Breaking Bad News

By Moritz Meyer-ter-Vehn and Simon Board

American Economic Review: Insights

We study how information disclosure shapes social learning about a potentially harmful product. Increased transparency helps early agents avoid harm, which may undermine learning by later agents. Despite this conflict of interest, we show that full tra...

Short- and Long-Term Effects of Universal Preschool: Evidence from the Arab Population in Israel

By Elad DeMalach and Analia Schlosser

American Economic Journal: Economic Policy

We estimate the causal impacts of universal preschool by leveraging a quasi-experimental design based on Israel’s implementation of free public preschool for children ages 3 and 4 beginning in September 1999. We focus on the Arab population, who were...

Optimal Taxation of Inflation

By Damien Capelle and Yang Liu

American Economic Journal: Macroeconomics

This paper analyzes the effectiveness of a tax on inflation policy (TIP), which would require firms to pay a tax proportional to the increase in their prices or wages, in stabilizing inflation. We show that TIP would effectively correct externalities i...

The Welfare Economics of Reference Dependence

By Daniel Reck and Arthur Seibold

American Economic Journal: Applied Economics

We analyze welfare under reference-dependent preferences. We decompose the first-order welfare effects of reference-point and price changes into direct and behavioral effects. The sign of these effects depends on the form of reference-dependent payoffs;...

The Silver Empire: How Germany Created Its First Common Currency by Oliver Volckart

By William Roberds

Journal of Economic Literature

Front Matter

American Economic Journal: Applied Economics, October 2025

Taxes Today, Benefits Tomorrow

By Thomas Le Barbanchon

American Economic Journal: Applied Economics, October 2025

This paper tests whether partially unemployed workers value future preserved benefits when they bunch at the kink of the unemployment insurance benefit-withdrawal schedule. I extend the bunching formula of Saez (2010) to a dynamic setting that accounts fo...

Pulled In and Crowded Out: Heterogeneous Outcomes of Merit-Based School Choice

By Antonio Dalla-Zuanna, Kai Liu, and Kjell G. Salvanes

American Economic Journal: Applied Economics, October 2025

We analyze the effects of reforming the high school admission system from a residence based allocation to a merit-based allocation. The merit-based system generates oversubscribed schools, which favor high-GPA students at the expense of displacing low-GPA...

Labor Market Inequality and the Changing Life Cycle Profile of Male and Female Wages

By Richard Blundell, Hugo Lopez, and James P. Ziliak

American Economic Journal: Applied Economics, October 2025

We estimate the full distribution of life cycle wages for cohorts of men and women in the United States using a quantile selection model to account for systematic differences in employment by gender and education group. Although common within-group time e...

Home Sweet Home: Returns to Returning in the Age of Mass Migration

By Olof Ejermo, Kerstin Enflo, Björn Eriksson, and Erik Prawitz

American Economic Journal: Applied Economics, October 2025

Despite significant circular migration flows historically and today, their economic impacts remain understudied. Using data on predominantly rural Swedish migrants who returned from the United States during the Age of Mass Migration, we estimate returns t...

Labor Supply and Entertainment Innovations: Evidence from the US TV Rollout

By George Fenton and Felix Koenig

American Economic Journal: Applied Economics, October 2025

We study the impact of entertainment technology on labor supply. Using Social Security work histories and a natural experiment arising from the regulated US rollout of television, we estimate that a station launch reduced the probability of working by aro...

Down to the Wire: Leveraging Technology to Improve Electric Utility Cost Recovery

By Husnain F. Ahmad, Ayesha Ali, Robyn C. Meeks, Zhenxuan Wang, and Javed Younas

American Economic Journal: Applied Economics, October 2025

We study the effects of a technical intervention in Karachi, Pakistan—converting bare distribution wires to aerial bundled cables (ABCs)—that was intended to prevent illegal grid connections and improve utility cost recovery. Theft-resistant cables re...

The Franchise, Policing, and Race: Evidence from Arrests Data and the Voting Rights Act

By Giovanni Facchini, Brian Knight, and Cecilia Testa

American Economic Journal: Applied Economics, October 2025

This paper investigates the relationship between the franchise and policing. We find that, following the Voting Rights Act of 1965, Black arrest rates in counties that both had more newly enfranchised Blacks and were covered by the legislation fell, compa...

Where Do My Tax Dollars Go? Tax Morale Effects of Perceived Government Spending

By Matias Giaccobasso, Brad Nathan, Ricardo Perez-Truglia, and Alejandro Zentner

American Economic Journal: Applied Economics, October 2025

Do perceptions about government spending affect willingness to pay taxes? We test this hypothesis with a natural field experiment that focuses on the allocation of property taxes to public schools. Our results show that taxpayers often misperceive the des...

Human Capital and Racial Inequality in the US Labor Market

By Owen Thompson

Journal of Economic Literature

If racial gaps in measures of human capital like educational attainment and standardized test scores were eliminated, what would happen to racial disparities in wages, employment, and other labor market outcomes? A credible answer to this question is foun...

Front Matter

American Economic Journal: Macroeconomics, October 2025

The Dynamics of Development: Innovation and Reallocation

By Francisco J. Buera and Roberto N. Fattal-Jaef

American Economic Journal: Macroeconomics, October 2025

This paper proposes a quantitative model of endogenous firm dynamics to study growth-acceleration episodes triggered by reforms. We find that reversals of entry distortions lead to persistent growth in TFP and declining average firm size, as in the experi...

The Consumption Origins of Business Cycles: Lessons from Sectoral Dynamics

By Christian Matthes and Felipe Schwartzman

American Economic Journal: Macroeconomics, October 2025

We measure the impact of household consumption shocks on aggregate fluctuations. These shocks affect household consumption directly, and production and prices indirectly through their impact on aggregate consumption. We show how to identify such shocks us...

GDP-B: Accounting for the Value of New and Free Goods

By Erik Brynjolfsson, Avinash Collis, W. Erwin Diewert, Felix Eggers, and Kevin J. Fox

American Economic Journal: Macroeconomics, October 2025

The welfare contributions of new goods and free goods are not well-measured in standard statistical agency metrics like GDP or productivity. We derive explicit terms for the contributions of these goods and introduce a new framework and metric, GDP-B, whi...

Real Exchange Rates and Endogenous Productivity

By Nils Gornemann, Pablo A. Guerrón Quintana, and Felipe Saffie

American Economic Journal: Macroeconomics, October 2025

Two-thirds of the real exchange rate's (RER's) volatility occurs at low frequencies. We provide empirical evidence that links movements in the RER to changes in research and development spending and patents. A two-country real business cycle model with en...