The Few Leading the Many: Foreign Affiliates and Business Cycle Comovement

By Jörn Kleinert, Julien Martin, and Farid Toubal

American Economic Journal: Macroeconomics, October 2015

This paper argues that the correlation of business cycles across countries is largely due to linkages between multinational firms and their foreign affiliates. There are very few foreign affiliates in France, but they contribute considerably to aggregate ...

What's the Good of the Market? An Essay on Michael Sandel's What Money Can't Buy

By Timothy Besley

Journal of Economic Literature, June 2013

This essay will discuss the criticisms of the economic approach to markets offered by Michael Sandel's What Money Can't Buy. After reviewing the main arguments, the essay looks at these from three main angles. First, it relates them to different tradit...

Understanding the Mechanisms of Economic Development

[Symposium: The Agenda for Development Economics]

By Angus Deaton

Journal of Economic Perspectives, Summer 2010

In this paper, I advocate the investigation, testing, and modification of mechanisms as a progressive empirical research strategy for the field of economic development (and other areas of applied economics). I discuss three lines of work that have elucida...

Nonparametric Counterfactual Predictions in Neoclassical Models of International Trade

By Rodrigo Adao, Arnaud Costinot, and Dave Donaldson

American Economic Review, March 2017

We develop a methodology to construct nonparametric counterfactual predictions, free of functional form restrictions on preferences and technology, in neoclassical models of international trade. First, we establish the equivalence between such models and ...

Seven Centuries of European Economic Growth and Decline

By Roger Fouquet and Stephen Broadberry

Journal of Economic Perspectives, Fall 2015

This paper investigates very long-run preindustrial economic development. New annual GDP per capita data for six European countries over the last seven hundred years paint a clearer picture of the history of European economic development. We confirm...

Challenges to Replication and Iteration in Field Experiments: Evidence from Two Direct Mail Shots

By Jake Bowers, Nathaniel Higgins, Dean Karlan, Sarah Tulman, and Jonathan Zinman

American Economic Review, May 2017

We conducted an experiment marketing microloans to farmers in the USA during Spring 2015 and found a simple direct mail letter increased borrowing from a government program. The subsequent spring, we built on this finding and enriched the design to test f...

Specialization Then and Now: Marriage, Children, and the Gender Earnings Gap across Cohorts

[Symposium: Women in the Labor Market]

By Chinhui Juhn and Kristin McCue

Journal of Economic Perspectives, Winter 2017

In this paper, we examine the evolution of the gender gap associated with marriage and parental status, comparing cohorts born between 1936 and 1985. The model of household specialization and division of labor introduced by Becker posits that when forming...

A New Era of Pollution Progress in Urban China?

[Symposium: China]

By Siqi Zheng and Matthew E. Kahn

Journal of Economic Perspectives, Winter 2017

Over the last 30 years, China's economy has boomed. This trend has lifted hundreds of millions of Chinese out of poverty but it has also sharply increased local, regional, and global pollution levels. We look at the rise in air pollution over recent dec...

Why Hasn't Democracy Slowed Rising Inequality?

[Symposium: The Top 1 Percent]

By Adam Bonica, Nolan McCarty, Keith T. Poole, and Howard Rosenthal

Journal of Economic Perspectives, Summer 2013

During the past two generations, democratic forms have coexisted with massive increases in economic inequality in the United States and many other advanced democracies. Moreover, these new inequalities have primarily benefited the top 1 percent and even...

The Missing Middle: Correspondence

By James Tybout

Journal of Economic Perspectives, Fall 2014

Capital and Wealth in the Twenty-First Century

By David N. Weil

American Economic Review, May 2015

In Capital in the Twenty-First Century, Thomas Piketty uses the market value of tradable assets to measure both productive capital and wealth. As a measure of wealth this is problematic because it ignores the value of human capital and transfer w...

Measuring Labor's Share

By Alan B. Krueger

American Economic Review, May 1999

Reallocation and Technology: Evidence from the US Steel Industry

By Allan Collard-Wexler and Jan De Loecker

American Economic Review, January 2015

We measure the impact of a drastic new technology for producing steel—the minimill—on industry-wide productivity in the US steel industry, using unique plant-level data between 1963 and 2002. The sharp increase in the industry's productivity is linked...

Efficient Procurement Auctions with Increasing Returns

By Oleg Baranov, Christina Aperjis, Lawrence M. Ausubel, and Thayer Morrill

American Economic Journal: Microeconomics, August 2017

For procuring from sellers with decreasing returns, there are known efficient dynamic auction formats. In this paper, we design an efficient dynamic procurement auction for the case where goods are homogeneous and bidders have increasing returns. Our moti...

Teaching a Behavioral Economics Elective: Highlighting the Science of Economics

By Ted O'Donoghue

American Economic Review, May 2015

In this paper, I provide an overview of how one might teach an advanced undergraduate elective on Behavioral Economics. While I focus on the structure and themes from my own course, I also attempt to highlight ways in which instructors might choose an alt...

Naked Exclusion: Reply

By Eric B. Rasmusen, J. Mark Ramseyer, and John Shepard Wiley

American Economic Review, March 2000

Monetary-Fiscal Policy Interactions and Indeterminacy in Postwar US Data

By Saroj Bhattarai, Jae Won Lee, and Woong Yong Park

American Economic Review, May 2012

Using a micro-founded model and a likelihood-based inference method, we show that while a passive monetary and passive fiscal policy regime prevailed in the U.S. before Paul Volcker's chairmanship at the Federal Reserve, an active monetary and passive fis...

Home Bias in Open Economy Financial Macroeconomics

By Nicolas Coeurdacier and Hélène Rey

Journal of Economic Literature, March 2013

Home bias is a perennial feature of international capital markets. We review various explanations of this puzzling phenomenon highlighting recent developments in macroeconomic modeling that incorporate international portfolio choices in standard twocountr...

Interest Rate Risk and Other Determinants of Post-WWII US Government Debt/GDP Dynamics

By George J. Hall and Thomas J. Sargent

American Economic Journal: Macroeconomics, July 2011

This paper uses a sequence of government budget constraints to motivate estimates of returns on the US Federal government debt. Our estimates differ conceptually and quantitatively from the interest payments reported by the US government. We use our esti...

Another Look at Airport Congestion Pricing

By Steven A. Morrison and Clifford Winston

American Economic Review, December 2007

We study alternate approaches to implement congestion pricing at US airports. Conventional formulations toll all aircraft without determining whether a plane operated by a given airline delays other planes that it operates or planes operated by other airl...