Pareto-Efficient International Taxation

By Michael Keen and David Wildasin

American Economic Review, March 2004

This paper analyzes Pareto-efficient international tax regimes. Because every country faces its own national budget constraint, the Diamond-Mirrlees production-efficiency theorem, which underlies key tenets of policy advice in international taxation - the...

The Constitutional Dilemma of Economic Liberty

[Symposium: Institutions]

By Barry R. Weingast

Journal of Economic Perspectives, Summer 2005

This paper studies the problem of self-enforcing constitutions, addressing the question, how do some constitutions provide incentives for political officials to abide by the constraints announced in the constitution? To understand the mechanisms underlyin...

Debt Contracts with Partial Commitment

By Natalia Kovrijnykh

American Economic Review, December 2013

This paper analyzes a dynamic lending relationship where the borrower cannot be forced to make repayments, and the lender offers long-term contracts that are imperfectly enforced and repeatedly renegotiated. No commitment and full commitment by the len...

CONDI: A Cost-of-Nominal-Distortions Index

By Stefano Eusepi, Bart Hobijn, and Andrea Tambalotti

American Economic Journal: Macroeconomics, July 2011

We construct a PCE-based price index whose weights minimize the welfare costs of nominal distortions: a cost-of-nominal-distortions index. We compute these weights in a multi-sector New Keynesian model, calibrated to match US data on price stickiness, lab...

Hassle Costs and Price Discrimination: An Empirical Welfare Analysis

By Guillermo Marshall

American Economic Journal: Applied Economics, July 2015

This paper studies a market where soda is sold in both refillable and nonrefillable bottles. Purchasing refillables is inconvenient but cheaper. Using a discrete choice model, I find that price-sensitive customers put less weight on the inconveniences of ...

Trade Policy and Loss Aversion

By Caroline Freund and Caglar Ozden

American Economic Review, September 2008

We develop a political economy model where loss aversion and reference dependence are important in shaping people’s preferences over trade policy. The policy implications of the augmented model differ in three ways: there is a region of compensating pro...

Economic Analysis of Social Interactions

By Charles F. Manski

Journal of Economic Perspectives, Summer 2000

Economics is broadening its scope from analysis of markets to study of general social interactions. Developments in game theory, the economics of the family, and endogenous growth theory have led the way. Economists have also performed new empirical resea...

New Evidence on the Money's Worth of Individual Annuities

By Olivia S. Mitchell, James M. Poterba, Mark J. Warshawsky, and Jeffrey R. Brown

American Economic Review, December 1999

Central-Bank Credibility: Why Do We Care? How Do We Build It?

By Alan S. Blinder

American Economic Review, December 2000

Hicksian Welfare Measures and the Normative Endowment Effect

By Thomas A. Weber

American Economic Journal: Microeconomics, November 2010

We show that the Hicksian welfare measures of compensating variation and equivalent variation coincide if one of them is evaluated at a compensated income. The measures are nondecreasing in income if the varied attribute and income are complementary, and...

Bidder Solicitation, Adverse Selection, and the Failure of Competition

By Stephan Lauermann and Asher Wolinsky

American Economic Review, June 2017

We study a common value, first-price auction in which the number of bidders is endogenous: the seller (auctioneer) knows the value and solicits bidders at a cost. The number of bidders, which is unobservable, may thus depend on the true value. Therefore, ...

Unpacking the Long-Run Effects of Tariff Shocks: New Structural Implications from Firm Heterogeneity Models

By Alan Spearot

American Economic Journal: Microeconomics, May 2016

I derive a novel solution for the general equilibrium effects of tariffs that is robust to heterogeneity across industries and countries, and is a function of only aggregate trade data and country-by-industry Pareto shape parameters. Using the model to...

The Nominal Share Price Puzzle

By William C. Weld, Roni Michaely, Richard H. Thaler, and Shlomo Benartzi

Journal of Economic Perspectives, Spring 2009

The average nominal share prices of common stocks traded on the New York Stock Exchange have remained constant at approximately $35 per share since the Great Depression as a result of stock splits. It is surprising that U.S. firms actively maintained cons...

Antitrust in Innovative Industries

By Ilya Segal and Michael D. Whinston

American Economic Review, December 2007

We study the effects of antitrust policy in industries with continual innovation. Antitrust policies that restrict incumbent behavior toward new entrants may have conflicting effects on innovation incentives, raising the profits of new entrants, but lo...

Tracking Decision Makers under Uncertainty

By Amos Arieli, Yaniv Ben-Ami, and Ariel Rubinstein

American Economic Journal: Microeconomics, November 2011

Eye tracking is used to investigate the procedures that participants employ in choosing between two lotteries. Eye movement patterns in problems where the deliberation process is clearly identified are used to substantiate an interpretation of the results...

Challenges from State-Federal Interactions in US Climate Change Policy

By Lawrence H. Goulder and Robert N. Stavins

American Economic Review, May 2011

With a focus on two sorts of regulation—renewable electricity and clean energy standards, and automobile fuel-economy standards—we analyze problematic interactions that arise when state policies are nested within the domain of Federal policy. ...

Immigration and the Diffusion of Technology: The Huguenot Diaspora in Prussia

By Erik Hornung

American Economic Review, January 2014

This paper analyzes long-term effects of skilled-worker immigration on productivity for the Huguenot migration to Prussia. In 1685, religiously persecuted French Huguenots settled in Brandenburg- Prussia and compensated for population losses due to pla...

The Long-Run Effects of Attending an Elite School: Evidence from the United Kingdom

By Damon Clark and Emilia Del Bono

American Economic Journal: Applied Economics, January 2016

This paper estimates the impact of elite school attendance on long-run outcomes including completed education, income, and fertility. Our data consist of individuals born in the 1950s and educated in a UK district that assigned students to either elite or...

Challenges to Mismeasurement Explanations for the US Productivity Slowdown

[Symposium: Are Measures of Economic Growth Biased?]

By Chad Syverson

Journal of Economic Perspectives, Spring 2017

The United States has been experiencing a slowdown in measured labor productivity growth since 2004. A number of commentators and researchers have suggested that this slowdown is at least in part illusory because real output data have failed to capture ...

Historical Presidential Betting Markets

[Symposium: Event Markets]

By Paul W. Rhode and Koleman S. Strumpf

Journal of Economic Perspectives, Spring 2004

This paper analyzes the large and often well-organized markets for betting on U.S. presidential elections that operated between 1868 and 1940. Four main points are addressed. First, we show that the market did a remarkable job forecasting elections in an ...