Can Warranties Substitute for Reputations?

By James W. Roberts

American Economic Journal: Microeconomics, August 2011

In markets where product quality is imperfectly observed or delivery is uncertain, seller reputations and product guarantees or warranties can impact equilibrium prices and quantities. Using data from a decentralized online market, this paper empirically ...

The Twin Crises: The Causes of Banking and Balance-of-Payments Problems

By Graciela L. Kaminsky and Carmen M. Reinhart

American Economic Review, June 1999

In the wake of the Mexican and Asian currency turmoil, the subject of financial crises have come to the forefront of academic and policy discussions. This paper analyzes the links between banking and currency crises. The authors find that problems in the ...

Information Rigidity and the Expectations Formation Process: A Simple Framework and New Facts

By Olivier Coibion and Yuriy Gorodnichenko

American Economic Review, August 2015

We propose a new approach to test the full-information rational expectations hypothesis which can identify whether rejections of the null arise from information rigidities. This approach quantifies the economic significance of departures from the null and...

Expertise versus Bias in Evaluation: Evidence from the NIH

By Danielle Li

American Economic Journal: Applied Economics, April 2017

Evaluators with expertise in a particular field may have an informational advantage in separating good projects from bad. At the same time, they may also have personal preferences that impact their objectivity. This paper examines these issues in the cont...

Taxman's Dilemma: Coercion or Persuasion? Evidence from a Randomized Field Experiment in Ethiopia

By Abebe Shimeles, Daniel Zerfu Gurara, and Firew Woldeyes

American Economic Review, May 2017

We analyze data from a randomized controlled trial of two innovative anti-tax evasion schemes in Ethiopia that signal threats of audit and complimentary messages that encourage tax morale. Our results indicate that the threat of audit reduces tax evasion ...

Does Quality Adjustment Matter for Technologically Stable Products? An Application to the CPI for Food

By John S. Greenlees and Robert McClelland

American Economic Review, May 2011

Most indexes in the Consumer Price Index (CPI) use a form of the "matched-model" approach. It is frequently assumed that this approach accurately reflects inflation for items that have no major trend in quality. In this paper we investigate that hypothesi...

Establishment Size Dynamics in the Aggregate Economy

By Esteban Rossi-Hansberg and Mark L. J. Wright

American Economic Review, December 2007

This paper presents a theory of establishment size dynamics based on the accumulation of industry-specific human capital that simultaneously rationalizes the economy- wide facts on establishment growth rates, exit rates, and size distributions. The the...

Human Capital and Productivity in a Team Environment: Evidence from the Healthcare Sector

By Ann P. Bartel, Nancy D. Beaulieu, Ciaran S. Phibbs, and Patricia W. Stone

American Economic Journal: Applied Economics, April 2014

Using panel data from a large hospital system, this paper presents estimates of the productivity effects of human capital in a team production environment. Proxying nurses' general human capital by education and their unit-specific human capital by expe...

Strategies for Promoting Healthier Food Choices

By Julie S. Downs, George Loewenstein, and Jessica Wisdom

American Economic Review, May 2009

Unemployment Insurance Fraud and Optimal Monitoring

By David L. Fuller, B. Ravikumar, and Yuzhe Zhang

American Economic Journal: Macroeconomics, April 2015

An important incentive problem for the design of unemployment insurance is the fraudulent collection of unemployment benefits by workers who are gainfully employed. We show how to efficiently use a combination of tax/subsidy and monitoring to prevent such...

Using District Magnitude to Regulate Political Party Competition

[Symposium: Economics of Voting]

By Douglas W. Rae

Journal of Economic Perspectives, Winter 1995

This is an essay about the use of districting systems to regulate electoral outcomes and the evolution of party systems. By changing the number of seats from each district, a balance can be struck between the often conflicting goals of minority representa...

Economic Prescriptions for Environmental Problems: How the Patient Followed the Doctor's Orders

By Robert W. Hahn

Journal of Economic Perspectives, Spring 1989

In this paper, I consider two tools which have received widespread support from the economics community: marketable permits and emission charges. Until the 1960s, these tools only existed on blackboards and in academic journals, as products of the fertil...

Castes and Labor Mobility

By Viktoria Hnatkovska, Amartya Lahiri, and Sourabh Paul

American Economic Journal: Applied Economics, April 2012

We examine the relative fortunes of the historically disadvantaged scheduled castes and tribes (SC/ST) in India in terms of their education attainment, occupation choices, consumption and wages. We study the period 1983-2005 using household survey data fr...

Delegating Multiple Decisions

By Alex Frankel

American Economic Journal: Microeconomics, November 2016

This paper shows how to extend the heuristic of capping an agent against her bias to delegation problems over multiple decisions. Caps may be exactly optimal when the agent has constant biases, in which case a cap corresponds to a ceiling on the weighted ...

Quantifying the Disincentive Effects of Joint Taxation on Married Women's Labor Supply

By Alexander Bick and Nicola Fuchs-Schündeln

American Economic Review, May 2017

We quantify the disincentive effects of elements of joint taxation in the labor income tax codes of 17 European countries and the US. We analyze the extent to which hours worked of married men and women would change if each country switched to a system of...

Historical Property Rights, Sociality, and the Emergence of Impersonal Exchange in Long-Distance Trade

By Erik O. Kimbrough, Vernon L. Smith, and Bart J. Wilson

American Economic Review, June 2008

This laboratory experiment explores the extent to which impersonal exchange emerges from personal exchange with opportunities for long-distance trade. We design a three-commodity production and exchange economy in which agents in three geographically ...

Is American Health Care Uniquely Inefficient?

[Symposium: Health Care]

By Alan M. Garber and Jonathan Skinner

Journal of Economic Perspectives, Fall 2008

The U.S. health system has been described as the most competitive, heterogeneous, inefficient, fragmented, and advanced system of care in the world. In this paper, we consider two questions: First, is the U.S. healthcare system productively efficient rela...

An Experimental Component Index for the CPI: From Annual Computer Data to Monthly Data on Other Goods

By Tim Erickson and Ariel Pakes

American Economic Review, August 2011

The CPI component indices are obtained from comparing price quotes at a given store in different periods. If we omit comparisons from goods in the store in the initial, but not in the comparison, period we generate a selection bias: goods that exit are di...

An Economist's Guide to Visualizing Data

By Jonathan A. Schwabish

Journal of Economic Perspectives, Winter 2014

Once upon a time, a picture was worth a thousand words. But with online news, blogs, and social media, a good picture can now be worth so much more. Economists who want to disseminate their research, both inside and outside the seminar room, should inve...

Illiquidity and All Its Friends

By Jean Tirole

Journal of Economic Literature, June 2011

The recent crisis was characterized by massive illiquidity. This paper reviews what we know and don't know about illiquidity and all its friends: market freezes, fire sales, contagion, and ultimately insolvencies and bailouts. It first explains why liquid...