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...

Medical Care Spending and Labor Market Outcomes: Evidence from Workers' Compensation Reforms

By David Powell and Seth Seabury

American Economic Review, October 2018

Medical care represents an important component of workers' compensation benefits with the potential to improve health and post- injury labor outcomes, but little is known about the relationship between medical care spending and the labor outcomes of injur...

Moved to Opportunity: The Long-Run Effects of Public Housing Demolition on Children

By Eric Chyn

American Economic Review, October 2018

This paper provides new evidence on the effects of moving out of disadvantaged neighborhoods on the long-run outcomes of children. I study public housing demolitions in Chicago, which forced low-income households to relocate to less disadvantaged neighbor...

Evaluating Strategic Forecasters

By Rahul Deb, Mallesh M. Pai, and Maher Said

American Economic Review, October 2018

Motivated by the question of how one should evaluate professional election forecasters, we study a novel dynamic mechanism design problem without transfers. A principal who wishes to hire only high-quality forecasters is faced with an agent of unknown qua...

Testing Efficient Risk Sharing with Heterogeneous Risk Preferences: Comment

By Aditya Shrinivas and Marcel Fafchamps

American Economic Review, October 2018

Mazzocco and Saini (2012) propose and implement a test of efficient risk sharing that allows for preference heterogeneity. They motivate their approach as yielding different results from those of standard efficiency test with homogeneous preferences. We s...

Testing Efficient Risk Sharing with Heterogeneous Risk Preferences: Reply

By Maurizio Mazzocco and Shiv Saini

American Economic Review, October 2018

Front Matter

American Economic Journal: Macroeconomics, October 2018

The Price of Growth: Consumption Insurance in China 1989–2009

By Raül Santaeulàlia-Llopis and Yu Zheng

American Economic Journal: Macroeconomics, October 2018

We exploit a novel and unique opportunity to document the transmission of income risk to consumption in a growing economy. Our laboratory is China, an economy that has witnessed enormous and sustained growth. We build a long panel of household-level consu...

International Transmission with Heterogeneous Sectors

By Keyu Jin and Nan Li

American Economic Journal: Macroeconomics, October 2018

This paper documents new facts about the behavior of capital- and labor-intensive goods over the business cycle and also identifies a mechanism that generates international investment comovement through shifting compositional changes of production and tra...

The Gains from Input Trade with Heterogeneous Importers

By Joaquin Blaum, Claire Lelarge, and Michael Peters

American Economic Journal: Macroeconomics, October 2018

Firms differ substantially in their participation in foreign input markets. We develop a methodology to measure the aggregate effects of input trade that takes such heterogeneity into account. We provide a theoretical result that holds in a variety of set...

Oil and Macroeconomic (In)stability

By Hilde C. Bjørnland, Vegard H. Larsen, and Junior Maih

American Economic Journal: Macroeconomics, October 2018

We analyze the role of oil price volatility in reducing U.S. macroeconomic instability. Using a Markov Switching Rational Expectation New-Keynesian model we revisit the timing of the Great Moderation and the sources of changes in the volatility of macroec...

A Model of Endogenous Loan Quality and the Collapse of the Shadow Banking System

By Francesco Ferrante

American Economic Journal: Macroeconomics, October 2018

I develop a macroeconomic model in which banks can affect loan quality by exerting costly screening effort. Informational frictions limit the amount of external funds that banks can raise. In this framework I consider two types of financial intermediation...

Low Real Interest Rates, Collateral Misrepresentation, and Monetary Policy

By Stephen D. Williamson

American Economic Journal: Macroeconomics, October 2018

A model is constructed in which households and banks have incentives to fake the quality of collateral. These incentive problems matter when collateral is scarce in the aggregate—when real interest rates are low. Conventional monetary easing can exacerb...

The Effect of Consumer Sentiment on Consumption: Cross-Sectional Evidence from Elections

By Christian Gillitzer and Nalini Prasad

American Economic Journal: Macroeconomics, October 2018

We seek to identify the causal effect of sentiment innovations on consumption. Using unique Australian consumer sentiment survey data we show that, immediately after elections with a change of government, supporters of the winning party report substantial...

Corporate Income Tax, Legal Form of Organization, and Employment

By Daphne Chen, Shi Qi, and Don Schlagenhauf

American Economic Journal: Macroeconomics, October 2018

A dynamic stochastic occupational choice model with heterogeneous agents is developed to evaluate the impact of a corporate income tax reduction on employment. In this framework, the key margin is the endogenous entrepreneurial choice of legal form of org...

Front Matter

American Economic Journal: Microeconomics, November 2018

Sophisticated Bidders in Beauty-Contest Auctions

By Stefano Galavotti, Luigi Moretti, and Paola Valbonesi

American Economic Journal: Microeconomics, November 2018

We study bidding behavior by firms in beauty-contest auctions, i.e., auctions in which the winning bid is the one which gets closest to some function (average) of all submitted bids. Using a dataset on public procurement beauty-contest auctions, we show t...

Trading across Borders in Online Auctions

By Elena Krasnokutskaya, Christian Terwiesch, and Lucia Tiererova

American Economic Journal: Microeconomics, November 2018

We invoke the insights from the auction literature to study trade in services using data from an online market for programming support. We find that the observed clustering of trade between countries can be rationalized through a model featuring endogenou...

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...

A Theory of Organizational Dynamics: Internal Politics and Efficiency

By Hongbin Cai, Hong Feng, and Xi Weng

American Economic Journal: Microeconomics, November 2018

We consider a three-member organization in which one member retires in each period and the incumbent members vote to admit a candidate to fill the vacancy. Candidates differ in quality and belong to one of two types, and majority-type members share the to...