Dynamics and Stagnation in the Malthusian Epoch

By Quamrul Ashraf and Oded Galor

American Economic Review, August 2011

This paper examines the central hypothesis of the influential Malthusian theory, according to which improvements in the technological environment during the preindustrial era had generated only temporary gains in income per capita, eventually leading to a...

Bargaining in Stationary Networks

By Mihai Manea

American Economic Review, August 2011

We study an infinite horizon game in which pairs of players connected in a network are randomly matched to bargain. Players who reach agreement are replaced by new players at the same positions in the network. We show that all equilibria are payoff equiva...

State Misallocation and Housing Prices: Theory and Evidence from China

By Shing-Yi Wang

American Economic Review, August 2011

This paper examines the equilibrium price effects of the privatization of housing assets that were previously owned and allocated by the state. I develop a theoretical framework that shows that privatization can have ambiguous effects on prices in the pri...

Forced Sales and House Prices

By John Y. Campbell, Stefano Giglio, and Parag Pathak

American Economic Review, August 2011

This paper uses data on all house transactions in Massachusetts over the last 20 years to show that houses sold after foreclosure, or close in time to the death or bankruptcy of a seller, are sold at lower prices than other houses. Foreclosure discounts a...

House Prices, Home Equity-Based Borrowing, and the US Household Leverage Crisis

By Atif Mian and Amir Sufi

American Economic Review, August 2011

Borrowing against the increase in home equity by existing homeowners was responsible for a significant fraction of the rise in US household leverage from 2002 to 2006 and the increase in defaults from 2006 to 2008. Instrumental variables estimation shows ...

Panic on the Streets of London: Police, Crime, and the July 2005 Terror Attacks

By Mirko Draca, Stephen Machin, and Robert Witt

American Economic Review, August 2011

In this paper we study the causal impact of police on crime, looking at what happened to crime and police before and after the terror attacks that hit central London in July 2005. The attacks resulted in a large redeployment of police officers to central ...

Barriers to Investment in Polarized Societies

By Marina Azzimonti

American Economic Review, August 2011

I present a tractable dynamic model of political economy where disagreements about the composition of public spending result in implementation of short-sighted policies. Excessive taxation reduces the return to physical capital and hence investment rates,...

The Area and Population of Cities: New Insights from a Different Perspective on Cities

By Hernán D. Rozenfeld, Diego Rybski, Xavier Gabaix, and Hernán A. Makse

American Economic Review, August 2011

The distribution of city populations has attracted much attention, in part because it constrains models of local growth. However, there is no consensus on the distribution below the very upper tail, because available data need to rely on "legal" rather th...

The Effects of Lottery Prizes on Winners and Their Neighbors: Evidence from the Dutch Postcode Lottery

By Peter Kuhn, Peter Kooreman, Adriaan Soetevent, and Arie Kapteyn

American Economic Review, August 2011

Each week, the Dutch Postcode Lottery (PCL) randomly selects a postal code, and distributes cash and a new BMW to lottery participants in that code. We study the effects of these shocks on lottery winners and their neighbors. Consistent with the life-cycl...

Did Household Consumption Become More Volatile?

By Olga Gorbachev

American Economic Review, August 2011

I show that after accounting for predictable variation arising from movements in real interest rates, preferences and income shocks, liquidity constraints and measurement errors, volatility of household consumption in the US increased by 25 percent betwee...

Strotz Meets Allais: Diminishing Impatience and the Certainty Effect: Comment

By Kota Saito

American Economic Review, August 2011

Halevy (2008) states the equivalence between diminishing impatience (i.e., quasi-hyperbolic discounting) and the common ratio effect. The present paper shows that one way of the equivalence is false and shows the correct and general relationships: diminis...

Front Matter

Journal of Economic Perspectives, Summer 2011

Why Economists Should Conduct Field Experiments and 14 Tips for Pulling One Off

[Symposium: Field Experiments]

By John A. List

Journal of Economic Perspectives, Summer 2011

In this introduction to the symposium, I first offer an overview of the spectrum of experimental methods in economics, from laboratory experiments to the field experiments that are the subject of this symposium. I then offer some thoughts about the potent...

Mechanism Experiments and Policy Evaluations

[Symposium: Field Experiments]

By Jens Ludwig, Jeffrey R. Kling, and Sendhil Mullainathan

Journal of Economic Perspectives, Summer 2011

Randomized controlled trials are increasingly used to evaluate policies. How can we make these experiments as useful as possible for policy purposes? We argue greater use should be made of experiments that identify the behavioral mechanisms that are centr...

The Role of Theory in Field Experiments

[Symposium: Field Experiments]

By David Card, Stefano DellaVigna, and Ulrike Malmendier

Journal of Economic Perspectives, Summer 2011

We classify all published field experiments in five top economics journals from 1975 to 2010 according to how closely the experimental design and analysis are linked to economic theory. We find that the vast majority of field experiments (68 percent) are ...

Field Experiments with Firms

[Symposium: Field Experiments]

By Oriana Bandiera, Iwan Barankay, and Imran Rasul

Journal of Economic Perspectives, Summer 2011

We discuss how the use of field experiments sheds light on long-standing research questions relating to firm behavior. We present insights from two classes of experiments—within and across firms—and draw common lessons from both sets. Field ex...

Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?

[Symposium: Emigration]

By Michael A. Clemens

Journal of Economic Perspectives, Summer 2011

What is the greatest single class of distortions in the global economy? One contender for this title is the tightly binding constraints on emigration from poor countries. Vast numbers of people in low-income countries want to emigrate from those countries...

Eight Questions about Brain Drain

[Symposium: Emigration]

By John Gibson and David McKenzie

Journal of Economic Perspectives, Summer 2011

The term "brain drain" dominates popular discourse on high-skilled migration, and for this reason, we use it in this article. However, as Harry Johnson noted, it is a loaded phrase implying serious loss. It is far from clear that such a loss actually occu...

Migrant Remittances

[Symposium: Emigration]

By Dean Yang

Journal of Economic Perspectives, Summer 2011

This article is about the economics of migrant remittances sent to developing countries. I review the overall magnitude of remittances and what current research reveals about the motivations for migrant remittances and what effects they have. I discuss fi...

Killing Me Softly: The Fetal Origins Hypothesis

By Douglas Almond and Janet Currie

Journal of Economic Perspectives, Summer 2011

In the epidemiological literature, the fetal origins hypothesis associated with David J. Barker posits that chronic, degenerative conditions of adult health, including heart disease and type 2 diabetes, may be triggered by circumstances decades earlier, p...