Can Government Purchases Stimulate the Economy?

By Valerie A. Ramey

Journal of Economic Literature, September 2011

This essay briefly reviews the state of knowledge about the government spending multiplier. Drawing on theoretical work, aggregate empirical estimates from the United States, as well as cross-locality estimates, I assess the likely range of multiplier va...

An Empirical Analysis of the Revival of Fiscal Activism in the 2000s

By John B. Taylor

Journal of Economic Literature, September 2011

An empirical review of the three fiscal stimulus packages of the 2000s shows that they had little if any direct impact on consumption or government purchases. Households largely saved the transfers and tax rebates. The federal government only increased pu...

On Measuring the Effects of Fiscal Policy in Recessions

By Jonathan A. Parker

Journal of Economic Literature, September 2011

We do not have a good measure of the effects of fiscal policy in a recession because the methods that we use to estimate the effects of fiscal policy—both those using the observed outcomes following different policies in aggregate data and those st...

Book Reviews

Journal of Economic Literature, September 2011

Annotated Listing of New Books

Journal of Economic Literature, September 2011

JEL Classification System

Journal of Economic Literature, September 2011

Front Matter

American Economic Journal: Applied Economics, October 2011

Informal Taxation

By Benjamin A. Olken and Monica Singhal

American Economic Journal: Applied Economics, October 2011

Informal payments are a frequently overlooked source of local public finance in developing countries. We use microdata from ten countries to establish stylized facts on the magnitude, form, and distributional implications of this "informal taxation." Inf...

Public Provision and Protection of Natural Resources: Groundwater Irrigation in Rural India

By Sheetal Sekhri

American Economic Journal: Applied Economics, October 2011

This paper evaluates the effects of a public groundwater provision program on water tables in Northern India. I theorize that public provision leads to sustainable use of groundwater when the fixed costs for private well provision are high. I use village-...

Health Capital and the Prenatal Environment: The Effect of Ramadan Observance during Pregnancy

By Douglas Almond and Bhashkar Mazumder

American Economic Journal: Applied Economics, October 2011

This paper uses the Islamic holy month of Ramadan as a natural experiment in diurnal fasting and fetal health. Among births to Arab parents in Michigan, we find prenatal exposure to Ramadan results in lower birth weight. Exposure in the first month of ges...

The Consumption Response to Seasonal Income: Evidence from Japanese Public Pension Benefits

By Melvin Stephens and Takashi Unayama

American Economic Journal: Applied Economics, October 2011

Japanese public pension benefits, which were distributed quarterly through February 1990, and every other month since then, induce substantial but predictable income fluctuations. The relative magnitude of the payments combined with the delay between paym...

Government Advertising and Media Coverage of Corruption Scandals

By Rafael Di Tella and Ignacio Franceschelli

American Economic Journal: Applied Economics, October 2011

We construct measures of the extent to which the four main newspapers in Argentina report government corruption on their front page during the period 1998-2007 and correlate them with government advertising. The correlation is negative. The size is consid...

Climate Change, Mortality, and Adaptation: Evidence from Annual Fluctuations in Weather in the US

By Olivier Deschênes and Michael Greenstone

American Economic Journal: Applied Economics, October 2011

Using random year-to-year variation in temperature, we document the relationship between daily temperatures and annual mortality rates and daily temperatures and annual residential energy consumption. Both relationships exhibit nonlinearities, with signif...

Subsidized Farm Input Programs and Agricultural Performance: A Farm-Level Analysis of West Bengal's Green Revolution, 1982-1995

By Pranab Bardhan and Dilip Mookherjee

American Economic Journal: Applied Economics, October 2011

We examine the role of delivery of subsidized seeds and fertilizers in the form of agricultural minikits by local governments in three successive farm panels in West Bengal spanning 1982-1995. These programs significantly raised farm value added per acre,...

Economic Shocks and Civil Conflict: A Comment

By Antonio Ciccone

American Economic Journal: Applied Economics, October 2011

Edward Miguel, Shanker Satyanath, and Ernest Sergenti (2004), henceforth MSS, argue that lower rainfall levels and negative rainfall shocks increase conflict risk in sub-Saharan Africa. This conclusion rests on their finding of a negative correlation betw...

Re-examining Economic Shocks and Civil Conflict

By Edward Miguel and Shanker Satyanath

American Economic Journal: Applied Economics, October 2011

Miguel, Satyanath, and Ernest Sergenti (2004), henceforth MSS, show that economic growth is negatively related to civil conflict in Africa, using annual rainfall variation as an IV for growth. Antonio Ciccone (2011) argues that thanks to rainfall's mean-r...

Front Matter

American Economic Journal: Macroeconomics, October 2011

Taxes, Social Subsidies, and the Allocation of Work Time

By L. Rachel Ngai and Christopher A. Pissarides

American Economic Journal: Macroeconomics, October 2011

We examine the allocation of hours of work across industrial sectors in OECD countries. We find large disparities across three sector groups, one that produces goods without home substitutes, and two others that have home substitutes but are treated diffe...

Forces Shaping Hours Worked in the OECD, 1960-2004

By Cara McDaniel

American Economic Journal: Macroeconomics, October 2011

The goal of this paper is to examine the role of taxes and productivity growth as forces influencing market hours. To achieve this goal, the paper considers a calibrated growth model extended to include home production and subsistence consumption, both of...

Exchange Rates and Wages in an Integrated World

By Prachi Mishra and Antonio Spilimbergo

American Economic Journal: Macroeconomics, October 2011

We analyze how the pass-through from exchange rate to domestic wages depends on the degree of integration between domestic and foreign labor markets. Using data from 66 countries over the period 1981-2005, we find that the elasticity of domestic wages to ...