Front Matter

American Economic Review: Insights, June 2025

The Broad Decline in Health and Human Capital of Americans Born after 1947

By Nicholas Reynolds

American Economic Review: Insights, June 2025

I present evidence of across-cohort decline in the health and human capital of Americans, beginning with those born after 1947 and continuing until those born in the mid-1960s. Education, men's wages, women's maternal health (proxied by their infants' bir...

How Do Entrants Build Market Share? The Role of Demand Frictions

By David Argente, Doireann Fitzgerald, Sara Moreira, and Anthony Priolo

American Economic Review: Insights, June 2025

We construct a new dataset to show that successful entrants in the consumer food sector build market share by adding new customers. Entrants reach new customers by entering more geographical markets, placing their product in more stores in these markets, ...

Labor Market Power and Development

By Tristany Armangué-Jubert, Nezih Guner, and Alessandro Ruggieri

American Economic Review: Insights, June 2025

Imperfect competition in labor markets can lead to efficiency losses and lower aggregate output. This paper examines how variations in labor market competitiveness may account for differences in GDP per capita among countries. By structurally estimating a...

Sustainability in a Risky World

By John Y. Campbell and Ian W. R. Martin

American Economic Review: Insights, June 2025

How much consumption is sustainable, if "sustainability" requires that welfare should not be expected to decline over time? We impose a sustainability constraint on a standard consumption/portfolio choice problem. The constraint does not distort portfolio...

Information Acquisition and Time-Risk Preference

By Daniel Chen and Weijie Zhong

American Economic Review: Insights, June 2025

An agent acquires information dynamically until her belief about a binary state reaches an upper or lower threshold. She can choose any signal process subject to a constraint on the rate of entropy reduction. Strategies are ordered by "time risk"—the di...

Building Nondiscriminatory Algorithms in Selected Data

By David Arnold, Will Dobbie, and Peter Hull

American Economic Review: Insights, June 2025

We develop new quasi-experimental tools to understand algorithmic discrimination and build nondiscriminatory algorithms when the outcome of interest is only selectively observed. We first show that algorithmic discrimination arises when the available algo...

Growth and Redistribution: The Hedging Perspective

By Larry Samuelson and Jakub Steiner

American Economic Review: Insights, June 2025

We investigate the impact of wealth redistribution on economic growth, building on Kelly's (1956) optimal investment portfolio theory. A growth-optimal policy redistributes wealth from "lucky" overperforming individuals to underperforming ones, minimizing...

Regional Dissent: Do Local Economic Conditions Influence FOMC Votes?

By Anton Bobrov, Rupal Kamdar, and Mauricio Ulate

American Economic Review: Insights, June 2025

US monetary policy decisions are made by the 12 voting members of the FOMC, seven of which inherently represent national-level interests. The remaining members, a rotating group of presidents from the 12 Federal Reserve districts, come instead from subnat...

Front Matter

American Economic Review, June 2025

Nobel Lecture: Institutions, Technology, and Prosperity

By Daron Acemoglu

American Economic Review, June 2025

This paper reviews the main motivations and arguments of my work on comparative development, colonialism, and institutional change, which was often carried out jointly with James Robinson and Simon Johnson. I then provide a simple framework to organize th...

Nobel Lecture: The Institutional Origins of Shared Prosperity

By Simon Johnson

American Economic Review, June 2025

Nobel Lecture: Paths to the Periphery

By James A. Robinson

American Economic Review, June 2025

My research suggests that world inequality is explained by the incidence of extractive and inclusive institutions. But why do some countries have extractive institutions? I distinguish between two main reasons; first, power relations; second, the "normati...

The Geographic Flow of Bank Funding and Access to Credit: Branch Networks, Synergies, and Local Competition

By Victor Aguirregabiria, Robert Clark, and Hui Wang

American Economic Review, June 2025

Geographic dispersion of depositors, borrowers, and banks may prevent funding from flowing to high-loan-demand areas, limiting credit access. Using bank-county-year-level data, we provide evidence of geographic imbalance of deposits and loans and develop ...

Who Benefits from Online Gig Economy Platforms?

By Christopher T. Stanton and Catherine Thomas

American Economic Review, June 2025

Online labor platforms for short-term remote work have many more job seekers than available jobs. Despite their relative abundance, workers capture a substantial share of the surplus from transactions. We draw this conclusion from demand estimates that im...

Fiscal Policy and Credit Supply in a Crisis

By Diana Bonfim, Miguel A. Ferreira, Francisco Queiró, and Sujiao (Emma) Zhao

American Economic Review, June 2025

We measure how cuts to public procurement propagate through the banking system in a financial crisis. During the European sovereign debt crisis, the Portuguese government cut procurement spending by 4.3 percent of GDP. We find that this cut saddled banks ...

Targeting Impact versus Deprivation

By Johannes Haushofer, Paul Niehaus, Carlos Paramo, Edward Miguel, and Michael Walker

American Economic Review, June 2025

A large literature has examined how best to target antipoverty programs to those most deprived in some sense (e.g., consumption). We examine the potential trade-off between this objective and targeting those most impacted by such programs. We work in the ...

Leaders in Social Movements: Evidence from Unions in Myanmar

By Laura Boudreau, Rocco Macchiavello, Virginia Minni, and Mari Tanaka

American Economic Review, June 2025

Social movements are catalysts for crucial institutional changes. To succeed, they must coordinate members' views (consensus building) and actions (mobilization). We study union leaders within Myanmar's burgeoning labor movement. Union leaders are positiv...

Corporate Discount Rates

By Niels Joachim Gormsen and Kilian Huber

American Economic Review, June 2025

We construct a dataset of firms' discount rates (i.e., required returns to capital) and perceived cost of capital using corporate conference calls. The relation between discount rates and the cost of capital is far below the one-to-one mapping assumed in ...

Optimal Security Design for Risk-Averse Investors

By Alex Gershkov, Benny Moldovanu, Philipp Strack, and Mengxi Zhang

American Economic Review, June 2025

We use the tools of mechanism design combined with the theory of risk measures to analyze how a cash-constrained owner of an asset with known, stochastic returns raises capital from a population of investors who differ in their risk aversion and budget co...