Investment, Emissions, and Reliability in Electricity Markets

By Jonathan T. Elliott

American Economic Review

This paper explores how to reduce emissions from electricity generation while preventing blackouts. Wind and solar are zero-emissions but intermittent, which can lead to blackouts if the entry of renewables causes more reliable power plants to retire. I...

Optimal Monetary Policy during a Cost-of-Living Crisis

By Alan Olivi, Vincent Sterk, and Dajana Xhani

American Economic Review

How should monetary policy respond to sectoral shocks in a world where consumption baskets vary systematically across households? We present a multi-sector New-Keynesian model with generalized, non-homothetic preferences and inequality. The output gap ...

Departmental Seed Grants for Innovation in Diversity and Inclusion

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Prime Locations

By Gabriel M. Ahlfeldt, Thilo N. H. Albers, and Kristian Behrens

American Economic Review: Insights, September 2026

We develop a method for delineating prime locations—ultradense clusters of economic activity—within cities and apply it to comprehensive establishment data covering all US metropolitan areas. We further use big data to extend the analysis to a global ...

What Is Newsworthy? Theory and Evidence

By Luis Armona, Matthew Gentzkow, Emir Kamenica, and Jesse M. Shapiro

American Economic Review: Insights, September 2026

We introduce a model in which a benevolent news outlet decides whether to report the realization of a state to a consumer, who pays a cost to receive it. A simple statistical rule, called a proper scoring rule, describes when the outlet should be more lik...

Pricing with Algorithms

By Rohit Lamba and Sergey Zhuk

American Economic Review: Insights, September 2026

This paper studies Markov perfect equilibria in a repeated duopoly model where sellers choose algorithms. An algorithm is a mapping from the competitor's price to own price. Once set, the algorithms respond quickly. Customers arrive randomly, and sellers ...

Unconditional Convergence in Manufacturing: A Reassessment

By Berthold Herrendorf, Richard Rogerson, and Ákos Valentinyi

American Economic Review: Insights, September 2026

The movement of labor out of agriculture is a central feature of the development process. A long-held view is that successful development requires that much of the labor released from agriculture be allocated to manufacturing rather than services. Rodrik'...

The Missing Middle Managers: Labor Costs, Firm Structure, and Development

By Jonas Hjort, Hannes Malmberg, and Todd Schoellman

American Economic Review: Insights, September 2026

Using data obtained from human resources consulting firms, we document the cost to large firms of hiring managers and business professionals in 146 countries worldwide. The average pay in the poorest decile of countries is $18,000 per year, which is 9.7 t...

The Missing Loan-to-Value Cycle

By Manuel Adelino, W. Ben McCartney, and Antoinette Schoar

American Economic Review: Insights, September 2026

We show that the equilibrium loan-to-value (LTV) distribution in the US mortgage market has been remarkably stable over the last quarter century, both in aggregate and region by region, despite large, cross-sectionally heterogeneous house price cycles. Wh...

How Test-Optional Policies in College Admissions Disproportionately Harm High-Achieving Applicants from Disadvantaged Backgrounds

By Bruce Sacerdote, Douglas O. Staiger, and Michele Tine

American Economic Review: Insights, September 2026

We analyze data from one elite institution and find that test score-optional policies harm the likelihood of admission for high-achieving applicants from disadvantaged backgrounds. Under test-optional policies, these applicants submit test scores at too l...

Screening Adaptive Cartels

By Juan Ortner, Sylvain Chassang, and Kei Kawai

American Economic Review: Insights, September 2026

We propose an equilibrium theory of data-driven antitrust oversight in which regulators launch investigations on the basis of suspicious bidding patterns and cartels can adapt to the statistical screens used by regulators. Our main result establishes that...

Front Matter

American Economic Review: Insights, September 2026

CSWEP South

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Presidential Address: Neighborhood Effects and Missing Markets for Opportunity

By Lawrence F. Katz

American Economic Review, September 2026

Experimental and quasi-experimental studies show that childhood neighborhoods have substantial causal impacts on children's adult earnings and other long-term socioeconomic outcomes. Several market failures are likely to lead to excessive residential segr...

Front Matter

American Economic Review, September 2026

Optimal Public Transportation Networks: Evidence from the World's Largest Bus Rapid Transit System in Jakarta

By Gabriel Kreindler, Arya Gaduh, Tilman Graff, Rema Hanna, and Benjamin A. Olken

American Economic Review, September 2026

Designing public transport networks involves trade-offs between coverage, service frequency, and direct service. We use the expansion of the bus system in Jakarta, Indonesia, to study these trade-offs. We analyze how new direct connections, changes in bus...

Corporate Tax Cuts, Firm Growth, and Workers' Earnings

By Patrick J. Kennedy, Christine L. Dobridge, Paul Landefeld, and Jacob Mortenson

American Economic Review, September 2026

We study the effects of the largest corporate income tax cut in US history on firms and workers. To identify causal effects, we use employer-employee matched tax records and event studies comparing similarly sized firms in the same industry that faced div...

Contextually Private Mechanisms

By Andreas Haupt and Zoë Hitzig

American Economic Review, September 2026

A designer employs a dynamic protocol to elicit private information. Protocols produce a set of contextual privacy violations—information learned that may be superfluous given the context. A protocol is maximally contextually private if there is no prot...

Risk-Sharing Tests and Covariate Shocks: Drought, Floods, and Pests in Uganda

By Ethan Ligon

American Economic Review, September 2026

Efficient risk sharing implies a simple factor structure for marginal utilities of expenditure (MUEs): Pareto weights divided by a common price. The standard approach infers MUEs from total expenditures, implicitly assuming homothetic preferences, unitary...

Rationing by Race

By Manasvini Singh and Atheendar Venkataramani

American Economic Review, September 2026

We document how deepening resource scarcity results in rationing on the basis of race in a high-stakes setting: health care. Using detailed, time stamped data on 107,000 inpatient admissions to a large health system, we find that in-hospital mortality inc...