On the Timing and Pricing of Dividends

By Jules van Binsbergen, Michael Brandt, and Ralph Koijen

American Economic Review, June 2012

We present evidence on the term structure of the equity premium. We recover prices of dividend strips, which are short-term assets that pay dividends on the stock index every period up to period T and nothing thereafter. It is short-term relative to the ...

The Finnish Great Depression: From Russia with Love

By Yuriy Gorodnichenko, Enrique G. Mendoza, and Linda L. Tesar

American Economic Review, June 2012

Why did Finland experience, in 1991-1993, the deepest recession observed in an industrialized country since the 1930s? Using a dynamic general equilibrium model with labor frictions, we argue that the collapse of the Soviet-Finnish trade was a major cont...

The Currency of Reciprocity: Gift Exchange in the Workplace

By Sebastian Kube, Michel André Maréchal, and Clemens Puppe

American Economic Review, June 2012

What determines reciprocity in employment relations? We conducted a controlled field experiment to measure the extent to which monetary and nonmonetary gifts affect workers' performance. We find that nonmonetary gifts have a much stronger impact than mon...

Risk Aversion and the Labor Margin in Dynamic Equilibrium Models

By Eric T. Swanson

American Economic Review, June 2012

The household's labor margin has a substantial effect on risk aversion, and hence asset prices, in dynamic equilibrium models even when utility is additively separable between consumption and labor. This paper derives simple, closed-form expressions for r...

Credit Spreads and Business Cycle Fluctuations

By Simon Gilchrist and Egon Zakrajšek

American Economic Review, June 2012

Using micro-level data, we construct a credit spread index with considerable predictive power for future economic activity. We decompose the credit spread into a component that captures firm-specific information on expected defaults and a residual compone...

Do Matching Frictions Explain Unemployment? Not in Bad Times

By Pascal Michaillat

American Economic Review, June 2012

This paper proposes a search-and-matching model of unemployment in which jobs are rationed: the labor market does not clear in the absence of matching frictions. This job shortage arises in an economic equilibrium from the combination of some wage rigidit...

Taxes, Cigarette Consumption, and Smoking Intensity: Comment

By Jason Abrevaya and Laura Puzzello

American Economic Review, June 2012

This paper re-examines Adda and Cornaglia's (2006) evidence on the compensatory behavior of smokers who, in face of higher taxes, are found to reduce their consumption of cigarettes while maintaining their cotinine—a biomarker for nicotine—lev...

Independent Auditor's Report

American Economic Review, June 2012

Front Matter

Journal of Economic Literature, June 2012

Macroeconomics and the Term Structure

By Refet S. Gürkaynak and Jonathan H. Wright

Journal of Economic Literature, June 2012

This paper provides an overview of the analysis of the term structure of interest rates with a special emphasis on recent developments at the intersection of macroeconomics and finance. The topic is important to investors and also to policymakers, who wis...

Economic Incentives and Social Preferences: Substitutes or Complements?

By Samuel Bowles and Sandra Polania-Reyes

Journal of Economic Literature, June 2012

Explicit economic incentives designed to increase contributions to public goods and to promote other pro-social behavior sometimes are counterproductive or less effective than would be predicted among entirely self-interested individuals. This may occur ...

What Does Human Capital Do? A Review of Goldin and Katz's The Race between Education and Technology

By Daron Acemoglu and David Autor

Journal of Economic Literature, June 2012

Goldin and Katz's The Race between Education and Technology is a monumental achievement that supplies a unified framework for interpreting how the demand and supply of human capital have shaped the distribution of earnings in the U.S. labor market over t...

Micro and Macro Labor Supply Elasticities: A Reassessment of Conventional Wisdom

By Michael Keane and Richard Rogerson

Journal of Economic Literature, June 2012

The response of aggregate labor supply to various changes in the economic environment is central to many economic issues, especially the optimal design of tax policies. Conventional wisdom based on studies in the 1980s and 1990s has long held that the ana...

Consumer Protection and Contingent Charges

By Mark Armstrong and John Vickers

Journal of Economic Literature, June 2012

Contingent charges for financial services, such as fees for unauthorized overdrafts, are often controversial. We study the economics of contingent charges in a stylized setting with naive and sophisticated consumers. We contrast situations where the naive...

Financial Advice

By Roman Inderst and Marco Ottaviani

Journal of Economic Literature, June 2012

Financial advice could play an essential role in well-functioning markets for retail financial products, given that many consumers find it difficult to evaluate the complex products on offer. However, conflicts of interest, which are pervasive in some pa...

Book Reviews

Journal of Economic Literature, June 2012

Annotated Listing of New Books

Journal of Economic Literature, June 2012

JEL Classification System

Journal of Economic Literature, June 2012

Front Matter

American Economic Journal: Macroeconomics, July 2012

Sticky Wages: Evidence from Quarterly Microeconomic Data

By Hervé Le Bihan, Jérémi Montornès, and Thomas Heckel

American Economic Journal: Macroeconomics, July 2012

Using an original micro-dataset from France, we investigate nominal wage stickiness. Nominal wage changes are found to occur at a quarterly frequency of around 38 percent over our sample period, and to be to a large extent staggered across establishments,...