Inefficient Water Pricing and Incentives for Conservation

By Ujjayant Chakravorty, Manzoor H. Dar, and Kyle Emerick

American Economic Journal: Applied Economics, January 2023

Farmers often buy water using fixed fees—rather than with marginal prices. We use two randomized controlled trials in Bangladesh to study the relationship between marginal prices, adoption of a water-saving technology, and water usage. Our first experim...

High School Majors and Future Earnings

By Gordon B. Dahl, Dan-Olof Rooth, and Anders Stenberg

American Economic Journal: Applied Economics, January 2023

We study how high school majors affect adult earnings using a regression discontinuity design. In Sweden students are admitted to majors in tenth grade based on their preference rankings and ninth grade GPA. We find engineering, natural science, and busin...

The Effects of Working While in School: Evidence from Employment Lotteries

By Thomas Le Barbanchon, Diego Ubfal, and Federico Araya

American Economic Journal: Applied Economics, January 2023

Does working while in school smooth students' transition into the labor market? We provide evidence on this question by leveraging a one-year work-study program that randomized job offers among over 90,000 student applicants in Uruguay. Program rules forb...

The Employee Costs of Corporate Debarment in Public Procurement

By Christiane Szerman

American Economic Journal: Applied Economics, January 2023

This paper studies an anticorruption policy—corporate debarment, or blacklisting—to understand how disclosing illicit corporate practices and the sanctions for these practices affect firm and worker outcomes. Exploiting a policy change in Brazil that ...

The Economic Incidence of Wildfire Suppression in the United States

By Patrick Baylis and Judson Boomhower

American Economic Journal: Applied Economics, January 2023

This study measures the degree to which public expenditures on wildfire protection subsidize development in harm's way. We use administrative data on firefighting expenditures to measure the causal effect of nearby homes on the amount spent to extinguish ...

Wage Stagnation and the Decline of Standardized Pay Rates, 1974–1991

By Maxim Massenkoff ⓡ Nathan Wilmers

American Economic Journal: Applied Economics, January 2023

Using new establishment-by-occupation microdata, we show that the use of discretionary wage setting significantly expanded in the 1970s and 1980s. Increasingly, wages for blue-collar workers were not standardized by job title or seniority but instead subj...

Front Matter

American Economic Journal: Macroeconomics, January 2023

Anchored Inflation Expectations

By Carlos Carvalho, Stefano Eusepi, Emanuel Moench, and Bruce Preston

American Economic Journal: Macroeconomics, January 2023

We develop a theory of low-frequency movements in inflation expectations, and use it to interpret joint dynamics of inflation and inflation expectations for the United States and other countries over the postwar period. In our theory, long-run inflation e...

Firm Entry and Exit and Aggregate Growth

By Jose Asturias, Sewon Hur, Timothy J. Kehoe, and Kim J. Ruhl

American Economic Journal: Macroeconomics, January 2023

Applying the Foster, Haltiwanger, and Krizan (2001) decomposition to plant-level manufacturing data from Chile and Korea, we find that the entry and exit of plants account for a larger fraction of aggregate productivity growth during periods of fast GDP g...

On The Politics of Property Rights by Haber, Razo, and Maurer

By Robert H. Bates

Journal of Economic Literature, June 2004

Stephen Haber et al. explore economic growth in key sectors of the Mexican economy, 1876-1929, an era of political instability and (1914-17) civil war. The authors demonstrate that economic growth continued amidst political instability and offer an explan...

Learning about Debt Crises

By Radoslaw Paluszynski

American Economic Journal: Macroeconomics, January 2023

The European debt crisis presents a challenge to our understanding of the relationship between government bond yields and economic fundamentals. I argue that information frictions are an important missing element and support that claim with evidence on th...

Uncovering the Effects of the Zero Lower Bound with an Endogenous Financial Wedge

By Dan Cao, Wenlan Luo, and Guangyu Nie

American Economic Journal: Macroeconomics, January 2023

We study the effects of the zero lower bound (ZLB) on the severity of financial crises using an incomplete markets New Keynesian model with two occasionally binding constraints: a ZLB on the nominal interest rate and a borrowing constraint tied to an asse...

Robust Predictions for DSGE Models with Incomplete Information

By Ryan Chahrour and Robert Ulbricht

American Economic Journal: Macroeconomics, January 2023

We provide predictions for DSGE models with incomplete information that are robust across information structures. Our approach maps an incomplete-information model into a full-information economy with time-varying expectation wedges and provides condition...

The Government Spending Multiplier in a Multisector Economy

By Hafedh Bouakez, Omar Rachedi, and Emiliano Santoro

American Economic Journal: Macroeconomics, January 2023

We study the effects of aggregate government spending shocks in a production network economy where sectors differ in their price rigidity, factor intensities, use of intermediate inputs, and contribution to final demand. The model implies an aggregate val...

Skilled Labor Productivity and Cross-Country Income Differences

By Lutz Hendricks and Todd Schoellman

American Economic Journal: Macroeconomics, January 2023

This paper revisits the question of how allowing for imperfect substitution among workers with different skill levels affects the results of development accounting. We consider a range of models that nest the approaches in the literature and calibrate the...

Women, Wealth Effects, and Slow Recoveries

By Masao Fukui, Emi Nakamura, and Jón Steinsson

American Economic Journal: Macroeconomics, January 2023

Business cycle recoveries have slowed in recent decades. This slow-down comes entirely from female employment, as women's employment rates converged toward men's during the past half-century. But does the slowdown in the growth of female employment rates ...

Consumption Heterogeneity: Micro Drivers and Macro Implications

By Edmund Crawley and Andreas Kuchler

American Economic Journal: Macroeconomics, January 2023

We document heterogeneity in the marginal propensity to consume (MPC) across household characteristics relevant to understanding heterogeneous agent models and monetary policy transmission. We find a strong negative relationship between household liquid w...

Assessing the Gains from E-Commerce

By Paul Dolfen, Liran Einav, Peter J. Klenow, Benjamin Klopack, Jonathan D. Levin, Larry Levin, and Wayne Best

American Economic Journal: Macroeconomics, January 2023

E-commerce represents a rapidly growing share of consumer spending in the United States. We use transactions-level data on credit and debit cards from Visa, Inc. between 2007 and 2017 to quantify the resulting consumer surplus. We estimate e-commerce reac...

Fiscal Policy, Relative Prices, and Net Exports in a Currency Union

By Luisa Lambertini and Christian Proebsting

American Economic Journal: Macroeconomics, January 2023

The hoped-for silver lining of euro-area austerity programs was to raise external competitiveness and improve current accounts. Using product- and industry-level data for 12 countries over the period 1999–2018, we show that reductions in government spen...

House Prices and Consumption: A New Instrumental Variables Approach

By James Graham and Christos A. Makridis

American Economic Journal: Macroeconomics, January 2023

We introduce a novel Bartik-like instrument for house prices consisting of the local composition of housing characteristics interacted with aggregate changes in the marginal prices of these characteristics. Using household-level panel data, we estimate el...