The Negligible Effect of Free Contraception on Fertility: Experimental Evidence from Burkina Faso

By Pascaline Dupas, Seema Jayachandran, Adriana Lleras-Muney, and Pauline Rossi

American Economic Review, August 2025

We conducted a randomized trial among 14,545 households in rural Burkina Faso to test the oft-cited hypothesis that limited access to contraception is an important driver of high fertility rates in West Africa. We do not find support for this hypothesis. ...

Monopsony and Employer Misoptimization Explain Why Wages Bunch at Round Numbers

By Arindrajit Dube, Alan Manning, and Suresh Naidu

American Economic Review, August 2025

We show that administrative hourly wage data exhibit considerable bunching at round numbers. We run two experiments randomizing wages around $0.10 and $1.00 to experimentally measure left-digit bias for identical tasks on Amazon Mechanical Turk; we fail t...

From Retributive to Restorative: An Alternative Approach to Justice in Schools

By Anjali Adukia, Benjamin Feigenberg, and Fatemeh Momeni

American Economic Review, August 2025

School districts historically approached conflict resolution from the perspective that suspending disruptive students was necessary to protect their classmates, even if this caused harm to perceived offenders. Restorative practices (RP)—focusing on repa...

Underbidding for Oil and Gas Tracts

By Julien Martin, Martin Pesendorfer, and Jack Shannon

American Economic Review, August 2025

Common values auction models, where bidder decisions depend on noisy signals of common values, provide predictions about Bayesian Nash equilibrium (BNE) outcomes. In settings where these common values can be estimated, these predictions can be tested. We ...

Direct and Indirect Effects of Investment Tax Incentives

By Adrian Lerche

American Economic Review, August 2025

This paper estimates the direct effects and indirect spillover effects of investment tax credits on firms. Exploiting a differential tax credit rate change by firm size in the German manufacturing sector, I find that lowering a firm's investment cost by 7...

Monetary Policy and Rational Asset Price Bubbles: Comment

By Franklin Allen, Gadi Barlevy, and Douglas Gale

American Economic Review, August 2025

Galí (2014) showed that a monetary policy rule that raises rates when bubbles exceed some steady-state benchmark can paradoxically lead to larger deviations from steady state. Nevertheless, this comment shows that a central bank can always dampen a bubbl...

Property Rights and Finance

By Simon Johnson, John McMillan, and Christopher Woodruff

American Economic Review, December 2002

Which is the tighter constraint on private sector investment: weak property rights or limited access to external finance? From a survey of new firms in post-communist countries, we find that weak property rights discourage firms from reinvesting their pro...

China’s Nationwide CO2 Emissions Trading System: A General Equilibrium Assessment

By Lawrence H. Goulder, Xianling Long, Chenfei Qu, and Da Zhang

American Economic Journal: Economic Policy

China’s CO2 emissions trading system, the world’s largest, aims to significantly reduce CO2 emissions. The system is a tradable performance standard (TPS), differing from cap and trade (C&T). We provide a dynamic general equilibrium assessment that un...

Vertical Integration and Cream Skimming of Profitable Referrals: The Case of Hospital-Owned Skilled Nursing Facilities

By David Cutler, Leemore Dafny, David C. Grabowski, Steven Lee, and Christopher Ody

American Economic Journal: Economic Policy

We examine whether vertical integration of hospitals and skilled nursing facilities (SNFs) could lessen competition by foreclosing rival SNFs’ access to lucrative referrals. We find that it could: among integrated providers, a one percent increase in SN...

Interbank Rate Uncertainty and Bank Lending

By Carlo Altavilla, Giacomo Carboni, Michele Lenza, and Harald Uhlig

American Economic Journal: Macroeconomics

We propose a new measure of interbank rate uncertainty, defined as the crosssectional dispersion in interbank market rates for overnight unsecured loans. We show that higher interbank rate uncertainty increases lending rates for firm loans, with larger...

Airport Congestion When Carriers Have Market Power

By Jan K. Brueckner

American Economic Review, December 2002

This paper analyzes airport congestion when carriers are nonatomistic, showing how the results of the road-pricing literature are modified when the economic agents causing congestion have market power. The analysis shows that when an airport is dominated ...

The Economic Consequences of Effective Carbon Taxes

By Felix Kapfhammer

American Economic Journal: Macroeconomics

This paper studies the sectoral and macroeconomic consequences of carbon taxes in four Nordic countries using a novel monthly measure of effective carbon tax rates. The suggested measure accounts for the time-varying emission coverage of taxes that are...

The Life-Cycle Implications of Temporary Employment Contracts

By Rosemary Kaiser

American Economic Journal: Macroeconomics

Employment protections often create two-tiered labor markets with substantial differences in job security. I estimate the effects of removing these protections using a quantitative life-cycle model, where younger workers are more likely to select into ...

Work from Home and Disability Employment

By Nicholas Bloom, Gordon B. Dahl, and Dan-Olof Rooth

American Economic Review: Insights

There has been a dramatic rise in disability employment since the pandemic. At the same time, work from home (WFH) has risen four-fold. This paper asks whether the two are causally related. Controlling for compositional changes and labor market tightnes...

Different Paths to College Success: The Impact of Massachusetts’ Charter Schools on College Trajectories

By Sarah R. Cohodes and Astrid Pineda

American Economic Review: Insights

The charter school movement encompasses many school models. In Massachusetts in the 2010’s, the site of our study, urban charter schools primarily used “No Excuses” practices, whereas nonurban charters had greater model variety. Using randomized a...

Measuring Market Inefficiencies in California's Restructured Wholesale Electricity Market

By Severin Borenstein, James B. Bushnell, and Frank A. Wolak

American Economic Review, December 2002

We present a method for decomposing wholesale electricity payments into production costs, inframarginal competitive rents, and payments resulting from the exercise of market power. Using data from June 1998 to October 2000 in California, we find significa...

Transport Costs and the Geography of Arbitrage in Eighteenth-Century China

By Carol H. Shiue

American Economic Review, December 2002

Trade has been considered a condition for growth and development, a view that might have merits in explaining the rise of the Western world. I use a new data set from archival sources of eighteenth-century China to revisit this question. This analysis sug...

University Research and the Market for Higher Education

By Titan Alon, Damien Capelle, and Kazushige Matsuda

American Economic Journal: Macroeconomics

This paper develops a framework in which university research depends endogenously on competition for tuition and talented students in the market for higher education. When students are highly stratified across colleges, or when tuition rises sharply with ...

Identifying Monetary Policy Shocks: A Natural Language Approach

By S. Borağan Aruoba and Thomas Drechsel

American Economic Journal: Macroeconomics

We develop a novel method for the identification of monetary policy shocks. By applying natural language processing techniques to documents that Federal Reserve staff prepare in advance of policy decisions, we capture the Fed's information set. Using mach...

The Transmission of Monetary Policy to Corporate Investment: the Role of Loan Renegotiation

By Eunkyung Lee

American Economic Journal: Macroeconomics

I construct a novel dataset comprising over 100,000 loan observations from U.S. firms and estimate that renegotiating existing loans —rather than originating new loans —significantly contributes to the corporate investment response to monetary policy...