjali Adukia, Sam Asher, and Paul Novosad

American Economic Journal: Applied Economics, January 2020

The rural poor in developing countries, once economically isolated, are increasingly being connected to outside markets. Whether these new connections crowd out or encourage educational investment is a central question. We examine the effects on education...

On the Returns to Invention within Firms: Evidence from Finland

By Philippe Aghion, Ufuk Akcigit, Ari Hyytinen, and Otto Toivanen

AEA Papers and Proceedings, May 2018

In this paper we merge individual income data, firm-level data, patenting data, and IQ data in Finland over the period 1988–2012 to analyze the returns to invention for inventors and their coworkers or stakeholders within the same firm. We find that: (i...

The "Standard Error" of Event Studies: Lessons from the 2016 Election

By Justin Wolfers and Eric Zitzewitz

AEA Papers and Proceedings, May 2018

The 2016 Election offers an unusually stark warning about the limitations of event studies. In four separate pre-election event windows, financial market responses to shifts in electoral probabilities were consistent with expectations that a surprise Trum...

Measuring Welfare with Massive Online Choice Experiments: A Brief Introduction

By Erik Brynjolfsson, Felix Eggers, and Avinash Gannamaneni

AEA Papers and Proceedings, May 2018

GDP is a measure of production, and yet it is widely used as a proxy for well-being. It is particularly ill-suited for assessing the contributions of digital goods which are free to consumers and thus excluded from GDP measures. This underscores the need ...

International Recessions

By Fabrizio Perri and Vincenzo Quadrini

American Economic Review, April 2018

Macro developments leading up to the 2008 crisis displayed an unprecedented degree of international synchronization. Before the crisis, all G7 countries experienced credit growth and, around the time of the Lehman bankruptcy, they all faced sharp and larg...

Low Real Interest Rates, Collateral Misrepresentation, and Monetary Policy

By Stephen D. Williamson

American Economic Journal: Macroeconomics, October 2018

A model is constructed in which households and banks have incentives to fake the quality of collateral. These incentive problems matter when collateral is scarce in the aggregate—when real interest rates are low. Conventional monetary easing can exacerb...

Bargaining and News

By Brendan Daley and Brett Green

American Economic Review, February 2020

We study a bargaining model in which a buyer makes frequent offers to a privately informed seller, while gradually learning about the seller's type from "news." We show that the buyer's ability to leverage this information to extract more surplus from the...

Slow Moving Debt Crises

By Guido Lorenzoni and Iván Werning

American Economic Review, September 2019

We study slow moving debt crises: self-fulfilling equilibria in which high interest rates, due to the fear of a future default, lead to a gradual but faster accumulation of debt, ultimately validating investors' fear. We show that slow moving crises arise...

Factory Productivity and the Concession System of Incorporation in Late Imperial Russia, 1894–1908

By Amanda G. Gregg

American Economic Review, February 2020

In Imperial Russia, incorporation required an expensive special concession, yet over 4,000 Russian firms incorporated before 1914. I identify the characteristics of incorporating firms and measure the productivity gains and growth in machine power enjoyed...

Oil and Macroeconomic (In)stability

By Hilde C. Bjørnland, Vegard H. Larsen, and Junior Maih

American Economic Journal: Macroeconomics, October 2018

We analyze the role of oil price volatility in reducing U.S. macroeconomic instability. Using a Markov Switching Rational Expectation New-Keynesian model we revisit the timing of the Great Moderation and the sources of changes in the volatility of macroec...

An Economist's Guide to Climate Change Science

[Symposium: Climate Change]

By Solomon Hsiang and Robert E. Kopp

Journal of Economic Perspectives, Fall 2018

This article provides a brief introduction to the physical science of climate change, aimed towards economists. We begin by describing the physics that controls global climate, how scientists measure and model the climate system, and the magnitude of huma...

Partial Vertical Integration, Ownership Structure, and Foreclosure

By Nadav Levy, Yossi Spiegel, and David Gilo

American Economic Journal: Microeconomics, February 2018

We study the incentive to acquire a partial stake in a vertically related firm and then foreclose rivals. We show that whether such partial acquisitions are profitable depends crucially on the initial ownership structure of the target firm and on corporat...

Front Matter

Journal of Economic Perspectives, Fall 2018

Outsourcing Education: Experimental Evidence from Liberia

By Mauricio Romero, Justin Sandefur, and Wayne Aaron Sandholtz

American Economic Review, February 2020

In 2016, the Liberian government delegated management of 93 randomly selected public schools to private providers. Providers received US$50 per pupil, on top of US$50 per pupil annual expenditure in control schools. After one academic year, students in ou...

Entry and Exit, Multiproduct Firms, and Allocative Distortions

By Roberto N. Fattal Jaef

American Economic Journal: Macroeconomics, April 2018

Most studies quantifying the gains from reversing allocative distortions are static in nature. We propose a model of firm dynamics featuring entry, exit, and multiproduct firms to understand the contribution of these dynamic factors in shaping the welfare...

A Letter and Encouragement: Does Information Increase Postsecondary Enrollment of UI Recipients?

By Andrew Barr and Sarah Turner

American Economic Journal: Economic Policy, August 2018

For individuals who experience job loss, enrollment in postsecondary programs may provide an opportunity to improve future employment outcomes. However, decisions to enroll may be hampered by insufficient information about the benefits and costs and the n...

Monetary Policy, Real Activity, and Credit Spreads: Evidence from Bayesian Proxy SVARs

By Dario Caldara and Edward Herbst

American Economic Journal: Macroeconomics, January 2019

In this paper we develop a Bayesian framework to estimate a proxy structural vector autoregression to identify monetary policy shocks. We find that during the Great Moderation period, monetary policy shocks induce a persistent decline in real activity and...