What Remains of Cross-Country Convergence?

By Paul Johnson and Chris Papageorgiou

Journal of Economic Literature, March 2020

We examine the record of cross-country growth over the past fifty years and ask if developing countries have made progress on closing the income gap between their per capita incomes and those in the advanced economies. We conclude that, as a group, they h...

Liquidity Constraint Tightness and Consumer Responses to Fiscal Stimulus Policy

By Claus Thustrup Kreiner, David Dreyer Lassen, and Søren Leth-Petersen

American Economic Journal: Economic Policy, February 2019

The marginal interest rate is the price at which a household can access additional liquidity. Consumption theory posits that variation in marginal interest rates across consumers predicts differences in the propensity to spend a stimulus payment. This hyp...

Through a Crystal Ball Darkly: The Future of Monetary Policy Communication

By Alan S. Blinder

AEA Papers and Proceedings, May 2018

I make six predictions about the future of central bank communication about monetary policy. Some are made with great confidence, like: transparency will increase over time. Others are far riskier, like: attempts to communicate with the general public, th...

Time versus State in Insurance: Experimental Evidence from Contract Farming in Kenya

By Lorenzo Casaburi and Jack Willis

American Economic Review, December 2018

The gains from insurance arise from the transfer of income across states. Yet, by requiring that the premium be paid upfront, standard insurance products also transfer income across time. We show that this intertemporal transfer can help explain low ins...

Teacher Value Added in a Low-Income Country

By Natalie Bau and Jishnu Das

American Economic Journal: Economic Policy, February 2020

Using data from Pakistan, we show that existing methods produce unbiased and reliable estimates of teacher value added (TVA) despite significant differences in context. Although effective teachers increase learning substantially, observed teacher characte...

Advertising and Environmental Stewardship: Evidence from the BP Oil Spill

By Lint Barrage, Eric Chyn, and Justine Hastings

American Economic Journal: Economic Policy, February 2020

This paper explores whether private markets can incentivize environmental stewardship. We examine the consumer response to the 2010 BP oil spill and test how BP's investment in the 2000–2008 "Beyond Petroleum" green advertising campaign affected this re...

Beyond reproach

[Research Highlight]

April 08, 2020

Can an advertising campaign act as a kind of corporate insurance in a disaster?

The Rise of NGO Activism

By Julien Daubanes and Jean-Charles Rochet

American Economic Journal: Economic Policy, November 2019

Activist nongovernmental organizations (NGOs) increasingly oppose firms' practices. We suggest this might be related to the vulnerability of public regulation to corporate influence. We examine a potentially harmful industrial project subject to regulator...

Fading Stars

By Germán Gutiérrez and Thomas Philippon

AEA Papers and Proceedings, May 2019

We study the evolution of superstar firms in the US economy over the past 60 years. Contrary to common wisdom, superstar firms have not become larger or more productive but have become more profitable. The contribution of star firms to aggregate US produc...

Consumers as Tax Auditors

By Joana Naritomi

American Economic Review, September 2019

To investigate the enforcement value of third-party information on potentially collusive taxpayers, I study an anti-tax evasion program that rewards consumers for ensuring that firms report sales and establishes a verification system to aid whistle-blowin...

Firm Sorting and Agglomeration

By Cecile Gaubert

American Economic Review, November 2018

To account for the uneven distribution of economic activity in space, I propose a theory of the location choices of heterogeneous firms in a variety of sectors across cities. In equilibrium, the distribution of city sizes and the sorting patterns of firms...

Team-Specific Capital and Innovation

By Xavier Jaravel, Neviana Petkova, and Alex Bell

American Economic Review, April 2018

We establish the importance of team-specific capital in the typical inventor's career. Using administrative tax and patent data for the population of US patent inventors from 1996 to 2012, we find that an inventor's premature death causes a large and long...

Allocating Scarce Organs: How a Change in Supply Affects Transplant Waiting Lists and Transplant Recipients

By Stacy Dickert-Conlin, Todd Elder, and Keith Teltser

American Economic Journal: Applied Economics, October 2019

Vast organ shortages motivated recent efforts to increase the supply of transplantable organs, but we know little about the demand side of the market. We test the implications of a model of organ demand using the universe of US transplant data from 1987 t...

An Economic Analysis of Privacy Protection and Statistical Accuracy as Social Choices

By John M. Abowd and Ian M. Schmutte

American Economic Review, January 2019

Statistical agencies face a dual mandate to publish accurate statistics while protecting respondent privacy. Increasing privacy protection requires decreased accuracy. Recognizing this as a resource allocation problem, we propose an economic solution: ope...

The End of Alchemy by Mervyn King: A Review Essay

By Roger E. A. Farmer

Journal of Economic Literature, September 2018

I review The End of Alchemy by Mervyn King, published by W.W. Norton and Company in 2016. I discuss King's proposed regulatory reform, the "Pawn Broker for All Seasons" (PFAS), and I compare it to an alternative solution developed in my own work....

Historical Legacies and African Development

By Stelios Michalopoulos and Elias Papaioannou

Journal of Economic Literature, March 2020

As Africa's role on the global stage is rising, so does the need to understand the shadow of history on the continent's economy and polity. We discuss recent works that shed light on Africa's colonial and precolonial legacies. The emerging corpus is rem...

Student Loan Nudges: Experimental Evidence on Borrowing and Educational Attainment

By Benjamin M. Marx and Lesley J. Turner

American Economic Journal: Economic Policy, May 2019

We provide the first experimental evidence on the effect of student loans on educational attainment. Loan amounts listed in financial aid award letters ("offers") do not alter students' choice sets but significantly affect borrowing. Students randomly rec...

Does Household Electrification Supercharge Economic Development?

[Symposium: Electricity in Developing Countries]

By Kenneth Lee, Edward Miguel, and Catherine Wolfram

Journal of Economic Perspectives, Winter 2020

In recent years, electrification has reemerged as a key priority in low-income countries, with a particular focus on electrifying households. Yet the microeconomic literature examining the impacts of electrifying households on economic development has p...

Recommendations for Further Reading

By Timothy Taylor

Journal of Economic Perspectives, Winter 2020

Universal Basic Incomes versus Targeted Transfers: Anti-Poverty Programs in Developing Countries

[Symposium: Development and State Capacity]

By Rema Hanna and Benjamin A. Olken

Journal of Economic Perspectives, Fall 2018

Of the 17 Sustainable Development Goals articulated by the United Nations, number one is the elimination of extreme poverty by 2030. While future economic growth should continue to reduce poverty, it will not solve the problem by itself; thus, there is ...