Front Matter

American Economic Journal: Macroeconomics, July 2010

Does Wage Persistence Matter for Employment Fluctuations? Evidence from Displaced Workers

By Johannes F. Schmieder and Till von Wachter

American Economic Journal: Applied Economics, July 2010

Previous literature has found that tight labor market conditions during a job raise wages. Using the Displaced Worker Survey from 1984 to 2006, we show that wage gains associated with good labor market conditions disappear at job loss. We also find that ...

Amplification Mechanisms in Liquidity Crises

By Arvind Krishnamurthy

American Economic Journal: Macroeconomics, July 2010

I describe two amplifications mechanisms that operate during crises and discuss the benefits of policy given each mechanism. The first mechanism involves asset prices and balance sheets. A negative shock to agents' balance sheets causes them to liquidate...

Information, Direct Access to Farmers, and Rural Market Performance in Central India

By Aparajita Goyal

American Economic Journal: Applied Economics, July 2010

This paper estimates the impact of a change in procurement strategy of a private buyer in the central Indian state of Madhya Pradesh. Beginning in October 2000, Internet kiosks and warehouses were established that provide wholesale price information and ...

The Effect of Corporate Taxes on Investment and Entrepreneurship

By Simeon Djankov, Tim Ganser, Caralee McLiesh, Rita Ramalho, and Andrei Shleifer

American Economic Journal: Macroeconomics, July 2010

We present new data on effective corporate income tax rates in 85 countries in 2004. The data come from a survey, conducted jointly with PricewaterhouseCoopers, of all taxes imposed on "the same" standardized mid-size domestic firm. In a cross-section of...

Information from Markets Near and Far: Mobile Phones and Agricultural Markets in Niger

By Jenny C. Aker

American Economic Journal: Applied Economics, July 2010

Price dispersion across markets is common in developing countries. Using novel market and trader-level data, this paper provides estimates of the impact of mobile phones on price dispersion across grain markets in Niger. The introduction of mobile phone ...

Was the Wealth of Nations Determined in 1000 BC?

By Diego Comin, William Easterly, and Erick Gong

American Economic Journal: Macroeconomics, July 2010

We assemble a dataset on technology adoption in 1000 bc, 0 ad, and 1500 AD for the predecessors to today's nation states. Technological differences are surprisingly persistent over long periods of time. Our most interesting, strong, and robust results are...

Microfinance Games

By Xavier Giné, Pamela Jakiela, Dean Karlan, and Jonathan Morduch

American Economic Journal: Applied Economics, July 2010

Microfinance banks use group-based lending contracts to strengthen borrowers' incentives for diligence, but the contracts are vulnerable to free-riding and collusion. We systematically unpack microfinance mechanisms through ten experimental games played ...

Labor Contracts, Equal Treatment, and Wage-Unemployment Dynamics

By Andy Snell and Jonathan P. Thomas

American Economic Journal: Macroeconomics, July 2010

This paper analyses a model in which firms cannot pay discriminate based on year of entry. It is assumed that workers can costlessly quit at any time, while firms are committed to contracts. We solve for the dynamics of wages and unemployment, and show th...

Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from "Work First"

By David H. Autor and Susan N. Houseman

American Economic Journal: Applied Economics, July 2010

Temporary-help jobs offer rapid entry into paid employment, but they are typically brief and it is unknown whether they foster longer term employment. We utilize the unique structure of Detroit's welfare-to- work program to identify the effect of tempor...

Relative Goods' Prices, Pure Inflation, and the Phillips Correlation

By Ricardo Reis and Mark W. Watson

American Economic Journal: Macroeconomics, July 2010

This paper uses a dynamic factor model for the quarterly changes in consumption goods' prices in the United States since 1959 to separate them into three independent components: idiosyncratic relative-price changes, a low-dimensional index of aggregate re...

Why Have College Completion Rates Declined? An Analysis of Changing Student Preparation and Collegiate Resources

By John Bound, Michael F. Lovenheim, and Sarah Turner

American Economic Journal: Applied Economics, July 2010

Rising college enrollment over the last quarter century has not been met with a proportional increase in college completion. Comparing the high school classes of 1972 and 1992, we show declines in college completion rates have been most pronounced for men...

Financiers versus Engineers: Should the Financial Sector Be Taxed or Subsidized?

By Thomas Philippon

American Economic Journal: Macroeconomics, July 2010

I study the allocation of human capital in an economy with production externalities, financial constraints, and career choices. Agents choose to become entrepreneurs, workers, or financiers. Entrepreneurship has positive externalities but requires the ser...

US Environmental Regulation and FDI: Evidence from a Panel of US-Based Multinational Firms

By Rema Hanna

American Economic Journal: Applied Economics, July 2010

This paper measures the response of US-based multinationals to the Clean Air Act Amendments (CAAA). Using a panel of firm-level data over the period 1966-1999, I estimate the effect of regulation on a multinational's foreign production decisions. The CAAA...

Do Expectations Matter? The Great Moderation Revisited

By Fabio Canova and Luca Gambetti

American Economic Journal: Macroeconomics, July 2010

We examine the role of expectations in the Great Moderation episode. We derive theoretical restrictions in a New-Keynesian model and test them using measures of expectations obtained from survey data, the Greenbook and bond markets. Expectations explain t...

Service Delivery and Corruption in Public Services: How Does History Matter?

By Priyanka Pandey

American Economic Journal: Applied Economics, July 2010

This paper provides microlevel evidence of how past institutions impact present economic outcomes. It looks at the impact of colonial land tenure institutions on local governance and education outcomes in northern India. Outcomes are worse in villages tha...

Confucianism and the East Asian Miracle

By Ming-Yih Liang

American Economic Journal: Macroeconomics, July 2010

We examine two behavioral traits essential to Confucianism, and put forward hypotheses as to whether these behavioral traits impede or are conducive to "leading" or "follower" mode growth. A dynamic leader-follower general equilibrium model with appropria...

Teacher Incentives

By Paul Glewwe, Nauman Ilias, and Michael Kremer

American Economic Journal: Applied Economics, July 2010

We analyze a randomized trial of a program that rewarded Kenyan primary school teachers based on student test scores, with penalties for students not taking the exams. Scores increased on the formula used to reward teachers, and program school students sc...

Central Bank Communication and Expectations Stabilization

By Stefano Eusepi and Bruce Preston

American Economic Journal: Macroeconomics, July 2010

The value of communication is analyzed in a model in which agents' expectations need not be consistent with central bank policy. Without communication, the Taylor principle is not sufficient for macroeconomic stability: divergent learning dynamics are pos...

Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Sectors

By Marianne Bertrand, Claudia Goldin, and Lawrence F. Katz

American Economic Journal: Applied Economics, July 2010

The careers of MBAs from a top US business school are studied to understand how career dynamics differ by gender. Although male and female MBAs have nearly identical earnings at the outset of their careers, their earnings soon diverge, with the male earni...