Front Matter

American Economic Review: Insights, December 2021

The Tax Elasticity of Capital Gains and Revenue-Maximizing Rates

By Ole Agersnap and Owen Zidar

American Economic Review: Insights, December 2021

This paper uses a direct-projections approach to estimate the effect of capital gains taxation on realizations at the state level and then develops a framework for determining revenue-maximizing rates at the federal level. We find that the elasticity of r...

Cheating with Models

By Kfir Eliaz, Ran Spiegler, and Yair Weiss

American Economic Review: Insights, December 2021

Beliefs and decisions are often based on confronting models with data. What is the largest "fake" correlation that a misspecified model can generate, even when it passes an elementary misspecification test? We study an "analyst" who fits a model, represen...

Do Women Respond Less to Performance Pay? Building Evidence from Multiple Experiments

By Oriana Bandiera, Greg Fischer, Andrea Prat, and Erina Ytsma

American Economic Review: Insights, December 2021

Existing empirical work raises the hypothesis that performance pay—whatever its output gains—may widen the gender earnings gap because women may respond less to incentives. We evaluate this possibility by aggregating evidence from existing experiments...

Policy Watch: Reform of the U.S. Postal Service

By R. Richard Geddes

Journal of Economic Perspectives, Summer 2005

The author first reviews the current structure and regulation of the U.S. Postal Service. He then discusses the changing size and composition of the U.S. mail stream. Many other countries have already undertaken comprehensive postal reform, including both...

Allocation Mechanisms without Reduction

By David Dillenberger and Uzi Segal

American Economic Review: Insights, December 2021

We study a simple variant of the house allocation problem (one-sided matching). We demonstrate that agents with recursive preferences may systematically prefer one allocation mechanism to the other, even among mechanisms that are considered to be the same...

Long-Term Effects of the Targeting the Ultra Poor Program

By Abhijit Banerjee, Esther Duflo, and Garima Sharma

American Economic Review: Insights, December 2021

This paper studies the long-run effects of a "big-push" program providing a large asset transfer to the poorest Indian households. In a randomized controlled trial that follows these households over ten years, we find positive effects on consumption (0.6 ...

Optimal Targeted Lockdowns in a Multigroup SIR Model

By Daron Acemoglu, Victor Chernozhukov, Iván Werning, and Michael D. Whinston

American Economic Review: Insights, December 2021

We study targeted lockdowns in a multigroup SIR model where infection, hospitalization, and fatality rates vary between groups—in particular between the "young," the "middle-aged," and the "old." Our model enables a tractable quantitative analysis of op...

Optimal Lockdown in a Commuting Network

By Pablo D. Fajgelbaum, Amit Khandelwal, Wookun Kim, Cristiano Mantovani, and Edouard Schaal

American Economic Review: Insights, December 2021

We study optimal dynamic lockdowns against COVID-19 within a commuting network. Our framework integrates canonical spatial epidemiology and trade models and is applied to cities with varying initial viral spread: Seoul, Daegu, and the New York City metrop...

Teenage Driving, Mortality, and Risky Behaviors

By Jason Huh and Julian Reif

American Economic Review: Insights, December 2021

We investigate the effect of teenage driving on mortality and risky behaviors in the United States using a regression discontinuity design. We estimate that total mortality rises by 5.84 deaths per 100,000 (15 percent) at the minimum legal driving age cut...

Recommendations for Further Reading

By Timothy Taylor

Journal of Economic Perspectives, Summer 2005

Comments

Journal of Economic Perspectives, Summer 2005

Front Matter

Journal of Economic Literature, December 2021

Forecasting in the Presence of Instabilities: How We Know Whether Models Predict Well and How to Improve Them

By Barbara Rossi

Journal of Economic Literature, December 2021

This article provides guidance on how to evaluate and improve the forecasting ability of models in the presence of instabilities, which are widespread in economic time series. Empirically relevant examples include predicting the financial crisis of 2007...

A Survey on Income Inequality in China

By Junsen Zhang

Journal of Economic Literature, December 2021

After China's recent great success in eliminating absolute poverty, addressing relative income inequality becomes a more important issue. This survey finds that income inequality rapidly increased in the first three decades since 1978 but stabilized and s...

Mass Atrocities and Their Prevention

By Charles H. Anderton and Jurgen Brauer

Journal of Economic Literature, December 2021

Counting conservatively, data show about 100 million mass atrocity-related deaths since 1900. A distinct empirical phenomenon, mass atrocities are events of enormous scale, severity, and brutality, occur in wartime and in peacetime, are geographically w...

Ten Years of Evidence: Was Fraud a Force in the Financial Crisis?

By John M. Griffin

Journal of Economic Literature, December 2021

This article synthesizes the large literature regarding the role of various players in residential mortgage-backed securities (RMBS) securitization at the center of the 2008–09 US housing and financial crisis. Underwriting banks facilitated wide-scale...

The Human Tide: A Review Essay

By Timothy W. Guinnane

Journal of Economic Literature, December 2021

The Human Tide: How Population Shaped the Modern World, by Paul Morland, argues for the importance of demography in both historical events and our current situation. Intended for a general audience, the book traces demographic developments from...

Book Review: The Great Reversal by Thomas Philippon

By Jan Eeckhout

Journal of Economic Literature, December 2021

Thomas Philippon's The Great Reversal: How America Gave Up on Free Markets is a remarkable piece of research that draws our attention to a timely and relevant issue: the rise of market power and its macroeconomic implications. The book document...

"Somewhere in the Middle You Can Survive": Review of The Narrow Corridor by Daron Acemoglu and James Robinson

By Avinash Dixit

Journal of Economic Literature, December 2021

This article reviews Daron Acemoglu and James Robinson's book The Narrow Corridor. They depict a constant tussle between "society," which wants liberty but cannot sustain order, and "state," which maintains order but grows oppressive. I argue tha...