Evil Is the Root of All Money

By Nobuhiro Kiyotaki and John Moore

American Economic Review, May 2002

The Impact of Extending Employment Protection to Agency Workers on Firms

By Alejandro Micco and Pablo Muñoz

American Economic Journal: Macroeconomics, January 2024

We study the impact of a reform that extended employment protection to temporary agency workers. Using a difference-in-difference research design, we show that plants more exposed to the regulation experienced a decrease in revenues and total employment, ...

Immigrant Communities and Knowledge Spillovers: Danish Americans and the Development of the Dairy Industry in the United States

By Nina Boberg-Fazlić and Paul Sharp

American Economic Journal: Macroeconomics, January 2024

Despite the growing literature on the impact of immigration, little is known about the role existing migrant settlements can play for knowledge transmission and the location of industry. We present a case that can illustrate this important mechanism and h...

Wage Rigidity and Employment Outcomes: Evidence from Administrative Data

By Gabriel Ehrlich and Joshua Montes

American Economic Journal: Macroeconomics, January 2024

This paper examines the relationship between downward nominal wage rigidity and employment outcomes using linked employer-employee data. Wage rigidity prevents 27.1 percent of counterfactual wage cuts, with a standard deviation of 19.2 percent across esta...

Homeownership and Portfolio Choice over the Generations

By Gonzalo Paz-Pardo

American Economic Journal: Macroeconomics, January 2024

Earnings are riskier and more unequal for households born in the 1960s and 1980s than for those born in the 1940s. Despite improvements in financial conditions, younger generations are less likely to be living in their own homes than older generations at ...

A Congestion Theory of Unemployment Fluctuations

By Yusuf Mercan, Benjamin Schoefer, and Petr Sedláček

American Economic Journal: Macroeconomics, January 2024

We propose a theory of unemployment fluctuations in which new hires and incumbent workers are imperfect substitutes. Hence, attempts to hire away the unemployed during recessions diminish the marginal product of new hires, discouraging job creation. This ...

Government Borrowing and Crowding Out

By Yasin Kürşat Önder, Sara Restrepo-Tamayo, Maria Alejandra Ruiz-Sanchez, and Mauricio Villamizar-Villegas

American Economic Journal: Macroeconomics, January 2024

We investigate the impact of fiscal expansions on firm investment by exploiting firms with multiple banking relationships. Further, we conduct a localized approach and compare the lending behavior of banks that barely met and missed the criteria of being ...

Scarred Consumption

By Ulrike Malmendier and Leslie Sheng Shen

American Economic Journal: Macroeconomics, January 2024

We show that prior lifetime experiences can "scar" consumers. Consumers who have lived through times of unemployment exhibit persistent pessimism about their future financial situation and spend significantly less years later, controlling for income, empl...

Firms' Precautionary Savings and Employment during a Credit Crisis

By Davide Melcangi

American Economic Journal: Macroeconomics, January 2024

Can the macroeconomic effects of credit supply shocks be large even when a small share of firms is credit constrained? I use UK firm-level accounting data to discipline a heterogeneous-firm model where the interaction between real and financial frictions ...

Assessing the Stabilizing Effects of Unemployment Benefit Extensions

By Alexey Gorn and Antonella Trigari

American Economic Journal: Macroeconomics, January 2024

We study the stabilizing role of benefit extensions. We develop a tractable quantitative model with heterogeneous agents, search frictions, and nominal rigidities. The model allows for a stabilizing aggregate demand channel and a destabilizing labor marke...

Adverse Selection Dynamics in Privately Produced Safe Debt Markets

By Nathan Foley-Fisher, Gary Gorton, and Stéphane Verani

American Economic Journal: Macroeconomics, January 2024

Privately produced safe debt is designed so that there is no adverse selection in trade. But in some macro states—here, the onset of the pandemic—it becomes profitable for some agents to produce private information, and then agents face adverse select...

Matching and Money

By Dean Corbae, Ted Temzelides, and Randall Wright

American Economic Review, May 2002

Chaotic Interest-Rate Rules

By Jess Benhabib, Stephanie Schmitt-Grohé, and Martín Uribe

American Economic Review, May 2002

Taylor Rules in a Model that Satisfies the Natural-Rate Hypothesis

By Charles T. Carlstrom and Timothy S. Fuerst

American Economic Review, May 2002

The Choice of an Inflation Target Range in a Small Open Economy

By Christopher J. Erceg

American Economic Review, May 2002

Front Matter

American Economic Review, February 2024

Distinguishing Common Ratio Preferences from Common Ratio Effects Using Paired Valuation Tasks

By Christina McGranaghan, Kirby Nielsen, Ted O'Donoghue, Jason Somerville, and Charles D. Sprenger

American Economic Review, February 2024

Without strong assumptions about how noise manifests in choices, we can infer little from existing empirical observations of the common ratio effect (CRE) about whether there exists an underlying common ratio preference (CRP). We propose to solve this inf...

The Immigrant Next Door

By Leonardo Bursztyn, Thomas Chaney, Tarek A. Hassan, and Aakaash Rao

American Economic Review, February 2024

We study how decades-long exposure to individuals of a given foreign descent shapes natives' attitudes and behavior toward that group. Using individualized donations data, we show that long-term exposure to a given foreign ancestry leads to more generous ...

The Nurture of Nature and the Nature of Nurture: How Genes and Investments Interact in the Formation of Skills

By Mikkel Aagaard Houmark, Victor Ronda, and Michael Rosholm

American Economic Review, February 2024

This paper studies the interplay between genetics and family investments in the process of skill formation. We model and estimate the joint evolution of skills and parental investments throughout early childhood. We document three genetic mechanisms: the ...

The Fed and Interest Rates - A High-Frequency Identification

By John H. Cochrane and Monika Piazzesi

American Economic Review, May 2002