International Income Inequality: Measuring PPP Bias by Estimating Engel Curves for Food

By Ingvild Almås

American Economic Review, April 2012

Purchasing power-adjusted incomes applied in cross-country comparisons are measured with bias. This paper estimates the purchasing power parity (PPP) bias in Penn World Table incomes and provides corrected incomes. The bias is substantial and systematic: ...

Prospects in the Academic Labor Market for Economists

By Ronald G. Ehrenberg

Journal of Economic Perspectives, Spring 2004

This paper discussed what the academic labor market for economists is likely to look like in the years ahead. After tracing out trends in PhD production of new economists, including the increasing share of new PhDs who are foreign residents, it presents n...

Learning about an Infrequent Event: Evidence from Flood Insurance Take-Up in the United States

By Justin Gallagher

American Economic Journal: Applied Economics, July 2014

I examine the learning process that economic agents use to update their expectation of an uncertain and infrequently observed event. I use a new nation-wide panel dataset of large regional floods and flood insurance policies to show that insurance take-up...

Euro-Area Quantitative Easing and Portfolio Rebalancing

By Ralph S. J. Koijen, François Koulischer, Benoît Nguyen, and Motohiro Yogo

American Economic Review, May 2017

We use new and comprehensive data on the security holdings of euro-area investors to document facts about the ongoing quantitative easing program. The holdings of purchase-eligible government bonds have strong home bias not only for banks but also for ins...

A Behavioral-Economics View of Poverty

By Marianne Bertrand, Sendhil Mullainathan, and Eldar Shafir

American Economic Review, May 2004

Market Structure, Reputation, and the Value of Quality Certification

By Daniel W. Elfenbein, Raymond Fisman, and Brian McManus

American Economic Journal: Microeconomics, November 2015

Quality certification programs help consumers identify high-quality products or sellers in markets with information asymmetries. Using data from eBay UK's online marketplace, we study how certification's impact on demand varies with market- and seller- le...

Inefficiencies in Networked Markets

By Matthew Elliott

American Economic Journal: Microeconomics, November 2015

In many markets, relationship specific investments are necessary for trade. These formed relationships constitute a networked market in which not all buyers can trade with all sellers. We show that networked markets can be decomposed to identify how alter...

Net Neutrality, Business Models, and Internet Interconnection

By Jay Pil Choi, Doh-Shin Jeon, and Byung-Cheol Kim

American Economic Journal: Microeconomics, August 2015

We analyze the effect of net neutrality regulation in a two-sided market framework when content is heterogeneous in its sensitivity to delivery quality. We characterize the equilibrium in a neutral network constrained to offer the same quality vis-à-vis ...

The Preference for Belief Consonance

[Symposium: Motivated Beliefs]

By Russell Golman, George Loewenstein, Karl Ove Moene, and Luca Zarri

Journal of Economic Perspectives, Summer 2016

We consider the determinants and consequences of a source of utility that has received limited attention from economists: people's desire for the beliefs of other people to align with their own. We relate this 'preference for belief consonance' to a varie...

Specifying a Structural Matching Game of Trading Networks with Transferable Utility

By Jeremy T. Fox

American Economic Review, May 2017

Structural estimation of matching games with transferable utility, including matching games of trading networks and many-to-many matching, is increasingly popular in empirical work. I explore several modeling decisions that need to be made when specifying...

The Case for Antitrust Enforcement

[Symposium: Activist Antitrust?]

By Jonathan B. Baker

Journal of Economic Perspectives, Fall 2003

This paper provides evidence of the necessity and success of antitrust enforcement. It begins with examples of socially beneficial antitrust challenges by the federal antitrust agencies to price-fixing and other forms of collusion; to mergers that appear ...

Pushing on a String: US Monetary Policy Is Less Powerful in Recessions

By Silvana Tenreyro and Gregory Thwaites

American Economic Journal: Macroeconomics, October 2016

We investigate how the response of the US economy to monetary policy shocks depends on the state of the business cycle. The effects of monetary policy are less powerful in recessions, especially for durables expenditure and business investment. The asymme...

The Aggregate Impact of Household Saving and Borrowing Constraints: Designing a Field Experiment in Uganda

By Joseph P. Kaboski, Molly Lipscomb, and Virgiliu Midrigan

American Economic Review, May 2014

We develop a model of households with multiple needs (smoothing shocks, financing investment) and constraints (limited credit, self-control issues) in order to examine the nature of household's financing constraints in a developing country, and the impact...

Does a Bank's History Affect Its Risk-Taking?

By Christa H. S. Bouwman and Ulrike Malmendier

American Economic Review, May 2015

We ask whether past macro-economic and bank-specific shocks experienced and survived by a bank affect its current capitalization and risk-taking. Using Call Report data from 1984 to 2010, we find that a bank's experience shapes its capital structure and r...

The Negative Income Tax and the Evolution of U.S. Welfare Policy

By Robert A. Moffitt

Journal of Economic Perspectives, Summer 2003

The negative income tax proposed by Milton Friedman represents one of the fundamental ideas of modern welfare policy. However, the academic literature has raised two difficulties with it, one challenging its purported work incentives and the other suggest...

Inspecting the Mechanism: Leverage and the Great Recession in the Eurozone

By Philippe Martin and Thomas Philippon

American Economic Review, July 2017

We provide a comprehensive account of the dynamics of eurozone countries from 2000 to 2012. We analyze private leverage, fiscal policy, labor costs, and spreads, and we propose a model and an identification strategy to separate the impact of credit cycles...

Minutes of the Executive Committee Meetings

By John J. Siegfried

American Economic Review, May 2009

Maturity, Indebtedness, and Default Risk

By Satyajit Chatterjee and Burcu Eyigungor

American Economic Review, October 2012

We advance quantitative-theoretic models of sovereign debt by proving the existence of a downward sloping equilibrium price function for long-term debt and implementing a novel method to accurately compute it. We show that incorporating long-term debt al...

Raising the Barcode Scanner: Technology and Productivity in the Retail Sector

By Emek Basker

American Economic Journal: Applied Economics, July 2012

Barcodes and barcode scanners transformed the grocery industry in the 1970s. I use store-level data from the 1972, 1977, and 1982 Census of Retail Trade, matched to data on store scanner installations, to estimate scanners' effect on labor productivity. I...

Public Provision of Private Goods and Nondistortionary Marginal Tax Rates

By Sören Blomquist, Vidar Christiansen, and Luca Micheletto

American Economic Journal: Economic Policy, May 2010

Using an optimal taxation model combined with a previously neglected scheme of public provision of private goods, we show that there is an efficiency gain if public provision of selected goods replaces market purchases and that efficiency requires margina...