Corporate Minimum Tax and the Elasticity of Taxable Income: Evidence from Administrative Tax Records

By Jaroslav Bukovina, Tomáš Lichard, Ján Palguta, and Branislav Žúdel

American Economic Journal: Economic Policy, May 2025

We examine business responses to a minimum tax (MT) that prescribed fixed floors on corporate tax liability while permitting MT credit carryforwards. Using 2010–2020 tax-return data on all Slovak corporations, we find that many companies immediately rel...

Dividend Taxation and Firm Performance with Heterogeneous Payout Responses

By Katarzyna Bilicka, İrem Güçeri, and Evangelos Koumanakos

American Economic Journal: Economic Policy, May 2025

We analyze the performance of firms that were differentially affected by an unexpected tax on dividends before the global financial crisis. We use exogenous policy variation for firms with different legal statuses and financial year-end dates to separatel...

Informing Mothers about the Benefits of Conversing with Infants: Experimental Evidence from Ghana

By Pascaline Dupas, Camille Falezan, Seema Jayachandran, and Mark Walsh

American Economic Journal: Economic Policy, May 2025

We evaluate a low-cost intervention designed to boost parents' verbal engagement with infants, which tends to be limited in developing countries. In our randomized experiment, recent or expectant mothers watched a three-minute informational video and rece...

Who Watches the Watchmen? Local News and Police Behavior in the United States

By Nicola Mastrorocco and Arianna Ornaghi

American Economic Journal: Economic Policy, May 2025

Do US municipal police departments respond to news coverage of local crime? We address this question exploiting an exogenous shock to local crime reporting induced by acquisitions of local TV stations by a large broadcast group, Sinclair. Using a unique d...

Buy Baits and Consumer Sophistication: Field Evidence from Instant Rebates

By Matthias Rodemeier

American Economic Journal: Economic Policy, May 2025

Are consumers in the marketplace aware of their cognitive limitations? I answer this question in the context of a ubiquitous form of price discrimination: instant rebates that require active redemption. In a large-scale field experiment with a major onlin...

Do Consumers Distinguish Fixed Cost from Variable Cost? "Schmeduling" in Two-Part Tariffs in Energy

By Koichiro Ito and Shuang Zhang

American Economic Journal: Economic Policy, May 2025

A central assumption in economics is that consumers properly distinguish fixed cost from variable cost. This assumption is fundamental to various economic theories, including optimal taxation, redistribution, and price discrimination. Using a quasi-experi...

Show Me the Money! A Field Experiment on Electric Vehicle Charge Timing

By Megan R. Bailey, David P. Brown, Blake Shaffer, and Frank A. Wolak

American Economic Journal: Economic Policy, May 2025

We use a field experiment to measure the effectiveness of financial incentives to shift the timing of electric vehicle (EV) charging. EV owners respond strongly to financial incentives, reducing charging during peak hours by 49 percent by shifting to off-...

Free Trade and the Formation of Environmental Policy: Evidence from US Legislative Votes

By Jevan Cherniwchan and Nouri Najjar

American Economic Journal: Economic Policy, May 2025

We test the hypothesis that governments alter environmental policy in response to trade by studying NAFTA's effects on the formation of environmental policy in the US House of Representatives between 1990 and 2000. We find that reductions in US tariffs de...

Presidential Address: Investing in Children to Address the Child Mental Health Crisis

By Janet Currie

American Economic Review, May 2025

The child mental health crisis has been described as the "defining public health crisis of our time." This article addresses three myths about the crisis: (i) the idea that the crisis is new; (ii) the belief that increases in youth suicide mainly reflect ...

Front Matter

American Economic Review, May 2025

Does Entry Remedy Collusion? Evidence from the Generic Prescription Drug Cartel

By Amanda Starc and Thomas G. Wollmann

American Economic Review, May 2025

Entry represents a fundamental threat to cartels. We study the extent and effect of this behavior in the largest price-fixing case in US history, which involves generic drug manufacturing. We link information on the cartel's internal operations to regulat...

The Role of People versus Places in Individual Carbon Emissions

By Eva Lyubich

American Economic Review, May 2025

There is substantial spatial heterogeneity in household carbon emissions. I leverage movers in two decades of administrative Decennial Census and American Community Survey data to estimate place effects—the amount by which carbon emissions change for th...

Efficiency in Household Decision-Making: Evidence from the Retirement Savings of US Couples

By Taha Choukhmane, Lucas Goodman, and Cormac O'Dea

American Economic Review, May 2025

We study how couples allocate retirement-saving contributions across each spouse's account. In a new dataset covering over a million US individuals, we find retirement contributions are not allocated to the account with the highest employer match rate. Th...

When Do "Nudges" Increase Welfare?

By Hunt Allcott, Daniel Cohen, William Morrison, and Dmitry Taubinsky

American Economic Review, May 2025

We use public finance sufficient statistic approaches to characterize the welfare effects of "nudges," such as simplified information and warning labels, in markets with taxes and endogenous prices. While many studies focus on average effects, we show tha...

Risk Aversion and Insurance Propensity

By Fabio Maccheroni, Massimo Marinacci, Ruodu Wang, and Qinyu Wu

American Economic Review, May 2025

We provide a new foundation of risk aversion by showing that this attitude is fully captured by the propensity to seize insurance opportunities. In our main results, we first characterize Arrow-Pratt (1963–1964) risk aversion in terms of propensity to f...

Selling Subscriptions

By Liran Einav, Ben Klopack, and Neale Mahoney

American Economic Review, May 2025

We study one benefit to firms of selling subscriptions: the prospect that consumers will continue to pay for subscriptions they no longer value. We use comprehensive data from a large payment card network to document that months during which cards are rep...

How Do Mental Health Treatment Delays Impact Long-Term Mortality?

By Sydney Costantini

American Economic Review, May 2025

With a growing mental health crisis and a shortage of behavioral health specialists, those seeking mental health treatment often face long wait times to obtain care. I study how clinic congestion affects mortality for veterans experiencing mental health e...

Climate shocks and the economy

[Research Highlight]

April 29, 2025

Is the US economy adapting to more severe weather patterns?

Severe Weather and the Macroeconomy

By Hee Soo Kim, Christian Matthes, and Toàn Phan

American Economic Journal: Macroeconomics, April 2025

We investigate the impact of severe weather shocks on the US macroeconomy over the past 60 years. Using a nonlinear vector autoregressive model, we find robust evidence of time-varying effects. While negligible at the beginning of the sample, the impact b...

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