Paging Inspector Sands: The Costs of Public Information

By Sacha Kapoor and Arvind Magesan

American Economic Journal: Economic Policy, February 2014

We exploit the introduction of pedestrian countdown signals—timers that indicate when traffic lights will change—to evaluate a policy that improves the information of all market participants. We find that although countdown signals reduce the numbe...

Do Fiscal Rules Matter?

By Veronica Grembi, Tommaso Nannicini, and Ugo Troiano

American Economic Journal: Applied Economics, July 2016

Fiscal rules are laws aimed at reducing the incentive to accumulate debt, and many countries adopt them to discipline local governments. Yet, their effectiveness is disputed because of commitment and enforcement problems. We study their impact applying a ...

Deciding When to Quit: Reference-Dependence over Slot Machine Outcomes

By Jaimie W. Lien and Jie Zheng

American Economic Review, May 2015

We conduct tests for reference dependent loss aversion using slot machine gamblers' decisions on when to quit playing for a visit to a casino. Evidence for a lagged status-quo reference point is found in the aggregate, while endogenously determined refere...

Ronald Coase and Methodology

By Richard A. Posner

Journal of Economic Perspectives, Fall 1993

Ronald Coase wrote two great theoretical articles that earned him the Nobel Prize: "The Nature of the Firm" in 1937 and "The Problem of Social Cost" in 1960. He also wrote many articles dealing with the methodology of economics, often in the setting of a ...

Great and Almost-Great Magnitudes in Economics

By Julian L. Simon

Journal of Economic Perspectives, Winter 1990

Which ratios and key magnitudes should an educated economist know? An inevitably personal selection is offered below. The list is presented in the form of a quiz to liven up the exercise of pondering them, and therefore a question mark follows each title....

Classroom Games: Understanding Bayes' Rule

By Charles A. Holt and Lisa R. Anderson

Journal of Economic Perspectives, Spring 1996

This paper uses the technique of experimental economics to set up a classroom situation where students learn to make Bayesian decisions. The exercises allow students to discover for themselves a natural counting heuristic that corresponds to Bayes's rule ...

Expected Revenue from Open and Sealed Bid Auctions

[Symposium: Auctions]

By John G. Riley

Journal of Economic Perspectives, Summer 1989

The first objective of this paper has been to explain why it is that expected seller revenue is the same under very different auction rules. The second objective has been to explain why revenue equivalence no longer holds once the central assumptions of r...

GARCH 101: The Use of ARCH/GARCH Models in Applied Econometrics

[Symposium: Econometric Tools]

By Robert Engle

Journal of Economic Perspectives, Fall 2001

ARCH and GARCH models have become important tools in the analysis of time series data, particularly in financial applications. These models are especially useful when the goal of the study is to analyze and forecast volatility. This paper gives the motiva...

Return of the Solow Paradox? IT, Productivity, and Employment in US Manufacturing

By Daron Acemoglu, David Autor, David Dorn, Gordon H. Hanson, and Brendan Price

American Economic Review, May 2014

An increasingly influential "technological-discontinuity" paradigm suggests that IT-induced technological changes are rapidly raising productivity while making workers redundant. This paper explores the evidence for this view among the IT-using US manufac...

The Impact of Affirmative Action Regulation and Equal Employment Law on Black Employment

[Symposium: The Economic Status of African-Americans]

By Jonathan S. Leonard

Journal of Economic Perspectives, Fall 1990

Was affirmative action successful in increasing employment opportunities for blacks? In this paper, affirmative action will refer to the provisions of Lyndon Johnson's Executive Order 11246 in 1965, as amended by Richard Nixon's Executive Order 11375 [3 C...

The Labor Market Status of Black Americans: 1939-1985

[Symposium: The Economic Status of African-Americans]

By Gerald D. Jaynes

Journal of Economic Perspectives, Fall 1990

Among the empirical changes in the labor maket status of black Americans since 1939, three stand out: 1) three decades of rapid progress followed by two decades of relative stagnation in many aggregate measures of relative black earnings and incomes; 2) d...

Why Does the Economy Fall to Pieces after a Financial Crisis?

[Symposium: Macroeconomics after the Financial Crisis]

By Robert E. Hall

Journal of Economic Perspectives, Fall 2010

The worst financial crisis in the history of the United States and many other countries started in 1929. The Great Depression followed. The second-worst struck in the fall of 2008 and the Great Recession followed. Commentators have dwelt endlessly on the ...

Incentives and Stability in Large Two-Sided Matching Markets

By Fuhito Kojima and Parag A. Pathak

American Economic Review, June 2009

A number of labor markets and student placement systems can be modeled as many-to-one matching markets. We analyze the scope for manipulation in many-to-one matching markets under the student-optimal stable mechanism when the number of participants is ...

The Causes and Costs of Misallocation

By Diego Restuccia and Richard Rogerson

Journal of Economic Perspectives, Summer 2017

Why do living standards differ so much across countries? A consensus in the development literature is that differences in productivity are a dominant source of these differences. But what accounts for productivity differences across countries? One explana...

Efficient Pollution Regulation: Getting the Prices Right: Comment

By Art Fraas and Randall Lutter

American Economic Review, February 2012

The cost-effectiveness of cap-and-trade emissions regulations has become widely accepted. A 2009 proposal by Muller and Mendelsohn would replace conventional ton-for-ton trading with trading based on estimates of marginal damages by pollutant and by sour...

Yours, Mine, and Ours: Do Divorce Laws Affect the Intertemporal Behavior of Married Couples?

By Alessandra Voena

American Economic Review, August 2015

This paper examines how divorce laws affect couples' intertemporal choices and well-being. Exploiting panel variation in US laws, I estimate the parameters of a model of household decision-making. Household survey data indicate that the introduction of un...

Are Women More Credit Constrained? Experimental Evidence on Gender and Microenterprise Returns

By Suresh de Mel, David McKenzie, and Christopher Woodruff

American Economic Journal: Applied Economics, July 2009

We report on a field experiment providing random grants to microenterprise owners. The grants generated large profit increases for male owners but not for female owners. We show that the gender gap does not simply mask differences in ability, risk aver...

Financing Innovation: Evidence from R&D Grants

By Sabrina T. Howell

American Economic Review, April 2017

Governments regularly subsidize new ventures to spur innovation. This paper conducts the first large-sample, quasi-experimental evaluation of R&D subsidies. I use data on ranked applicants to the US Department of Energy's SBIR grant program. An early-...

Put Your Money Where Your Butt Is: A Commitment Contract for Smoking Cessation

By Xavier Giné, Dean Karlan, and Jonathan Zinman

American Economic Journal: Applied Economics, October 2010

We designed and tested a voluntary commitment product to help smokers quit smoking. The product (CARES) offered smokers a savings account in which they deposit funds for six months, after which they take a urine test for nicotine and cotinine. If they pas...

Do Taxpayers Bunch at Kink Points?

By Emmanuel Saez

American Economic Journal: Economic Policy, August 2010

This paper uses tax return data to analyze bunching at the kink points of the US income tax schedule. We estimate the compensated elasticity of reported income with respect to (one minus) the marginal tax rate using bunching evidence. We find clear eviden...