Learning about the Future and Dynamic Efficiency

By Alex Gershkov and Benny Moldovanu

American Economic Review, September 2009

We study an allocation problem where a set of objects needs to be allocated to agents arriving over time. The basic model is of the private, independent values type. The dynamically efficient allocation is implementable if the distribution of agents' valu...

Bank Runs and Institutions: The Perils of Intervention

By Huberto M. Ennis and Todd Keister

American Economic Review, September 2009

We study ex post efficient policy responses to a run on the banking system and the ex ante incentives these responses create. We show that the efficient response to a run is typically not to freeze all remaining deposits, since doing so imposes heavy cost...

Expectation Damages, Divisible Contracts, and Bilateral Investment

By Susanne Ohlendorf

American Economic Review, September 2009

This paper examines the efficiency of expectation damages as a breach remedy in a bilateral trade setting with renegotiation and relationship-specific investment by the buyer and the seller. As demonstrated by Edlin and Reichelstein (1996), no contract th...

Field Centipedes

By Ignacio Palacios-Huerta and Oscar Volij

American Economic Review, September 2009

In the centipede game, all standard equilibrium concepts dictate that the player who decides first must stop the game immediately. There is vast experimental evidence, however, that this rarely occurs. We first conduct a field experiment in which highly r...

VAR Analysis and the Great Moderation

By Luca Benati and Paolo Surico

American Economic Review, September 2009

Most analyses of the US Great Moderation are based on structural VARs, and point toward good luck as the main explanation for the recent macroeconomic stability. Based on an estimated New-Keynesian model where the only source of change is the move from pa...

Art as an Investment and Conspicuous Consumption Good

By Benjamin R. Mandel

American Economic Review, September 2009

This paper provides a simple and empirically plausible model of artworks as investment vehicles. It reconciles the observation that average financial returns for collectibles are low and volatile with the theory of consumption-based asset pricing. Art ass...

Offshoring and Volatility: Evidence from Mexico's Maquiladora Industry

By Paul R. Bergin, Robert C. Feenstra, and Gordon H. Hanson

American Economic Review, September 2009

This paper studies the second-moment properties of offshoring, the arrangement whereby firms carry out particular stages of production abroad. It documents a new empirical regularity: maquiladora industries in Mexico that are associated with US offshoring...

Gibrat's Law for (All) Cities: Comment

By Moshe Levy

American Economic Review, September 2009

Jan Eeckhout (2004) reports that the empirical city size distribution is lognormal, consistent with Gibrat's Law. We show that for the top 0.6 percent of the largest cities, the empirical distribution is dramatically different from the lognormal, and foll...

Gibrat's Law for (All) Cities: Reply

By Jan Eeckhout

American Economic Review, September 2009

This reply refutes the objection raised by Levy (2009) about the fit of the upper tail of the city size distribution in Eeckhout (2004). I show that the method on which his conclusion is based is unsubstantiated. The visual interpretation of the fit on lo...

The Economics and Law of Sovereign Debt and Default

By Ugo Panizza, Federico Sturzenegger, and Jeromin Zettelmeyer

Journal of Economic Literature, September 2009

This paper surveys the recent literature on sovereign debt and relates it to the evolution of the legal principles underlying the sovereign debt market and the experience of the most recent debt crises and defaults. It finds limited support for theories...

The Effects of Privatization and Ownership in Transition Economies

By Saul Estrin, Jan Hanousek, Evzen Kocenda, and Jan Svejnar

Journal of Economic Literature, September 2009

In this paper, we evaluate what we have learned to date about the effects of privatization from the experiences during the last fifteen to twenty years in the postcommunist (transition) economies and, where relevant, China. We distinguish separately th...

Toward a Theory of Regulation for Developing Countries: Following Jean-Jacques Laffont's Lead

By Antonio Estache and Liam Wren-Lewis

Journal of Economic Literature, September 2009

The efficient operation and expansion of infrastructures in developing countries is crucial for growth and poverty reduction. However, recent reforms aimed at improving the performance of these sectors have had limited success. Evidence suggests that, ...

A Review of Edward Luce's In Spite of the Gods: The Strange Rise of Modern India

By Lant Pritchett

Journal of Economic Literature, September 2009

India poses a development puzzle on a grand scale. Sixty years of electoral democracy, thirty years of rapid growth, and a number of world class institutions (such as the Institutes of Technology or Election Commission) have led to talk of India as a s...

Finance and Politics: A Review Essay Based on Kenneth Dam's Analysis of Legal Traditions in The Law-Growth Nexus

By Mark J. Roe and Jordan I. Siegel

Journal of Economic Literature, September 2009

Strong financial markets are widely thought to propel economic development, with many in finance seeing legal tradition as fundamental to protecting investors sufficiently for finance to flourish. Kenneth Dam finds that the legal tradition view inaccura...

Book Reviews

Journal of Economic Literature, September 2009

Front Matter

Journal of Economic Literature, September 2009

Annotated Listing of New Books

Journal of Economic Literature, September 2009

JEL Classification System

Journal of Economic Literature, September 2009

Do Television and Radio Destroy Social Capital? Evidence from Indonesian Villages

By Benjamin A. Olken

American Economic Journal: Applied Economics, October 2009

This paper investigates the impact of television and radio on social capital in Indonesia. I use two sources of variation in signal reception -- one based on Indonesia's mountainous terrain, and a second based on the differential introduction of priva...

Peer Effects in the Workplace: Evidence from Random Groupings in Professional Golf Tournaments

By Jonathan Guryan, Kory Kroft, and Matthew J. Notowidigdo

American Economic Journal: Applied Economics, October 2009

This paper uses random assignment in professional golf tournaments to test for peer effects in the workplace. We find no evidence that playing partners' ability affects performance, contrary to recent evidence on peer effects in the workplace from labo...