Physician Payment Reform and Hospital Referrals

By Kate Ho and Ariel Pakes

American Economic Review, May 2014

Commercial health insurers in California use provider capitation payments to different extents. These are similar to arrangements introduced by the recent health reforms to give physicians incentives to control costs. In a previous paper we showed that pa...

Was the New Deal Contractionary?

By Gauti B. Eggertsson

American Economic Review, February 2012

Can government policies that increase the monopoly power of firms and the militancy of unions increase output? This paper shows that the answer is yes under certain "emergency" conditions. These emergency conditions—zero interest rates and deflation...

Punishment and Deterrence: Evidence from Drunk Driving

By Benjamin Hansen

American Economic Review, April 2015

I test the effect of harsher punishments and sanctions on driving under the influence (DUI). In this setting, punishments are determined by strict rules on blood alcohol content (BAC) and previous offenses. Regression discontinuity derived estimates sugge...

Pharmaceuticals and the Developing World

[Symposium: Pharmaceuticals]

By Michael Kremer

Journal of Economic Perspectives, Fall 2002

Pharmaceuticals have greatly improved health in developing countries, but many people in developing countries do not obtain even inexpensive pharmaceuticals and little pharmaceutical R&D is oriented toward products needed by developing countries, such as ...

Is the Price Level Determined by the Needs of Fiscal Solvency?

By Matthew B. Canzoneri, Robert E. Cumby, and Behzad T. Diba

American Economic Review, December 2001

The fiscal theory of price determination suggests that if primary surpluses evolve independently of government debt, the equilibrium price level "jumps" to assure fiscal solvency. In this non-Ricardian regime, fiscal policy—not monetary policy—provide...

The Wage Effects of Offshoring: Evidence from Danish Matched Worker-Firm Data

By David Hummels, Rasmus Jørgensen, Jakob Munch, and Chong Xiang

American Economic Review, June 2014

We employ data that match the population of Danish workers to the universe of private-sector Danish firms, with product-level trade flows by origin- and destination-countries. We document new stylized facts about offshoring and instrument for offshoring...

Proofs and Prototypes for Sale: The Licensing of University Inventions

By Richard Jensen and Marie Thursby

American Economic Review, March 2001

Proponents of the Bayh-Dole Act argue that industrial use of federally funded research would be reduced without university patent licensing. Our survey of U.S. universities supports this view, emphasizing the embryonic state of most technologies licensed ...

Retrospectives: Do Productive Recessions Show the Recuperative Powers of Capitalism? Schumpeter's Analysis of the Cleansing Effect

By Muriel Dal Pont Legrand and Harald Hagemann

Journal of Economic Perspectives, Winter 2017

Schumpeter has often been interpreted as a "liquidationist," someone who is convinced that economic crises are necessary and unavoidable, and thus that government nonintervention is a sound policy in such crises. The first two sections of this paper dis...

Psychology and the Market

By Edward L. Glaeser

American Economic Review, May 2004

Firm Size Distortions and the Productivity Distribution: Evidence from France

By Luis Garicano, Claire Lelarge, and John Van Reenen

American Economic Review, November 2016

We show how size-contingent laws can be used to identify the equilibrium and welfare effects of labor regulation. Our framework incorporates such regulations into the Lucas (1978) model and applies it to France where many labor laws start to bind on firms...

(Dis)organization and Success in an Economics MOOC

By Abhijit V. Banerjee and Esther Duflo

American Economic Review, May 2014

Massive Online Open Courses (MOOCs) present the potential to deliver high quality education to a large number of students. But they suffer from low completion rates. This paper identifies disorganization as a factor behind failure to complete a MOOC. Stud...

Selection in Insurance Markets: Theory and Empirics in Pictures

By Liran Einav and Amy Finkelstein

Journal of Economic Perspectives, Winter 2011

Government intervention in insurance markets is ubiquitous and the theoretical basis for such intervention, based on classic work from the 1970s, has been the problem of adverse selection. Over the last decade, empirical work on selection in insurance mar...

A Time-Series Analysis of Crime, Deterrence, and Drug Abuse in New York City

By Hope Corman and H. Naci Mocan

American Economic Review, June 2000

From Peer Pressure to Biased Norms

By Moti Michaeli and Daniel Spiro

American Economic Journal: Microeconomics, February 2017

This paper studies a coordination game between a continuum of players with heterogeneous tastes who perceive peer pressure when behaving differently from each other. It characterizes the conditions under which a social norm—a mode of behavior followed b...

The Stock Market and Capital Accumulation

By Robert E. Hall

American Economic Review, December 2001

The value of a firm's securities measures the value of the firm's productive assets. If the assets include only capital goods and not a permanent monopoly franchise, the value of the securities measures the value of the capital. Finally, if the price of t...

Will the Sovereign Debt Market Survive?

By Andrei Shleifer

American Economic Review, May 2003

Parental Job Loss and Children's Long-Term Outcomes: Evidence from 7 Million Fathers' Layoffs

By Nathaniel G. Hilger

American Economic Journal: Applied Economics, July 2016

How do parental layoffs and their large attendant income losses affect children's long-term outcomes? This question has proven difficult to answer due to the endogeneity of parental layoffs. I overcome this problem by exploiting the timing of 7 million fa...

Managing Conflicts in Relational Contracts

By Jin Li and Niko Matouschek

American Economic Review, October 2013

A manager and a worker are in an infinitely repeated relationship in which the manager privately observes her opportunity costs of paying the worker. We show that the optimal relational contract generates periodic conflicts during which effort and expe...

Identity Economics 2016: Where Do Social Distinctions and Norms Come From?

By Rachel E. Kranton

American Economic Review, May 2016

Identity economics provides a framework to analyze economic outcomes by establishing people's identities—not just pecuniary incentives—as primary motivations for choice. The heart of the framework is social difference and norms. This paper engages the...

Entropy and the Value of Information for Investors

By Antonio Cabrales, Olivier Gossner, and Roberto Serrano

American Economic Review, February 2013

Consider an investor who fears ruin when facing investments that satisfy no-arbitrage. Before investing he can purchase information about the state of nature as an information structure. Given his prior, information structure α investment dominat...