A Bridge from Monty Hall to the Hot Hand: The Principle of Restricted Choice

By Joshua B. Miller and Adam Sanjurjo

Journal of Economic Perspectives, Summer 2019

We show how classic conditional probability puzzles, such as the Monty Hall problem, are intimately related to the recently discovered hot hand selection bias. We explain the connection by way of the principle of restricted choice, an intuitive inferentia...

Microeconomic Heterogeneity and Macroeconomic Shocks

[Symposium: Macroeconomics a Decade after the Great Recession]

By Greg Kaplan and Giovanni L. Violante

Journal of Economic Perspectives, Summer 2018

In this essay, we discuss the emerging literature in macroeconomics that combines heterogeneous agent models, nominal rigidities, and aggregate shocks. This literature opens the door to the analysis of distributional issues, economic fluctuations, and sta...

Stimulating the Vote: ARRA Road Spending and Vote Share

By Emiliano Huet-Vaughn

American Economic Journal: Economic Policy, February 2019

This paper estimates the impact of public good spending on voting behavior in the United States, using a quasi-experimental design and the distribution of American Recovery and Reinvestment Act (ARRA) road projects in New Jersey. I find an approximate 1.5...

Economists (and Economics) in Tech Companies

By Susan Athey and Michael Luca

Journal of Economic Perspectives, Winter 2019

As technology platforms have created new markets and new ways of acquiring information, economists have come to play an increasingly central role in tech companies-tackling problems such as platform design, strategy, pricing, and policy. Over the past f...

Exchange-Traded Funds 101 for Economists

By Martin Lettau and Ananth Madhavan

Journal of Economic Perspectives, Winter 2018

Exchange-traded funds (ETFs) represent one of the most important financial innovations in decades. An ETF is an investment vehicle, with a specific architecture that typically seeks to track the performance of a specific index. The first US-listed ETF, ...

Do Increasing Markups Matter? Lessons from Empirical Industrial Organization

[Symposium: Markups]

By Steven Berry, Martin Gaynor, and Fiona Scott Morton

Journal of Economic Perspectives, Summer 2019

This article considers the recent literature on firm markups in light of both new and classic work in the field of industrial organization. We detail the shortcomings of papers that rely on discredited approaches from the "structure-conduct-performance"...

The Impact of Brexit on Foreign Investment and Production

By Ellen R. McGrattan and Andrea Waddle

American Economic Journal: Macroeconomics, January 2020

Using simulations from a multicountry neoclassical growth model, we analyze several post-Brexit scenarios. First, the United Kingdom unilaterally imposes tighter restrictions on FDI and trade from other EU nations. Second, the European Union retaliates an...

Some Journal of Economic Perspectives Articles Recommended for Classroom Use

By Timothy Taylor

Journal of Economic Perspectives, Summer 2019

In 2018, the editors of the Journal of Economic Perspectives invited faculty to send us examples of JEP articles that they had found useful for teaching. We received 250 responses. On the JEP website, we have created a landing page (http...

Protecting Competition in the American Economy: Merger Control, Tech Titans, Labor Markets

[Symposium: Issues in Antitrust]

By Carl Shapiro

Journal of Economic Perspectives, Summer 2019

Accumulating evidence points to the need for more vigorous antitrust enforcement in the United States in three areas. First, stricter merger control is warranted in an economy where large, highly efficient and profitable "superstar" firms account for an i...

Inequality and Globalization: A Review Essay

By Martin Ravallion

Journal of Economic Literature, June 2018

As normally measured, "global inequality" is the relative inequality of incomes found among all people in the world no matter where they live. Francois Bourguignon and Branko Milanovic have written insightful and timely books on global inequality, emp...

Nonmonetary Incentives and the Implications of Work as a Source of Meaning

[Symposium: Incentives in the Workplace]

By Lea Cassar and Stephan Meier

Journal of Economic Perspectives, Summer 2018

Empirical research in economics has begun to explore the idea that workers care about nonmonetary aspects of work. An increasing number of economic studies using survey and experimental methods have shown that nonmonetary incentives and nonpecuniary aspec...

Why Do Defaults Affect Behavior? Experimental Evidence from Afghanistan

By Joshua Blumenstock, Michael Callen, and Tarek Ghani

American Economic Review, October 2018

We report on an experiment examining why default options impact behavior. By randomly assigning employees to different varieties of a salary-linked savings account, we find that default enrollment increases participation by 40 percentage points—an effec...

Measuring the Effects of Corporate Tax Cuts

[Symposium: The Tax Cuts and Jobs Act]

By Alan J. Auerbach

Journal of Economic Perspectives, Fall 2018

On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act (TCJA), the most sweeping revision of US tax law since the Tax Reform Act of 1986. The law introduced many significant changes. However, perhaps none was as important as the c...

Front Matter

American Economic Journal: Macroeconomics, October 2019

Medieval Origins: A Review Essay on Campbell's The Great Transition

By Eric Chaney

Journal of Economic Literature, June 2018

Bruce M. S. Campbell's The Great Transition: Climate, Disease and Society in the Late-Medieval World is a significant contribution to the growing literature that traces the roots of Europe's economic rise to the climatic and population shocks...

The Model Selection Curse

By Kfir Eliaz and Ran Spiegler

American Economic Review: Insights, September 2019

A statistician takes an action on behalf of an agent, based on the agent's self-reported personal data and a sample involving other people. The action that he takes is an estimated function of the agent's report. The estimation procedure involves model se...

The convergence hypothesis

[Research Highlight]

April 03, 2020

Are poor countries catching up with rich countries?

Quadratic Voting: How Mechanism Design Can Radicalize Democracy

By Steven P. Lalley and E. Glen Weyl

AEA Papers and Proceedings, May 2018

Can mechanism design save democracy? We propose a simple design that offers a chance: individuals pay for as many votes as they wish using a number of "voice credits" in the votes they buy. Only quadratic cost induces marginal costs linear in votes purcha...

Front Matter

American Economic Journal: Macroeconomics, April 2019

Bridging the Intention-Behavior Gap? The Effect of Plan-Making Prompts on Job Search and Employment

By Martin Abel, Rulof Burger, Eliana Carranza, and Patrizio Piraino

American Economic Journal: Applied Economics, April 2019

The paper tests the effects of plan making on job search and employment. In a field experiment with unemployed youths, participants who complete a detailed job search plan increase the number of job applications submitted (by 15 percent) but not the time ...