Consumption Inequality

[Symposium: Inequality Beyond Income]

By Orazio P. Attanasio and Luigi Pistaferri

Journal of Economic Perspectives, Spring 2016

In this essay, we discuss the importance of consumption inequality in the debate concerning the measurement of disparities in economic well-being. We summarize the advantages and disadvantages of using consumption as opposed to income for measuring trends...

Monitoring, Motivation, and Management: The Determinants of Opportunistic Behavior in a Field Experiment

By Daniel S. Nagin, James B. Rebitzer, Seth Sanders, and Lowell J. Taylor

American Economic Review, September 2002

Economic models of incentives in employment relationships are based on a specific theory of motivation: employees are "rational cheaters," who anticipate the consequences of their actions and shirk when the marginal benefits exceed costs. We investigate t...

Incentive Schemes for Local Government: Theory and Evidence from Comprehensive Performance Assessment in England

By Ben Lockwood and Francesco Porcelli

American Economic Journal: Economic Policy, August 2013

This paper studies Comprehensive Performance Assessment, an explicit incentive scheme for local government in England. Motivated by a theoretical political agency model, we predict that CPA should increase service quality and local taxation, but have an a...

The Economics of Structured Finance

[Symposium: Early Stages of the Credit Crunch]

By Joshua Coval, Jakub Jurek, and Erik Stafford

Journal of Economic Perspectives, Winter 2009

This paper investigates the spectacular rise and fall of structured finance. The essence of structured finance activities is the pooling of economic assets like loans, bonds, and mortgages, and the subsequent issuance of a prioritized capital structure of...

The New Econometrics of Structural Change: Dating Breaks in U.S. Labour Productivity

[Symposium: Econometric Tools]

By Bruce E. Hansen

Journal of Economic Perspectives, Fall 2001

We have seen the emergence of three major innovations in the econometrics of structural change in the past fifteen years: (1) tests for a structural break of unknown timing; (2) estimation of the timing of a structural break; and (3) tests to distinguish ...

Trade Agreements and Enforcement: Evidence from WTO Dispute Settlement

By Chad P. Bown and Kara M. Reynolds

American Economic Journal: Economic Policy, November 2017

This paper examines implications of the terms-of-trade theory for the determinants of outcomes arising under the enforcement provisions of international agreements. Like original trade agreement negotiations, formal trade dispute negotiations are modeled ...

Japan's Financial Crisis and Economic Stagnation

[Symposium: Japan's Economy]

By Takeo Hoshi and Anil K. Kashyap

Journal of Economic Perspectives, Winter 2004

We survey the macroeconomic stagnation and financial problems in Japan. The financial sector assessment includes separate analyses of the commercial banks, the life insurance companies and the government's fiscal investment and loan program (FILP). We est...

Corrective Taxation versus Liability

By Steven Shavell

American Economic Review, May 2011

Taxation and liability are compared as means of controlling harmful externalities, with a view toward explaining why the use of liability predominates over taxation. Taxation suffers from a disadvantage in the analysis: because taxes do not reflect all th...

Incentives in Organizations

[Symposium: The Firm and its Boundaries]

By Robert Gibbons

Journal of Economic Perspectives, Fall 1998

In this paper, the author summarizes four new strands in agency theory that help him think about incentives in real organizations. As a point of departure, The author begins with a quick sketch of the classic agency model. He then discusses static models ...

The Impact of Challenge Quizzes on Student Knowledge

By KimMarie McGoldrick and Peter W. Schuhmann

American Economic Review, May 2016

We evaluate the efficacy of a blended formative/summative assessment tool developed to support mastery learning by students without placing undue burden on instructors. Our innovation provides students with an opportunity to take a more difficult "challen...

Assessment Practices and Trends in Undergraduate Economics Courses

By Georg Schaur, Michael Watts, and William E. Becker

American Economic Review, May 2008

Molecular Genetics and Economics

[Symposium: Genetics and Economics]

By Jonathan P. Beauchamp, David Cesarini, Magnus Johannesson, Matthijs J. H. M. van der Loos, Philipp D. Koellinger, Patrick J. F. Groenen, James H. Fowler, J. Niels Rosenquist, A. Roy Thurik, and Nicholas A. Christakis

Journal of Economic Perspectives, Fall 2011

The costs of comprehensively genotyping human subjects have fallen to the point where major funding bodies, even in the social sciences, are beginning to incorporate genetic and biological markers into major social surveys. How, if at all, should economis...

Economic Understanding in US High School Courses

By William B. Walstad

American Economic Review, May 2013

The effects of courses on student achievement are studied using 2006 data from the National Assessment of Educational Progress (NAEP) in economics. A regression analysis showed expected and significant achievement differences by course, with the highest s...

In a Small Moment: Class Size and Moral Hazard in the Italian Mezzogiorno

By Joshua D. Angrist, Erich Battistin, and Daniela Vuri

American Economic Journal: Applied Economics, October 2017

Instrumental variables (IV) estimates show strong class-size effects in Southern Italy. But Italy's Mezzogiorno is distinguished by manipulation of standardized test scores as well as by economic disadvantage. IV estimates suggest small classes increase m...

Pay for Percentile

By Gadi Barlevy and Derek Neal

American Economic Review, August 2012

We propose an incentive scheme for educators that links compensation to the ranks of their students within comparison sets. Under certain conditions, this scheme induces teachers to allocate socially optimal levels of effort. Moreover, because this scheme...

The Quantity and Quality of Life and the Evolution of World Inequality

By Gary S. Becker, Tomas J. Philipson, and Rodrigo R. Soares

American Economic Review, March 2005

GDP per capita is usually used to proxy for the quality of life of individuals living in different countries. Welfare is also affected by quantity of life, however, as represented by longevity. This paper incorporates longevity into an overall assessment ...

The Growth of Finance

[Symposium: The Growth of the Financial Sector]

By Robin Greenwood and David Scharfstein

Journal of Economic Perspectives, Spring 2013

The US financial services industry grew from 4.9 percent of GDP in 1980 to 7.9 percent of GDP in 2007. A sizeable portion of the growth can be explained by rising asset management fees, which in turn were driven by increases in the valuation of tradable a...

Cleaning Up Third World Debt without Getting Taken to the Cleaners

[Symposium: New Institutions for Developing Country Debt]

By Jeremy Bulow and Kenneth Rogoff

Journal of Economic Perspectives, Winter 1990

Should taxpayers of wealthy countries finance a leveraged buyout of third world debt? The case for establishing an international debt discount facility rests on the belief that the overhang of foreign commercial bank debt is stifling growth in the Highly ...

Economic Foundations of the Current Regulatory Reform Efforts

By W. Kip Viscusi

Journal of Economic Perspectives, Summer 1996

Regulatory reform proposals before Congress would potentially increase the role of economics in regulatory policymaking. These reforms seek to override existing legislative mandates, which usually prohibit economic trade-offs and have often led to ineffic...

The National Assessment of Educational Progress in Economics: Findings for General Economics

By William B. Walstad and Stephen Buckles

American Economic Review, May 2008