Real Effects of Information Frictions: When the States and the Kingdom Became United

By Claudia Steinwender

American Economic Review, March 2018

This paper exploits a unique historical experiment to estimate how information frictions distort international trade: the establishment of the transatlantic telegraph in 1866. I use newly collected data on cotton prices, trade, and information flows from ...

Monetary Policy According to HANK

By Greg Kaplan, Benjamin Moll, and Giovanni L. Violante

American Economic Review, March 2018

We revisit the transmission mechanism from monetary policy to household consumption in a Heterogeneous Agent New Keynesian (HANK) model. The model yields empirically realistic distributions of wealth and marginal propensities to consume because of two fea...

A Model of Trading in the Art Market

By Stefano Lovo and Christophe Spaenjers

American Economic Review, March 2018

We present an infinite-horizon model of endogenous trading in the art auction market. Agents make purchase and sale decisions based on the relative magnitude of their private use value in each period. Our model generates endogenous cross-sectional and tim...

How Does Household Income Affect Child Personality Traits and Behaviors?

By Randall Akee, William Copeland, E. Jane Costello, and Emilia Simeonova

American Economic Review, March 2018

We examine the effects of a quasi-experimental unconditional household income transfer on child emotional and behavioral health and personality traits. Using longitudinal data, we find that there are large beneficial effects on children's emotional and be...

Advertising and Risk Selection in Health Insurance Markets

By Naoki Aizawa and You Suk Kim

American Economic Review, March 2018

This paper studies the impact of advertising as a channel for risk selection in Medicare Advantage. We provide evidence that insurer advertising is responsive to the gains from risk selection. Then we develop and estimate an equilibrium model of Medicare ...

Disentangling the Effects of a Banking Crisis: Evidence from German Firms and Counties

By Kilian Huber

American Economic Review, March 2018

Lending cuts by banks directly affect the firms borrowing from them, but also indirectly depress economic activity in the regions in which they operate. This paper moves beyond firm-level studies by estimating the effects of an exogenous lending cut by a ...

Front Matter

Journal of Economic Literature, March 2018

The Science of Monetary Policy: An Imperfect Knowledge Perspective

By Stefano Eusepi and Bruce Preston

Journal of Economic Literature, March 2018

This paper reevaluates the basic prescriptions of monetary policy design in the new Keynesian paradigm through the lens of imperfect knowledge. We show that while the basic logic of monetary policy design under rational expectations continues to obtain, p...

On the Determinants of Cooperation in Infinitely Repeated Games: A Survey

By Pedro Dal Bó and Guillaume R. Fréchette

Journal of Economic Literature, March 2018

A growing experimental literature studies the determinants of cooperation in infinitely repeated games, tests different predictions of the theory, and suggests an empirical solution to the problem of multiple equilibria. To provide a robust description of...

Citations in Economics: Measurement, Uses, and Impacts

By Daniel S. Hamermesh

Journal of Economic Literature, March 2018

I describe and compare sources of data on citations in economics and the statistics derived from them. Constructing data sets of the post-publication citation histories of articles published in the "top five" journals in the 1970s and 2000s, I examine dis...

Empirical Work on Auctions of Multiple Objects

By Ali Hortaçsu and David McAdams

Journal of Economic Literature, March 2018

Abundant data has led to new opportunities for empirical auctions research in recent years, with much of the newest work on auctions of multiple objects, including: (1) auctions of ranked objects (such as sponsored search ads), (2) auctions of identical o...

Markets and Manipulation: Time for a Paradigm Shift?

By Kaushik Basu

Journal of Economic Literature, March 2018

There is a growing appreciation in economics that people have emotional vulnerabilities, commitments to social norms, and systematic irrationalities that impact their decision making and choice in the market place. The flip side of this is that human bein...

A Review Essay on Howard Bodenhorn's The Color Factor: The Economics of African-American Well-Being in the Nineteenth-Century South

By Allison Shertzer

Journal of Economic Literature, March 2018

In The Color Factor: The Economics of African-American Well-Being in the Nineteenth-Century South, Howard Bodenhorn investigates the origins, health, and socioeconomic performance of mixed-race people in the antebellum Southern United States. The c...

Morality, Policy, and the Brain

By Aldo Rustichini

Journal of Economic Literature, March 2018

The book Moral Tribes: Emotion, Reason, and the Gap between Us and Them, by Joshua Greene, invites the reader to give a new look at the foundation of ethics and, by implication, to policy. Its specific strength is the systematic integration of new ...

A Review Essay on Social Neuroscience: Can Research on the Social Brain and Economics Inform Each Other?

By Carlos Alós-Ferrer

Journal of Economic Literature, March 2018

Social neuroscience studies the "social brain," conceived as the set of brain structures and functions supporting the perception and evaluation of the social environment. This article provides an overview of the field, using the book Social Neuroscienc...

Book Reviews

Journal of Economic Literature, March 2018

Annotated Listing of New Books

Journal of Economic Literature, March 2018

JEL Classification System

Journal of Economic Literature, March 2018

Front Matter

American Economic Journal: Applied Economics, April 2018

School Finance Reform and the Distribution of Student Achievement

By Julien Lafortune, Jesse Rothstein, and Diane Whitmore Schanzenbach

American Economic Journal: Applied Economics, April 2018

We study the impact of post-1990 school finance reforms, during the so-called "adequacy" era, on absolute and relative spending and achievement in low-income school districts. Using an event study research design that exploits the apparent randomness of r...