Strategic Ignorance in Sequential Procurement

By Silvana Krasteva and Huseyin Yildirim

American Economic Journal: Microeconomics, May 2019

Should a buyer approach sellers of complementary goods informed or uninformed of her private valuations, and if informed, in which sequence? In this paper, we show that an informed buyer would start with the high-value seller to minimize future holdup. In...

Wealth Shocks and Health Outcomes: Evidence from Stock Market Fluctuations

By Hannes Schwandt

American Economic Journal: Applied Economics, October 2018

Do wealth shocks affect the health of elderly in developed countries? I exploit the booms and busts in the US stock market as a natural experiment that generated considerable gains and losses in the wealth of stock-holding retirees. Using data from the 19...

Regulating Innovation with Uncertain Quality: Information, Risk, and Access in Medical Devices

By Matthew Grennan and Robert J. Town

American Economic Review, January 2020

We study the impact of regulating product entry and quality information requirements on an oligopoly equilibrium and consumer welfare. Product testing can reduce consumer uncertainty, but also increase entry costs and delay entry. Using variation between ...

Recommendations for Further Reading

By Timothy Taylor

Journal of Economic Perspectives, Spring 2019

Front Matter

Journal of Economic Perspectives, Spring 2019

Effects of Austerity: Expenditure- and Tax-Based Approaches

[Symposium: Fiscal Policy]

By Alberto Alesina, Carlo Favero, and Francesco Giavazzi

Journal of Economic Perspectives, Spring 2019

We review the debate surrounding the macroeconomic effects of deficit reduction policies (austerity). The discussion about "austerity" in general has distracted commentators and policymakers from a very important result, namely the enormous difference, on...

Subsidizing Health Insurance for Low-Income Adults: Evidence from Massachusetts

By Amy Finkelstein, Nathaniel Hendren, and Mark Shepard

American Economic Review, April 2019

How much are low-income individuals willing to pay for health insurance, and what are the implications for insurance markets? Using administrative data from Massachusetts' subsidized insurance exchange, we exploit discontinuities in the subsidy schedule...

Book Reviews

Journal of Economic Literature, June 2013

Slow Post-financial Crisis Recovery and Monetary Policy

By Daisuke Ikeda and Takushi Kurozumi

American Economic Journal: Macroeconomics, October 2019

Post-financial crisis recoveries tend to be slow and accompanied by slowdowns in total factor productivity (TFP) and permanent losses in GDP. To prevent them, how should monetary policy be conducted? We address this issue by developing a model with endoge...

Numbing the China shock

[Research Highlight]

March 06, 2020

Is there a link between free trade and deaths of despair?

The Long-Term Effects of Management and Technology Transfers

By Michela Giorcelli

American Economic Review, January 2019

This paper examines the long-run causal effects of management on firm performance. Under the Productivity Program (1952–1958), the US organized management-training trips for Italian managers to U.S. firms and granted technologically advanced machines to...

Economic Shocks and Crime: Evidence from the Brazilian Trade Liberalization

By Rafael Dix-Carneiro, Rodrigo R. Soares, and Gabriel Ulyssea

American Economic Journal: Applied Economics, October 2018

This paper studies the effect of changes in economic conditions on crime. We exploit the 1990s trade liberalization in Brazil as a natural experiment generating exogenous shocks to local economies. We document that regions exposed to larger tariff reducti...

Revisiting the Relationship between Competition and Price Discrimination

By Ambarish Chandra and Mara Lederman

American Economic Journal: Microeconomics, May 2018

We revisit the relationship between competition and price discrimination. Theoretically, we show that if consumers differ in terms of both their underlying willingness-to-pay and their brand loyalty, competition may increase price differences between some...

Academic Peer Effects with Different Group Assignment Policies: Residential Tracking versus Random Assignment

By Robert Garlick

American Economic Journal: Applied Economics, July 2018

I study the relative academic performance of students tracked or randomly assigned to South African university dormitories. Tracking reduces low-scoring students' GPAs and has little effect on high-scoring students, leading to lower and more dispersed GPA...

Cheating and Incentives: Learning from a Policy Experiment

By César Martinelli, Susan W. Parker, Ana Cristina Pérez-Gea, and Rodimiro Rodrigo

American Economic Journal: Economic Policy, February 2018

We use a database generated by a policy intervention that incentivized learning as measured by standardized exams to investigate empirically the relationship between cheating by students and cash incentives to students and teachers. We adapt methods from ...

Optimal Trend Inflation

By Klaus Adam and Henning Weber

American Economic Review, February 2019

Sticky price models featuring heterogeneous firms and systematic firm-level productivity trends deliver radically different predictions for the optimal inflation rate than their popular homogenous-firm counterparts: (i) the optimal steady-state inflation ...

Front Matter

American Economic Journal: Applied Economics, January 2019

Defensive Medicine: Evidence from Military Immunity

By Michael Frakes and Jonathan Gruber

American Economic Journal: Economic Policy, August 2019

We estimate the extent of defensive medicine by physicians, embracing the no-liability counterfactual made possible by the structure of liability rules in the Military Health System. Active-duty patients seeking treatment from military facilities cannot s...

Trucks without Bailouts: Equilibrium Product Characteristics for Commercial Vehicles

By Thomas G. Wollmann

American Economic Review, June 2018

The entry and exit of products, rather than firms, serve as the main equilibrating force in many markets, so accurately predicting changes from a merger or bankruptcy should incorporate this behavior. This paper estimates a structural model of the US comm...

Monetary Policy According to HANK

By Greg Kaplan, Benjamin Moll, and Giovanni L. Violante

American Economic Review, March 2018

We revisit the transmission mechanism from monetary policy to household consumption in a Heterogeneous Agent New Keynesian (HANK) model. The model yields empirically realistic distributions of wealth and marginal propensities to consume because of two fea...