Ensuring Sales: A Theory of Inter-firm Credit

By Arup Daripa and Jeffrey Nilsen

American Economic Journal: Microeconomics, February 2011

We propose a simple theory to account for the prevalence of interfirm credit at an interest rate of zero. A downstream firm trades off inventory holding costs against lost sales. Lost final sales impose a negative externality on the upstream firm. The sol...

Allowing the Data to Speak Freely: The Macroeconometrics of the Cointegrated Vector Autoregression

By Kevin D. Hoover, Soren Johansen, and Katarina Juselius

American Economic Review, May 2008

Behavioral Economics and Public Policy: A Pragmatic Perspective

By Raj Chetty

American Economic Review, May 2015

The debate about behavioral economics—the incorporation of insights from psychology into economics—is often framed as a question about the foundational assumptions of economic models. This paper presents a more pragmatic perspective on behavio...

Are You Sure You're Saving Enough for Retirement?

[Symposium: The Adequacy of Retirement Saving]

By Jonathan Skinner

Journal of Economic Perspectives, Summer 2007

Many view the soon-to-retire Baby Boomers as woefully unprepared for their golden years, while other economists have taken a more sanguine view of American levels of saving. And if Americans are failures at saving enough for retirement, why are some retir...

Does the Classic Microfinance Model Discourage Entrepreneurship among the Poor? Experimental Evidence from India

By Erica Field, Rohini Pande, John Papp, and Natalia Rigol

American Economic Review, October 2013

Do the repayment requirements of the classic microfinance contract inhibit investment in high-return but illiquid business opportunities among the poor? Using a field experiment, we compare the classic contract which requires that repayment begin immed...

The American Family and Family Economics

[Symposium: Household Economics]

By Shelly Lundberg and Robert A. Pollak

Journal of Economic Perspectives, Spring 2007

Gary Becker's path-breaking Treatise on the Family (1981) subjected individuals' decisions about sex, marriage, childbearing, and childrearing to rational choice analysis. The American family has changed radically in recent decades; we survey these change...

Why Did Productivity Fall So Much during the Great Depression?

By Lee E. Ohanian

American Economic Review, May 2001

Making the Transition to Prepaid Medicare

[Symposium: The Future of Medicare]

By Thomas R. Saving

Journal of Economic Perspectives, Spring 2000

The Medicare system is facing a financial crisis brought on by the combination of rapidly rising consumption of health care services by beneficiaries and financing based on generation transfers. This paper simulates a transition to prepaid Medicare where ...

Report: American Economic Association Committee on Statistics (AEAStat)

By Robert Moffitt

American Economic Review, May 2016

Cognitive Abilities and Household Financial Decision Making

By Sumit Agarwal and Bhashkar Mazumder

American Economic Journal: Applied Economics, January 2013

We analyze the effects of cognitive abilities on two examples of consumer financial decisions where suboptimal behavior is well defined. The first example features the optimal use of credit cards for convenience transactions after a balance transfer and t...

Federal Reserve Information and the Behavior of Interest Rates

By Christina D. Romer and David H. Romer

American Economic Review, June 2000

This paper tests for the existence of asymmetric information between the Federal Reserve and the public by examining Federal Reserve and commercial inflation forecasts. It demonstrates that the Federal Reserve has considerable information about inflation ...

Recommendations for Further Reading

By Bernard Saffran

Journal of Economic Perspectives, Winter 1995

Identity-Based Organizations

By Jean-Paul Carvalho

American Economic Review, May 2016

A single club model describes the collective production of both personal and social identity. Personal identity, how one perceives oneself, is formed through a process of cultural transmission. Social identity, how one is perceived by others, takes the fo...

Labor Contracts, Equal Treatment, and Wage-Unemployment Dynamics

By Andy Snell and Jonathan P. Thomas

American Economic Journal: Macroeconomics, July 2010

This paper analyses a model in which firms cannot pay discriminate based on year of entry. It is assumed that workers can costlessly quit at any time, while firms are committed to contracts. We solve for the dynamics of wages and unemployment, and show th...

Policy Watch: Proposals for Time-Limited Welfare

By Rebecca M. Blank

Journal of Economic Perspectives, Fall 1994

This paper summarizes the Clinton administration's welfare reform proposal and views the available evidence on the effects of time-limiting cash assistance and requiring work among long-term Aid to Families with Dependent Children users. The reforms are d...

The Dividend Clientele Hypothesis: Evidence from the 2003 Tax Act

By Laura Kawano

American Economic Journal: Economic Policy, February 2014

This paper provides evidence that dividend and capital gains tax rates importantly influence household portfolio choices. Using data from the Surveys of Consumer Finances around the 2003 dividend tax reductions, I estimate the relationship between taxe...

Gridlock: Ethnic Diversity in Government and the Provision of Public Goods

By Brian Beach and Daniel B. Jones

American Economic Journal: Economic Policy, February 2017

How does ethnic diversity in government impact public good provision? We construct a novel dataset linking the ethnicity of California city council candidates to election outcomes and expenditure decisions. Using a regression discontinuity approach, we fi...

Structural Change, Growth, and Volatility

By Alessio Moro

American Economic Journal: Macroeconomics, July 2015

I construct a two-sector general equilibrium model of structural change to study the impact of sectoral composition of gross domestic product (GDP) on cross-country differences in GDP growth and volatility. For an empirically relevant parametrization of s...

Market Maker Inventories and Stock Prices

By Terrence Hendershott and Mark S. Seasholes

American Economic Review, May 2007

The Demand for, and Impact of, Learning HIV Status

By Rebecca L. Thornton

American Economic Review, December 2008

This paper evaluates an experiment in which individuals in rural Malawi were randomly assigned monetary incentives to learn their HIV results after being tested. Distance to the HIV results centers was also randomly assigned. Without any incentive, 34 ...