The Productivity Consequences of Pollution-Induced Migration in China

By Gaurav Khanna, Wenquan Liang, Ahmed Mushfiq Mobarak, and Ran Song

American Economic Journal: Applied Economics, April 2025

We quantify how pollution affects aggregate productivity and welfare in spatial equilibrium. We show that skilled workers in China emigrate away from polluted cities. These patterns are evident under various empirical specifications, such as when instrume...

Family Spillover Effects of Marginal Diagnoses: The Case of ADHD

By Petra Persson, Xinyao Qiu, and Maya Rossin-Slater

American Economic Journal: Applied Economics, April 2025

The health care system uses patient family medical history in many settings, and this practice is widely believed to improve the efficiency of health care allocation. This paper provides a counterpoint by documenting that reliance on hereditary informatio...

A New Measure of Horizontal Equity

By Alan J. Auerbach and Kevin A. Hassett

American Economic Review, September 2002

Front Matter

American Economic Journal: Macroeconomics, April 2025

Optimal Fiscal and Monetary Policy with Distorting Taxes

By Christopher A. Sims

American Economic Journal: Macroeconomics, April 2025

When government debt pays a lower return than private assets, the reasoning in Friedman's (1969) essay on the optimal quantity of money suggests that it would be optimal to expand the debt until its return matched that on private assets. When the only oth...

Terms-of-Trade Shocks Are Not All Alike

By Federico Di Pace, Luciana Juvenal, and Ivan Petrella

American Economic Journal: Macroeconomics, April 2025

Terms of trade are an inaccurate empirical proxy for how fluctuations in international prices affect the economy. To capture the relevance of terms-of-trade fluctuations for the domestic business cycle, the role of export and import prices needs to be ana...

Does Unemployment Risk Affect Business Cycle Dynamics?

By Sebastian Graves

American Economic Journal: Macroeconomics, April 2025

In this paper, I show that the decline in consumption during unemployment depends on both liquid and illiquid wealth; that unemployment predicts illiquid asset withdrawal, primarily when households have few liquid assets; and that increased idiosyncratic ...

A Unified Model of Learning to Forecast

By George W. Evans, Christopher G. Gibbs, and Bruce McGough

American Economic Journal: Macroeconomics, April 2025

We propose a model of boundedly rational and heterogeneous expectations that unifies adaptive learning, k-level reasoning, and replicator dynamics. Level-0 forecasts evolve over time via adaptive learning. Agents revise over time their depth of reasoning ...

Skill Remoteness and Post-layoff Labor Market Outcomes

By Claudia Macaluso

American Economic Journal: Macroeconomics, April 2025

Local skill remoteness captures the dissimilarity between the skill profiles of a worker's last job and other jobs in a local labor market. Higher skill remoteness at layoff is associated with persistently lower earnings after layoff, a higher probability...

Job Displacement and Earnings Losses: The Role of Joblessness

By Bruce Fallick, John Haltiwanger, Erika McEntarfer, and Matthew Staiger

American Economic Journal: Macroeconomics, April 2025

A large literature finds that workers displaced in mass layoffs experience persistent earnings losses. We find that the earnings penalty from job displacement is mediated by the length of the jobless spell after displacement. Workers who experience little...

The Geography of Consumption and Local Economic Shocks: The Case of the Great Recession

By Abe Dunn and Mahsa Gholizadeh

American Economic Journal: Macroeconomics, April 2025

We estimate across-county spending flows between firms and consumers for every county in the United States, providing a new consumption link that has not been studied previously. We highlight the importance of this link by estimating the effect of changes...

Do Corrupt Governments Receive Less Foreign Aid?

By Alberto Alesina and Beatrice Weder

American Economic Review, September 2002

Public Liquidity and Financial Crises

By Wenhao Li

American Economic Journal: Macroeconomics, April 2025

This paper studies the equilibrium effect of public liquidity on financial crises. Banks borrow from households via insured deposits and partially runnable debt and suffer endogenous funding withdrawals from households in crises. Holding public liquidity ...

Min(d)ing the President: A Text Analytic Approach to Measuring Tax News

By Lenard Lieb, Adam Jassem, Rui Jorge Almeida, Nalan Baştürk, and Stephan Smeekes

American Economic Journal: Macroeconomics, April 2025

Economic agents react to signals about future tax policy changes. Consequently, estimating their macroeconomic effects requires identification of such signals. We propose a novel text analytic approach for transforming textual information into an economic...

Severe Weather and the Macroeconomy

By Hee Soo Kim, Christian Matthes, and Toàn Phan

American Economic Journal: Macroeconomics, April 2025

We investigate the impact of severe weather shocks on the US macroeconomy over the past 60 years. Using a nonlinear vector autoregressive model, we find robust evidence of time-varying effects. While negligible at the beginning of the sample, the impact b...

Front Matter

American Economic Review, April 2025

Presidential Address: The Economist as Designer in the Innovation Process for Socially Impactful Digital Products

By Susan Athey

American Economic Review, April 2025

This paper provides an economic perspective on data-driven innovation in digital products, focusing on the role of complex experiments in measuring and improving social impact. The discussion highlights how tools and insights from economics contribute to ...

Fragile New Economy: Intangible Capital, Corporate Savings Glut, and Financial Instability

By Ye Li

American Economic Review, April 2025

The transition toward an intangible-intensive economy reshapes financial systems by creating a self-perpetuating savings glut in the production sector. As intangibles become increasingly important, firms hoard liquidity to finance investment in intangible...

Trade Shocks and Credit Reallocation

By Stefano Federico, Fadi Hassan, and Veronica Rappoport

American Economic Review, April 2025

This paper identifies a credit-supply contraction that arises endogenously after trade liberalization. Banks with loan portfolios concentrated in sectors exposed to competition from China face an increase in nonperforming loans after China's entry into th...

Testing Mixed-Strategy Equilibria When Players Are Heterogeneous: The Case of Penalty Kicks in Soccer

By P.-A. Chiappori, S. Levitt, and T. Groseclose

American Economic Review, September 2002