Inequality and Globalization: A Review Essay

By Martin Ravallion

Journal of Economic Literature, June 2018

As normally measured, "global inequality" is the relative inequality of incomes found among all people in the world no matter where they live. Francois Bourguignon and Branko Milanovic have written insightful and timely books on global inequality, emp...

Nonmonetary Incentives and the Implications of Work as a Source of Meaning

[Symposium: Incentives in the Workplace]

By Lea Cassar and Stephan Meier

Journal of Economic Perspectives, Summer 2018

Empirical research in economics has begun to explore the idea that workers care about nonmonetary aspects of work. An increasing number of economic studies using survey and experimental methods have shown that nonmonetary incentives and nonpecuniary aspec...

Why Do Defaults Affect Behavior? Experimental Evidence from Afghanistan

By Joshua Blumenstock, Michael Callen, and Tarek Ghani

American Economic Review, October 2018

We report on an experiment examining why default options impact behavior. By randomly assigning employees to different varieties of a salary-linked savings account, we find that default enrollment increases participation by 40 percentage points—an effec...

Measuring the Effects of Corporate Tax Cuts

[Symposium: The Tax Cuts and Jobs Act]

By Alan J. Auerbach

Journal of Economic Perspectives, Fall 2018

On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act (TCJA), the most sweeping revision of US tax law since the Tax Reform Act of 1986. The law introduced many significant changes. However, perhaps none was as important as the c...

Front Matter

American Economic Journal: Macroeconomics, October 2019

Medieval Origins: A Review Essay on Campbell's The Great Transition

By Eric Chaney

Journal of Economic Literature, June 2018

Bruce M. S. Campbell's The Great Transition: Climate, Disease and Society in the Late-Medieval World is a significant contribution to the growing literature that traces the roots of Europe's economic rise to the climatic and population shocks...

The Model Selection Curse

By Kfir Eliaz and Ran Spiegler

American Economic Review: Insights, September 2019

A statistician takes an action on behalf of an agent, based on the agent's self-reported personal data and a sample involving other people. The action that he takes is an estimated function of the agent's report. The estimation procedure involves model se...

The convergence hypothesis

[Research Highlight]

April 03, 2020

Are poor countries catching up with rich countries?

Quadratic Voting: How Mechanism Design Can Radicalize Democracy

By Steven P. Lalley and E. Glen Weyl

AEA Papers and Proceedings, May 2018

Can mechanism design save democracy? We propose a simple design that offers a chance: individuals pay for as many votes as they wish using a number of "voice credits" in the votes they buy. Only quadratic cost induces marginal costs linear in votes purcha...

Front Matter

American Economic Journal: Macroeconomics, April 2019

Bridging the Intention-Behavior Gap? The Effect of Plan-Making Prompts on Job Search and Employment

By Martin Abel, Rulof Burger, Eliana Carranza, and Patrizio Piraino

American Economic Journal: Applied Economics, April 2019

The paper tests the effects of plan making on job search and employment. In a field experiment with unemployed youths, participants who complete a detailed job search plan increase the number of job applications submitted (by 15 percent) but not the time ...

Monopoly Power and Endogenous Product Variety: Distortions and Remedies

By Florin O. Bilbiie, Fabio Ghironi, and Marc J. Melitz

American Economic Journal: Macroeconomics, October 2019

The inefficiencies related to endogenous product creation and variety under monopolistic competition are two-fold: one static—the misalignment between consumers and producers regarding the value of a new variety; and one dynamic—time variation in mark...

Measuring Progress: A Review Essay on The Pricing of Progress: Economic Indicators and the Capitalization of American Life by Eli Cook

By Diane Coyle

Journal of Economic Literature, September 2019

There is growing interest in the history of economic statistics, and Eli Cook has provided in The Pricing of Progress: Economic Indicators and the Capitalization of American Life a fascinating account of the era of economic measurement prior to...

Evaluating Strategic Forecasters

By Rahul Deb, Mallesh M. Pai, and Maher Said

American Economic Review, October 2018

Motivated by the question of how one should evaluate professional election forecasters, we study a novel dynamic mechanism design problem without transfers. A principal who wishes to hire only high-quality forecasters is faced with an agent of unknown qua...

A Macroeconomic Approach to Optimal Unemployment Insurance: Applications

By Camille Landais, Pascal Michaillat, and Emmanuel Saez

American Economic Journal: Economic Policy, May 2018

In the United States, unemployment insurance (UI) is more generous when unemployment is high. This paper examines whether this policy is desirable. The optimal UI replacement rate is the Baily-Chetty replacement rate plus a correction term measuring the e...

Fighting Bundles: The Effects of Competition on Second-Degree Price Discrimination

By Andre Boik and Hidenori Takahashi

American Economic Journal: Microeconomics, February 2020

We study how changes in market structure affect how firms engage in second-degree price discrimination. Specifically, we study how a large incumbent cable firm changes its menu of price-quality offerings and mixed bundles in response to entry. Competition...

Attainment Effects of Student Loans and Pell Grants

By Benjamin M. Marx and Lesley J. Turner

AEA Papers and Proceedings, May 2019

We estimate attainment effects of financial aid at a large community college. Using variation from a field experiment that altered how the college presented loans and a discontinuity in the Pell Grant formula, we separately identify the effects of grant a...

Front Matter

American Economic Journal: Microeconomics, February 2020

The Limits to Partial Banking Unions: A Political Economy Approach

By Dana Foarta

American Economic Review, April 2018

This paper studies the welfare effects of a "partial banking union" in which cross-country transfers for bailouts are set at the supranational level, but policymakers in member countries decide the distribution of funds. This allows the self-interested po...

International Reserves and Rollover Risk

By Javier Bianchi, Juan Carlos Hatchondo, and Leonardo Martinez

American Economic Review, September 2018

We study the optimal accumulation of international reserves in a quantitative model of sovereign default with long-term debt and a risk-free asset. Keeping higher levels of reserves provides a hedge against rollover risk, but this is costly because using ...