Optimal Taxation of Inflation

By Damien Capelle and Yang Liu

American Economic Journal: Macroeconomics

This paper analyzes the effectiveness of a tax on inflation policy (TIP), which would require firms to pay a tax proportional to the increase in their prices or wages, in stabilizing inflation. We show that TIP would effectively correct externalities i...

The Effect of Mergers on Innovation

By Kaustav Das, Tatiana Mayskaya, and Arina Nikandrova

American Economic Journal: Microeconomics

We study the effect of a merger on R&D activity in a dynamic model with uncertainty about the feasibility of innovation. The merger has three effects: it may reduce the number of follow-up innovations (cannibalization effect), increase the probability ...

The Silver Empire: How Germany Created Its First Common Currency by Oliver Volckart

By William Roberds

Journal of Economic Literature

Front Matter

American Economic Review, October 2025

Treatment Effects in Market Equilibrium

By Evan Munro, Xu Kuang, and Stefan Wager

American Economic Review, October 2025

Policy-relevant treatment effect estimation in a marketplace setting requires assessing both the direct treatment benefit and spillovers induced by changes to the market equilibrium. We show how to identify and estimate policy-relevant treatment effects u...

Consistent Evidence on Duration Dependence of Price Changes

By Fernando Alvarez, Katarína Borovičková, and Robert Shimer

American Economic Review, October 2025

We develop a linear GMM estimator of the discrete-time mixed proportional hazard (MPH) model of duration with an arbitrary distribution of unobserved heterogeneity. We allow for competing risks, observable characteristics, and censoring. We prove our esti...

Politics at Work

By Emanuele Colonnelli, Valdemar Pinho Neto, and Edoardo Teso

American Economic Review, October 2025

We study how individual political views shape firm behavior and labor market outcomes using new microdata from Brazil. We first show that business owners are considerably more likely to employ copartisan workers. This phenomenon is in part driven by the o...

Art as an Investment and the Underperformance of Masterpieces

By Jianping Mei and Michael Moses

American Economic Review, December 2002

Place-Based Redistribution

By Cecile Gaubert, Patrick Kline, Damian Vergara, and Danny Yagan

American Economic Review, October 2025

We study optimal income taxation in a spatial equilibrium model with heterogeneous locational preferences, labor supply decisions, and competitive housing and labor markets. Expressions characterizing the optimal tax schedule in each community are provide...

Monetary Policy and the Labor Market: A Quasi-experiment in Sweden

By John Coglianese, Maria Olsson, and Christina Patterson

American Economic Review, October 2025

We analyze a monetary quasi-experiment in Sweden from 2010–2011, when the Riksbank raised the interest rate substantially. We argue that this increase was beyond what labor market conditions warranted, driven instead by new concerns about financial stab...

Apart but Connected: Online Tutoring, Cognitive Outcomes, and Soft Skills

By Michela Carlana and Eliana La Ferrara

American Economic Review, October 2025

We study the Tutoring Online Program (TOP), where tutoring is entirely online and tutors are volunteer university students matched with underprivileged middle school students. We leverage random assignment to estimate effects during and after the pandemic...

The Value of Software

By Roberto Gómez-Cram and Alastair Lawrence

American Economic Review, October 2025

Software is one of the most important assets that needs to be priced in the digital economy. It has emerged as a disruptive technology, with companies primarily valued for their software offerings growing from 2 percent to 13 percent of market share betwe...

Do Credit Conditions Move House Prices?

By Daniel L. Greenwald and Adam Guren

American Economic Review, October 2025

Did credit drive the 2000s housing cycle? The existing literature's findings range from credit having no effect to credit explaining most of the cycle. We show that these disparate results hinge on the extent to which landlords absorb credit-driven demand...

Diffusion of Reproductive Health Behavior through International Migration: Effects on Origin-Country Fertility

By Susan Godlonton and Caroline Theoharides

American Economic Review, October 2025

International migrants may facilitate the transmission of ideas across countries. We examine the impact of migrant exposure to reproductive health policies on origin-country fertility in the Philippines. We exploit temporal variation in destination-countr...

Intermediated Asymmetric Information, Compensation, and Career Prospects

By Ron Kaniel and Dmitry Orlov

American Economic Review, October 2025

Adverse selection benefits firms able to identify talent. An informed intermediary expropriates agents' ability by threatening to fire and expose them to undervaluation of their skill. An agent's track record gradually reduces intermediary's information a...

Human Capital and Racial Inequality in the US Labor Market

By Owen Thompson

Journal of Economic Literature

If racial gaps in measures of human capital like educational attainment and standardized test scores were eliminated, what would happen to racial disparities in wages, employment, and other labor market outcomes? A credible answer to this question is foun...

Improving Efficiency of On-Campus Housing: An Experimental Study

By Yan Chen and Tayfun Sönmez

American Economic Review, December 2002

The Dynamic Effects of Cash Transfers to Agricultural Households

By Shilpa Aggarwal, Jenny C. Aker, Dahyeon Jeong, Naresh Kumar, David Sungho Park, Jonathan Robinson, and Alan Spearot

American Economic Journal: Applied Economics

Little is known about the evolution and persistence of the effects of one-time cash transfers, especially in rural agricultural settings with limited productive investment opportunities. We use bi-monthly phone surveys to estimate dynamic impacts for ca...

The Political Geography of Cities

By Richard Bluhm, Christian Lessmann, and Paul Schaudt

American Economic Journal: Applied Economics

We study the link between regional capitals and urban development. We exploit new global data on hundreds of first-order administrative and capital city reforms from 1987 until 2018 to estimate the capital city premium. Gaining capital status increases...

Decentralizing Development: The Economic Impacts of Government Splits

By Ricardo Dahis and Christiane Szerman

American Economic Journal: Applied Economics

We examine the economic impacts of the creation of smaller government units through splitting. Exploiting reforms that led to sharp increases in the number of government units in Brazil, we show that voluntary splitting enlarges the public sector, enhance...