A Dose of Managed Care: Controlling Drug Spending in Medicaid

By David Dranove, Christopher Ody, and Amanda Starc

American Economic Journal: Applied Economics, January 2021

We study the effect of privatizing Medicaid drug benefits on drug prices and utilization. Drug spending would decrease by 21.3 percent if private insurers administered all drug benefits. One-third of the decrease is driven by private insurers' ability to ...

Older Yet Fairer: How Extended Reproductive Time Horizons Reshaped Marriage Patterns in Israel

By Naomi Gershoni and Corinne Low

American Economic Journal: Applied Economics, January 2021

Israel's 1994 adoption of free in vitro fertilization (IVF) provides a natural experiment for how fertility time horizons impact women's marriage timing and other outcomes. We find a substantial increase in average age at first marriage following the poli...

The Political Boundaries of Ethnic Divisions

By Samuel Bazzi and Matthew Gudgeon

American Economic Journal: Applied Economics, January 2021

We use a policy experiment in Indonesia to show how local political boundaries affect ethnic tension. Redrawing district borders along group lines reduces conflict. However, the gains in stability are undone or even reversed when new boundaries increase e...

Front Matter

American Economic Journal: Macroeconomics, January 2021

Interactions and Coordination between Monetary and Macroprudential Policies

By Alejandro Van der Ghote

American Economic Journal: Macroeconomics, January 2021

I study monetary and macroprudential policy intervention in a general equilibrium economy with recurrent boom-bust cycles. Recurrence causes forward-looking variables to also react to policy intervention during phases in which the intervention is inactive...

The Labor Market Impact of Immigration: Job Creation versus Job Competition

By Christoph Albert

American Economic Journal: Macroeconomics, January 2021

This paper studies the labor market effects of both documented and undocumented immigration in a search model featuring nonrandom hiring. As immigrants accept lower wages, they are preferably chosen by firms and therefore have higher job finding rates tha...

Consumption Insurance against Wage Risk: Family Labor Supply and Optimal Progressive Income Taxation

By Chunzan Wu and Dirk Krueger

American Economic Journal: Macroeconomics, January 2021

We show that a calibrated life cycle two-earner household model with endogenous labor supply can rationalize the extent of consumption insurance against shocks to male and female wages, as estimated empirically by Blundell, Pistaferri, and Saporta-Ekste...

Optimal Positive Capital Taxes at Interior Steady States

By Jess Benhabib and Bálint Szőke

American Economic Journal: Macroeconomics, January 2021

We generalize recent results of Bassetto and Benhabib (2006 ) and Straub and Werning (2019 ) in a neoclassical model with endogenous labor-leisure choice where all agents are allowed to save and accumulate capital. We provide a sufficient condition under ...

The Size Distribution of Firms and Industrial Water Pollution: A Quantitative Analysis of China

By Ji Qi, Xin Tang, and Xican Xi

American Economic Journal: Macroeconomics, January 2021

We argue that misallocation across firms amplifies industrial water pollution by distorting the firm size distribution in China. Firm-level data indicate that larger firms are more likely to use clean technology but face higher distortions. In a heterogen...

College Quality and Attendance Patterns: A Long-Run View

By Lutz Hendricks, Christopher Herrington, and Todd Schoellman

American Economic Journal: Macroeconomics, January 2021

We construct a time series of college attendance patterns for the United States and document a reversal: family background was a better predictor of college attendance before World War II, but academic ability was afterward. We construct a model of colleg...

Policy Watch: The Economics of Fuel Economy Standards

By Paul R. Portney, Ian W.H. Parry, Howard K. Gruenspecht, and Winston Harrington

Journal of Economic Perspectives, Fall 2003

One of the most hotly contested of all energy policy issues involves Corporate Average Fuel Economy (or CAFE) standards for new cars and light-duty trucks. Tighter standards would reduce gasoline consumption, and hence both greenhouse gas emissions as wel...

Sectoral Price Facts in a Sticky-Price Model

By Carlos Carvalho, Jae Won Lee, and Woong Yong Park

American Economic Journal: Macroeconomics, January 2021

We develop a multisector sticky-price DSGE model that can endogenously deliver differential responses of prices to aggregate and sectoral shocks. Input-output production linkages and a (standard) monetary policy rule contribute to a slow response of price...

Ten Facts on Declining Business Dynamism and Lessons from Endogenous Growth Theory

By Ufuk Akcigit and Sina T. Ates

American Economic Journal: Macroeconomics, January 2021

In this paper, we review the literature on declining business dynamism and its implications in the United States and propose a unifying theory to analyze the symptoms and the potential causes of this decline. We first highlight 10 pronounced stylized fa...

Are We Approaching an Economic Singularity? Information Technology and the Future of Economic Growth

By William D. Nordhaus

American Economic Journal: Macroeconomics, January 2021

What are the prospects for long-run economic growth? One prominent line of economic thinking is the trend toward stagnation. Stagnationism has a long history in economics, beginning prominently with Malthus and occasionally surfacing in different guises. ...

The Productivity J-Curve: How Intangibles Complement General Purpose Technologies

By Erik Brynjolfsson, Daniel Rock, and Chad Syverson

American Economic Journal: Macroeconomics, January 2021

General purpose technologies (GPTs) like AI enable and require significant complementary investments. These investments are often intangible and poorly measured in national accounts. We develop a model that shows how this can lead to underestimation of pr...

Recommendations for Further Reading

By Bernard Saffran

Journal of Economic Perspectives, Fall 2003

Comments

By Luigi L. Pasinetti, Franklin M. Fisher, Jesus Felipe, J.S.L. McCombie, Robert L. Greenfield, Avi J. Cohen, G.C. Harcourt, William H. Kaempfer, Anton D. Lowenberg, Lance E. Davis, and Stanley Engerman

Journal of Economic Perspectives, Fall 2003

Front Matter

American Economic Review, February 2021

Notes

Journal of Economic Perspectives, Fall 2003

Employer Consolidation and Wages: Evidence from Hospitals

By Elena Prager and Matt Schmitt

American Economic Review, February 2021

We test whether wage growth slows following employer consolidation by examining hospital mergers. We find evidence of reduced wage growth in cases where both (i) the increase in concentration induced by the merger is large and (ii) workers' skills are ind...