The Finnish Great Depression: From Russia with Love

By Yuriy Gorodnichenko, Enrique G. Mendoza, and Linda L. Tesar

American Economic Review, June 2012

Why did Finland experience, in 1991-1993, the deepest recession observed in an industrialized country since the 1930s? Using a dynamic general equilibrium model with labor frictions, we argue that the collapse of the Soviet-Finnish trade was a major cont...

Welfare-Based Optimal Monetary Policy with Unemployment and Sticky Prices: A Linear-Quadratic Framework

By Federico Ravenna and Carl E. Walsh

American Economic Journal: Macroeconomics, April 2011

We derive a linear-quadratic model that is consistent with sticky prices and search and matching frictions in the labor market. We show that the second-order approximation to the welfare of the representative agent depends on inflation and "gaps" that inv...

The Microeconomic Dimensions of the Eurozone Crisis and Why European Politics Cannot Solve Them

By Christian Thimann

Journal of Economic Perspectives, Summer 2015

The academic and policy debate about the crisis in Europe's single currency area is usually dominated by macroeconomic and public sector considerations. The microeconomic dimensions of the crisis and the private sector issues typically get much less att...

Wheat or Strawberries? Intermediated Trade with Limited Contracting

By Kala Krishna and Yelena Sheveleva

American Economic Journal: Microeconomics, August 2017

Why do developing countries fail to specialize in products in which they appear to have a comparative advantage? We propose a model of agricultural trade with intermediation that explains how hold up resulting from poor contracting environments can produc...

Stimulating Local Public Employment: Do General Grants Work?

By Heléne Lundqvist, Matz Dahlberg, and Eva Mörk

American Economic Journal: Economic Policy, February 2014

We apply the regression kink design to the Swedish grant system and estimate causal effects of intergovernmental grants on local public employment. Our robust conclusion is that grants do not stimulate local public employment. We find no statistically ...

Affiliation and Entry in First-Price Auctions with Heterogeneous Bidders: An Analysis of Merger Effects

By Tong Li and Bingyu Zhang

American Economic Journal: Microeconomics, May 2015

We study the effects of mergers in timber sale auctions in Oregon. We propose an entry and bidding model within the affiliated private value (APV) framework and with heterogeneous bidders, and establish existence of the entry equilibrium and existence and...

Does Abolishing User Fees Lead to Improved Health Status? Evidence from Post-apartheid South Africa

By Shinsuke Tanaka

American Economic Journal: Economic Policy, August 2014

Whether user fees for health services should be charged or abolished for the poor has recently been debated. This study examines the impact on child health status of removing user fees in South Africa. Our main innovation is to exploit plausibly exogenous...

The Obstinate Passion of Foreign Exchange Professionals: Technical Analysis

By Lukas Menkhoff and Mark P. Taylor

Journal of Economic Literature, December 2007

Technical analysis involves the prediction of asset price movements from inductive analysis of past movements. We establish a number of stylized facts, including that technical analysis is widespread in the foreign exchange market and that it may be pr...

Opportunities, Welfare, and Social Justice: A Review of Fishkin's Bottlenecks

By François Maniquet

Journal of Economic Literature, June 2017

In his Bottlenecks: A New Theory of Equal Opportunity, Joseph Fishkin claims he presents an entirely new way of thinking about equality of opportunity. The core of the new theory is the call for opportunity pluralism, which consists in enlarging th...

Correspondence: National Science Foundation Grants for Economics

By Milton Friedman

Journal of Economic Perspectives, Winter 1994

Correspondence regarding: National Science Foundation Grants for Economics

Renewable Natural Resource Management and Use without Markets

By Gardner M. Brown

Journal of Economic Literature, December 2000

Natural resources, by their nature, are not readily bent to the status of private property. Efficient resource use is complicated by jurisdictional externalities, public goods, non-use values, and beneficiaries spatially separated from the location of res...

Walking the Tightrope on Medicare Reform

[Symposium: The Future of Medicare]

By David M. Cutler

Journal of Economic Perspectives, Spring 2000

A central controversy in the debate about Medicare is whether the program spends too much money or whether instead it should be expanded to cover more. I consider the value of increased Medicare spending. I argue that on average Medicare spending is worth...

Targeting the Poor: Evidence from a Field Experiment in Indonesia

By Vivi Alatas, Abhijit Banerjee, Rema Hanna, Benjamin A. Olken, and Julia Tobias

American Economic Review, June 2012

This paper reports an experiment in 640 Indonesian villages on three approaches to target the poor: proxy means tests (PMT), where assets are used to predict consumption; community targeting, where villagers rank everyone from richest to poorest; and a hy...

Group Size and Incentives to Contribute: A Natural Experiment at Chinese Wikipedia

By Xiaoquan (Michael) Zhang and Feng Zhu

American Economic Review, June 2011

The literature on the private provision of public goods suggests an inverse relationship between incentives to contribute and group size. We find, however, that after an exogenous reduction of group size at Chinese Wikipedia, the nonblocked contributors d...

Markets: The Fulton Fish Market

By Kathryn Graddy

Journal of Economic Perspectives, Spring 2006

The Fulton Fish Market was a colorful part of the New York City landscape that operated on Fulton Street in Manhattan for over 150 years. In 2005 the market moved from the South Street Seaport in lower Manhattan to Hunts Point in the South Bronx. The Fult...

Bank Leverage and Social Welfare

By Lawrence Christiano and Daisuke Ikeda

American Economic Review, May 2016

We describe a general equilibrium model in which an agency problem arises because bankers must exert an unobserved and costly effort to perform their task. Suppose aggregate banker net worth is too low to insulate creditors from bad outcomes on their bala...

Inventories, Lumpy Trade, and Large Devaluations

By George Alessandria, Joseph P. Kaboski, and Virgiliu Midrigan

American Economic Review, December 2010

We document that delivery lags and transaction-level economics of scale matter for international trade, leading importers to import infrequently and hold additional inventory. In a model with these frictions calibrated to empirical measures of inventory a...

The Restoration of Welfare Economics

By Anthony B. Atkinson

American Economic Review, May 2011

This paper argues that welfare economics should be restored to a prominent place on the agenda of economists, and should occupy a central role in the teaching of economics. Economists should provide justification for the ethical criteria underlying welfar...

The Probability of Finding a Job

By Robert Shimer

American Economic Review, May 2008

The New Patent Intermediaries: Platforms, Defensive Aggregators, and Super-Aggregators

[Symposium: Patents]

By Andrei Hagiu and David B. Yoffie

Journal of Economic Perspectives, Winter 2013

The patent market consists mainly of privately negotiated, bilateral transactions, either sales or cross-licenses, between large companies. There is no eBay, Amazon, New York Stock Exchange, or Kelley's Blue Book equivalent for patents, and when buyers a...