Hit or Miss? The Effect of Assassinations on Institutions and War

By Benjamin F. Jones and Benjamin A. Olken

American Economic Journal: Macroeconomics, July 2009

Assassinations are a persistent feature of the political landscape. Using a new dataset of assassination attempts on all world leaders from 1875 to 2004, we exploit inherent randomness in the success or failure of assassination attempts to identify the...

Democratic Capital: The Nexus of Political and Economic Change

By Torsten Persson and Guido Tabellini

American Economic Journal: Macroeconomics, July 2009

We study the dynamics of economic and political change, theoretically and empirically. Democratic capital measured by a nation's historical experience with democracy, and the incidence of democracy in its neighborhood, appears to reduce exit rates from...

Understanding the Forward Premium Puzzle: A Microstructure Approach

By Craig Burnside, Martin Eichenbaum, and Sergio Rebelo

American Economic Journal: Macroeconomics, July 2009

High interest rate currencies tend to appreciate relative to low interest rate currencies. We argue that adverse selection problems between participants in foreign exchange markets can account for this "forward premium puzzle." The key feature of our m...

The International Diversification Puzzle When Goods Prices Are Sticky: It's Really about Exchange-Rate Hedging, Not Equity Portfolios

By Charles Engel and Akito Matsumoto

American Economic Journal: Macroeconomics, July 2009

This paper develops a two-country monetary DSGE model in which households choose a portfolio of home and foreign equities, and a forward position in foreign exchange. Some nominal goods prices are sticky. Trade in these assets achieves the same allocat...

A Century of Work and Leisure

By Valerie A. Ramey and Neville Francis

American Economic Journal: Macroeconomics, July 2009

We develop comprehensive measures of time spent in market work, home production, schooling, and leisure in the United States for the last 106 years. We find that hours of work for prime age individuals are essentially unchanged, with the rise in women'...

How Is Foreign Aid Spent? Evidence from a Natural Experiment

By Eric Werker, Faisal Z. Ahmed, and Charles Cohen

American Economic Journal: Macroeconomics, July 2009

We use oil price fluctuations to test the impact of transfers from wealthy OPEC nations to their poorer Muslim allies. The instrument identifies plausibly exogenous variation in foreign aid. We investigate how aid is spent by tracking its short-run eff...

The Economics of Online Crime

[Symposium: Internet Economics]

By Tyler Moore, Richard Clayton, and Ross Anderson

Journal of Economic Perspectives, Summer 2009

This paper will focus on online crime, which has taken off as a serious industry since about 2004. Until then, much of the online nuisance came from amateur hackers who defaced websites and wrote malicious software in pursuit of bragging rights. But now c...

Priced and Unpriced Online Markets

[Symposium: Internet Economics]

By Benjamin Edelman

Journal of Economic Perspectives, Summer 2009

Some online resources are free and others are not -- but it can be hard to predict which resources are in which category. In some cases, users are charged for things such as web-based e-mail, wireless Internet access, and software, while in other cases, t...

The Online Advertising Industry: Economics, Evolution, and Privacy

[Symposium: Internet Economics]

By David S. Evans

Journal of Economic Perspectives, Summer 2009

Online advertising accounts for almost 9 percent of all advertising in the United States. This share is expected to increase as more media is consumed over the Internet and as more advertisers shift spending to online technologies. The expansion of Intern...

Subsidizing Creativity through Network Design: Zero-Pricing and Net Neutrality

[Symposium: Internet Economics]

By Robin S. Lee and Tim Wu

Journal of Economic Perspectives, Summer 2009

This paper focuses on the pricing aspect of the "net neutrality" debate -- in particular, the de facto ban on fees levied by Internet service providers on content providers to reach users. This "zero-price" rule may prove desirable for several reasons. ...

What Are Grades Made Of?

[Symposium: Grade Differences and Inflation]

By Alexandra C. Achen and Paul N. Courant

Journal of Economic Perspectives, Summer 2009

The term "grade inflation" covers a multitude of phenomena, some of which are even alleged to be sins. Continuing increases in average grades have been widely documented in many universities over the last several decades. Also widely documented, and ofte...

Grade Information and Grade Inflation: The Cornell Experiment

[Symposium: Grade Differences and Inflation]

By Talia Bar, Vrinda Kadiyali, and Asaf Zussman

Journal of Economic Perspectives, Summer 2009

Grade inflation and high grade levels have been subjects of concern and public debate in recent decades. In the mid-1990s, Cornell University's Faculty Senate had a number of discussions about grade inflation and what might be done about it. In April 1996...

Interview with Edmund S. Phelps

By Howard R. Vane and Chris Mulhearn

Journal of Economic Perspectives, Summer 2009

Edmund S. Phelps has been McVickar Professor of Political Economy at Columbia University in New York City, New York, since 1982 and director of the Center on Capitalism and Society at Columbia University's Earth Institute since 2001. In 2006, he was award...

The Economics of Two-Sided Markets

By Marc Rysman

Journal of Economic Perspectives, Summer 2009

Broadly speaking, a two-sided market is one in which 1) two sets of agents interact through an intermediary or platform, and 2) the decisions of each set of agents affects the outcomes of the other set of agents, typically through an externality. In the c...

World Oil: Market or Mayhem?

By James L. Smith

Journal of Economic Perspectives, Summer 2009

Many observers regard the world oil market as a puzzle. Why are oil prices so volatile? Why did prices spike in the summer of 2008, and what role did speculators play? How important is OPEC? Where are oil prices headed in the long run? Is "peak oil" a...

The Three Arab Worlds

By James E. Rauch and Scott Kostyshak

Journal of Economic Perspectives, Summer 2009

Given the attention currently focused on the Arab world in part as a result of adjustments in U.S. foreign policy, a fresh look at Arab socioeconomic performance is in order. The Arab world is defined by language rather than ethnicity. The League of Arab ...

Retrospectives: Trouble in the Inaugural Issue of the American Economic Review: The Cross/Eaves Controversy

By Ann Mari May and Robert W. Dimand

Journal of Economic Perspectives, Summer 2009

The papers from the first year of the American Economic Review are included in the Archives of the American Economic Association. While researching the early years of the AEA, Ann Mari May came across a folder marked "Controversies, Criticisms, etc."-whi...

Recommendations for Further Reading

By Timothy Taylor

Journal of Economic Perspectives, Summer 2009

Front Matter

Journal of Economic Perspectives, Summer 2009

Notes

Journal of Economic Perspectives, Summer 2009