Front Matter

American Economic Review, April 2026

Similarity of Information and Collective Action

By Deepal Basak, Joyee Deb, and Aditya Kuvalekar

American Economic Review, April 2026

We study a canonical collective action game with incomplete information. Individuals attempt to coordinate to achieve a shared goal, while also facing a temptation to free-ride. More similar information can help them coordinate, but it can also exacerbate...

A Long and a Short Leg Make for a Wobbly Equilibrium

By Nicolae Gârleanu, Stavros Panageas, and Geoffery Zheng

American Economic Review, April 2026

We provide a model to explain how the interaction between the spot and lending markets for stocks can lead to abrupt changes in short selling activity. Furthermore, rational short sellers may choose to abandon the market even as mispricing widens. We docu...

Real Credit Cycles

By Pedro Bordalo, Nicola Gennaioli, Andrei Shleifer, and Stephen J. Terry

American Economic Review, April 2026

We embed diagnostic expectations in a workhorse neoclassical model with heterogeneous firms and risky debt. A realistic degree of overreaction estimated from US firms' earnings forecasts generates realistic credit cycles. Good times produce economic and f...

Market Power and Capital Constraints

By Milena Wittwer and Jason Allen

American Economic Review, April 2026

We explore how traders' equity capitalization influences asset prices in a framework that accounts for market power. In our model, traders with capital constraints engage in transactions in an imperfectly competitive market. We demonstrate that looser cap...

Robust Misspecified Models

By Cuimin Ba

American Economic Review, April 2026

This paper studies which misspecified models are likely to persist when decision-makers compare them with competing models. The main result characterizes such models based on two features that can be derived from primitives: The model's asymptotic accurac...

Negative Control Falsification Tests for Instrumental Variable Designs

By Oren Danieli, Daniel Nevo, Itai Walk, Bar Weinstein, and Dan Zeltzer

American Economic Review, April 2026

The validity of instrumental variable (IV) designs is typically tested using two types of falsification tests. We characterize these tests as conditional independence tests between negative control variables—proxies for unobserved variables posing a thr...

Games on Multiplex Networks

By Yves Zenou and Junjie Zhou

American Economic Review, April 2026

We develop a simple multilayer network model in which agents allocate effort across layers with heterogeneous structures, subject to an aggregate effort constraint. Incentives are shaped by agents' network positions within each layer, and equilibrium beha...

Spillovers in State Capacity Building: Evidence from the Digitization of Land Records in Pakistan

By Shan Aman-Rana and Clement Minaudier

American Economic Review, April 2026

Digitization reforms have been hailed as an effective way of strengthening state capacity. However, digitization can also fundamentally reshape the organization of bureaucracies. Using a unique administrative dataset on agricultural taxation and surveys o...

Sovereign Debt Restructuring: Messy or Messier?

By Anne Krueger

American Economic Review, May 2003

Making Bricks from Straw: Resources and Productivity in Health Care

By Edward N. Okeke

American Economic Review, April 2026

Why do health facilities in developing countries do so poorly? This paper examines the role of financial constraints. I describe an experiment in which we surprised health workers in randomly selected public health clinics in Nigeria with a ₦600,000 gra...

Abundance from Abroad: Migrant Income and Long-Run Economic Development

By Gaurav Khanna, Emir Murathanoglu, Caroline Theoharides, and Dean Yang

American Economic Review, April 2026

We study how international migrant income prospects affect long-run development in origin areas. We leverage the 1997 Asian Financial Crisis exchange rate shocks in a shift-share identification strategy across Philippine provinces. Initial migrant income ...

Deadwood Labor? The Effects of Eliminating Employment Protection for Older Workers

By Emmanuel Saez, Benjamin Schoefer, and David Seim

American Economic Journal: Applied Economics

We analyze mandatory retirement in Sweden which eliminates entirely employment protection at age 67. Employment falls by about 10 percent and total average earnings by about 20 percent immediately at age 67. 8 percent of jobs separate immediately due t...

Monetary Policy without Commitment

By Hassan Afrouzi, Marina Halac, Kenneth Rogoff, and Pierre Yared

American Economic Review

This paper studies the implications of central bank credibility for long-run inflation and inflation dynamics. We introduce central bank lack of commitment into a standard non-linear New Keynesian economy with sticky-price monopolistically competitive ...

The Chile Project: The Story of the Chicago Boys and the Downfall of Neoliberalism by Sebastian Edwards

By Raimundo Soto

Journal of Economic Literature

Optimal Procurement Design: A Reduced-Form Approach

By Kun Zhang

American Economic Journal: Microeconomics

Standard procurement models assume that the buyer knows the quality of the good at the time of procurement; however, in many settings, the quality is learned only long after the transaction. We study procurement problems in which the buyer’s valuatio...

Public Debt Levels and Real Interest Rates: Causal Evidence from Parliamentary Elections

By Gabriel Ehrlich, Owen Kay, and Aditi Thapar

American Economic Review: Insights

We use close parliamentary elections as natural experiments to estimate the debt sensitivity of interest rates. Relative to an election in which one party barely secures a majority, an election in which no party achieves a majority causes the debt-to-GD...

The Missing Poor

By Torsten Figueiredo Walter, Niclas Moneke, and Ana Radu

American Economic Review: Insights

Population censuses constitute the basis of public resource allocation and political representation globally. This paper shows that census forms commonly generate incentives for enumerators to disproportionately omit members of larger households. Using...

Friendship Networks and Political Opinions

By Yann Algan, Nicolò Dalvit, Quoc-Anh Do, Alexis Le Chapelain, and Yves Zenou

American Economic Review

We examine how social interactions and friendships shape students' political opinions in a natural experiment at Sciences Po, a leading French university specializing in social and political sciences. The quasi-random assignment of students into short-ter...

Sovereign Debt Restructuring

By Randall S. Kroszner

American Economic Review, May 2003