Retirement Consumption and Pension Design

By Jonas Kolsrud, Camille Landais, Daniel Reck, and Johannes Spinnewijn

American Economic Review, January 2024

This paper analyzes consumption to evaluate the distributional effects of pension reforms. Using Swedish administrative data, we show that on average, workers who retire earlier consume less while retired and experience larger drops in consumption around ...

The Ends of 27 Big Depressions

By Martin Ellison, Sang Seok Lee, and Kevin Hjortshøj O'Rourke

American Economic Review, January 2024

How did countries recover from the Great Depression? In this paper, we explore the argument that leaving the gold standard helped by boosting inflationary expectations, lowering real interest rates, and stimulating interest-sensitive expenditures. We do s...

Competing to Commit: Markets with Rational Inattention

By Carlo M. Cusumano, Francesco Fabbri, and Ferdinand Pieroth

American Economic Review, January 2024

Two homogeneous-good firms compete for a consumer's unitary demand. The consumer is rationally inattentive and pays entropy costs to process information about firms' offers. Compared to a collusion benchmark, competition produces two effects. As in standa...

Front Matter

American Economic Journal: Macroeconomics, January 2024

Wage Rigidity and Employment Outcomes: Evidence from Administrative Data

By Gabriel Ehrlich and Joshua Montes

American Economic Journal: Macroeconomics, January 2024

This paper examines the relationship between downward nominal wage rigidity and employment outcomes using linked employer-employee data. Wage rigidity prevents 27.1 percent of counterfactual wage cuts, with a standard deviation of 19.2 percent across esta...

Government Borrowing and Crowding Out

By Yasin Kürşat Önder, Sara Restrepo-Tamayo, Maria Alejandra Ruiz-Sanchez, and Mauricio Villamizar-Villegas

American Economic Journal: Macroeconomics, January 2024

We investigate the impact of fiscal expansions on firm investment by exploiting firms with multiple banking relationships. Further, we conduct a localized approach and compare the lending behavior of banks that barely met and missed the criteria of being ...

Innovation-Led Transitions in Energy Supply

By Derek Lemoine

American Economic Journal: Macroeconomics, January 2024

Generalizing models of directed technical change, I show that complementarities between innovations and factors of production (here, energy resources) can drive transitions away from a dominant sector. In a calibrated numerical implementation, the economy...

Homeownership and Portfolio Choice over the Generations

By Gonzalo Paz-Pardo

American Economic Journal: Macroeconomics, January 2024

Earnings are riskier and more unequal for households born in the 1960s and 1980s than for those born in the 1940s. Despite improvements in financial conditions, younger generations are less likely to be living in their own homes than older generations at ...

A Congestion Theory of Unemployment Fluctuations

By Yusuf Mercan, Benjamin Schoefer, and Petr Sedláček

American Economic Journal: Macroeconomics, January 2024

We propose a theory of unemployment fluctuations in which new hires and incumbent workers are imperfect substitutes. Hence, attempts to hire away the unemployed during recessions diminish the marginal product of new hires, discouraging job creation. This ...

The Impact of Extending Employment Protection to Agency Workers on Firms

By Alejandro Micco and Pablo Muñoz

American Economic Journal: Macroeconomics, January 2024

We study the impact of a reform that extended employment protection to temporary agency workers. Using a difference-in-difference research design, we show that plants more exposed to the regulation experienced a decrease in revenues and total employment, ...

Firms' Precautionary Savings and Employment during a Credit Crisis

By Davide Melcangi

American Economic Journal: Macroeconomics, January 2024

Can the macroeconomic effects of credit supply shocks be large even when a small share of firms is credit constrained? I use UK firm-level accounting data to discipline a heterogeneous-firm model where the interaction between real and financial frictions ...

Adverse Selection Dynamics in Privately Produced Safe Debt Markets

By Nathan Foley-Fisher, Gary Gorton, and Stéphane Verani

American Economic Journal: Macroeconomics, January 2024

Privately produced safe debt is designed so that there is no adverse selection in trade. But in some macro states—here, the onset of the pandemic—it becomes profitable for some agents to produce private information, and then agents face adverse select...

Assessing the Stabilizing Effects of Unemployment Benefit Extensions

By Alexey Gorn and Antonella Trigari

American Economic Journal: Macroeconomics, January 2024

We study the stabilizing role of benefit extensions. We develop a tractable quantitative model with heterogeneous agents, search frictions, and nominal rigidities. The model allows for a stabilizing aggregate demand channel and a destabilizing labor marke...

Scarred Consumption

By Ulrike Malmendier and Leslie Sheng Shen

American Economic Journal: Macroeconomics, January 2024

We show that prior lifetime experiences can "scar" consumers. Consumers who have lived through times of unemployment exhibit persistent pessimism about their future financial situation and spend significantly less years later, controlling for income, empl...

Monetary Policy When the Phillips Curve Is Quite Flat

By Paul Beaudry, Chenyu Hou, and Franck Portier

American Economic Journal: Macroeconomics, January 2024

This paper highlights how the presence of a monetary policy cost channel can offer new insights into the relation between monetary policy and inflation when the Phillips curve is quite flat. For instance, we highlight a key condition whereby lax monetary ...

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