Growth Dynamics: The Myth of Economic Recovery

By Valerie Cerra and Sweta Chaman Saxena

American Economic Review, March 2008

Using panel data for a large set of high-income, emerging market, developing, and transition countries, we find robust evidence that the large output loss from financial crises and some types of political crises is highly persistent. The results on financ...

Gambling at Lucky Stores: Empirical Evidence from State Lottery Sales

By Jonathan Guryan and Melissa S. Kearney

American Economic Review, March 2008

We show that the week after selling a large-prize Texas Lotto winning ticket, a retailer experiences a 12 to 38 percent relative increase in ticket sales. Some increase persists for up to 40 weeks. We document that the sales response increases with jackpo...

A Model of Housing in the Presence of Adjustment Costs: A Structural Interpretation of Habit Persistence

By Marjorie Flavin and Shinobu Nakagawa

American Economic Review, March 2008

The paper provides a model of household consumption and portfolio allocation which incorporates housing as both a consumption good and a component of wealth. Household utility depends, possibly nonseparably, on two goods: nondurable consumption, which is ...

A Simple Auction Mechanism for the Optimal Allocation of the Commons

By Juan-Pablo Montero

American Economic Review, March 2008

Efficient regulation of the commons requires information about the regulated firms that is rarely available to regulators (e.g., cost of pollution abatement). This paper proposes a simple mechanism that implements the first-best for any number of firms: a...

The Dynamic Behavior of the Real Exchange Rate in Sticky Price Models

By Jón Steinsson

American Economic Review, March 2008

Existing empirical evidence suggests that real exchange rates exhibit hump-shaped dynamics. I show that this is a robust fact across nine large, developed economies. This fact can help explain why sticky price business cycle models have been unable to mat...

Collective Memory, Cultural Transmission, and Investments

By Roberta Dessí

American Economic Review, March 2008

I study the transmission of collective memory as a mechanism for cultural transmission, in the presence of social externalities associated with individual cultural investment decisions. The younger generation's decisions depend on beliefs about the qualit...

Bureaucrats or Politicians? Comment

By Fuhito Kojima

American Economic Review, March 2008

Alesina and Tabellini (2007) investigate the normative criteria for allocating policy tasks to bureaucrats versus politicians. While they establish criteria with respect to a number of parameters, they do not give a criterion with respect to the degree of...

Economic Forecasting

By Graham Elliott and Allan Timmermann

Journal of Economic Literature, March 2008

Forecasts guide decisions in all areas of economics and finance and their value can only be understood in relation to, and in the context of, such decisions. We discuss the central role of the loss function in helping determine the forecaster's objectiv...

What Do We Know about Global Income Inequality?

By Sudhir Anand and Paul Segal

Journal of Economic Literature, March 2008

In this paper, we review the recent literature on global interpersonal income inequality. While all estimates agree that the level is very high, with a Gini of between 0.630 and 0.686 in the 1990s, there is no consensus regarding the direction of change...

Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles

By Andrew E. Clark, Paul Frijters, and Michael A. Shields

Journal of Economic Literature, March 2008

The well-known Easterlin paradox points out that average happiness has remained constant over time despite sharp rises in GNP per head. At the same time, a micro literature has typically found positive correlations between individual income and individ...

A Review of Janos Kornai

By Gerard Roland

Journal of Economic Literature, March 2008

This article reviews the memoirs of János Kornai. The famous Hungarian economist describes his life experiences and the concurrent history of Hungary. More importantly, he leads us through his intellectual evolution, explaining how his thinking evolve...

Book Reviews

Journal of Economic Literature, March 2008

Annotated Listing of New Books

Journal of Economic Literature, March 2008

JEL Classification System

Journal of Economic Literature, March 2008

What Is Middle Class about the Middle Classes around the World?

[Symposium: Development]

By Abhijit V. Banerjee and Esther Duflo

Journal of Economic Perspectives, Spring 2008

We expect a lot from the middle classes. At least three distinct arguments about the special economic role of the middle class are traditionally made. In one, new entrepreneurs armed with a capacity and a tolerance for delayed gratification emerge from th...

Where Does the Money Go? Best and Worst Practices in Foreign Aid

[Symposium: Development]

By William Easterly and Tobias Pfutze

Journal of Economic Perspectives, Spring 2008

This paper does not address the issue of aid effectiveness -- that is, the extent to which foreign aid dollars actually achieve their goals -- but on "best practices" in the way in which official aid is given, an important component of the wider debate. F...

Income, Health, and Well-Being around the World: Evidence from the Gallup World Poll

[Symposium: Development]

By Angus Deaton

Journal of Economic Perspectives, Spring 2008

During 2006, the Gallup Organization conducted a World Poll that used an identical questionnaire for national samples of adults from 132 countries. I analyze the data on life satisfaction and on health satisfaction and look at their relationships with nat...

What Do Nongovernmental Organizations Do?

[Symposium: Development]

By Eric Werker and Faisal Z. Ahmed

Journal of Economic Perspectives, Spring 2008

Nongovernmental organizations are one group of players who are active in the efforts of international development and increasing the welfare of poor people in poor countries. Nongovernmental organizations are largely staffed by altruistic employees and vo...

The Quality of Medical Advice in Low-Income Countries

[Symposium: Development]

By Jishnu Das, Jeffrey Hammer, and Kenneth Leonard

Journal of Economic Perspectives, Spring 2008

This paper documents the quality of medical advice in low-income countries. Our evidence on health care quality in low-income countries is drawn primarily from studies in four countries: Tanzania, India, Indonesia, and Paraguay. We provide an overview of...

What the Seller Won't Tell You: Persuasion and Disclosure in Markets

[Symposium: Economics of Persuasion]

By Paul Milgrom

Journal of Economic Perspectives, Spring 2008

Imagine that you are considering an investment in a new public offering of a firm's shares. The firm's officers make a presentation that includes an audited financial statement, an earnings forecast reviewed by its prestigious investment bankers, and an i...