Macroeconomics and the Term Structure

By Refet S. Gürkaynak and Jonathan H. Wright

Journal of Economic Literature, June 2012

This paper provides an overview of the analysis of the term structure of interest rates with a special emphasis on recent developments at the intersection of macroeconomics and finance. The topic is important to investors and also to policymakers, who wis...

A Field Study on Matching with Network Externalities

By Mariagiovanna Baccara, Ayşe İmrohoroğlu, Alistair J. Wilson, and Leeat Yariv

American Economic Review, August 2012

We study the effects of network externalities within a protocol for matching faculty to offices in a new building. Using web and survey data on faculty's attributes and choices, we identify the different layers of the social network: institutional affili...

The Provision of Public Goods under Alternative Electoral Incentives

By Alessandro Lizzeri and Nicola Persico

American Economic Review, March 2001

Politicians who care about the spoils of office may underprovide a public good because its benefits cannot be targeted to voters as easily as pork-barrel spending. We compare a winner-take-all system--where all the spoils go to the winner--to a proportion...

Molecular Genetics and Economics

[Symposium: Genetics and Economics]

By Jonathan P. Beauchamp, David Cesarini, Magnus Johannesson, Matthijs J. H. M. van der Loos, Philipp D. Koellinger, Patrick J. F. Groenen, James H. Fowler, J. Niels Rosenquist, A. Roy Thurik, and Nicholas A. Christakis

Journal of Economic Perspectives, Fall 2011

The costs of comprehensively genotyping human subjects have fallen to the point where major funding bodies, even in the social sciences, are beginning to incorporate genetic and biological markers into major social surveys. How, if at all, should economis...

Team Incentives and Performance: Evidence from a Retail Chain

By Guido Friebel, Matthias Heinz, Miriam Krueger, and Nikolay Zubanov

American Economic Review, August 2017

In a field experiment with a retail chain (1,300 employees, 193 shops), randomly selected sales teams received a bonus. The bonus increases both sales and number of customers dealt with by 3 percent. Each dollar spent on the bonus generates $3.80 in sales...

Taxation of Couples under Assortative Mating

By Alexander Frankel

American Economic Journal: Economic Policy, August 2014

I present a simple and tractable model of the optimal taxation of married couples, working off of the multidimensional screening framework of Armstrong and Rochet (1999). In particular, I study how the tax code varies with the degree of assortative mating...

Chaos: Significance, Mechanism, and Economic Applications

By William J. Baumol and Jess Benhabib

Journal of Economic Perspectives, Winter 1989

Chaos has become a subject of great interest to specialists and nonspecialists alike. Besides economics, it has entered the literature of geometry, physics, ecology and meteorology. This article seeks to describe what it is, how it works, and what it mean...

The Past, Present, and Future of Macroeconomic Forecasting

By Francis X. Diebold

Journal of Economic Perspectives, Spring 1998

Broadly defined, macroeconomic forecasting is alive and well. Nonstructural forecasting, which is based largely on reduced-form correlations, has always been well and continues to improve. Structural forecasting, which aligns itself with economic theory a...

Taking the Pulse of the Economy: Measuring GDP

By J. Steven Landefeld, Eugene P. Seskin, and Barbara M. Fraumeni

Journal of Economic Perspectives, Spring 2008

This article provides a broad overview of the measurement techniques used in estimating GDP and the national accounts in the United States. In the United States, the GDP and the national accounts estimates are fundamentally based on detailed economic cen...

Institutions, Factor Prices, and Taxation: Virtues of Strong States?

By Daron Acemoglu

American Economic Review, May 2010

Evaluating Uncertain Evidence with Sir Thomas Bayes: A Note for Teachers

By Steven C. Salop

Journal of Economic Perspectives, Summer 1987

Consider the following problem: On the night of March 1, 1986, in Lorain, Ohio, John Doe was struck by a speeding taxi as he crossed the street. The taxi was driving the wrong way down a one-way street and did not stop. An eyewitness thought that the taxi...

Comparative Risk Aversion in the Presence of Ambiguity

By Marie-Charlotte Guetlein

American Economic Journal: Microeconomics, August 2016

his paper suggests a characterization of increases in risk aversion within the smooth ambiguity model by Klibanoff, Marinacci, and Mukerji (2005). I show that an increase in risk aversion is qualitatively different from that under expected utility, due to...

At Least Do No Harm: The Use of Scarce Data

By Alvaro Sandroni

American Economic Journal: Microeconomics, February 2014

When data is scarce, it is difficult to screen the opinions of informed and uninformed experts. In spite of this difficulty it is possible to deliver incentives for informed experts to honestly reveal their views, and for uninformed experts to do no harm ...

International Portfolio Allocation under Model Uncertainty

By Pierpaolo Benigno and Salvatore Nisticò

American Economic Journal: Macroeconomics, January 2012

This paper revisits an old argument, hedging real exchange rate risk, as an explanation of the international home bias in equity. In a dynamic model, the relevant risk to be hedged is the long-run risk as opposed to the short-run risk. Domestic equity is ...

Harmonization and Side Payments in Political Cooperation

By Bård Harstad

American Economic Review, June 2007

For two districts or countries that try to internalize externalities, I analyze a bargaining game under private information. I derive conditions for when it is efficient with uniform policies across regions—with and without side payments— a...

Reflections on Finance and the Good Society

By Robert J. Shiller

American Economic Review, May 2013

The concept of the Good Society--grounded in principles of reciprocity and the Golden Rule--is as ancient as human civilization. To many the concept may appear in conflict with the goings-on of financial markets. This may be especially true after the fina...

Government Spending and Legislative Organization: Quasi-experimental Evidence from Germany

By Peter Egger and Marko Koethenbuerger

American Economic Journal: Applied Economics, October 2010

This paper presents empirical evidence of a positive effect of council size on government spending using a dataset of 2,056 municipalities in the German state of Bavaria over a period of 21 years. We apply a regression discontinuity design to avoid an end...

Defensive Investments and the Demand for Air Quality: Evidence from the NOx Budget Program

By Olivier Deschênes, Michael Greenstone, and Joseph S. Shapiro

American Economic Review, October 2017

The demand for air quality depends on health impacts and defensive investments, but little research assesses the empirical importance of defenses. A rich quasi-experiment suggests that the Nitrogen Oxides (NOx) Budget Program (NBP), a cap-and-trade market...

Globalization, Brain Drain, and Development

By Frédéric Docquier and Hillel Rapoport

Journal of Economic Literature, September 2012

This paper reviews four decades of economics research on the brain drain, with a focus on recent contributions and on development issues. We first assess the magnitude, intensity, and determinants of the brain drain, showing that brain drain (or high-skil...

Battle Scars? The Puzzling Decline in Employment and Rise in Disability Receipt among Vietnam Era Veterans

By David H. Autor, Mark G. Duggan, and David S. Lyle

American Economic Review, May 2011

Using Current Population Survey and US Army administrative data, we document that between 2000 and 2010, the employment rate of Vietnam era veterans fell markedly relative to non-veterans of the same cohorts while simultaneously their enrollment increased...