Persuading Voters

By Ricardo Alonso and Odilon Câmara

American Economic Review, November 2016

In a symmetric information voting model, an individual (politician) can influence voters' choices by strategically designing a policy experiment (public signal). We characterize the politician's optimal experiment. With a nonunanimous voting rule, she exp...

Auctions and Bidding: A Primer

[Symposium: Auctions]

By Paul Milgrom

Journal of Economic Perspectives, Summer 1989

The "Winner's Curse," is just one of the surprising and puzzling conclusions turned up by modern research into auctions. Another is the theoretical proposition that, for example, a sealed-bid Treasury bill auction in which each buyer pays a price equal to...

How Important Can the Non-violation Clause Be for the GATT/WTO?

By Robert W. Staiger and Alan O. Sykes

American Economic Journal: Microeconomics, May 2017

The "non-violation" clause of GATT is Exhibit A for the proposition that international trade agreements are incomplete contracts. According to the terms-of-trade theory of trade agreements, it underpins the success of the GATT/WTO's "shallow integration" ...

Stories of the Twentieth Century for the Twenty-First

By Pierre-Olivier Gourinchas and Maurice Obstfeld

American Economic Journal: Macroeconomics, January 2012

A key precursor of twentieth-century financial crises in emerging and advanced economies alike was the rapid buildup of leverage. Those emerging economies that avoided leverage booms during the 2000s also were most likely to avoid the worst effects of the...

Race and Home Ownership from the End of the Civil War to the Present

By William J. Collins and Robert A. Margo

American Economic Review, May 2011

We present new estimates of home ownership for black and white households from 1870 to 2007. Black ownership increased by 46 percentage points, whereas white ownership increased by 20 points. Remarkably, 25 of the 26 point narrowing occurred between 1870 ...

Cash Transfers, Behavioral Changes, and Cognitive Development in Early Childhood: Evidence from a Randomized Experiment

By Karen Macours, Norbert Schady, and Renos Vakis

American Economic Journal: Applied Economics, April 2012

Cash transfer programs have become extremely popular in the developing world. A large literature analyzes their effects on schooling, health and nutrition, but relatively little is known about possible impacts on child development. This paper analyzes the...

Is American Health Care Uniquely Inefficient? Evidence from Prescription Drugs

By Margaret Kyle and Heidi Williams

American Economic Review, May 2017

Alan Garber and Jonathan Skinner (2008) famously conjectured that the US health care system was "uniquely inefficient" relative to other countries. We test this idea using cross-country data on prescription drug sales newly linked with an arguably objecti...

The Effect of Public Insurance Coverage for Childless Adults on Labor Supply

By Laura Dague, Thomas DeLeire, and Lindsey Leininger

American Economic Journal: Economic Policy, May 2017

This study provides plausibly causal estimates of the effect of public insurance coverage on the employment of non-elderly, nondisabled adults without dependent children ("childless adults"). We take advantage of the sudden imposition of an enrollment cap...

Optimal Taxation in Theory and Practice

By N. Gregory Mankiw, Matthew Weinzierl, and Danny Yagan

Journal of Economic Perspectives, Fall 2009

The optimal design of a tax system is a topic that has long fascinated economic theorists and flummoxed economic policymakers. This paper explores the interplay between tax theory and tax policy. It identifies key lessons policymakers might take from the ...

Retrospectives: A Dismal Romantic

By Joseph Persky

Journal of Economic Perspectives, Fall 1990

Economists like to think of their discipline as queen of the social sciences. Unfortunately, our vocation is more likely to be berated as "the dismal science." This witticism has a checkered history. In the popular mind, economists are viewed as "dismal" ...

Do We Follow Others When We Should? A Simple Test of Rational Expectations

By Georg Weizsäcker

American Economic Review, December 2010

The paper presents a meta dataset covering 13 experiments on social learning games. It is found that in situations where it is empirically optimal to follow others and contradict one's own information, the players err in the majority of cases, forgoing su...

Exclusive Goods and Formal-Sector Employment

By Reto Foellmi and Josef Zweimüller

American Economic Journal: Macroeconomics, January 2011

We explore how the underemployment problem of less-developed economies is related to income inequality. Consumers have nonhomothetic preferences over differentiated products of formal-sector goods and thus inequality affects the composition of aggregate ...

Classroom Games: Strategic Interaction on the Internet

By Marko Grobelnik, Charles A. Holt, and Vesna Prasnikar

Journal of Economic Perspectives, Spring 1999

Economics is often taught at a level of abstraction that can hinder some students from gaining basic intuition. However, lecture and textbook presentations can be complemented with classroom exercises in which students make decisions and interact. The app...

Does Antitrust Need to be Modernized?

By Dennis W. Carlton

Journal of Economic Perspectives, Summer 2007

Economics has had an enormous positive effect on the evolution of antitrust policy over the last 30 years or so. However, the evolving forces of technology and globalization, together with experience gained over time, suggest that further modernization is...

Information Cascades: Replication and an Extension to Majority Rule and Conformity-Rewarding Institutions

By Angela A. Hung and Charles R. Plott

American Economic Review, December 2001

A Community College Instructor Like Me: Race and Ethnicity Interactions in the Classroom

By Robert W. Fairlie, Florian Hoffmann, and Philip Oreopoulos

American Economic Review, August 2014

Administrative data from a large and diverse community college are used to examine if underrepresented minority students benefit from taking courses with underrepresented minority instructors. To identify racial interactions we estimate models that includ...

The Implications of Electronic Commerce for Fiscal Policy (and Vice Versa)

[Symposium: E-Commerce]

By Austan Goolsbee

Journal of Economic Perspectives, Winter 2001

Validating Migration Responses to Flooding Using Satellite and Vital Registration Data

By Joyce J. Chen, Valerie Mueller, Yuanyuan Jia, and Steven Kuo-Hsin Tseng

American Economic Review, May 2017

Rainfall measures may be imperfect proxies for floods, given factors such as upstream water balance, proximity to rivers, and topography. We check the robustness of flooding-migration relationships by combining nationally-representative survey data with m...

How Large Are Non-Budget-Constraint Effects of Prices on Demand?

By Ori Heffetz and Moses Shayo

American Economic Journal: Applied Economics, October 2009

Elementary consumer theory assumes prices affect demand only because they affect the budget constraint (BC). Alternative models, and some evidence, suggest prices can affect demand through other, non-BC channels (e.g., by signaling quality). This paper...

Externalities in the Classroom: How Children Exposed to Domestic Violence Affect Everyone's Kids

By Scott E. Carrell and Mark L. Hoekstra

American Economic Journal: Applied Economics, January 2010

There is a widespread perception that externalities from troubled children are significant, though measuring them is difficult due to data and methodological limitations. We estimate the negative spillovers caused by children from troubled families by ...