Saving Lives at Birth: The Impact of Home Births on Infant Outcomes

By N. Meltem Daysal, Mircea Trandafir, and Reyn van Ewijk

American Economic Journal: Applied Economics, July 2015

Many developed countries have recently experienced sharp increases in home birth rates. This paper investigates the impact of home births on the health of low-risk newborns using data from the Netherlands, the only developed country where home births are ...

Financial Networks and Contagion

By Matthew Elliott, Benjamin Golub, and Matthew O. Jackson

American Economic Review, October 2014

We study cascades of failures in a network of interdependent financial organizations: how discontinuous changes in asset values (e.g., defaults and shutdowns) trigger further failures, and how this depends on network structure. Integration (greater dep...

The Economics of HIV/AIDS in Low-Income Countries: The Case for Prevention

[Symposium: Disease and Development]

By David Canning

Journal of Economic Perspectives, Summer 2006

There are two approaches to reducing the burden of sickness and death associated with the human immunodeficiency virus (HIV), which leads to acquired immunodeficiency syndrome (AIDS): treatment and prevention. Despite large international aid flows for HIV...

Anomalies: The Equity Premium Puzzle

By Jeremy J. Siegel and Richard H. Thaler

Journal of Economic Perspectives, Winter 1997

The equity premium is the difference in returns between equities and fixed income securities, such as Treasury bills. The puzzle refers to the fact that the premium has historically been very large--about 6 percent per year--too large to be easily explain...

Game Theory in Economics and Beyond

[Symposium: What is Happening in Game Theory?]

By Larry Samuelson

Journal of Economic Perspectives, Fall 2016

Within economics, game theory occupied a rather isolated niche in the 1960s and 1970s. It was pursued by people who were known specifically as game theorists and who did almost nothing but game theory, while other economists had little idea what game theo...

The Economics of Two-Sided Markets

By Marc Rysman

Journal of Economic Perspectives, Summer 2009

Broadly speaking, a two-sided market is one in which 1) two sets of agents interact through an intermediary or platform, and 2) the decisions of each set of agents affects the outcomes of the other set of agents, typically through an externality. In the c...

Income and Democracy

By Daron Acemoglu, Simon Johnson, James A. Robinson, and Pierre Yared

American Economic Review, June 2008

Existing studies establish a strong cross-country correlation between income and democracy but do not control for factors that simultaneously affect both variables. We show that controlling for such factors by including country fixed effects removes th...

The Crisis in Economic Theory: A Review Essay

By Kevin D. Hoover

Journal of Economic Literature, December 2016

The Great Recession and the financial crisis of 2007-09 prompted calls for fundamental reforms of economic theory. The role of theory in economics and in recent economic events is considered in light of two recent books: the sociologist Richard Swedberg's...

Islamic Economics and the Islamic Subeconomy

By Timur Kuran

Journal of Economic Perspectives, Fall 1995

Although Islamic economics was developed to serve cultural and political ends, efforts have been made to put its ideals into practice. There now exist Islamic banks, which claim to offer an interest-free alternative to conventional banking, and government...

New Directions for Modelling Strategic Behavior: Game-Theoretic Models of Communication, Coordination, and Cooperation in Economic Relationships

[Symposium: What is Happening in Game Theory?]

By Vincent P. Crawford

Journal of Economic Perspectives, Fall 2016

In this paper, I discuss the state of progress in applications of game theory in economics and try to identify possible future developments that are likely to yield further progress. To keep the topic manageable, I focus on a canonical economic problem th...

Lessons from the Kibbutz on the Equality-Incentives Trade-Off

By Ran Abramitzky

Journal of Economic Perspectives, Winter 2011

The first kibbutz was established southwest of the Sea of Galilee in 1910, but the vast majority of kibbutzim were established in the 1930s and 1940s, shortly before the creation of the state of Israel in 1948. Founders aimed to create a "new human being"...

Colorism, Complexion Homogamy, and Household Wealth: Some Historical Evidence

By Howard Bodenhorn

American Economic Review, May 2006

Are Risk Aversion and Impatience Related to Cognitive Ability?

By Thomas Dohmen, Armin Falk, David Huffman, and Uwe Sunde

American Economic Review, June 2010

This paper investigates whether there is a link between cognitive ability, risk aversion, and impatience, using a representative sample of roughly 1,000 German adults. Subjects participate in choice experiments with monetary incentives measuring risk aver...

Beyond Computation: Information Technology, Organizational Transformation and Business Performance

[Symposium: Computers and Productivity]

By Erik Brynjolfsson and Lorin M. Hitt

Journal of Economic Perspectives, Fall 2000

To understand the economic value of computers, one must broaden the traditional definition of both the technology and its effects. Case studies and firm-level econometric evidence suggest that: 1) organizational "investments" have a large influence on the...

No Taxation without Information: Deterrence and Self-Enforcement in the Value Added Tax

By Dina Pomeranz

American Economic Review, August 2015

Claims that the VAT facilitates tax enforcement by generating paper trails on transactions between firms contributed to widespread VAT adoption worldwide, but there is surprisingly little evidence. This paper analyzes the role of third-party information f...

One Swallow Doesn't Make a Summer: New Evidence on Anchoring Effects

By Zacharias Maniadis, Fabio Tufano, and John A. List

American Economic Review, January 2014

Some researchers have argued that anchoring in economic valuations casts doubt on the assumption of consistent and stable preferences. We present new evidence that explores the strength of certain anchoring results. We then present a theoretical framew...

International Robust Disagreement

By Riccardo Colacito and Mariano M. Croce

American Economic Review, May 2012

We characterize the equilibrium of a two-country, two-good economy in which agents have opposite preference bias toward one of the two consumption goods and fear model misspecification. We document that disagreement about endowments' growth prospects is a...

Stock Prices, News, and Economic Fluctuations: Comment

By André Kurmann and Elmar Mertens

American Economic Review, April 2014

Beaudry and Portier (2006) propose an identification scheme to study the effects of news shocks about future productivity in vector error correction models (VECMs). This comment shows that, when applied to their VECMs with more than two variables, the ...

State versus Private Ownership

[Symposium: The Firm and its Boundaries]

By Andrei Shleifer

Journal of Economic Perspectives, Fall 1998

Private ownership should generally be preferred to public ownership when the incentives to innovate and to contain costs must be strong. In essence, this is the case for capitalism over socialism, explaining the 'dynamic vitality' of free enterprise. The ...

Human Capital Persistence and Development

By Rudi Rocha, Claudio Ferraz, and Rodrigo R. Soares

American Economic Journal: Applied Economics, October 2017

This paper documents the persistence of human capital over time and its association with long-term development. We exploit variation induced by a state-sponsored settlement policy that attracted immigrants with higher levels of schooling to particular reg...