Fiscal Rules and Discretion in a World Economy

By Marina Halac and Pierre Yared

American Economic Review, August 2018

Governments are present-biased toward spending. Fiscal rules are deficit limits that trade off commitment to not overspend and flexibility to react to shocks. We compare coordinated rules, chosen jointly by a group of countries, to uncoordinated rules. If...

Real Exchange Rates and Sectoral Productivity in the Eurozone

By Martin Berka, Michael B. Devereux, and Charles Engel

American Economic Review, June 2018

We investigate the link between real exchange rates and sectoral TFP for eurozone countries. We show that real exchange rate variation, both cross-country and time-series, closely accords with an amended Balassa-Samuelson interpretation, incorporating sec...

The Causes and Consequences of Test Score Manipulation: Evidence from the New York Regents Examinations

By Thomas S. Dee, Will Dobbie, Brian A. Jacob, and Jonah Rockoff

American Economic Journal: Applied Economics, July 2019

We show that the design and decentralized scoring of New York's high school exit exams—the Regents Examinations—led to systematic manipulation of test scores just below important proficiency cutoffs. Exploiting a series of reforms that eliminated scor...

Housing Booms and Busts, Labor Market Opportunities, and College Attendance

By Kerwin Kofi Charles, Erik Hurst, and Matthew J. Notowidigdo

American Economic Review, October 2018

We study how the recent housing boom and bust affected college enrollment during the 2000s. We exploit cross-city variation in local housing booms, which improved labor market opportunities for young men and women. We find that the boom lowered college en...

Disclosure to a Psychological Audience

By Elliot Lipnowski and Laurent Mathevet

American Economic Journal: Microeconomics, November 2018

We study how a benevolent expert should disclose information to an agent with psychological concerns. We first provide a method to compute an optimal information policy for many psychological traits. The method suggests, for instance, that an agent suffer...

Mismatch Unemployment and the Geography of Job Search

By Ioana Marinescu and Roland Rathelot

American Economic Journal: Macroeconomics, July 2018

Could we significantly reduce US unemployment by helping job seekers move closer to jobs? Using data from the leading employment board CareerBuilder.com, we show that, indeed, workers dislike applying to distant jobs: job seekers are 35 percent less likel...

Projections and Uncertainties about Climate Change in an Era of Minimal Climate Policies

By William Nordhaus

American Economic Journal: Economic Policy, August 2018

Climate change remains one of the major international environmental challenges facing nations. Up to now, nations have adopted minimal policies to slow climate change. Moreover, there has been no major improvement in emissions trends as of the latest data...

The Political Economy of Municipal Pension Funding

By Jeffrey Brinkman, Daniele Coen-Pirani, and Holger Sieg

American Economic Journal: Macroeconomics, July 2018

Many US municipalities have committed to pay retirement benefits to public sector employees but have not saved enough to fulfill these obligations. This paper studies the determinants of municipal pension funding and its implications for intergenerational...

The Economic Impact of Hurricane Katrina on Its Victims: Evidence from Individual Tax Returns

By Tatyana Deryugina, Laura Kawano, and Steven Levitt

American Economic Journal: Applied Economics, April 2018

Hurricane Katrina destroyed over 200,000 homes and led to massive economic and physical dislocation. Using a panel of tax return data, we provide one of the first comprehensive analyses of the hurricane's long-term economic impact on its victims. Hurrican...

The Surge of Economic Nationalism in Western Europe

[Symposium: Modern Populism]

By Italo Colantone and Piero Stanig

Journal of Economic Perspectives, Fall 2019

We document the surge of economic nationalist and radical-right parties in western Europe between the early 1990s and 2016. We discuss how economic shocks contribute to explaining this political shift, looking in turn at theory and evidence on the polit...

Role Models or Individual Consulting: The Impact of Personalizing Micro-entrepreneurship Training

By Jeanne Lafortune, Julio Riutort, and José Tessada

American Economic Journal: Applied Economics, October 2018

Using a randomized experiment in Chile we study the impact role models have in the context of a training program for micro-entrepreneurs. We show that being in a group randomly chosen to be visited by a successful alumnus of the program increases househol...

How Market Design Emerged from Game Theory: A Mutual Interview

By Alvin E. Roth and Robert B. Wilson

Journal of Economic Perspectives, Summer 2019

We interview each other about how game theory and mechanism design evolved into practical market design. When we learned game theory, games were modeled either in terms of the strategies available to the players ("noncooperative games") or the outcomes ...

Islam and Economic Performance: Historical and Contemporary Links

By Timur Kuran

Journal of Economic Literature, December 2018

This essay critically evaluates the analytic literature concerned with causal connections between Islam and economic performance. It focuses on works since 1997, when this literature was last surveyed. Among the findings are the following: Ramadan fasti...

Changes in Between-Group Inequality: Computers, Occupations, and International Trade

By Ariel Burstein, Eduardo Morales, and Jonathan Vogel

American Economic Journal: Macroeconomics, April 2019

We provide a unifying framework to quantify the impact of several determinants of changes in US between-group inequality. We use an assignment framework with many labor groups, equipment types, and occupations in which changes in inequality are driven by ...

Pre-event Trends in the Panel Event-Study Design

By Simon Freyaldenhoven, Christian Hansen, and Jesse M. Shapiro

American Economic Review, September 2019

We consider a linear panel event-study design in which unobserved confounds may be related both to the outcome and to the policy variable of interest. We provide sufficient conditions to identify the causal effect of the policy by exploiting covariates re...

The Collateral Composition Channel

By Frédéric Boissay and Russell Cooper

American Economic Journal: Macroeconomics, January 2020

Wholesale financial markets reallocate deposits. Because of incentive problems, these flows are limited by endogenous collateral constraints. The composition of collateral matters. The use of inside collateral creates a "collateral pyramid": cash flows fr...

The Impact of Financial Education on Adolescents' Intertemporal Choices

By Melanie Lührmann, Marta Serra-Garcia, and Joachim Winter

American Economic Journal: Economic Policy, August 2018

We study the impact of financial education on intertemporal choice in adolescence. The educational program was randomly assigned among high school students, and choices were measured using an incentivized experiment. Students who participated in the progr...

When Britain Turned Inward: The Impact of Interwar British Protection

By Alan de Bromhead, Alan Fernihough, Markus Lampe, and Kevin Hjortshøj O'Rourke

American Economic Review, February 2019

International trade collapsed, and also became much less multilateral, during the 1930s. Previous studies, looking at aggregate trade flows, have argued that trade policies had relatively little to do with either phenomenon. Using a new dataset incorporat...

Demographic Structure and Macroeconomic Trends

By Yunus Aksoy, Henrique S. Basso, Ron P. Smith, and Tobias Grasl

American Economic Journal: Macroeconomics, January 2019

We estimate the effect of changes in demographic structure on long-term trends of key macroeconomic variables using a Panel VAR for 21 OECD economies from 1970–2014. The panel data variation assists the identification of demographic effects, while t...

Report: Job Openings for Economists

By John J. Siegfried

AEA Papers and Proceedings, May 2019