You're the One That I Want! Understanding the Overrepresentation of Women in the Public Sector

By Pedro Gomes and Zoë Kuehn

American Economic Journal: Macroeconomics, April 2026

The public sector hires disproportionally more women than men. Using microdata, we document gender differences in employment, transition probabilities, hours, and wages in the public and private sector. We calibrate a search and matching model where men a...

Misallocation in Indian Agriculture

By Marijn Bolhuis, Swapnika Rachapalli, and Diego Restuccia

American Economic Journal: Macroeconomics, April 2026

We exploit substantial variation in land-market institutions across Indian states and detailed household-level panel data to assess the effect of land-market distortions on agricultural productivity. We develop a model of heterogeneous farms and distorted...

Large Firms, Consumer Heterogeneity, and the Profit Share

By Robert C. Feenstra, Luca Macedoni, and Mingzhi (Jimmy) Xu

American Economic Journal: Macroeconomics, April 2026

We examine the relationship between large firms and the rising profit share in a model that features oligopolistic competition and consumer heterogeneity. Conditional on the sales distribution, consumer heterogeneity increases firm-level markups and the p...

Shocks and Exchange Rates in Small Open Economies

By Vito Cormun and Pierre De Leo

American Economic Journal: Macroeconomics, April 2026

We separately identify domestic and external sources of exchange rate fluctuations in a large sample of small open economies (SOEs). We find that external shocks lead to large and predictable deviations from uncovered interest parity (UIP), while domestic...

Banking Networks and Economic Growth: From Idiosyncratic Shocks to Aggregate Fluctuations

By Shohini Kundu and Nishant Vats

American Economic Journal: Macroeconomics, April 2026

This paper investigates the role of banking networks in the transmission of shocks across borders. Combining banking deregulation in the United States with state-level idiosyncratic demand shocks, we show that geographically diversified banks reallocate f...

Disagreement about Monetary Policy

By Karthik A. Sastry

American Economic Journal: Macroeconomics, April 2026

This paper studies why central banks and markets hold different beliefs. I introduce a model that formalizes three mechanisms for disagreement: asymmetric information about fundamentals, different perceptions of the policy rule, and different confidence i...

Cognitive Hubs and Spatial Redistribution

By Esteban Rossi-Hansberg, Pierre-Daniel Sarte, and Felipe Schwartzman

American Economic Journal: Macroeconomics, April 2026

In the United States, cognitive nonroutine (CNR) occupations are disproportionately and increasingly represented in large cities. To study the allocation of workers across cities, we propose a quantitative spatial equilibrium model with multiple industrie...

Time for Growth

By Lars Boerner and Battista Severgnini

American Economic Journal: Macroeconomics, April 2026

This paper investigates the adoption, diffusion, and long-run impact of the public mechanical clock, one of the most important high-technology machines in history, on European economic growth and development. We avoid endogeneity by considering the relati...

Mis-specified Forecasts and Myopia in an Estimated New Keynesian Model

By Ina Hajdini

American Economic Journal: Macroeconomics, April 2026

I consider a New Keynesian framework where agents combine mis-specified forecasts and myopia to form expectations. This combination is consistent with inflation forecasts' late overshooting, underreaction to forecast revisions, and overreaction to current...

Housing Constraints and Spatial Misallocation: Comment

By Brian Greaney

American Economic Journal: Macroeconomics, April 2026

Hsieh and Moretti (2019) find that relaxing land use regulations in three productive US cities would increase GDP by 3.7 percent. In this comment, I revisit their findings. I first attempt to replicate their result and find that their counterfactual would...

Partial Specialization and Heterogeneous Task Assignments

By Chen Liu

American Economic Journal: Macroeconomics, April 2026

I develop a general equilibrium model featuring multidimensional skills and partial specialization in tasks to quantify the impact of several determinants on within-occupation inequality growth from 1980 to 2000. The model introduces a new mechanism by wh...

Inflation Targeting under Fiscal Fragility

By Aloisio Araujo, Vitor Costa, Paulo Lins, Rafael Santos, and Serge de Valk

American Economic Journal: Macroeconomics, April 2026

We propose a model to study an inflation-targeting regime under a high government debt burden. We assume that an altruistic policymaker chooses debt issuance, inflation, and public expenditure, while private agents dislike inflation and finance the govern...

Optimism about Graduation and College Financial Aid

By Emily G. Moschini, Gajendran Raveendranathan, and Ming Xu

American Economic Journal: Macroeconomics, April 2026

In the United States, college dropout risk is sizable. We provide new empirical evidence that beliefs about the likelihood of earning a bachelor's degree predict college enrollment, and that the distribution of these beliefs exhibits widespread optimism. ...

Not a Typical Firm: Capital–Labor Substitution and Firms' Labor Shares

By Joachim Hubmer and Pascual Restrepo

American Economic Journal: Macroeconomics, April 2026

The US labor share has declined, especially in manufacturing and retail. Yet the labor share of a typical firm in these sectors has risen. We introduce a model where firms incur fixed costs to automate tasks. A decline in the price of capital goods used f...

Management and Misallocation in Mexico

By Nicholas Bloom, Leonardo Iacovone, Mariana Pereira-López, and John Van Reenen

American Economic Journal: Macroeconomics, April 2026

Using comprehensive administrative management surveys from Mexico and the United States, we document large management gaps between the two countries, driven by both lower average management quality among Mexican firms and greater misallocation. Compared w...

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Front Matter

American Economic Review, April 2026

A Long and a Short Leg Make for a Wobbly Equilibrium

By Nicolae Gârleanu, Stavros Panageas, and Geoffery Zheng

American Economic Review, April 2026

We provide a model to explain how the interaction between the spot and lending markets for stocks can lead to abrupt changes in short selling activity. Furthermore, rational short sellers may choose to abandon the market even as mispricing widens. We docu...

Real Credit Cycles

By Pedro Bordalo, Nicola Gennaioli, Andrei Shleifer, and Stephen J. Terry

American Economic Review, April 2026

We embed diagnostic expectations in a workhorse neoclassical model with heterogeneous firms and risky debt. A realistic degree of overreaction estimated from US firms' earnings forecasts generates realistic credit cycles. Good times produce economic and f...