Traffic Congestion and Infant Health: Evidence from E-ZPass

By Janet Currie and Reed Walker

American Economic Journal: Applied Economics, January 2011

We exploit the introduction of electronic toll collection, (E-ZPass), which greatly reduced both traffic congestion and vehicle emissions near highway toll plazas. We show that the introduction of E-ZPass reduced prematurity and low birth weight among mo...

Menstruation, Sanitary Products, and School Attendance: Evidence from a Randomized Evaluation

By Emily Oster and Rebecca Thornton

American Economic Journal: Applied Economics, January 2011

Policy-makers have cited menstruation and lack of sanitary products as barriers to girls' schooling. We evaluate these claims using a randomized evaluation of sanitary products provision to girls in Nepal. We report two findings. First, menstruation has ...

The Labor Market Returns to Cognitive and Noncognitive Ability: Evidence from the Swedish Enlistment

By Erik Lindqvist and Roine Vestman

American Economic Journal: Applied Economics, January 2011

We use data from the Swedish military enlistment to assess the importance of cognitive and noncognitive ability for labor market outcomes. The measure of noncognitive ability is based on a personal interview conducted by a psychologist. We find strong evi...

Minimum Wages and Firm Profitability

By Mirko Draca, Stephen Machin, and John Van Reenen

American Economic Journal: Applied Economics, January 2011

We study the impact of minimum wages on firm profitability, exploiting the changes induced by the introduction of a UK national minimum wage in 1999. We use pre-policy information on the distribution of wages to implement a difference-in-differences appro...

Are Restaurants Really Supersizing America?

By Michael L. Anderson and David A. Matsa

American Economic Journal: Applied Economics, January 2011

While many researchers and policymakers infer from correlations between eating out and body weight that restaurants are a leading cause of obesity, a basic identification problem challenges these conclusions. We exploit the placement of Interstate Highway...

Aftershocks: The Impact of Clinic Violence on Abortion Services

By Mireille Jacobson and Heather Royer

American Economic Journal: Applied Economics, January 2011

Between 1973 and 2003, abortion providers in the United States were the targets of over 300 acts of extreme violence. Using unique data on attacks and on abortions, abortion providers, and births, we examine how anti-abortion violence has affected provide...

Was There Really a Hawthorne Effect at the Hawthorne Plant? An Analysis of the Original Illumination Experiments

By Steven D. Levitt and John A. List

American Economic Journal: Applied Economics, January 2011

The "Hawthorne effect" draws its name from a landmark set of studies conducted at the Hawthorne plant in the 1920s. The data from the first and most influential of these studies, the "Illumination Experiment," were never formally analyzed and were thought...

Caste as an Impediment to Trade

By Siwan Anderson

American Economic Journal: Applied Economics, January 2011

We compare outcomes across two types of villages in rural India. Villages vary by which caste is dominant (owns the majority of land): either a low or high caste. The key finding is that income is substantially higher for low-caste households residing in ...

Front Matter

American Economic Journal: Macroeconomics, January 2011

Simple Analytics of the Government Expenditure Multiplier

By Michael Woodford

American Economic Journal: Macroeconomics, January 2011

This paper explains the key factors that determine the output multiplier of government purchases in New Keynesian models, through a series of simple examples that can be solved analytically. Sticky prices or wages allow for larger multipliers than in a ne...

Industry Evidence on the Effects of Government Spending

By Christopher J. Nekarda and Valerie A. Ramey

American Economic Journal: Macroeconomics, January 2011

This paper investigates the effects of government purchases at the industry level in order to shed light on the transmission mechanism for government spending on the aggregate economy. We create a new panel dataset that matches output and labor variables ...

Sticky Prices versus Monetary Frictions: An Estimation of Policy Trade-Offs

By S. Borağan Aruoba and Frank Schorfheide

American Economic Journal: Macroeconomics, January 2011

We develop a two-sector monetary model with a centralized and decentralized market. Activities in the centralized market resemble those in a standard New Keynesian economy with price rigidities. In the decentralized market agents engage in bilateral excha...

Pricing-to-Market and the Failure of Absolute PPP

By George Alessandria and Joseph P. Kaboski

American Economic Journal: Macroeconomics, January 2011

We show that deviations from the law of one price in tradable goods are an important source of violations of absolute purchasing power parity. Using highly disaggregated export data, we document systematic international price discrimination: at the US doc...

Worker Heterogeneity and Endogenous Separations in a Matching Model of Unemployment Fluctuations

By Mark Bils, Yongsung Chang, and Sun-Bin Kim

American Economic Journal: Macroeconomics, January 2011

We model worker heterogeneity in the rents from being employed in a Diamond-Mortensen-Pissarides model of matching and unemployment. We show that heterogeneity, reflecting differences in match quality and worker assets, reduces the extent of fluctuations ...

Bank Integration and Transmission of Financial Shocks: Evidence from Japan

By Masami Imai and Seitaro Takarabe

American Economic Journal: Macroeconomics, January 2011

This paper investigates whether banking integration plays an important role in transmitting financial shocks across geographical boundaries by using a dataset on the branch network of nationwide city banks and prefecture-level dataset on the formation and...

Professional Forecasters' View of Permanent and Transitory Shocks to GDP

By Spencer D. Krane

American Economic Journal: Macroeconomics, January 2011

This paper examines how the professional forecasters comprising the Blue Chip Economic Consensus view shocks to GDP. I use an unobserved components model of the forecast revisions to identify forecasters' perceptions of permanent and transitory shocks t...

Housing Bubbles

By Óscar Arce and David López-Salido

American Economic Journal: Macroeconomics, January 2011

We use the notion of a housing bubble as an equilibrium in which some investors hold houses for resale purposes only and not with the expectation of receiving a dividend, either in the form of rent or utility. We show that an economy with looser collatera...

Exclusive Goods and Formal-Sector Employment

By Reto Foellmi and Josef Zweimüller

American Economic Journal: Macroeconomics, January 2011

We explore how the underemployment problem of less-developed economies is related to income inequality. Consumers have nonhomothetic preferences over differentiated products of formal-sector goods and thus inequality affects the composition of aggregate ...

Front Matter

American Economic Journal: Microeconomics, February 2011

Strategic Entry Deterrence and the Behavior of Pharmaceutical Incumbents Prior to Patent Expiration

By Glenn Ellison and Sara Fisher Ellison

American Economic Journal: Microeconomics, February 2011

This paper develops a new approach to testing for strategic entry deterrence and applies it to the behavior of pharmaceutical incumbents before patent expiration. It examines a cross section of markets, determining whether behavior is nonmonotonic in mark...