Post-Selection and Post-Regularization Inference in Linear Models with Many Controls and Instruments

By Victor Chernozhukov, Christian Hansen, and Martin Spindler

American Economic Review, May 2015

We consider estimation of and inference about coefficients on endogenous variables in a linear instrumental variables model where the number of instruments and exogenous control variables are each allowed to be larger than the sample size. We work within ...

How Do Mortgage Subsidies Affect Home Ownership? Evidence from the Mid-Century GI Bills

By Daniel K. Fetter

American Economic Journal: Economic Policy, May 2013

The largest twentieth-century increase in US home ownership occurred between 1940 and 1960, associated largely with declining age at first ownership. I shed light on the contribution of coincident government mortgage market interventions by examining h...

Family Economics Writ Large

By Jeremy Greenwood, Nezih Guner, and Guillaume Vandenbroucke

Journal of Economic Literature, December 2017

Powerful currents have reshaped the structure of families over the last century. There has been (1) a dramatic drop in fertility and greater parental investment in children; (2) a rise in married female labor-force participation; (3) a significant decline...

"Reverse Bayesianism": A Choice-Based Theory of Growing Awareness

By Edi Karni and Marie-Louise Vierø

American Economic Review, December 2013

This article introduces a new approach to modeling the expanding universe of decision makers in the wake of growing awareness, and invokes the axiomatic approach to model the evolution of decision makers' beliefs as awareness grows. The expanding unive...

The Role of Trade and Competitiveness Measures in US Climate Policy

By Carolyn Fischer and Alan K. Fox

American Economic Review, May 2011

We review the proposed measures for addressing competitiveness and carbon leakage concerns in recent US climate policy legislation. For eligible energy-intensive, trade-exposed sectors, output-based rebates would initially dampen cost increases; later, bo...

Sinking, Swimming, or Learning to Swim in Medicare Part D

By Jonathan D. Ketcham, Claudio Lucarelli, Eugenio J. Miravete, and M. Christopher Roebuck

American Economic Review, October 2012

Under Medicare Part D, senior citizens choose prescription drug insurance offered by numerous private insurers. We examine nonpoor enrollees- actions in 2006 and 2007 using panel data. Our sample reduced overspending by $298 on average, with gains by 81 p...

Welfare Reversals in a Monetary Union

By Stéphane Auray and Aurélien Eyquem

American Economic Journal: Macroeconomics, October 2014

We show that welfare can be lower under complete financial markets than under autarky in a monetary union with home bias, sticky prices, and asymmetric shocks. Such a monetary union is a second- best environment in which the structure of financial mark...

The Economics of Temporary Migrations

By Christian Dustmann and Joseph-Simon Görlach

Journal of Economic Literature, March 2016

Many migrations are temporary -- a fact that has often been ignored in the economic literature on migration. Such omission may be serious in that expected migration temporariness can impart a distinct dynamic element to immigrants' economic behavior, gene...

Open Skies: Estimating Travelers' Benefits from Free Trade in Airline Services

By Clifford Winston and Jia Yan

American Economic Journal: Economic Policy, May 2015

The United States has negotiated bilateral open skies agreements to deregulate airline competition on US international routes, but little is known about their effects on travelers' welfare and the gains from the US negotiating agreements with more countri...

Social Media and Fake News in the 2016 Election

By Hunt Allcott and Matthew Gentzkow

Journal of Economic Perspectives, Spring 2017

Following the 2016 US presidential election, many have expressed concern about the effects of false stories ("fake news"), circulated largely through social media. We discuss the economics of fake news and present new data on its consumption prior to the ...

The IMF's Unmet Challenges

[Symposium: The Bretton Woods Institutions]

By Barry Eichengreen and Ngaire Woods

Journal of Economic Perspectives, Winter 2016

The International Monetary Fund is a controversial institution whose interventions regularly provoke passionate reactions. We will argue that there is an important role for the IMF in helping to solve information, commitment, and coordination problems wit...

Monopolistic Competition and Optimum Product Selection

By Antonella Nocco, Gianmarco I. P. Ottaviano, and Matteo Salto

American Economic Review, May 2014

We provide novel insights on the decentralization of optimal outcomes under monopolistic competition with nonseparable utility, variable demand elasticity, and endogenous firm heterogeneity. Relative to the unconstrained optimum, equilibrium firm selectio...

Mirage of Floating Exchange Rates

By Carmen M. Reinhart

American Economic Review, May 2000

Recommendations for Further Reading

By Timothy Taylor

Journal of Economic Perspectives, Fall 2010

Investor Sentiment in the Stock Market

[Symposium: Behavioral Finance]

By Malcolm Baker and Jeffrey Wurgler

Journal of Economic Perspectives, Spring 2007

Investor sentiment, defined broadly, is a belief about future cash flows and investment risks that is not justified by the facts at hand. The question is no longer whether investor sentiment affects stock prices, but how to measure investor sentiment and ...

Theory and History behind Business Cycles: Are the 1990s the Onset of a Golden Age?

[Symposium: Business Cycles]

By Victor Zarnowitz

Journal of Economic Perspectives, Spring 1999

The theory presented in this paper ties together profits, investment, credit, stock prices, inflation, and interest rates. The author discusses new estimates of profit and investment functions with important roles for growth and demand and productivity, p...

The Decentralized Central Bank: A Review Essay on The Power and Independence of the Federal Reserve by Peter Conti-Brown

By Narayana R. Kocherlakota

Journal of Economic Literature, June 2017

This essay discusses the structure and governance of the Federal Reserve System in light of the many changes in its activities over the past thirty years. Based on this analysis, it argues in favor of four specific reforms: clarification of Congressional ...

Imports "Я" Us: Retail Chains as Platforms for Developing-Country Imports

By Emek Basker and Pham Hoang Van

American Economic Review, May 2010

Cognition and Behavior in Two-Person Guessing Games: An Experimental Study

By Miguel A. Costa-Gomes and Vincent P. Crawford

American Economic Review, December 2006

This paper reports an experiment that elicits subjects’ initial responses to 16 dominance-solvable two-person guessing games. The structure is publicly announced except for varying payoff parameters, to which subjects are given free access. Varying th...

Face Value

By Catherine C. Eckel and Ragan Petrie

American Economic Review, June 2011

People pay attention to the appearance of others, and personal characteristics can affect many types of decisions. We ask, is there informational value in a face in a situation where trust and reciprocity can increase earnings? We use a laboratory trust g...