Financial Regulatory Reform: Challenges Ahead

By Randall S. Kroszner and Philip E. Strahan

American Economic Review, May 2011

Today's financial system is dominated by markets with institutions connected by short-term financing, securitization, derivatives, and other means. Yet regulations have focused on depositories, leaving regulators unprepared for the 2008 crisis. We suggest...

Herd Behavior in a Laboratory Financial Market

By Marco Cipriani and Antonio Guarino

American Economic Review, December 2005

We study herd behavior in a laboratory financial market. Subjects receive private information on the fundamental value of an asset and trade it in sequence with a market maker. The market maker updates the asset price according to the history of trades. T...

Health, Human Capital, and Life Cycle Labor Supply

By Charles Hokayem and James P. Ziliak

American Economic Review, May 2014

We use new PSID data on consumption and health, along with information on annual sick time, to estimate a structural labor supply model that incorporates a health capital stock with the traditional human capital learning-by-doing model. The estimates show...

The Modigliani-Miller Propositions after Thirty Years

By Merton H. Miller

Journal of Economic Perspectives, Fall 1988

This issue of the Journal of Economic Perspectives appears on the 30th anniversary of the Modigliani-Miller propositions in "The Cost of Capital, Corporation Finance and the Theory of Investment," published in the American Economic Review, June 1958. The ...

Why Don't We See Poverty Convergence?

By Martin Ravallion

American Economic Review, February 2012

Average living standards are converging among developing countries and faster growing economies see more progress against poverty. Yet we do not find poverty convergence; countries starting with higher poverty rates do not see higher proportionate rates o...

The Political Economy of the European Economic and Monetary Union: Political Sources of an Economic Liability

[Symposium: EMU]

By Martin Feldstein

Journal of Economic Perspectives, Fall 1997

EMU would be an economic liability. A single currency would cause, at most, small trade and investment gains but would raise average cyclical unemployment and possibly raise inflation, perpetuate structural unemployment, and increase the risk of protectio...

R&D Investments, Exporting, and the Evolution of Firm Productivity

By Bee Yan Aw, Mark J. Roberts, and Daniel Yi Xu

American Economic Review, May 2008

Full Implementation and Belief Restrictions

By Mariann Ollár and Antonio Penta

American Economic Review, August 2017

Multiplicity of equilibria and the dependence on strong common knowledge assumptions are well-known problems in mechanism design. We address them by studying full implementation via transfer schemes, under general restrictions on agents' beliefs. We show ...

Credible Commitment to Optimal Escape from a Liquidity Trap: The Role of the Balance Sheet of an Independent Central Bank

By Olivier Jeanne and Lars E. O. Svensson

American Economic Review, March 2007

Central banks target CPI inflation; independent central banks are concerned about their balance sheet and the level of their capital. The first fact makes it difficult for a central bank to implement the optimal escape from a liquidity trap, because it un...

The Swing Voter's Curse: Comment

By Mark Fey and Jaehoon Kim

American Economic Review, September 2002

Choice and Matching

By Christopher P. Chambers and M. Bumin Yenmez

American Economic Journal: Microeconomics, August 2017

We study path-independent choice rules applied to a matching context. We use a classic representation of these choice rules to introduce a powerful technique for matching theory. Using this technique, we provide a deferred acceptance algorithm for many-to...

Age-Dependent Payoffs and Assortative Matching by Age in a Market with Search

By Anja Sautmann

American Economic Journal: Microeconomics, May 2017

This paper considers a matching market with two-sided search and transferable utility where match payoffs depend on age at marriage (time until match) and search is finite. We define and prove existence of equilibrium, and provide sufficient conditions fo...

The Gender Gap in Wages, circa 2000

By June O'Neill

American Economic Review, May 2003

Gibrat's Law for (All) Cities: Comment

By Moshe Levy

American Economic Review, September 2009

Jan Eeckhout (2004) reports that the empirical city size distribution is lognormal, consistent with Gibrat's Law. We show that for the top 0.6 percent of the largest cities, the empirical distribution is dramatically different from the lognormal, and foll...

Women, Wealth, and Mobility

By Lena Edlund and Wojciech Kopczuk

American Economic Review, March 2009

Using estate tax returns data, we observe that the share of women among the very wealthy in the United States peaked in the late 1960s at nearly one-half and then declined to one-third. We argue that this pattern reflects changes in the importance of d...

The Parallel-Currency Approach to Asian Monetary Integration

By Barry Eichengreen

American Economic Review, May 2006

Organizational Fragmentation and Care Quality in the U.S. Healthcare System

[Symposium: Health Care]

By Randall D. Cebul, James B. Rebitzer, Lowell J. Taylor, and Mark E. Votruba

Journal of Economic Perspectives, Fall 2008

Many goods and services can be readily provided through a series of unconnected transactions, but in health care, close coordination over time and within care episodes improves both health outcomes and efficiency. Close coordination is problematic in the ...

Saying no to energy savings

[Research Highlight]

December 01, 2017

Economics is helping to explain the energy-efficiency gap.

Exchange Rates and Wages in an Integrated World

By Prachi Mishra and Antonio Spilimbergo

American Economic Journal: Macroeconomics, October 2011

We analyze how the pass-through from exchange rate to domestic wages depends on the degree of integration between domestic and foreign labor markets. Using data from 66 countries over the period 1981-2005, we find that the elasticity of domestic wages to ...

Separating Bayesian Updating from Non-Probabilistic Reasoning: An Experimental Investigation

By Dan Levin, James Peck, and Asen Ivanov

American Economic Journal: Microeconomics, May 2016

Through a series of decision tasks involving colored cards, we provide separate measures of Bayesian updating and non-probabilistic reasoning skills. We apply these measures to (and are the first to study) a common-value Dutch auction. This format is m...