Boosting the youth vote

[Research Highlight]

August 14, 2020

How do states respond when young voters gain more political leverage?

Community policing, WWII economics, and public transit

[News]

July 13, 2020

Reading recommendations from Timothy Taylor, managing editor of the Journal of Economic Perspectives.

Webinar on the Job Market for New Economics Ph.D.s

[Page]

Teaching Replication in the Social Sciences Workshop 2020

[News]

August 26, 2020

The workshop takes place at the Mannheim Centre for European Social Research on September 24-25, 2020.

A solution creates a problem

[Page]

An anti-poverty program improved monitoring by going digital and inadvertently reduced access for people it aimed to help.

Market Panics, Frenzies, and Informational Efficiency: Theory and Experiment

By Chad Kendall

American Economic Journal: Microeconomics, August 2020

In a market rush, the fear of future adverse price movements causes traders to trade before they become well informed, reducing the informational efficiency of the market. I derive theoretical conditions under which market rushes are equilibrium behavior ...

Processing the rise of quantitative investing

[Page]

Are financial experts shifting away from analyzing company fundamentals?

Front Matter

American Economic Review, September 2020

An Estimated Structural Model of Entrepreneurial Behavior

By John Bailey Jones and Sangeeta Pratap

American Economic Review, September 2020

Using a rich panel of owner-operated New York dairy farms, we provide new evidence on entrepreneurial behavior. We formulate a dynamic model of farms facing uninsured risks and financial constraints. Farmers derive nonpecuniary benefits from operating the...

Ultimatum Bargaining with Rational Inattention

By Doron Ravid

American Economic Review, September 2020

A seller bargains with a rationally inattentive buyer (Sims 2003) over a good of random quality. After observing quality, the seller makes a take-it-or-leave-it offer. The buyer pays attention to the seller's product and offer at a cost proportional to ex...

Rich Pickings? Risk, Return, and Skill in Household Wealth

By Laurent Bach, Laurent E. Calvet, and Paolo Sodini

American Economic Review, September 2020

We investigate wealth returns on an administrative panel containing the disaggregated balance sheets of Swedish residents. The expected return on household net wealth is strongly persistent, determined primarily by systematic risk, and increasing in net w...

Self-Fulfilling Debt Dilution: Maturity and Multiplicity in Debt Models

By Mark Aguiar and Manuel Amador

American Economic Review, September 2020

We establish that creditor beliefs regarding future borrowing can be self-fulfilling, leading to multiple equilibria with markedly different debt accumulation patterns. We characterize such indeterminacy in the Eaton-Gersovitz sovereign debt model augment...

Overreaction in Macroeconomic Expectations

By Pedro Bordalo, Nicola Gennaioli, Yueran Ma, and Andrei Shleifer

American Economic Review, September 2020

We study the rationality of individual and consensus forecasts of macroeconomic and financial variables using the methodology of Coibion and Gorodnichenko (2015), who examine predictability of forecast errors from forecast revisions. We find that individu...

Household Debt Revaluation and the Real Economy: Evidence from a Foreign Currency Debt Crisis

By Emil Verner and Győző Gyöngyösi

American Economic Review, September 2020

We examine the consequences of a sudden increase in household debt burdens by exploiting variation in exposure to household foreign currency debt during Hungary's late-2008 currency crisis. The revaluation of debt burdens causes higher default rates and a...

Job Matching under Constraints

By Fuhito Kojima, Ning Sun, and Ning Neil Yu

American Economic Review, September 2020

Studying job matching in a Kelso-Crawford framework, we consider arbitrary constraints imposed on sets of doctors that a hospital can hire. We characterize all constraints that preserve the substitutes condition (for all revenue functions that satisfy the...

Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects

By Clément de Chaisemartin and Xavier D'Haultfœuille

American Economic Review, September 2020

Linear regressions with period and group fixed effects are widely used to estimate treatment effects. We show that they estimate weighted sums of the average treatment effects (ATE) in each group and period, with weights that may be negative. Due to the n...

Youth Enfranchisement, Political Responsiveness, and Education Expenditure: Evidence from the US

By Graziella Bertocchi, Arcangelo Dimico, Francesco Lancia, and Alessia Russo

American Economic Journal: Economic Policy, August 2020

We examine the link between the political participation of the young and fiscal policies in the United States. We generate exogenous variation in participation using the passage of preregistration laws, which allow the young to register before being eligi...

Front Matter

American Economic Review: Insights, September 2020

Foreign Competition and Domestic Innovation: Evidence from US Patents

By David Autor, David Dorn, Gordon H. Hanson, Gary Pisano, and Pian Shu

American Economic Review: Insights, September 2020

Manufacturing accounts for more than three-quarters of US corporate patents. The competitive shock to this sector emanating from China's economic ascent could in theory either augment or stifle US innovation. Using three decades of US patents matched to c...

The Long-Term Impacts of Grants on Poverty: Nine-Year Evidence from Uganda's Youth Opportunities Program

By Christopher Blattman, Nathan Fiala, and Sebastian Martinez

American Economic Review: Insights, September 2020

In 2008, Uganda gave 400 USD per person to thousands of young people to help them start skilled trades, work more, and raise incomes. Four years on, an experimental evaluation found grants raised work by 17 percent and earnings by 38 percent (Blattman, Fi...