Front Matter

American Economic Journal: Macroeconomics, July 2020

Sticky Expectations and Consumption Dynamics

By Christopher D. Carroll, Edmund Crawley, Jiri Slacalek, Kiichi Tokuoka, and Matthew N. White

American Economic Journal: Macroeconomics, July 2020

To match aggregate consumption dynamics, macroeconomic models must generate "excess smoothness" in consumption expenditures. But microfounded models are calibrated to match micro data, which exhibit no "excess smoothness." So standard microfounded models ...

Liquidity Traps and Monetary Policy: Managing a Credit Crunch

By Francisco J. Buera and Juan Pablo Nicolini

American Economic Journal: Macroeconomics, July 2020

We study a model with heterogeneous producers that face collateral and cash-in-advance constraints. A tightening of the collateral constraint results in a credit-crunch-generated recession that reproduces some features of the financial crisis that unravel...

Optimal Capital Requirements over the Business and Financial Cycles

By Frederic Malherbe

American Economic Journal: Macroeconomics, July 2020

I study economies where banks do not fully internalize the social costs of their lending decisions, which leads to real overinvestment. The bank capital requirement that restores investment efficiency varies over time. During booms, more investment is des...

Non-neutrality of Open-Market Operations

By Pierpaolo Benigno and Salvatore Nisticò

American Economic Journal: Macroeconomics, July 2020

We analyze the effects on inflation and output of unconventional open-market operations due to the possible income losses on the central bank's balance sheet. We first state a general Neutrality Property, and characterize the theoretical conditions suppor...

Managing the UK National Debt 1694–2018

By Martin Ellison and Andrew Scott

American Economic Journal: Macroeconomics, July 2020

We examine UK debt management using a new monthly dataset on the quantity and market price of every individual bond issued by the government since 1694. Our bond-by-bond dataset identifies variations in the market value of debt and so captures investors' ...

A Central Bank Theory of Price Level Determination

By Pierpaolo Benigno

American Economic Journal: Macroeconomics, July 2020

This paper develops a theory in which the central bank can control the price level without fiscal backing. It is shown that the remittances policy and the balance sheet of the central bank are important elements to specify. A central bank that is appropri...

Sticky Wage Models and Labor Supply Constraints

By Zhen Huo and José-Víctor Ríos-Rull

American Economic Journal: Macroeconomics, July 2020

In sticky wages models (either à la Calvo or à la Rotemberg), labor is solely determined by the demand side. However, a change of circumstances may make labor demand higher than agents' willingness to work. We find that workers are required to work agai...

Liquidity and Consumption: Evidence from Three Post-earthquake Reconstruction Programs in Italy

By Antonio Acconcia, Giancarlo Corsetti, and Saverio Simonelli

American Economic Journal: Macroeconomics, July 2020

In Italian regions hit by earthquakes, homeowners typically receive public funds to finance reconstruction. While these funds are strictly tied to reconstruction work, they are in part disbursed up front, leading to significant variation in cash on hand. ...

Front Matter

American Economic Journal: Applied Economics, July 2020

Prestige Matters: Wage Premium and Value Addition in Elite Colleges

By Sheetal Sekhri

American Economic Journal: Applied Economics, July 2020

This paper provides evidence that graduates of elite public institutions in India have an earnings advantage in the labor market even though attending these colleges has no discernible effect on academic outcomes. Admission to the elite public colleges is...

Multilateral Trade Bargaining: A First Look at the GATT Bargaining Records

By Kyle Bagwell, Robert W. Staiger, and Ali Yurukoglu

American Economic Journal: Applied Economics, July 2020

This paper empirically examines recently declassified tariff bargaining data from the GATT/WTO. Focusing on the Torquay Round (1950–1951), we document stylized facts about these interconnected high-stakes international negotiations that suggest a lack o...

The Impact of Information Technology on the Diffusion of New Pharmaceuticals

By Kenneth J. Arrow, L. Kamran Bilir, and Alan Sorensen

American Economic Journal: Applied Economics, July 2020

Do information differences across US physicians contribute to treatment disparities? This paper uses a unique new dataset to evaluate how changes in physician access to a decision-relevant drug database affect prescribing decisions. Our results indicate d...

The Competitive Effects of Entry: Evidence from Supercenter Expansion

By Peter Arcidiacono, Paul B. Ellickson, Carl F. Mela, and John D. Singleton

American Economic Journal: Applied Economics, July 2020

Coupling weekly grocery transactions with the exact location and opening date of Walmarts over an 11-year period, we examine how Supercenter entry affects prices and revenues at incumbent supermarkets. We find that entry within 1 mile of an incumbent caus...

Front-Loading the Unemployment Benefit: An Empirical Assessment

By Attila Lindner and Balázs Reizer

American Economic Journal: Applied Economics, July 2020

We estimate the effect of front-loading unemployment benefit payments on nonemployment duration and reemployment wages. Exploiting a sharp change in the path of benefits for those who claimed unemployment benefits after November 1, 2005 in Hungary, we sho...

Gender Differences in the Choice of Major: The Importance of Female Role Models

By Catherine Porter and Danila Serra

American Economic Journal: Applied Economics, July 2020

We conducted a field experiment aimed at increasing the percentage of women majoring in economics. We exposed students enrolled in introductory classes to successful and charismatic women who majored in economics at the same university. The intervention s...

One in a Million: Field Experiments on Perceived Closeness of the Election and Voter Turnout

By Alan Gerber, Mitchell Hoffman, John Morgan, and Collin Raymond

American Economic Journal: Applied Economics, July 2020

During the 2010 gubernatorial elections, we elicit voter beliefs about the closeness of the election before and after showing different polls, which, depending on treatment, indicate a close or not-close race. Subjects update their beliefs in response to ...

The Value of Reference Letters: Experimental Evidence from South Africa

By Martin Abel, Rulof Burger, and Patrizio Piraino

American Economic Journal: Applied Economics, July 2020

We show that reference letters from former employers alleviate information frictions in a low-skill labor market, improving applicant screening and gender equity. A resume audit study finds that using a reference letter in the application increases callba...

What Is the Added Value of Preschool for Poor Children? Long-Term and Intergenerational Impacts and Interactions with an Infant Health Intervention

By Maya Rossin-Slater and Miriam Wüst

American Economic Journal: Applied Economics, July 2020

We study the impact of preschool targeted at children from low-income families over the life cycle and across generations, and examine its interaction with an infant health intervention. Using Danish administrative data with variation in the timing of pro...

The Reach of Radio: Ending Civil Conflict through Rebel Demobilization

By Alex Armand, Paul Atwell, and Joseph F. Gomes

American Economic Review, May 2020

We examine the role of FM radio in mitigating violent conflict. We collect original data on radio broadcasts encouraging defections during the Lord's Resistance Army (LRA) insurgency. This constitutes the first quantitative evaluation of an active counter...