Shopping for Lower Sales Tax Rates

By Scott R. Baker, Stephanie Johnson, and Lorenz Kueng

American Economic Journal: Macroeconomics, July 2021

Using comprehensive high-frequency state and local sales tax data, we show that shopping behavior responds strongly to changes in sales tax rates. Even though sales taxes are not observed in posted prices and have a wide range of rates and exemptions, c...

Advertising, Innovation, and Economic Growth

By Laurent Cavenaile and Pau Roldan-Blanco

American Economic Journal: Macroeconomics, July 2021

This paper analyzes the implications of advertising for firm dynamics and economic growth through its interaction with R&D. We develop a model of endogenous growth with firm heterogeneity that incorporates advertising decisions and calibrate it to match s...

Fewer but Better: Sudden Stops, Firm Entry, and Financial Selection

By Sina T. Ates and Felipe E. Saffie

American Economic Journal: Macroeconomics, July 2021

We develop a tractable quantitative framework to study the productivity effects of financial crises. The model features endogenous productivity, heterogeneous firm dynamics, and aggregate risk. Selection of the most promising ideas gives rise to a trade-o...

Comparative Advantage in Innovation and Production

By Mariano Somale

American Economic Journal: Macroeconomics, July 2021

This paper develops a dynamic model of innovation and international trade in which agents can direct their research efforts to specific goods in the economy. Trade affects the direction of innovation through its impact on the expected market size for an i...

Front Matter

American Economic Review, July 2021

Notching R&D Investment with Corporate Income Tax Cuts in China

By Zhao Chen, Zhikuo Liu, Juan Carlos Suárez Serrato, and Daniel Yi Xu

American Economic Review, July 2021

We study a Chinese policy that awards substantial tax cuts to firms with R&D investment over a threshold or "notch." Quasi-experimental variation and administrative tax data show a significant increase in reported R&D that is partly driven by firms relabe...

What is Economic Sociology and Should any Economists Care?

[Symposium: Sociology and Economics]

By Robert Gibbons

Journal of Economic Perspectives, Winter 2005

Unwatched Pollution: The Effect of Intermittent Monitoring on Air Quality

By Eric Yongchen Zou

American Economic Review, July 2021

Intermittent monitoring of environmental standards may induce strategic changes in polluting activities. This paper documents local strategic responses to a cyclical, once-every-six-day air quality monitoring schedule under the federal Clean Air Act. Usin...

How to Avoid Black Markets for Appointments with Online Booking Systems

By Rustamdjan Hakimov, C.-Philipp Heller, Dorothea Kübler, and Morimitsu Kurino

American Economic Review, July 2021

Allocating appointment slots is presented as a new application for market design. Online booking systems are commonly used by public authorities to allocate appointments for visa interviews, driver's licenses, passport renewals, etc. We document that bl...

Adverse and Advantageous Selection in the Laboratory

By S. Nageeb Ali, Maximilian Mihm, Lucas Siga, and Chloe Tergiman

American Economic Review, July 2021

We study two-player games where one-sided asymmetric information can lead to either adverse or advantageous selection. We contrast behavior in these games with settings where both players are uninformed. We find stark differences, suggesting that subjects...

Pay Me Later: Savings Constraints and the Demand for Deferred Payments

By Lasse Brune, Eric Chyn, and Jason Kerwin

American Economic Review, July 2021

We study a simple savings scheme that allows workers to defer receipt of part of their wages for three months at zero interest. The scheme significantly increases savings during the deferral period, leading to higher postdisbursement spending on lumpy goo...

Recruitment, Effort, and Retention Effects of Performance Contracts for Civil Servants: Experimental Evidence from Rwandan Primary Schools

By Clare Leaver, Owen Ozier, Pieter Serneels, and Andrew Zeitlin

American Economic Review, July 2021

This paper reports on a two-tiered experiment designed to separately identify the selection and effort margins of pay for performance (P4P). At the recruitment stage, teacher labor markets were randomly assigned to a "pay-for-percentile" or fixed-wage con...

Market Fragmentation

By Daniel Chen and Darrell Duffie

American Economic Review, July 2021

We model a simple market setting in which fragmentation of trade of the same asset across multiple exchanges improves allocative efficiency. Fragmentation reduces the inhibiting effect of price-impact avoidance on order submission. Although fragmentation ...

Security Transitions

By Thiemo Fetzer, Pedro C. L. Souza, Oliver Vanden Eynde, and Austin L. Wright

American Economic Review, July 2021

How do foreign powers disengage from a conflict? We study this issue by examining the recent, large-scale security transition from international troops to local forces in the ongoing civil conflict in Afghanistan. We construct a new dataset that combine...

The Economic Consequences of Bankruptcy Reform

By Tal Gross, Raymond Kluender, Feng Liu, Matthew J. Notowidigdo, and Jialan Wang

American Economic Review, July 2021

A more generous consumer bankruptcy system provides greater insurance against financial risks but may also raise the cost of credit. We study this trade-off using the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which increased t...

On Her Own Account: How Strengthening Women's Financial Control Impacts Labor Supply and Gender Norms

By Erica Field, Rohini Pande, Natalia Rigol, Simone Schaner, and Charity Troyer Moore

American Economic Review, July 2021

Can increasing control over earnings incentivize a woman to work, and thereby influence norms around gender roles? We randomly varied whether rural Indian women received bank accounts, training in account use, and direct deposit of public sector wages int...

Identity and the Economics of Organizations

[Symposium: Sociology and Economics]

By George A. Akerlof and Rachel E. Kranton

Journal of Economic Perspectives, Winter 2005

The economics of organizations is replete with the pitfalls of monetary rewards and punishments to motivate workers. If economic incentives do not work, what does? This paper proposes that workers' self-image as jobholders, coupled with their ideal as to ...

The Impact of Social Structure on Economic Outcomes

[Symposium: Sociology and Economics]

By Mark Granovetter

Journal of Economic Perspectives, Winter 2005

Ecologies of Organizations: Diversity and Identity

[Symposium: Sociology and Economics]

By Michael T. Hannan

Journal of Economic Perspectives, Winter 2005

A Sociological Perspective on Gender and Career Outcomes

[Symposium: Sociology and Economics]

By Barbara F. Reskin and Denise D. Bielby

Journal of Economic Perspectives, Winter 2005