Policy Watch: Challenges for Terrorism Risk Insurance in the United States

By Howard Kunreuther and Erwann Michel-Kerjan

Journal of Economic Perspectives, Fall 2004

This paper examines the role that insurance has played in dealing with terrorism before and after September 11, 2001, by focusing on the distinctive challenges associated with terrorism as a catastrophic risk. The Terrorism Risk Insurance Act of 2002 (TRI...

Front Matter

American Economic Journal: Applied Economics, July 2021

Family Labor Supply Responses to Severe Health Shocks: Evidence from Danish Administrative Records

By Itzik Fadlon and Torben Heien Nielsen

American Economic Journal: Applied Economics, July 2021

We provide new evidence on households' labor supply responses to fatal and severe nonfatal health shocks in the short run and medium run. To identify causal effects, we leverage administrative data on Danish families and construct counterfactuals using ho...

Capital Markets in China and Britain, 1770–1860: Evidence from Grain Prices

By Wolfgang Keller, Carol H. Shiue, and Xin Wang

American Economic Journal: Applied Economics, July 2021

Based on comprehensive grain price data, we employ a storage model to estimate consistent interest rates and compare capital market development between Britain and China. Interest rates for Britain were lower than China's on average by about 3 percentage ...

Communication Infrastructure and Stabilizing Food Prices: Evidence from the Telegraph Network in China

By Pei Gao and Yu-Hsiang Lei

American Economic Journal: Applied Economics, July 2021

This paper exploits a unique historical setting―the expansion of the telegraph network in nineteenth-century China when railroads were limited―to examine whether the reduction of information frictions stabilizes grain prices. Employing a difference-in...

Recommendations for Further Reading

By Bernard Saffran

Journal of Economic Perspectives, Fall 2004

A Network of Thrones: Kinship and Conflict in Europe, 1495–1918

By Seth G. Benzell and Kevin Cooke

American Economic Journal: Applied Economics, July 2021

We construct a database linking European royal kinship networks, monarchies, and wars to study the effect of family ties on conflict. To establish causality, we exploit decreases in connection caused by apolitical deaths of rulers' mutual relatives. These...

Migration Networks and Location Decisions: Evidence from US Mass Migration

By Bryan A. Stuart and Evan J. Taylor

American Economic Journal: Applied Economics, July 2021

This paper studies how birth town migration networks affected long-run location decisions during historical US migration episodes. We develop a new method to estimate the strength of migration networks for each receiving and sending location. Our estimate...

Hometown Ties and the Quality of Government Monitoring: Evidence from Rotation of Chinese Auditors

By Jian Chu, Raymond Fisman, Songtao Tan, and Yongxiang Wang

American Economic Journal: Applied Economics, July 2021

Audits are a standard mechanism for reducing corruption in government investments. The quality of audits themselves, however, may be affected by relationships between auditor and target. We study whether provincial chief auditors in China show greater l...

Credit Rationing and Pass-Through in Supply Chains: Theory and Evidence from Bangladesh

By M. Shahe Emran, Dilip Mookherjee, Forhad Shilpi, and M. Helal Uddin

American Economic Journal: Applied Economics, July 2021

Traders are often blamed for high prices, prompting government regulation. We study the effects of a government ban of a layer of financing intermediaries in edible oil supply chain in Bangladesh during 2011–2012. Contrary to the predictions of a standa...

Minority Salience and Political Extremism

By Tommaso Colussi, Ingo E. Isphording, and Nico Pestel

American Economic Journal: Applied Economics, July 2021

We investigate how the salience of an ethnic minority affects the majority group's voting behavior. We use the increased salience of Muslim communities during Ramadan as a natural experiment. Exploiting exogenous variation in the distance of election date...

Uber versus Taxi: A Driver's Eye View

By Joshua D. Angrist, Sydnee Caldwell, and Jonathan V. Hall

American Economic Journal: Applied Economics, July 2021

Rideshare drivers pay a proportion of their fares to a ride-hailing platform operator, a commission-based compensation model used by many service providers. To Uber drivers, this commission is known as the Uber fee. By contrast, traditional taxi drivers...

Front Matter

American Economic Journal: Macroeconomics, July 2021

Higher Taxes at the Top: The Role of Entrepreneurs

By Bettina Brüggemann

American Economic Journal: Macroeconomics, July 2021

This paper computes optimal top marginal tax rates in Bewley-Huggett-Aiyagari–type economies that include entrepreneurs. Consistent with the data, entrepreneurs are overrepresented at the top of the income distribution and are thus disproportionately af...

Tight Money-Tight Credit: Coordination Failure in the Conduct of Monetary and Financial Policies

By Julio A. Carrillo, Enrique G. Mendoza, Victoria Nuguer, and Jessica Roldán-Peña

American Economic Journal: Macroeconomics, July 2021

Violations of Tinbergen's rule and strategic interaction undermine stabilization policies in a New Keynesian model with the Bernanke-Gertler accelerator. Welfare costs of risk shocks are large because of efficiency losses and income effects of costly moni...

Notes

Journal of Economic Perspectives, Fall 2004

The Transmission of Monetary Policy Shocks

By Silvia Miranda-Agrippino and Giovanni Ricco

American Economic Journal: Macroeconomics, July 2021

Commonly used instruments for the identification of monetary policy disturbances are likely to combine the true policy shock with information about the state of the economy due to the information disclosed through the policy action. We show that this sign...

Optimal Inflation Target in an Economy with Menu Costs and a Zero Lower Bound

By Andrés Blanco

American Economic Journal: Macroeconomics, July 2021

I study the optimal inflation target in a quantitative menu cost model with a zero lower bound on interest rates. I find that the optimal inflation target is 3.5 percent, which is higher than in models commonly used for monetary policy analysis. Key to th...

Macro and Micro Dynamics of Productivity: From Devilish Details to Insights

By G. Jacob Blackwood, Lucia S. Foster, Cheryl A. Grim, John Haltiwanger, and Zoltan Wolf

American Economic Journal: Macroeconomics, July 2021

Firm-level, revenue-based productivity measures are ubiquitous in studies of firm dynamics and aggregate outcomes. One common measure is increasingly interpreted as reflecting "distortions" since in distortions' absence, equalization of marginal revenue p...

Trade in Commodities and Business Cycle Volatility

By David Kohn, Fernando Leibovici, and Håkon Tretvoll

American Economic Journal: Macroeconomics, July 2021

This paper studies the role of differences in the patterns of production and international trade on the business cycle volatility of emerging and developed economies. We study a multisector small open economy in which firms produce and trade commodities a...