The Future of Microeconomic Theory

[Symposium: Forecasts for the Future of Economics]

By Beth Allen

Journal of Economic Perspectives, Winter 2000

The question of what constitutes good economic theory is analyzed. Current good and bad aspects of its methodologies are discussed. Interdisciplinary work that goes beyond the social sciences is advocated. The future predictions are presented concerning r...

Trade, Tragedy, and the Commons

By Brian R. Copeland and M. Scott Taylor

American Economic Review, June 2009

We develop a theory of resource management where the degree to which countries escape the tragedy of the commons, and hence the de facto property rights regime, is endogenously determined. Three forces determine success or failure in resource managemen...

Global Interest Rates, Currency Returns, and the Real Value of the Dollar

By Charles Engel and Kenneth D. West

American Economic Review, May 2010

After Midnight: A Regression Discontinuity Design in Length of Postpartum Hospital Stays

By Douglas Almond and Joseph J. Doyle

American Economic Journal: Economic Policy, August 2011

Estimates of moral hazard in health insurance markets can be confounded by adverse selection. This paper considers a plausibly exogenous source of variation in insurance coverage for childbirth in California. We find that additional health insurance cover...

Consumers' Response to State Energy Efficient Appliance Rebate Programs

By Sébastien Houde and Joseph E. Aldy

American Economic Journal: Economic Policy, November 2017

Through an evaluation of the 2009 Recovery Act's State Energy Efficient Appliance Rebate Program, this paper examines consumers' response to energy efficiency rebates. The analysis shows that 70 percent of consumers claiming a rebate were inframarginal an...

The London Congestion Charge

By Jonathan Leape

Journal of Economic Perspectives, Fall 2006

By the 1990s, the average speed of trips across London was below that at the beginning of the twentieth century -- before the car was introduced -- and by the end of that decade, public concern over levels of traffic congestion was high. In early 2003, Lo...

Toward an International Migration Regime

By Jeffrey D. Sachs

American Economic Review, May 2016

Few if any issues in public policy are as muddled and contentious as international migration. There is no international regime that establishes standards and principles for national migration policies other than in the case of refugees (migrants escaping ...

Language, Meaning, and Games: A Model of Communication, Coordination, and Evolution

By Stefano Demichelis and Jorgen W. Weibull

American Economic Review, September 2008

Language is a powerful coordination device. We generalize the cheap-talk approach to pre-play communication by way of introducing a meaning correspondence between messages and actions, and by postulating two axioms met by natural languages. Players hav...

Trade Costs, Asset Market Frictions, and Risk Sharing

By Doireann Fitzgerald

American Economic Review, October 2012

I use bilateral import data to test for and quantify the importance of trade costs and asset market frictions in explaining the failure of perfect international consumption risk sharing. I find that while frictions in international asset markets significa...

Active and Passive Waste in Government Spending: Evidence from a Policy Experiment

By Oriana Bandiera, Andrea Prat, and Tommaso Valletti

American Economic Review, September 2009

We propose a distinction between active and passive waste as determinants of the cost of public services. Active waste entails utility for the public decision maker, whereas passive waste does not. We analyze purchases of standardized goods by Italian ...

Do Investors Trade Too Much?

By Terrance Odean

American Economic Review, December 1999

Financial Globalization, Inequality, and the Rising Public Debt

By Marina Azzimonti, Eva de Francisco, and Vincenzo Quadrini

American Economic Review, August 2014

During the last three decades government debt has increased in most developed countries. During the same period we have also observed a significant liberalization of international financial markets. We propose a multi-country model with incomplete markets...

Search and Satisficing

By Andrew Caplin, Mark Dean, and Daniel Martin

American Economic Review, December 2011

Many everyday decisions are made without full examination of all available options, and, as a result, the best available option may be missed. We develop a search-theoretic choice experiment to study the impact of incomplete consideration on the quality o...

Natural Resources: Curse or Blessing?

By Frederick van der Ploeg

Journal of Economic Literature, June 2011

Are natural resources a "curse" or a "blessing"? The empirical evidence suggests that either outcome is possible. This paper surveys a variety of hypotheses and supporting evidence for why some countries benefit and others lose from the presence of natura...

Economic Growth: How Good Can It Get?

By Frank P. Stafford

American Economic Review, May 1999

Estimating a Structural Model of Herd Behavior in Financial Markets

By Marco Cipriani and Antonio Guarino

American Economic Review, January 2014

We develop a new methodology to estimate herd behavior in financial markets. We build a model of informational herding that can be estimated with financial transaction data. In the model, rational herding arises because of information-event uncertainty...

Can Compulsory Military Service Raise Civilian Wages? Evidence from the Peacetime Draft in Portugal

By David Card and Ana Rute Cardoso

American Economic Journal: Applied Economics, October 2012

We provide new evidence on the long-term impacts of peacetime conscription, using longitudinal data for Portuguese men born in 1967. These men were inducted at age 21, allowing us to use preconscription wages to control for ability differences between con...

Malthusian Dynamism and the Rise of Europe: Make War, Not Love

By Nico Voigtlander and Hans-Joachim Voth

American Economic Review, May 2009

A True Development Round? A Review of Joseph E. Stiglitz and Andrew Charlton's Fair Trade for All: How Trade Can Promote Development

By Robert Z. Lawrence

Journal of Economic Literature, December 2007

In Fair Trade for All: How Trade Can Promote Development, Stiglitz and Charlton prescribe what a multilateral trade agreement--that promotes development and is fair for all--would include. This review appraises their prescriptions and offers some...

The Rise in Mortgage Defaults

[Symposium: Early Stages of the Credit Crunch]

By Christopher Mayer, Karen Pence, and Shane M. Sherlund

Journal of Economic Perspectives, Winter 2009

The first hints of trouble in the mortgage market surfaced in mid-2005, and conditions subsequently began to deteriorate rapidly. Mortgage defaults and delinquencies are particularly concentrated among borrowers whose mortgages are classified as "subprime...