If Technology Has Arrived Everywhere, Why Has Income Diverged?

By Diego Comin and Martí Mestieri

American Economic Journal: Macroeconomics, July 2018

We study the cross-country evolution of technology diffusion over the last two centuries. We document that adoption lags between poor and rich countries have converged, while the intensity of use of adopted technologies of poor countries relative to rich ...

Constrained Efficiency in a Human Capital Model

By Yena Park

American Economic Journal: Macroeconomics, July 2018

This paper investigates whether capital and human capital are over-accumulated in an incomplete market economy. As in Davila et al. (2012), whether capital is over-accumulated depends on how the pecuniary externalities affect insurance and redistribution....

The Political Economy of Municipal Pension Funding

By Jeffrey Brinkman, Daniele Coen-Pirani, and Holger Sieg

American Economic Journal: Macroeconomics, July 2018

Many US municipalities have committed to pay retirement benefits to public sector employees but have not saved enough to fulfill these obligations. This paper studies the determinants of municipal pension funding and its implications for intergenerational...

Government Spending Multipliers under the Zero Lower Bound: Evidence from Japan

By Wataru Miyamoto, Thuy Lan Nguyen, and Dmitriy Sergeyev

American Economic Journal: Macroeconomics, July 2018

Using a rich dataset on government spending forecasts in Japan, we provide new evidence on the effects of unexpected changes in government spending when the nominal interest rate is near the zero lower bound (ZLB). The on-impact output multiplier is 1.5 i...

Front Matter

American Economic Journal: Microeconomics, August 2018

Matching with Moral Hazard: Assigning Attorneys to Poor Defendants

By Behrang Kamali Shahdadi

American Economic Journal: Microeconomics, August 2018

We model the problem of assigning counsel to poor defendants as a matching problem. A novel aspect of this matching problem is the moral hazard component on the part of counsel. Within the model, we show that holding the total expenditure for counsel fixe...

Multiple Activities in Networks

By Ying-Ju Chen, Yves Zenou, and Junjie Zhou

American Economic Journal: Microeconomics, August 2018

We consider a network model where individuals exert efforts in two types of activities that are interdependent. These activities can be either substitutes or complements. We provide a full characterization of the Nash equilibrium of this game for any netw...

Two-Sided Investment and Matching with Multidimensional Cost Types and Attributes

By Deniz Dizdar

American Economic Journal: Microeconomics, August 2018

Heterogeneous buyers and sellers must make investments before entering a continuum assignment market. I show that efficient ex post contracting equilibria (Cole, Mailath and Postlewaite 2001b) exist in a general assignment game framework. I then shed ligh...

Preferences and Social Influence

By Chaim Fershtman and Uzi Segal

American Economic Journal: Microeconomics, August 2018

Interaction between decision makers may affect their preferences. We consider a setup in which each individual is characterized by two sets of preferences: his unchanged core preferences and his behavioral preferences. Each individual has a social influen...

Electoral Accountability and Interdistrict Competition

By Galina Zudenkova

American Economic Journal: Microeconomics, August 2018

This paper analyzes a multidistrict game of electoral accountability in which constituencies compete over scarce resources by setting expectations for targeted spending. I build a political agency model in which a vote-maximizing politician is subject to ...

Should First-Price Auctions Be Transparent?

By Dirk Bergemann and Johannes Hörner

American Economic Journal: Microeconomics, August 2018

We investigate the role of market transparency in repeated first-price auctions. We consider a setting with independent private and persistent values. We analyze three distinct disclosure regimes regarding the bid and award history. In the minimal disclos...

When to Confront: The Role of Patience

By Alvaro Sandroni and Can Urgun

American Economic Journal: Microeconomics, August 2018

This paper examines the effects of patience on ordinary conflicts such as divorce, price wars and commercial litigation. Players optimally decide when, if ever, to start a destructive confrontation. In the unique equilibrium, there is a tight connection b...

Why Voting? A Welfare Analysis

By Moritz Drexl and Andreas Kleiner

American Economic Journal: Microeconomics, August 2018

This article studies costly signaling. The signaling effort is chosen in multiple periods and observed with noise. The signaler benefits from the belief of the market, not directly from the effort or the signal. Optimal signaling behavior in time-varying ...

A Pseudo-Market Approach to Allocation with Priorities

By Yinghua He, Antonio Miralles, Marek Pycia, and Jianye Yan

American Economic Journal: Microeconomics, August 2018

We propose a pseudo-market mechanism for no-monetary-transfer allocation of indivisible objects based on priorities such as those in school choice. Agents are given token money, face priority-specific prices, and buy utility-maximizing random assignments....

Contracts with Framing

By Yuval Salant and Ron Siegel

American Economic Journal: Microeconomics, August 2018

We study a model of contracts in which a profit-maximizing seller uses framing to influence buyers' purchasing behavior. Framing temporarily affects how buyers evaluate different products, and buyers can renege on their purchases after the framing effect ...

Front Matter

American Economic Journal: Economic Policy, August 2018

The Role of Information in Disability Insurance Application: An Analysis of the Social Security Statement Phase-In

By Philip Armour

American Economic Journal: Economic Policy, August 2018

This paper exploits a natural experiment in information provision on US Disability Insurance (DI) applications: the Social Security statement. Although the effect of the statement on DI application was negligible in the general health and retirement study...

A Letter and Encouragement: Does Information Increase Postsecondary Enrollment of UI Recipients?

By Andrew Barr and Sarah Turner

American Economic Journal: Economic Policy, August 2018

For individuals who experience job loss, enrollment in postsecondary programs may provide an opportunity to improve future employment outcomes. However, decisions to enroll may be hampered by insufficient information about the benefits and costs and the n...

Cash-Flow Taxes in an International Setting

By Alan J. Auerbach and Michael P. Devereux

American Economic Journal: Economic Policy, August 2018

We model the effects of cash-flow taxes, differing according to the location of the tax, on the behavior of a multinational producing and selling in two countries with three sources of economic rent: a fixed basic-production factor (located with initial p...

Does the Election of a Female Leader Clear the Way for More Women in Politics?

By Thushyanthan Baskaran and Zohal Hessami

American Economic Journal: Economic Policy, August 2018

Women remain underrepresented in politics and it remains unclear how this might change. In this paper, we investigate whether female council candidates receive more preferential votes when a female mayor has been recently elected into office. We hand coll...