Approximating the Cost-of-Living Index for a Storable Good

By Matthew Osborne

American Economic Journal: Microeconomics, May 2018

This paper estimates a cost-of-living index using a dynamic structural model for two storable product categories. In each category, regime shifts to higher or lower retail prices are observed. Fixed-base indexes do a poor job of capturing changes in welfa...

Moved to Opportunity: The Long-Run Effects of Public Housing Demolition on Children

By Eric Chyn

American Economic Review, October 2018

This paper provides new evidence on the effects of moving out of disadvantaged neighborhoods on the long-run outcomes of children. I study public housing demolitions in Chicago, which forced low-income households to relocate to less disadvantaged neighbor...

Bond Convenience Yields and Exchange Rate Dynamics

By Rosen Valchev

American Economic Journal: Macroeconomics, April 2020

This paper proposes a new explanation for the failure of Uncovered Interest Parity (UIP) that rationalizes both the classic UIP puzzle and the evidence that the puzzle reverses direction at longer horizons. In the model, excess currency returns arise as c...

The Decline, Rebound, and Further Rise in SNAP Enrollment: Disentangling Business Cycle Fluctuations and Policy Changes

By Peter Ganong and Jeffrey B. Liebman

American Economic Journal: Economic Policy, November 2018

One-in-seven Americans received benefits from the Supplemental Nutrition Assistance Program in 2011, an all-time high. We analyze changes in program enrollment over the past two decades, quantifying the contributions of unemployment and state policy chang...

Spatial Misallocation and Rent Controls

By Guillaume Chapelle, Etienne Wasmer, and Pierre-Henri Bono

AEA Papers and Proceedings, May 2019

In many global cities the rental housing market is partially regulated. We document that the Paris housing market is dual: a flexible rent sector coexists with a large controlled rent sector. The two sectors have very different rent gradients towards the ...

The Effect of Public Pension Wealth on Saving and Expenditure

By Marta Lachowska and Michał Myck

American Economic Journal: Economic Policy, August 2018

This paper examines the degree of substitution between public pension wealth and private saving by studying Poland's 1999 pension reform. The analysis identifies the effect of pension wealth on private saving using cohort-by-time variation in pension weal...

Lerner Symmetry: A Modern Treatment

By Arnaud Costinot and Iván Werning

American Economic Review: Insights, June 2019

Which policies are protectionist and which ones are not? The Lerner Symmetry Theorem establishes that import tariffs and export taxes are equally protectionist. In this paper we provide a modern treatment of this classical result, highlighting the importa...

Export Markets and Labor Allocation in a Low-Income Country

By Brian McCaig and Nina Pavcnik

American Economic Review, July 2018

We study the effects of a positive export shock on labor allocation between the informal, microenterprise sector and the formal firm sector in a low-income country. The United States-Vietnam Bilateral Trade Agreement led to large reductions in US tariffs ...

The Effect of House Prices on Household Borrowing: A New Approach

By James Cloyne, Kilian Huber, Ethan Ilzetzki, and Henrik Kleven

American Economic Review, June 2019

We investigate the effect of house prices on household borrowing using administrative mortgage data from the United Kingdom and a new empirical approach. The data contain household-level information on house prices and borrowing in a panel of homeowners, ...

The Causal Effect of Competition on Prices and Quality: Evidence from a Field Experiment

By Matias Busso and Sebastian Galiani

American Economic Journal: Applied Economics, January 2019

This paper provides experimental evidence on the effect of increased competition on prices and quality in the retail sector. We randomized the entry of 61 firms into 72 markets serving the beneficiaries of a conditional cash transfer program in the Domini...

The Formation of Expectations, Inflation, and the Phillips Curve

By Olivier Coibion, Yuriy Gorodnichenko, and Rupal Kamdar

Journal of Economic Literature, December 2018

This paper argues for a careful (re)consideration of the expectations formation process and a more systematic inclusion of real-time expectations through survey data in macroeconomic analyses. While the rational expectations revolution has allowed for g...

Citations in Economics: Measurement, Uses, and Impacts

By Daniel S. Hamermesh

Journal of Economic Literature, March 2018

I describe and compare sources of data on citations in economics and the statistics derived from them. Constructing data sets of the post-publication citation histories of articles published in the "top five" journals in the 1970s and 2000s, I examine dis...

Stealth Consolidation: Evidence from an Amendment to the Hart-Scott-Rodino Act

By Thomas G. Wollmann

American Economic Review: Insights, June 2019

Prospective merger review is the most frequent application of antitrust law. It exempts transactions on the basis of size, though small deals can have large anticompetitive effects in segmented industries. I examine its impact on antitrust enforcement and...

Rationalizing Choice: A Review Essay on Peter Leeson's WTF?!: An Economic Tour of the Weird

By Rajiv Sethi

Journal of Economic Literature, December 2019

The methodology of economics has been applied with increasing frequency to nonmarket behavior and interactions. Peter Leeson's book WTF?!: An Economic Tour of the Weird illustrates both the promise and the perils of this practice. When applied ju...

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...

An Estimable Model of Income Redistribution in a Federation: Musgrave Meets Oates

By Kevin Milligan and Michael Smart

American Economic Journal: Economic Policy, February 2019

We develop a theory of cross-border income shifting in response to subnational personal taxation in a federation and examine its implications for the excess burden of personal taxes. We show how a properly chosen federal tax rate can offset the fiscal ext...

Does Household Finance Matter? Small Financial Errors with Large Social Costs

By Harjoat S. Bhamra and Raman Uppal

American Economic Review, March 2019

Households with familiarity biases tilt their portfolios toward a few risky assets. The resulting mean-variance loss from portfolio underdiversification is equivalent to only a modest reduction of about 1 percent per year in a household's portfolio return...

Strategic Performance of Deferred Acceptance in Dynamic Matching Problems

By John Kennes, Daniel Monte, and Norovsambuu Tumennasan

American Economic Journal: Microeconomics, May 2019

In dynamic matching problems, priorities often depend on previous allocations and create opportunities for manipulations that are absent in static problems. In the dynamic school choice problem, students can manipulate the period-by-period deferred accept...

Housing Supply Dynamics under Rent Control: What Can Evictions Tell Us?

By Brian J. Asquith

AEA Papers and Proceedings, May 2019

Measuring how rent-controlled landlords change their housing supply in response to rent increases is difficult, because new construction is automatically exempt. This paper explores evictions as a barometer for landlords' willingness to return their units...

Information Design

By Ina Taneva

American Economic Journal: Microeconomics, November 2019

A designer commits to a signal distribution that is informative about a payoff-relevant state. Conditional upon the privately observed signals, agents take actions that affect their payoffs as well as those of the designer. We show how to derive the (desi...