Bayesian Model Comparison and Validation

By John Geweke

American Economic Review, May 2007

A Reassessment of Real Business Cycle Theory

By Ellen R. McGrattan and Edward C. Prescott

American Economic Review, May 2014

During the downturn of 2008–2009, output and hours fell significantly, but labor productivity rose. These facts have led many to conclude that there is a significant deviation between observations and current macrotheories that assume business cycle...

Optimal Annuitization with Stochastic Mortality and Correlated Medical Costs

By Felix Reichling and Kent Smetters

American Economic Review, November 2015

The conventional wisdom since Yaari (1965) is that households without a bequest motive should fully annuitize their investments. Numerous frictions do not break this sharp result. We modify the Yaari framework by allowing a household's mortality risk itse...

Investor Sentiment and Corporate Finance: Micro and Macro

By Owen A. Lamont and Jeremy C. Stein

American Economic Review, May 2006

Consumption Inequality over the Last Half Century: Some Evidence Using the New PSID Consumption Measure

By Orazio Attanasio and Luigi Pistaferri

American Economic Review, May 2014

This paper contributes to the debate regarding trends in consumption inequality in the United States. We present a new measure of consumption inequality based on the redesigned 1999–2011 PSID. We impute consumption to the families observed before 19...

Committee on the Status of Minority Groups in the Economics Profession: Report of Committee Activities for the 2010 Calendar Year

By Ngina Chiteji

American Economic Review, May 2011

Pitfalls of Forward-Looking Monetary Policy

By Michael Woodford

American Economic Review, May 2000

Women's Inheritance Rights, Household Allocation, and Gender Bias

By Nayana Bose and Shreyasee Das

American Economic Review, May 2017

We analyze the impact of improved land inheritance rights for women in India on female empowerment by examining their educational attainment and the intergenerational effects of the reform. Using a difference-in-differences strategy, we find that the amen...

Systematic Bias and Nontransparency in US Social Security Administration Forecasts

By Konstantin Kashin, Gary King, and Samir Soneji

Journal of Economic Perspectives, Spring 2015

We offer an evaluation of the Social Security Administration demographic and financial forecasts used to assess the long-term solvency of the Social Security Trust Funds. This same forecasting methodology is also used in evaluating policy proposals put fo...

Monetary Policy and the Financing of Firms

By Fiorella De Fiore, Pedro Teles, and Oreste Tristani

American Economic Journal: Macroeconomics, October 2011

How should monetary policy respond to changes in financial conditions? We consider a simple model where firms are subject to shocks which may force them to default on their debt. Firms' assets and liabilities are nominal and predetermined. Monetary policy...

Delay and Deadlines: Freeriding and Information Revelation in Partnerships

By Arthur Campbell, Florian Ederer, and Johannes Spinnewijn

American Economic Journal: Microeconomics, May 2014

We study two sources of delay in teams: freeriding and lack of communication. Partners contribute to the value of a common project, but have private information about the success of their own efforts. When the deadline is far away, unsuccessful partners...

The Impact of Global Warming on Agriculture: A Ricardian Analysis: Reply

By Robert Mendelsohn and William D. Nordhaus

American Economic Review, September 1999

The Impact of Indonesian Forest Fires on Singaporean Pollution and Health

By Tamara L. Sheldon and Chandini Sankaran

American Economic Review, May 2017

Forest burning in Indonesia results in severe episodes of "seasonal haze" in neighboring Singapore. We offer the first causal analysis of the transboundary health effects of the Indonesian forest burning. Instrumenting for air pollution with satellite fir...

Urban Accounting and Welfare

By Klaus Desmet and Esteban Rossi-Hansberg

American Economic Review, October 2013

We use a simple theory of a system of cities to decompose the determinants of the city size distribution into three main components: efficiency, amenities, and frictions. Higher efficiency and better amenities lead to larger cities but also to greater ...

Competition as a Discovery Procedure: Schumpeter Meets Hayek in a Model of Innovation

By Pedro Bento

American Economic Journal: Macroeconomics, July 2014

I incorporate an insight of Friedrich Hayek—that competition allows a thousand flowers to bloom, and discovers the best among them—into a model of Schumpeterian innovation. Firms face uncertainty about the optimal direction of innovation, so m...

Individual Perceptions of the Criminal Justice System

By Lance Lochner

American Economic Review, March 2007

This paper empirically examines belief updating of the perceived probability of arrest and its criminal deterrence effects using two longitudinal data sources. While beliefs about the probability of arrest are positively correlated with local official arr...

A Review of Gregory Clark's A Farewell to Alms: A Brief Economic History of the World

By Robert C. Allen

Journal of Economic Literature, December 2008

A Farewell to Alms advances striking claims about the economic history of the world. These include (1) the preindustrial world was in a Malthusian preventive check equilibrium, (2) living standards were unchanging and above subsistence for the la...

Labor Supply Responses to Large Social Transfers: Longitudinal Evidence from South Africa

By Cally Ardington, Anne Case, and Victoria Hosegood

American Economic Journal: Applied Economics, January 2009

We quantify the labor supply responses of prime-aged adults to the presence of pensioners in their households, using longitudinal data collected in South Africa. We compare households and individuals before and after pension receipt and pension loss, w...

Disasterization: A Simple Way to Fix the Asset Pricing Properties of Macroeconomic Models

By Xavier Gabaix

American Economic Review, May 2011

A central difficulty in economics is to create a model with both good business cycle properties and asset pricing properties. I show how to solve this difficulty by a simple portable modeling device: the "disasterization" of models. Take an economy with g...

Review of Political Economy: An Introductory Text, by Edmund S. Phelps

By Michael M. Weinstein

Journal of Economic Perspectives, Fall 1987

Political Economy is a scintillating excursion into modern economic thinking. Not a stultified world of price elasticities of demand. Nor a world where transaction costs are zero and information is perfect. Rather, Phelps's world is a modernist (his word)...