A Macroeconomic Model with a Financial Sector

By Markus K. Brunnermeier and Yuliy Sannikov

American Economic Review, February 2014

This article studies the full equilibrium dynamics of an economy with financial frictions. Due to highly nonlinear amplification effects, the economy is prone to instability and occasionally enters volatile crisis episodes. Endogenous risk, driven by a...

The Effects of "Girl-Friendly" Schools: Evidence from the BRIGHT School Construction Program in Burkina Faso

By Harounan Kazianga, Dan Levy, Leigh L. Linden, and Matt Sloan

American Economic Journal: Applied Economics, July 2013

We evaluate a 'girl-friendly' primary school program in Burkina Faso using a regression discontinuity design. After 2.5 years, the program increased enrollment by 19 percentage points and increased test scores by 0.41 standard deviations. For those cau...

Immigration and the Rise of American Ingenuity

By Ufuk Akcigit, John Grigsby, and Tom Nicholas

American Economic Review, May 2017

We build on the analysis in Akcigit, Grigsby, and Nicholas (2017) by using US patent and census data to examine the relationship between immigration and innovation. We construct a measure of foreign born expertise and show that technology areas where immi...

Assessing the Incidence and Efficiency of a Prominent Place Based Policy

By Matias Busso, Jesse Gregory, and Patrick Kline

American Economic Review, April 2013

This paper empirically assesses the incidence and efficiency of Round I of the federal urban Empowerment Zone (EZ ) program using confidential microdata from the Decennial Census and the Longitudinal Business Database. Using rejected and future applica...

Learning in a Medium-Scale DSGE Model with Expectations Based on Small Forecasting Models

By Sergey Slobodyan and Raf Wouters

American Economic Journal: Macroeconomics, April 2012

This paper evaluates the empirical performance of a medium-scale DSGE model with agents forming expectations using small forecasting models updated by the Kalman filter. The adaptive learning model fits the data better than the rational expectations (RE) ...

The World Trade Organization and the Future of Multilateralism

[Symposium: The Bretton Woods Institutions]

By Richard Baldwin

Journal of Economic Perspectives, Winter 2016

When the General Agreement on Tariffs and Trade was signed by 23 nations in 1947, the goal was to establish a rules-based world trading system and to facilitate mutually advantageous trade liberalization. As the GATT evolved over time and morphed into the...

Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela

By Brian J. Aitken and Ann E. Harrison

American Economic Review, June 1999

Governments often promote inward foreign investment to encourage technology 'spillovers' from foreign to domestic firms. Using panel data on Venezuelan plants, the authors find that foreign equity participation is positively correlated with plant producti...

Friendship at Work: Can Peer Effects Catalyze Female Entrepreneurship?

By Erica Field, Seema Jayachandran, Rohini Pande, and Natalia Rigol

American Economic Journal: Economic Policy, May 2016

Does the lack of peers contribute to the observed gender gap in entrepreneurial success? A random sample of customers of India’s largest women's bank was offered two days of business counseling, and a random subsample was invited to attend with a fri...

The Effects of DNA Databases on Crime

By Jennifer L. Doleac

American Economic Journal: Applied Economics, January 2017

Every US state has a database of criminal offenders' DNA profiles. These databases receive widespread attention in the media and popular culture, but there has been no rigorous analysis of their impact on crime. This paper intends to fill that gap. I expl...

The Retirement Consumption Puzzle: Evidence from a Regression Discontinuity Approach

By Erich Battistin, Agar Brugiavini, Enrico Rettore, and Guglielmo Weber

American Economic Review, December 2009

We investigate the size of the consumption drop at retirement in Italy by exploiting pension eligibility information to correct for endogenous retirement. We take a regression discontinuity approach and assume that spending would be smooth around pension ...

Media Influences on Social Outcomes: The Impact of MTV's 16 and Pregnant on Teen Childbearing

By Melissa S. Kearney and Phillip B. Levine

American Economic Review, December 2015

This paper explores the impact of the introduction of the widely viewed MTV reality show 16 and Pregnant on teen childbearing. Our main analysis relates geographic variation in changes in teen childbearing rates to viewership of the show. We impl...

Conflicts and Choices in Biodiversity Preservation

[Symposium: Endangered Species Act]

By Andrew Metrick and Martin L. Weitzman

Journal of Economic Perspectives, Summer 1998

The purpose of this article is to examine the preservation of biodiversity as an economic problem. Using a very simple prototype model, the authors discuss how to include diversity in the objective function and how to develop a simple cost-benefit ranking...

Formal versus Informal Monitoring in Teams

By Alex Gershkov and Eyal Winter

American Economic Journal: Microeconomics, May 2015

In this paper we analyze a principal's optimal monitoring strategies in a team environment. In doing so we study the interaction between formal monitoring and informal (peer) monitoring. We show that if the technology satisfies complementarity, peer monit...

Set-Asides and Subsidies in Auctions

By Susan Athey, Dominic Coey, and Jonathan Levin

American Economic Journal: Microeconomics, February 2013

Set-asides and subsidies are used extensively in government procurement and resource sales. We analyze these policies in an empirical model of US Forest Service timber auctions. The model fits the data well both within the sample of unrestricted sales ...

The Double Diamond Paradox

By Daniel Garcia, Jun Honda, and Maarten Janssen

American Economic Journal: Microeconomics, August 2017

We study vertical relations in markets with consumer and retailer search. We obtain three important new results. First, we provide a novel explanation for price dispersion that does not depend on some form of heterogeneity among consumers. Price dispersio...

Racial Realism: A Review Essay on John Skrentny's After Civil Rights

By Kevin Lang

Journal of Economic Literature, June 2015

In his valuable contribution, After Civil Rights, John Skrentny shows that in many sectors of the labor market, race is used in ways that were unanticipated when the 1964 Civil Rights Act was enacted. With separate chapters on the professions and...

Binary Payment Schemes: Moral Hazard and Loss Aversion

By Fabian Herweg, Daniel Müller, and Philipp Weinschenk

American Economic Review, December 2010

We modify the principal-agent model with moral hazard by assuming that the agent is expectation-based loss averse according to Kőszegi and Rabin (2006, 2007). The optimal contract is a binary payment scheme even for a rich performance measure, where...

Back on the Rails: Competition and Productivity in State-Owned Industry

By Sanghamitra Das, Kala Krishna, Sergey Lychagin, and Rohini Somanathan

American Economic Journal: Applied Economics, January 2013

We use a proprietary dataset on the floor-level operations at the largest rail mill in India to study the response of productivity to the threat of entry. Output per active shift increased by 28 percent over 3 years with minimal changes in physical cap...

Global Capital Markets in the Long Run: A Review of Maurice Obstfeld and Alan Taylor's Global Capital Markets

By Jeffrey G. Williamson

Journal of Economic Literature, June 2007

Written by Maurice Obstfeld and Alan Taylor, Global Capital Markets: Integration, Crisis, and Growth was a much-needed book that will be cited extensively by those with interests in the long run evolution of the world financial capital market. The ...

Report: Committee on the Status of Women in the Economics Profession (CSWEP)

By Marjorie B. McElroy

American Economic Review, May 2016