Monetary Policy Surprises, Credit Costs, and Economic Activity

By Mark Gertler and Peter Karadi

American Economic Journal: Macroeconomics, January 2015

We provide evidence on the transmission of monetary policy shocks in a setting with both economic and financial variables. We first show that shocks identified using high frequency surprises around policy announcements as external instruments produce resp...

How Auctions Work for Wine and Art

[Symposium: Auctions]

By Orley Ashenfelter

Journal of Economic Perspectives, Summer 1989

At the first wine auction I ever attended, I saw the repeal of the law of one price. This empirical surprise led me to begin collecting data on wine auctions, to interview auctioneers, and even to buy a little wine. In the meantime I have also had the opp...

Middlemen Margins and Globalization

By Pranab Bardhan, Dilip Mookherjee, and Masatoshi Tsumagari

American Economic Journal: Microeconomics, November 2013

We study a competitive theory of middlemen with brand-name reputations necessary to overcome product quality moral hazard problems. Agents with heterogeneous abilities sort into different sectors and occupations. Middleman margins do not equalize acros...

Human Capital and Growth

By Robert E. Lucas Jr.

American Economic Review, May 2015

This paper describes a growth model with the property that human capital accumulation can account for all observed growth. The model is shown to be consistent with evidence on individual productivities as measured by census earnings data. The central hypo...

The Cost of Contract Renegotiation: Evidence from the Local Public Sector

By Philippe Gagnepain, Marc Ivaldi, and David Martimort

American Economic Review, October 2013

Contract theory claims that renegotiation prevents attainment of the efficient solution that could be obtained under full commitment. Assessing the cost of renegotiation remains an open issue from an empirical viewpoint. We fit a structural principal-a...

The Wages of Sinistrality: Handedness, Brain Structure, and Human Capital Accumulation

By Joshua Goodman

Journal of Economic Perspectives, Fall 2014

Left- and right-handed individuals have different neurological wiring, particularly with regard to language processing. Multiple datasets from the United States and the United Kingdom show that lefties exhibit significant human capital deficits relative t...

An Alternative Test of Racial Prejudice in Motor Vehicle Searches: Theory and Evidence

By Shamena Anwar and Hanming Fang

American Economic Review, March 2006

We propose a simple model of trooper behavior to design empirical tests for whether troopers of different races are monolithic in their search behavior, and whether they exhibit relative racial prejudice in motor vehicle searches. Our test of relative rac...

Effects of Terms of Trade Gains and Tariff Changes on the Measurement of US Productivity Growth

By Robert C. Feenstra, Benjamin R. Mandel, Marshall B. Reinsdorf, and Matthew J. Slaughter

American Economic Journal: Economic Policy, February 2013

The acceleration in US productivity growth since 1995 is often attributed to declining prices for information technology (IT ) goods, and therefore enhanced productivity growth in that sector. We investigate an alternative explanation for these IT price m...

Social Comparisons and Pro-social Behavior: Testing "Conditional Cooperation" in a Field Experiment

By Bruno S. Frey and Stephan Meier

American Economic Review, December 2004

Subjective Expectations and Asset-Return Puzzles

By Martin L. Weitzman

American Economic Review, September 2007

In textbook expositions of the equity-premium, riskfree-rate and equity-volatility puzzles, agents are sure of the economy's structure while growth rates are normally distributed. But because of parameter uncertainty the thin-tailed normal distribution...

The Safe Assets Shortage Conundrum

[Symposium: The Global Monetary System]

By Ricardo J. Caballero, Emmanuel Farhi, and Pierre-Olivier Gourinchas

Journal of Economic Perspectives, Summer 2017

A safe asset is a simple debt instrument that is expected to preserve its value during adverse systemic events. The supply of safe assets, private and public, has historically been concentrated in a small number of advanced economies, most prominently t...

Reforming LIBOR and Other Financial Market Benchmarks

By Darrell Duffie and Jeremy C. Stein

Journal of Economic Perspectives, Spring 2015

LIBOR is the London Interbank Offered Rate: a measure of the interest rate at which large banks can borrow from one another on an unsecured basis. LIBOR is often used as a benchmark rate—meaning that the interest rates that consumers and businesses ...

"Fisher Dynamics" in US Household Debt, 1929-2011

By J. W. Mason and Arjun Jayadev

American Economic Journal: Macroeconomics, July 2014

The evolution of debt-income ratios over time depends on income growth, inflation, and interest rates, independent of any changes in borrowing. We examine the effect of these "Fisher dynamics" on household debt-income ratios in the United States over the ...

Agricultural Volatility and Investments in Children

By Robert Jensen

American Economic Review, May 2000

A Century of US Central Banking: Goals, Frameworks, Accountability

[Symposium: The First 100 Years of the Federal Reserve]

By Ben S. Bernanke

Journal of Economic Perspectives, Fall 2013

Several key episodes in the 100-year history of the Federal Reserve have been referred to in various contexts with the adjective "Great" attached to them: the Great Experiment of the Federal Reserve's founding, the Great Depression, the Great Inflation ...

Police Officer on the Frontline or a Soldier? The Effect of Police Militarization on Crime

By Vincenzo Bove and Evelina Gavrilova

American Economic Journal: Economic Policy, August 2017

Sparked by high-profile confrontations between police and citizens in Ferguson, Missouri, and elsewhere, many commentators have criticized the excessive militarization of law enforcement. We investigate whether surplus military-grade equipment acquired by...

Resolving Debt Overhang: Political Constraints in the Aftermath of Financial Crises

By Atif Mian, Amir Sufi, and Francesco Trebbi

American Economic Journal: Macroeconomics, April 2014

Countries become more politically polarized and fractionalized following financial crises, reducing the likelihood of major financial reforms precisely when they might have especially large benefits. The evidence from a large sample of countries provides...

What High-Achieving Low-Income Students Know about College

By Caroline M. Hoxby and Sarah Turner

American Economic Review, May 2015

Previous work demonstrates that low-income higher achievers fail to apply to selective colleges despite their being admitted at high rates and receiving financial aid so generous that they pay less than at non-selective schools. The Expanding College Oppo...

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...

The Need for Accountability in Education in Developing Countries

[Symposium: Schools and Accountability]

By Isaac M. Mbiti

Journal of Economic Perspectives, Summer 2016

Despite the rapid growth in enrollment rates across the developing world, there are major concerns about the quality of education that children receive. Across numerous developing countries, recent learning assessments have revealed that children are not ...