High-Frequency Data and a Weekly Economic Index during the Pandemic

By Daniel J. Lewis, Karel Mertens, James H. Stock, and Mihir Trivedi

AEA Papers and Proceedings, May 2021

This paper describes a weekly economic index (WEI) developed to track the rapid economic developments associated with the onset of and policy response to the novel coronavirus in the United States. The WEI, with its ten component series, tracks the overal...

Arrow Meets Hotelling: Modeling Spatial Innovation

By Steven Callander, Nicolas Lambert, and Niko Matouschek

AEA Papers and Proceedings, May 2021

We combine a spatial model of innovation with Hotelling's model of competition. Innovations are vertically and also horizontally differentiated. Potential innovators choose not only whether to innovate but also how to innovate. The bolder they are with a ...

Learning and Corruption on Monitoring Chains

By Bruno Strulovici

AEA Papers and Proceedings, May 2021

"But who will guard the guardians?" I revisit this age-old question under the following assumptions: (i) guardians are devoid of ethical motives and have quasilinear preferences, (ii) guardians monitor one another through a monitoring chain, and (iii) any...

Constrained Retrospective Search

By Can Urgun and Leeat Yariv

AEA Papers and Proceedings, May 2021

The search for good outcomes—be it government policies, technological breakthroughs, or lasting purchases—takes time and effort. At times, the decision process is unconstrained: an individual seeking a well-priced product determines her search scope a...

Business Formation: A Tale of Two Recessions

By Emin Dinlersoz, Timothy Dunne, John Haltiwanger, and Veronika Penciakova

AEA Papers and Proceedings, May 2021

The trajectory of new business applications and transitions to employer businesses differs markedly during the Great Recession and the COVID-19 recession. Both applications and transitions to employer start-ups decreased slowly but persistently in the pos...

Nominal Wage Adjustments during the Pandemic Recession

By John Grigsby, Erik Hurst, Ahu Yildirmaz, and Yulia Zhestkova

AEA Papers and Proceedings, May 2021

In this paper, we show that the pandemic recession has led to frequent cuts in nominal wages. Within three months in 2020, as many wage cuts had occurred as occurred throughout the Great Recession. Unlike employment declines, wage cuts were concentrated a...

COVID-19 Shifted Patent Applications toward Technologies That Support Working from Home

By Nicholas Bloom, Steven J. Davis, and Yulia Zhestkova

AEA Papers and Proceedings, May 2021

We examine the text content of US patent applications, identifying those that advance technologies in support of video conferencing, telecommuting, remote interactivity, and working from home (collectively, WFH). The share of new patent applications that ...

Across the Universe: Policy Support for Employment and Revenue in the Pandemic Recession

By Ryan A. Decker, Robert J. Kurtzman, Byron F. Lutz, and Christopher J. Nekarda

AEA Papers and Proceedings, May 2021

Using data from 14 government sources, we develop comprehensive estimates of US economic activity by sector, legal form of organization, and firm size to characterize how four government direct-lending programs—the Paycheck Protection Program, Main Stre...

Friend-Based Ranking in Practice

By Francis Bloch and Matthew Olckers

AEA Papers and Proceedings, May 2021

A planner aims to target individuals who exceed a threshold in a characteristic, such as wealth or ability. The individuals can rank their friends according to the characteristic. We study a strategy-proof mechanism for the planner to use the rankings for...

Urban Networks and Targeting: Evidence from Liberia

By Lori Beaman, Niall Keleher, Jeremy Magruder, and Carly Trachtman

AEA Papers and Proceedings, May 2021

To solicit information from a social network in urban Monrovia, Liberia, we ask community members to assess their neighbors' poverty and assist in targeting a cash transfer. We find little evidence that local leaders, randomly selected neighbors, or neigh...

Adapting to the COVID-19 Pandemic

By Michael Droste and James H. Stock

AEA Papers and Proceedings, May 2021

From early in the COVID-19 pandemic, economists have stressed the importance of individuals endogenously changing their behavior to reduce their risk of infection. This paper quantifies time variation in the endogenous behavioral response of economic acti...

Behavior and the Transmission of COVID-19

By Andrew G. Atkeson, Karen Kopecky, and Tao Zha

AEA Papers and Proceedings, May 2021

A simple model of COVID-19 that incorporates feedback from disease prevalence to disease transmission through an endogenous response of human behavior does a remarkable job fitting the main features of the data on the growth rates of daily deaths observed...

Implied Dividend Volatility and Expected Growth

By Niels J. Gormsen, Ralph S. J. Koijen, and Ian W. R. Martin

AEA Papers and Proceedings, May 2021

We study the behavior of implied dividend volatility, constructed from the prices of options on index-level dividends, during the COVID-19 pandemic. We use these data to construct a lower bound on expected excess returns on dividend claims and find that t...

COVID-19 and the Costs of Deadly Disasters

By Sydney C. Ludvigson, Sai Ma, and Serena Ng

AEA Papers and Proceedings, May 2021

Using monthly data on costly natural disasters affecting the United States over the last 40 years, we estimate 2 time series models and use them to generate predictions about the impact of COVID-19. We find that while our models yield reasonable estimates...

Confederate Streets and Black-White Labor Market Differentials

By Jhacova A. Williams

AEA Papers and Proceedings, May 2021

Using a unique dataset, this paper examines the extent to which streets named after prominent Confederate generals are related to Black-White labor market differentials. Examining individual-level data shows that Blacks who reside in areas that have a rel...

Homefront: Black Veterans and Black Voters in the Civil Rights Era

By Thomas Koch, Trevon D. Logan, and John M. Parman

AEA Papers and Proceedings, May 2021

While the role of World War II veterans in the civil rights movement has been well documented, debate about the causal effect of military service remains. Combining detailed information on World War II enlistments and Civil Rights Commission data on voter...

Carbon-Trading Pilot Programs in China and Local Air Quality

By Douglas Almond and Shuang Zhang

AEA Papers and Proceedings, May 2021

China emits twice as much CO2 as the United States. Launched in seven regions in 2013–2014, China's pilot carbon-trading programs cover roughly 7 percent of China's CO2 emissions. These market-based policies offer the best existing...

Industrial Energy Regulation: The Role of Business Conglomerates in China

By Qiaoyi Chen, Zhao Chen, Zhikuo Liu, Juan Carlos Suárez Serrato, and Daniel Yi Xu

AEA Papers and Proceedings, May 2021

This paper characterizes the importance of ownership networks of firms that are subject to a prominent energy regulation in China: the Top 1000 Enterprises Energy-Saving Program. We use data on the activities of regulated and unregulated firms that are pa...

Border Carbon Adjustments When Carbon Intensity Varies across Producers: Evidence from California

By Meredith Fowlie, Claire Petersen, and Mar Reguant

AEA Papers and Proceedings, May 2021

Governments taxing carbon emissions within their jurisdiction can impose a commensurate tax on emissions embodied in imports in order to mitigate emissions leakage. California offers a rare opportunity to investigate how such a border carbon adjustment (B...

Changing Population Exposure to Pollution in China's Special Economic Zones

By Leslie A. Martin and Katie Zhang

AEA Papers and Proceedings, May 2021

Martin and Zhang (2020) show that the increase in manufacturing output in China's special economic zones significantly increased air pollution. In this complementary paper, we document that widespread migration into these industrial clusters between 2000 ...