Economists and the Media

[Symposium: Economists as Policy Advocates]

By Michael Weinstein

Journal of Economic Perspectives, Summer 1992

When my colleagues at The New York Times use the word "academic," they intend no compliment; they mean irrelevant. And when my former colleagues in the academy describe someone's work as "journalistic," they invariably mean shallow. One way to frame discu...

Declining Volatility in the U.S. Automobile Industry

By Valerie A. Ramey and Daniel J. Vine

American Economic Review, December 2006

Dramatic changes in the volatility of output occurred in the U.S. auto industry in the early 1980s. Namely, output volatility declined, the covariance of inventory investment and sales grew more negative, and adjustments to production schedules, which in ...

Spatial Development

By Klaus Desmet and Esteban Rossi-Hansberg

American Economic Review, April 2014

We present a theory of spatial development. Manufacturing and services firms located in a continuous geographic area choose each period how much to innovate. Firms trade subject to transport costs and technology diffuses spatially. We apply the model t...

Puzzles: Professional Advice and Other Hazards

By Suzanne Scotchmer

Journal of Economic Perspectives, Fall 1990

This edition includes four puzzles, all with answers given at the end.

Identification of the Effect of Depression on Risky Sexual Behavior: Exploiting a Natural Experiment

By Susan L. Averett and Yang Wang

American Economic Review, May 2012

Depression is pervasive in the US particularly among women. The costs in terms of direct medical costs and forgone earnings are substantial. This paper investigates an additional cost of depression. Using data from the National Longitudinal Survey of Adol...

Regulatory Races: The Effects of Jurisdictional Competition on Regulatory Standards

By Bruce G. Carruthers and Naomi R. Lamoreaux

Journal of Economic Literature, March 2016

This article surveys the literature on regulatory arbitrage in four settings: labor regulation, environmental protection, corporate governance, and banking and finance. For a regulatory race to occur, firms must migrate across state or country borders in ...

Convergence in Macroeconomics: Elements of the New Synthesis

By Michael Woodford

American Economic Journal: Macroeconomics, January 2009

While macroeconomics is often thought of as a deeply divided field, with less of a shared core and correspondingly less cumulative progress than other areas of economics, in fact, there are fewer fundamental disagreements among macroeconomists now than...

Macroeconomic Performance and Collective Bargaining: An International Perspective

By Robert J. Flanagan

Journal of Economic Literature, September 1999

This paper critically reviews the research on how collective bargaining systems influence macroeconomic performance in industrialized countries. The review considers effects of bargaining level, coordination, and corporatist institutional arrangements. Ke...

A Theory of Rational Demand for Index Insurance

By Daniel J. Clarke

American Economic Journal: Microeconomics, February 2016

Rational demand for index insurance products is shown to be fundamentally different to that for indemnity insurance products due to the presence of basis risk. In particular, optimal demand is zero for infinitely risk-averse individuals, and is nonmonoton...

The Economic Consequences of Social-Network Structure

By Matthew O. Jackson, Brian W. Rogers, and Yves Zenou

Journal of Economic Literature, March 2017

We survey the literature on the economic consequences of the structure of social networks. We develop a taxonomy of "macro" and "micro" characteristics of social-interaction networks and discuss both the theoretical and empirical findings concerning the r...

Village Economic Accounts: Real and Financial Intertwined

By Archawa Paweenawat and Robert M. Townsend

American Economic Review, May 2012

We propose a framework to create village economic and balance of payments accounts from a micro-level household survey. Using the Townsend Thai data, we create the accounts for villages in rural and semi-urban areas of Thailand. We then study these villag...

Outside Options and the Failure of the Coase Conjecture

By Simon Board and Marek Pycia

American Economic Review, February 2014

A buyer wishes to purchase a good from a seller who chooses a sequence of prices over time. Each period the buyer can also exercise an outside option, abandoning their search or moving on to another seller. We show there is a unique equilibrium in whic...

Symposium on the Economic Status of African-Americans

[Symposium: The Economic Status of African-Americans]

By Henry J. Aaron

Journal of Economic Perspectives, Fall 1990

The purpose of this symposium is to explore a number of controversial issues that divide economists and remain relevant to current debates on public policy. The central questions explored in these papers concern the economic progress of American blacks: W...

Modeling Competition and Market Equilibrium in Insurance: Empirical Issues

By Pierre-Andre Chiappori and Bernard Salanie

American Economic Review, May 2008

Are Incentives for R&D Effective? Evidence from a Regression Discontinuity Approach

By Raffaello Bronzini and Eleonora Iachini

American Economic Journal: Economic Policy, November 2014

This paper evaluates a unique R&D subsidy program implemented in northern Italy. Firms were invited to submit proposals for new projects and only those which scored above a certain threshold received the subsidy. We use a sharp regression discontinuity...

The Distributional Consequences of Large Devaluations

By Javier Cravino and Andrei A. Levchenko

American Economic Review, November 2017

We study the impact of large exchange rate devaluations on the cost of living at different points on the income distribution. Poor households spend relatively more on tradeable product categories and consume lower-priced varieties within categories. Cha...

Technical Change, Wage Inequality, and Taxes

By Laurence Ales, Musab Kurnaz, and Christopher Sleet

American Economic Review, October 2015

This paper considers the normative implications of technical change for tax policy design. A task-to-talent assignment model of the labor market is embedded into an optimal tax problem. Technical change modifies equilibrium wage growth across talents and ...

Evaluating Microfoundations for Aggregate Price Rigidities: Evidence from Matched Firm-Level Data on Product Prices and Unit Labor Cost

By Mikael Carlsson and Oskar Nordström Skans

American Economic Review, June 2012

Using matched data on product-level prices and the producing firm's unit labor cost, we find a moderate pass-through of current idiosyncratic marginal-cost changes. Also, the response does not vary across firms facing very different idiosyncratic shock v...

Increasing Returns versus National Product Differentiation as an Explanation for the Pattern of U.S.-Canada Trade

By Keith Head and John Ries

American Economic Review, September 2001

We evaluate two alternative models of international trade in differentiated products. An increasing returns model where varieties are linked to firms predicts home market effects: increases in a country's share of demand cause disproportionate increases i...

Optimal Sales Schemes against Interdependent Buyers

By Masaki Aoyagi

American Economic Journal: Microeconomics, February 2010

This paper studies a monopoly pricing problem when the seller can choose the timing of a trade with each buyer, and a buyer's valuation of the seller's good is the weighted sum of his and other buyers' private signals. We show that it is optimal for th...