Debt Financing in Asset Markets

By Zhiguo He and Wei Xiong

American Economic Review, May 2012

We study rollover risk and collateral value in a dynamic asset pricing model with endogenous debt financing by extending the framework of Geanakoplos (2009) with a generic binomial tree and time-varying heterogeneous beliefs. Optimistic borrowers face rol...

A Behavioral Analysis of Stochastic Reference Dependence

By Yusufcan Masatlioglu and Collin Raymond

American Economic Review, September 2016

We examine the reference-dependent risk preferences of Koszegi and Rabin (2007), focusing on their choice-acclimating personal equilibria. Although their model has only a trivial intersection (expected utility) with other reference-dependent models, it ha...

Imported Inputs and Productivity

By László Halpern, Miklós Koren, and Adam Szeidl

American Economic Review, December 2015

We estimate a model of importers in Hungarian microdata and conduct counterfactual analysis to investigate the effect of imported inputs on productivity. We find that importing all input varieties would increase a firm's revenue productivity by 22 percent...

Redistribution and Social Insurance

By Mikhail Golosov, Maxim Troshkin, and Aleh Tsyvinski

American Economic Review, February 2016

We study optimal redistribution and insurance in a life-cycle economy with private idiosyncratic shocks. We characterize Pareto optima, show the forces determining optimal labor distortions, and derive closed form expressions for their limiting behavior. ...

A Representative Consumer Theory of Distribution

By Francesco Caselli and Jaume Ventura

American Economic Review, September 2000

This paper introduces various sources of consumer heterogeneity in one-sector representative consumer (RC) growth models and develops tools to study the evolution of the distribution of consumptions, assets, and incomes. These tools are applied to the Ram...

The Effects of State Medicaid Expansions for Working-Age Adults on Senior Medicare Beneficiaries

By Melissa McInerney, Jennifer M. Mellor, and Lindsay M. Sabik

American Economic Journal: Economic Policy, August 2017

Do Medicaid expansions to working-age adults affect healthcare spending and utilization among older Medicare beneficiaries? Although economic theory provides conflicting predictions about the presence and direction of such spillover effects, it does ident...

The Phillips Curve, the Persistence of Inflation, and the Lucas Critique: Evidence from Exchange-Rate Regimes: Comment

By Clemens J. M. Kool and Alex Lammertsma

American Economic Review, March 2000

Why Organizations Fail: Models and Cases

By Luis Garicano and Luis Rayo

Journal of Economic Literature, March 2016

Organizations fail due to incentive problems (agents do not want to act in the organization's interests) and bounded rationality problems (agents do not have the necessary information to do so). This survey uses recent advances in organizational economics...

Long-Run Risk Is the Worst-Case Scenario

By Rhys Bidder and Ian Dew-Becker

American Economic Review, September 2016

We study an investor who is unsure of the dynamics of the economy. Not only are parameters unknown, but the investor does not even know what order model to estimate. She estimates her consumption process nonparametrically--allowing potentially infinite-or...

Are Cities Dying?

[Symposium: Urban Agglomeration]

By Edward L. Glaeser

Journal of Economic Perspectives, Spring 1998

This paper organizes a discussion of the costs and benefits of cities around the question: Are cities becoming obsolete? While minimizing transport costs for manufactured goods no longer justifies the existence of cities, they still facilitate the divisio...

Research on Teaching Economics to Undergraduates

By Sam Allgood, William B. Walstad, and John J. Siegfried

Journal of Economic Literature, June 2015

This survey summarizes the main research findings about teaching economics to undergraduates. After briefly reviewing the history of research on undergraduate economic education, it discusses the status of the economics major numbers and trends, goals, co...

Forty Years of Oil Price Fluctuations: Why the Price of Oil May Still Surprise Us

[Symposium: Oil and Gas Markets]

By Christiane Baumeister and Lutz Kilian

Journal of Economic Perspectives, Winter 2016

It has been 40 years since the oil crisis of 1973/74. This crisis has been one of the defining economic events of the 1970s and has shaped how many economists think about oil price shocks. In recent years, a large literature on the economic determinants o...

Profit with Purpose? A Theory of Social Enterprise

By Timothy Besley and Maitreesh Ghatak

American Economic Journal: Economic Policy, August 2017

When social benefits cannot be measured, an organization that selects managers based on pro-social motivation can be used to balance profits with a social purpose. This paper develops a model of social enterprise based on selection of citizen-managers to ...

Implications of the U.S. Current Account Deficit

By David H. Howard

Journal of Economic Perspectives, Fall 1989

In 1988, the United States recorded a deficit of about $135 billion on the current account of its balance of payments with the rest of the world. This paper presents an analytical framework for thinking about the current account deficit, explores causes o...

Discrepancies in International Data: An Application to China-Hong Kong Entrepot Trade

By Robert C. Feenstra, Wen Hai, Wing T. Woo, and Shunli Yao

American Economic Review, May 1999

Overlapping Generations: The First Jubilee

By Philippe Weil

Journal of Economic Perspectives, Fall 2008

Paul Samuelson's (1958) overlapping generations model has turned 50. Seldom has so simple a model been so influential. The paper, in spite of its ripe age, still elicits wonder. Starting from the uncontroversial observation that "we live in a world where ...

Market Impacts of a Nuclear Power Plant Closure

By Lucas Davis and Catherine Hausman

American Economic Journal: Applied Economics, April 2016

Falling revenues and rising costs have put US nuclear plants in financial trouble, and some threaten to close. To understand the potential private and social consequences, we examine the abrupt closure of the San Onofre Nuclear Generating Station (SONGS) ...

The Economics of Rights: Does the Right to Counsel Increase Crime?

By Itai Ater, Yehonatan Givati, and Oren Rigbi

American Economic Journal: Economic Policy, May 2017

We examine the broad consequences of the right to counsel by exploiting a legal reform in Israel that extended the right to publicly provided legal counsel to suspects in arrest proceedings. Using the staggered regional rollout of the reform, we find that...

Recovery from Financial Crises: Evidence from 100 Episodes

By Carmen M. Reinhart and Kenneth S. Rogoff

American Economic Review, May 2014

We examine the evolution of real per capita GDP around 100 systemic banking crises. Part of the costs of these crises owes to the protracted nature of recovery. On average, it takes about 8 years to reach the pre-crisis level of income; the median is abou...

Survey Measures of Expected U.S. Inflation

By Lloyd B. Thomas

Journal of Economic Perspectives, Fall 1999

The forecasting performance of widely accessible surveys of expected inflation are evaluated against naive and financial market benchmark forecasts. In the period of rising inflation (1960-80), the Michigan household consensus forecasts exhibited smaller ...