Cash Distributions to Shareholders

By Laurie Simon Bagwell and John B. Shoven

Journal of Economic Perspectives, Summer 1989

Economists have long been puzzled by why firms pay dividends when alternative methods of rewarding shareholders and financiers exist which involve less taxes. This paper will highlight the fact that firms can distribute cash to equity holders in ways more...

The Wind of Change: Maritime Technology, Trade, and Economic Development

By Luigi Pascali

American Economic Review, September 2017

The 1870-1913 period marked the birth of the first era of trade globalization. How did this tremendous increase in trade affect economic development? This work isolates a causality channel by exploiting the fact that the introduction of the steamship in t...

The Sky Is Not Flat: How Discriminatory Is the Access to International Air Services?

By Roberta Piermartini and Linda Rousová

American Economic Journal: Economic Policy, August 2013

Using information on 2,300 Air Services Agreements covering 184 countries, we investigate the impact of air services liberalization on passenger flows. We find that a certain level of liberalization is required to have a positive effect on passenger traff...

Altruism and the Child Cycle of Alumni Donations

By Jonathan Meer and Harvey S. Rosen

American Economic Journal: Economic Policy, February 2009

We study alumni contributions to an anonymous research university. If alumni believe donations will increase the likelihood of their child's admission, and if this belief helps motivate their giving, then the pattern of giving should vary systematicall...

Incentives Work: Getting Teachers to Come to School

By Esther Duflo, Rema Hanna, and Stephen P. Ryan

American Economic Review, June 2012

We use a randomized experiment and a structural model to test whether monitoring and financial incentives can reduce teacher absence and increase learning in India. In treatment schools, teachers' attendance was monitored daily using cameras, and their sa...

How Effective Are Capital Controls?

[Symposium: Global Financial Instability]

By Sebastian Edwards

Journal of Economic Perspectives, Fall 1999

A number of authors have recently argued that, in order to avoid financial instability, emerging countries should rely on capital controls. Two type of controls have been considered: controls on capital outflows, and controls on capital inflows. In this p...

The Nature of Credit Constraints and Human Capital

By Lance J. Lochner and Alexander Monge-Naranjo

American Economic Review, October 2011

We develop a human capital model with borrowing constraints explicitly derived from government student loan (GSL) programs and private lending under limited commitment. The model helps explain the persistent strong positive correlation between ability and...

The Trouble With Electricity Markets: Understanding California's Restructuring Disaster

By Severin Borenstein

Journal of Economic Perspectives, Winter 2002

In June 2000, after two years of fairly smooth operation, California's deregulated wholesale electricity market began producing extremely high prices and threats of supply shortages. The upheaval demonstrated dramatically why most current electricity mark...

Evaluating the Medical Malpractice System and Options for Reform

[Symposium: Constraining Healthcare Costs]

By Daniel P. Kessler

Journal of Economic Perspectives, Spring 2011

The U.S. medical malpractice liability system has two principal objectives: to compensate patients who are injured through the negligence of healthcare providers and to deter providers from practicing negligently. In practice, however, the system is slow ...

Value-Added Taxes, Chain Effects, and Informality

By Áureo de Paula and Jose A. Scheinkman

American Economic Journal: Macroeconomics, October 2010

We present an equilibrium model of tax avoidance and test its implications using a survey of firms in Brazil. In the model, the credit method used to collect value-added tax (VAT) creates informality chains-clients or suppliers of informal firms are more ...

Auctions as an Allocation Mechanism in Academia: The Case of Faculty Offices

[Symposium: Auctions]

By William J. Boyes and Stephen K. Happel

Journal of Economic Perspectives, Summer 1989

A six-story addition to Arizona State University's College of Business was completed in 1983, causing entire departments to be uprooted and relocated. Faculty offices had to be reassigned as a result. What seemed to be a trivial problem, the allocation of...

How Longer Work Lives Ease the Crunch of Population Aging

[Symposium: Retirement and Work Choices]

By Nicole Maestas and Julie Zissimopoulos

Journal of Economic Perspectives, Winter 2010

Population aging is not a looming crisis of the future -- it is already here. Economic challenges arise when the increase in people surviving to old age and the decline in the number of young people alive to support them cause the growth in society's cons...

Replication, Meta-analysis, and Research Synthesis in Economics

By Richard G. Anderson and Areerat Kichkha

American Economic Review, May 2017

Replicability is essential to assure the scientific integrity of empirical economic research. Some authors have suggested metadata analysis as a complementary tool. This suggestion must be addressed with caution. Empirical studies in most of economics are...

Organizing to Adapt and Compete

By Ricardo Alonso, Wouter Dessein, and Niko Matouschek

American Economic Journal: Microeconomics, May 2015

We examine the relationship between the organization of a multi-divisional firm and its ability to adapt production decisions to changes in the environment. We show that even if lower-level managers have superior information about local conditions, and in...

Tax Reform: Theory and Practice

[Symposium: Tax Reform]

By Joseph A. Pechman

Journal of Economic Perspectives, Summer 1987

The Tax Reform Act of 1986 is the most significant piece of tax legislation enacted since the income tax was converted to a mass tax during World War II. After decades of erosion, the individual and corporate income tax bases were broadened and the revenu...

Worker Heterogeneity and Endogenous Separations in a Matching Model of Unemployment Fluctuations

By Mark Bils, Yongsung Chang, and Sun-Bin Kim

American Economic Journal: Macroeconomics, January 2011

We model worker heterogeneity in the rents from being employed in a Diamond-Mortensen-Pissarides model of matching and unemployment. We show that heterogeneity, reflecting differences in match quality and worker assets, reduces the extent of fluctuations ...

On the Evolution of Firm Size Distributions

By Paolo Angelini and Andrea Generale

American Economic Review, March 2008

We study the impact of financial constraints on firm size distribution (FSD). We find that financially constrained firms, identified using various proxies, are smaller than the others (their FSD is more skewed to the right). However, among OECD countries,...

Crime, the Criminal Justice System, and Socioeconomic Inequality

[Symposium: Inequality Beyond Income]

By Magnus Lofstrom and Steven Raphael

Journal of Economic Perspectives, Spring 2016

Crime rates in the United States have declined to historical lows since the early 1990s. Prison and jail incarceration rates as well as community correctional populations have increased greatly since the mid-1970s. Both of these developments have disprop...

Man-Bites-Dog Business Cycles

By Kristoffer P. Nimark

American Economic Review, August 2014

The newsworthiness of an event is partly determined by how unusual it is and this paper investigates the business cycle implications of this fact. Signals that are more likely to be observed after unusual events may increase both uncertainty and disagreem...

Exchange Asymmetries Incorrectly Interpreted as Evidence of Endowment Effect Theory and Prospect Theory?

By Charles R. Plott and Kathryn Zeiler

American Economic Review, September 2007

Systematic asymmetries in exchange behavior have been widely interpreted as support for "endowment effect theory," an application of prospect theory positing that loss aversion and utility function kinks set by entitlements explain observed asymmetries. W...