From Final Goods to Inputs: The Protectionist Effect of Rules of Origin

By Paola Conconi, Manuel García-Santana, Laura Puccio, and Roberto Venturini

American Economic Review, August 2018

Recent decades have witnessed a surge of trade in intermediate goods and a proliferation of free trade agreements (FTAs). FTAs use rules of origin (RoO) to distinguish goods originating from member countries from those originating from third countries. We...

Violence and Risk Preference: Experimental Evidence from Afghanistan: Comment

By Ferdinand M. Vieider

American Economic Review, August 2018

In this comment on Callen et al. (2014), I revisit recent evidence uncovering a "preference for certainty" in violation of dominant normative and descriptive theories of decision-making under risk. I show that the empirical findings are potentially confou...

Front Matter

Journal of Economic Perspectives, Summer 2018

What Happened: Financial Factors in the Great Recession

[Symposium: Macroeconomics a Decade after the Great Recession]

By Mark Gertler and Simon Gilchrist

Journal of Economic Perspectives, Summer 2018

At the onset of the recent global financial crisis, the workhorse macroeconomic models assumed frictionless financial markets. These frameworks were thus not able to anticipate the crisis, nor to analyze how the disruption of credit markets changed what i...

Finance and Business Cycles: The Credit-Driven Household Demand Channel

[Symposium: Macroeconomics a Decade after the Great Recession]

By Atif Mian and Amir Sufi

Journal of Economic Perspectives, Summer 2018

What is the role of the financial sector in explaining business cycles? This question is as old as the field of macroeconomics, and an extensive body of research conducted since the Global Financial Crisis of 2008 has offered new answers. The specific ide...

Identification in Macroeconomics

[Symposium: Macroeconomics a Decade after the Great Recession]

By Emi Nakamura and Jón Steinsson

Journal of Economic Perspectives, Summer 2018

This paper discusses empirical approaches macroeconomists use to answer questions like: What does monetary policy do? How large are the effects of fiscal stimulus? What caused the Great Recession? Why do some countries grow faster than others? Identificat...

The State of New Keynesian Economics: A Partial Assessment

[Symposium: Macroeconomics a Decade after the Great Recession]

By Jordi Galí

Journal of Economic Perspectives, Summer 2018

In August 2007, when the first signs emerged of what would come to be the most damaging global financial crisis since the Great Depression, the New Keynesian paradigm was dominant in macroeconomics. Ten years later, tons of ammunition has been fired again...

On DSGE Models

[Symposium: Macroeconomics a Decade after the Great Recession]

By Lawrence J. Christiano, Martin S. Eichenbaum, and Mathias Trabandt

Journal of Economic Perspectives, Summer 2018

The outcome of any important macroeconomic policy change is the net effect of forces operating on different parts of the economy. A central challenge facing policymakers is how to assess the relative strength of those forces. Economists have a range of to...

Evolution of Modern Business Cycle Models: Accounting for the Great Recession

[Symposium: Macroeconomics a Decade after the Great Recession]

By Patrick J. Kehoe, Virgiliu Midrigan, and Elena Pastorino

Journal of Economic Perspectives, Summer 2018

Modern business cycle theory focuses on the study of dynamic stochastic general equilibrium (DSGE) models that generate aggregate fluctuations similar to those experienced by actual economies. We discuss how these modern business cycle models have evolved...

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...

Compensation and Incentives in the Workplace

[Symposium: Incentives in the Workplace]

By Edward P. Lazear

Journal of Economic Perspectives, Summer 2018

Labor is supplied because most of us must work to live. Indeed, it is called "work" in part because without compensation, the overwhelming majority of workers would not otherwise perform the tasks. The theme of this essay is that incentives affect behavio...

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...

The Changing (Dis-)utility of Work

[Symposium: Incentives in the Workplace]

By Greg Kaplan and Sam Schulhofer-Wohl

Journal of Economic Perspectives, Summer 2018

We study how changes in the distribution of occupations have affected the aggregate non-pecuniary costs and benefits of working. The physical toll of work is less now than in 1950, with workers shifting away from occupations in which people report experie...

Social Connectedness: Measurement, Determinants, and Effects

By Michael Bailey, Rachel Cao, Theresa Kuchler, Johannes Stroebel, and Arlene Wong

Journal of Economic Perspectives, Summer 2018

Social networks can shape many aspects of social and economic activity: migration and trade, job-seeking, innovation, consumer preferences and sentiment, public health, social mobility, and more. In turn, social networks themselves are associated with geo...

Recommendations for Further Reading

By Timothy Taylor

Journal of Economic Perspectives, Summer 2018

Front Matter

American Economic Review, September 2018

The Market for Used Capital: Endogenous Irreversibility and Reallocation over the Business Cycle

By Andrea Lanteri

American Economic Review, September 2018

This paper studies the business-cycle dynamics of secondary markets for physical capital and their effects on the macroeconomy. In the data, both capital reallocation and the price of used capital are procyclical. To rationalize these facts, I propose a m...

Equal but Inequitable: Who Benefits from Gender-Neutral Tenure Clock Stopping Policies?

By Heather Antecol, Kelly Bedard, and Jenna Stearns

American Economic Review, September 2018

Many skilled professional occupations are characterized by an early period of intensive skill accumulation and career establishment. Examples include law firm associates, surgical residents, and untenured faculty at research-intensive universities. High...

Media Bias in China

By Bei Qin, David Strömberg, and Yanhui Wu

American Economic Review, September 2018

This paper examines whether and how market competition affected the political bias of government-owned newspapers in China from 1981 to 2011. We measure media bias based on coverage of government mouthpiece content (propaganda) relative to commercial cont...

Forward Guidance without Common Knowledge

By George-Marios Angeletos and Chen Lian

American Economic Review, September 2018

How does the economy respond to news about future policies or future fundamentals? Standard practice assumes that agents have common knowledge of such news and face no uncertainty about how others will respond. Relaxing this assumption attenuates the gene...