Coping with Asymmetries in the Commons: Self-Governing Irrigation Systems Can Work

[Symposium]

By Elinor Ostrom and Roy Gardner

Journal of Economic Perspectives, Fall 1993

Many analysts presume that the appropriators of a common-pool resource are trapped in a Hobbesian state of nature and cannot themselves create rules to counteract the perverse incentives they face in managing the resource. The logical consequence of this ...

Vertical Linkages and the Collapse of Global Trade

By Rudolfs Bems, Robert C. Johnson, and Kei-Mu Yi

American Economic Review, May 2011

A common view is that cross-border vertical linkages played a key role in the 2008-2009 collapse of global trade. This paper presents two accounting results from a global input-output framework that shed light on this channel. We feed in observed changes ...

Competition through Commissions and Kickbacks

By Roman Inderst and Marco Ottaviani

American Economic Review, April 2012

In markets for retail financial products and health services, consumers often rely on the advice of intermediaries to decide which specialized offering best fits their needs. Product providers, in turn, compete to influence the intermediaries' advice thr...

Crash and Wait? The Impact of the Great Recession on the Retirement Plans of Older Americans

By Brooke Helppie McFall

American Economic Review, May 2011

This study uses data from pre- and post-crash surveys from the Cognitive Economics study to examine the impact of recent stock and labor market wealth losses on the planned retirement ages of older Americans. Regression estimates imply that the average we...

The Long-Term Impact of Military Service on Health: Evidence from World War II and Korean War Veterans

By Kelly Bedard and Olivier Deschênes

American Economic Review, March 2006

During the World War II and Korean War era, the U.S. military freely distributed cigarettes to overseas personnel and provided low-cost tobacco products on domestic military bases. In fact, even today the military continues to sell subsidized tobacco prod...

Public Debt and Changing Inflation Targets

By Michael U. Krause and Stéphane Moyen

American Economic Journal: Macroeconomics, October 2016

What are the effects of a higher central bank inflation target on the burden of real public debt? Several recent proposals have suggested that even a moderate increase in the inflation target can have a pronounced effect on real public debt. We consider t...

Optimal Sovereign Default

By Klaus Adam and Michael Grill

American Economic Journal: Macroeconomics, January 2017

When is it optimal for a fully committed government to default on its legal repayment obligations? Considering a small open economy with domestic production risk and noncontingent government debt, we show that it is ex ante optimal to occasionally deviate...

Were There Regime Switches in U.S. Monetary Policy?

By Christopher A. Sims and Tao Zha

American Economic Review, March 2006

A multivariate regime-switching model for monetary policy is confronted with U.S. data. The best fit allows time variation in disturbance variances only. With coefficients allowed to change, the best fit is with change only in the monetary policy rule and...

Knowledge Capital and Aggregate Income Differences: Development Accounting for US States

By Eric A. Hanushek, Jens Ruhose, and Ludger Woessmann

American Economic Journal: Macroeconomics, October 2017

Improvement in human capital is often presumed to be important for state economic development, but little research links better education to state incomes. We develop detailed measures of worker skills in each state that incorporate cognitive skills from ...

The Economic Lives of the Poor

By Abhijit V. Banerjee and Esther Duflo

Journal of Economic Perspectives, Winter 2007

The 1990 World Development Report from the World Bank defined the "extremely poor" people of the world as those who are currently living on no more than $1 per day per person. But how actually does one live on less than $1 per day? This essay is about th...

The Rescue of Fannie Mae and Freddie Mac

[Symposium: The Bailouts of 2007-2009]

By W. Scott Frame, Andreas Fuster, Joseph Tracy, and James Vickery

Journal of Economic Perspectives, Spring 2015

The imposition of federal conservatorships on September 6, 2008, at the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation—commonly known as Fannie Mae and Freddie Mac—was one of the most dramatic events of th...

Corporate Takeovers: The Efficiency Arguments

[Symposium: Takeovers]

By F. M. Scherer

Journal of Economic Perspectives, Winter 1988

In recent years, the tender offer takeover has been praised and damned with a ferocity suggesting that the survival of capitalism is at stake. The truth, as in most disputes with substantial metaphysical content, is more prosaic. Some takeovers enhance ec...

On Economics: A Review of Why Nations Fail by D. Acemoglu and J. Robinson and Pillars of Prosperity by T. Besley and T. Persson

By W. Bentley MacLeod

Journal of Economic Literature, March 2013

The purpose of this essay is to review the books Why Nations Fail by Daron Acemoglu and James Robinson, and Pillars of Prosperity by Timothy Besley and Torsten Persson. The essay briefly discusses the main contributions of the books and ...

Caste as an Impediment to Trade

By Siwan Anderson

American Economic Journal: Applied Economics, January 2011

We compare outcomes across two types of villages in rural India. Villages vary by which caste is dominant (owns the majority of land): either a low or high caste. The key finding is that income is substantially higher for low-caste households residing in ...

Should Monetary Policy Respond Strongly to Output Gaps?

By Bennett T. McCallum

American Economic Review, May 2001

Culture and Institutions

By Alberto Alesina and Paola Giuliano

Journal of Economic Literature, December 2015

A growing body of empirical work measuring different types of cultural traits has shown that culture matters for a variety of economic outcomes. This paper focuses on one specific aspect of the relevance of culture: its relationship to institutions. We re...

Valuing the Wind: Renewable Energy Policies and Air Pollution Avoided

By Kevin Novan

American Economic Journal: Economic Policy, August 2015

Exploiting variation in the hourly production from wind turbines, this paper quantifies the heterogeneity in the marginal impact of renewable electricity on pollution. The results reveal that output from competing renewable capacity additions—e.g., ...

The Paradox of Declining Female Happiness

By Betsey Stevenson and Justin Wolfers

American Economic Journal: Economic Policy, August 2009

The lives of women in the United States have improved over the past 35 years by many objective measures, yet we show that measures of subjective well-being indicate that women's happiness has declined both absolutely and relative to men. This decline i...

Value Maximization and the Acquisition Process

[Symposium: Takeovers]

By Andrei Shleifer and Robert W. Vishny

Journal of Economic Perspectives, Winter 1988

Like the rest of us, corporate managers have many personal goals and ambitions, only one of which is to get rich. The way they try to run their companies reflects these personal goals. Shareholders, in contrast, deprived of the pleasures of running the co...

Evaluating Counterterrorism Spending

By John Mueller and Mark G. Stewart

Journal of Economic Perspectives, Summer 2014

In this article, we present a simple back-of-the-envelope approach for evaluating whether counterterrorism security measures reduce risk sufficiently to justify their costs. The approach uses only four variables: the consequences of a successful attack, t...