Surplus Maximization and Optimality

By Edward E. Schlee

American Economic Review, October 2013

Expected consumer's surplus rarely represents preferences over price lotteries. Still, I give sufficient conditions for policies which maximize aggregate expected surplus to be interim Pareto Optimal. Besides two standard partial equilibrium conditions, I...

Bargaining in Stationary Networks

By Mihai Manea

American Economic Review, August 2011

We study an infinite horizon game in which pairs of players connected in a network are randomly matched to bargain. Players who reach agreement are replaced by new players at the same positions in the network. We show that all equilibria are payoff equiva...

Vertical Control of Price and Inventory

By Harish Krishnan and Ralph A. Winter

American Economic Review, December 2007

This paper offers a simple approach to the theory of decentralizing inventory and pricing decisions along a supply chain. We consider an upstream manufacturer selling to two outlets, which compete as differentiated duopolists and face uncertain demand....

What Do College Seniors Know about Economics?

By William B. Walstad and Sam Allgood

American Economic Review, May 1999

An Interpretation of Recent Research on Exchange Rate Target Zones

By Lars E. O. Svensson

Journal of Economic Perspectives, Fall 1992

How do exchange rate bands work compared to completely fixed rates (between realignments); or, more precisely, what are the dynamics of exchange rates, interest rates, and central bank interventions within exchange rate bands? Does the difference between ...

Recommendations for Further Reading

By Bernard Saffran

Journal of Economic Perspectives, Fall 1999

Corrigendum: Emerging Market Currency Excess Returns

By Stephen Gilmore and Fumio Hayashi

American Economic Journal: Macroeconomics, January 2012

Puzzles: Blockades, Carrier Missions, Secret Intelligence, and More

By Barry Nalebuff

Journal of Economic Perspectives, Fall 1988

As usual, this feature begins with several speed puzzles; answers can be found at the end of the problems. Following is one longer puzzle for which readers are challenged to submit their own answer. The puzzles in this issue focus on everything from diver...

Global Financial Crisis and Africa: Is the Impact Permanent or Transitory? Time Series Evidence from North Africa

By Hassan Y. Aly and Mark C. Strazicich

American Economic Review, May 2011

We utilize time series tests with structural breaks to test for an adverse impact on economic growth rates in North Africa associated with the recent US financial crisis and global recession. One or two breaks are identified for each country, except for M...

The Structure of Tariffs and Long-Term Growth

By Nathan Nunn and Daniel Trefler

American Economic Journal: Macroeconomics, October 2010

We show that the "skill bias" of a country's tariff structure is positively correlated with long-term per capita GDP growth. Testing for causal mechanisms, we find evidence consistent with the existence of real benefits from tariffs focused in skill-inte...

The Role of Intergenerational Transfers and Life Cycle Saving in the Accumulation of Wealth

[Symposium: Explaining Savings]

By Franco Modigliani

Journal of Economic Perspectives, Spring 1988

The purpose of this paper is to review what economists know at present about the following question: How large a portion of the existing wealth is the result of a bequest motive, that is, of accumulation for the specific purpose of leaving bequests? But ...

Learning from Others' HIV Testing: Updating Beliefs and Responding to Risk

By Susan Godlonton and Rebecca L. Thornton

American Economic Review, May 2013

An individual who takes an HIV test can be informed about their own status and risk. Similarly, when friends, family or neighbors learn of a person's HIV status, they may update their beliefs about HIV infection among people they know. Using an experiment...

Productivity Differences between and within Countries

By Daron Acemoglu and Melissa Dell

American Economic Journal: Macroeconomics, January 2010

We document substantial within-country (cross-municipality) differences in incomes for a large number of countries in the Americas. A significant fraction of the within-country differences cannot be explained by observed human capital. We conjecture that...

Distributional Preferences, Reciprocity-Like Behavior, and Efficiency in Bilateral Exchange

By Daniel J. Benjamin

American Economic Journal: Microeconomics, February 2015

Under what conditions do distributional preferences, such as altruism or a concern for fair outcomes, generate efficient trade? I analyze theoretically a simple bilateral exchange game: each player sequentially takes an action that reduces his own materia...

Correspondence: Are Economists Different?

By Ralph Lattimore

Journal of Economic Perspectives, Spring 1992

Understanding the Forward Premium Puzzle: A Microstructure Approach

By Craig Burnside, Martin Eichenbaum, and Sergio Rebelo

American Economic Journal: Macroeconomics, July 2009

High interest rate currencies tend to appreciate relative to low interest rate currencies. We argue that adverse selection problems between participants in foreign exchange markets can account for this "forward premium puzzle." The key feature of our m...

Within-City Variation in Urban Decline: The Case of Detroit

By Veronica Guerrieri, Daniel Hartley, and Erik Hurst

American Economic Review, May 2012

When a city experiences a decline in income or population, do all neighborhoods within the city decline equally? Or, do some neighborhoods decline more than others? What are the characteristics of the neighborhoods that decline the most? We answer thes...

Job Loss and the Fraying of the Implicit Employment Contract

[Symposium: Household Risks]

By Kevin F. Hallock

Journal of Economic Perspectives, Fall 2009

Most workers have one employment contract that is explicit and another one that is implicit. The explicit employment contract specifies working hours, compensation, and job tasks. The implicit contract involves expectations about the extent to which the e...

Productivity Spillovers across Firms through Worker Mobility

By Andrey Stoyanov and Nikolay Zubanov

American Economic Journal: Applied Economics, April 2012

Using matched firm-worker data from Danish manufacturing, we observe firm-to-firm worker movements and find that firms that hired workers from more productive firms experience productivity gains one year after the hiring. The productivity gains associated...

Great Expectations and the End of the Depression

By Gauti B. Eggertsson

American Economic Review, September 2008

This paper suggests that the US recovery from the Great Depression was driven by a shift in expectations. This shift was caused by President Franklin Delano Roosevelt's policy actions. On the monetary policy side, Roosevelt abolished the gold standard ...