Universal Basic Incomes versus Targeted Transfers: Anti-Poverty Programs in Developing Countries

[Symposium: Development and State Capacity]

By Rema Hanna and Benjamin A. Olken

Journal of Economic Perspectives, Fall 2018

Of the 17 Sustainable Development Goals articulated by the United Nations, number one is the elimination of extreme poverty by 2030. While future economic growth should continue to reduce poverty, it will not solve the problem by itself; thus, there is ...

Retrospectives: On the Genius Behind David Ricardo's 1817 Formulation of Comparative Advantage

By Daniel M. Bernhofen and John C. Brown

Journal of Economic Perspectives, Fall 2018

Last year marked the 200th anniversary of Ricardo's famous "four numbers" paragraph on comparative advantage, which is one of the oldest analytical results in economics. Following the lead of James Mill (1821), these four numbers have been interpreted as ...

Recommendations for Further Reading

By Timothy Taylor

Journal of Economic Perspectives, Fall 2018

Front Matter

American Economic Review, December 2018

How Are SNAP Benefits Spent? Evidence from a Retail Panel

By Justine Hastings and Jesse M. Shapiro

American Economic Review, December 2018

We use a novel retail panel with detailed transaction records to study the effect of the Supplemental Nutrition Assistance Program (SNAP) on house-hold spending. We use administrative data to motivate three approaches to causal inference. The marginal pro...

Bad Investments and Missed Opportunities? Postwar Capital Flows to Asia and Latin America

By Lee E. Ohanian, Paulina Restrepo-Echavarria, and Mark L. J. Wright

American Economic Review, December 2018

After World War II, international capital flowed into slow-growing Latin America rather than fast-growing Asia. This is surprising as, everything else equal, fast growth should imply high capital returns. This paper develops a capital flow accounting fram...

Market Integration, Demand, and the Growth of Firms: Evidence from a Natural Experiment in India

By Robert Jensen and Nolan H. Miller

American Economic Review, December 2018

In many developing countries, the average firm is small, does not grow and has low productivity. Lack of market integration and limited information on non-local products often leave consumers unaware of the prices and quality of non-local firms. They ther...

Taking a Financial Position in Your Opponent in Litigation

By Albert H. Choi and Kathryn E. Spier

American Economic Review, December 2018

Before filing suit, a plaintiff can take a financial position in a defendant firm. A short position benefits the plaintiff by transforming a negative expected-value claim into a positive expected-value one and by enhancing the claim's settlement value. If...

Speed, Accuracy, and the Optimal Timing of Choices

By Drew Fudenberg, Philipp Strack, and Tomasz Strzalecki

American Economic Review, December 2018

We model the joint distribution of choice probabilities and decision times in binary decisions as the solution to a problem of optimal sequential sampling, where the agent is uncertain of the utility of each action and pays a constant cost per unit time f...

Identifying Industry Margins with Price Constraints: Structural Estimation on Pharmaceuticals

By Pierre Dubois and Laura Lasio

American Economic Review, December 2018

We develop a structural model to investigate the effects of pharmaceutical price regulation on demand and on manufacturers' price-setting behavior in France. We estimate price-cost margins in a regulated market with price constraints and infer whether the...

Health Care Access, Costs, and Treatment Dynamics: Evidence from In Vitro Fertilization

By Barton H. Hamilton, Emily Jungheim, Brian McManus, and Juan Pantano

American Economic Review, December 2018

We study public policies designed to improve access and reduce costs for In Vitro Fertilization (IVF). High out-of-pocket prices can deter potential patients from IVF, while active patients have an incentive to risk costly high-order pregnancies to improv...

Time versus State in Insurance: Experimental Evidence from Contract Farming in Kenya

By Lorenzo Casaburi and Jack Willis

American Economic Review, December 2018

The gains from insurance arise from the transfer of income across states. Yet, by requiring that the premium be paid upfront, standard insurance products also transfer income across time. We show that this intertemporal transfer can help explain low ins...

Why Is Pollution from US Manufacturing Declining? The Roles of Environmental Regulation, Productivity, and Trade

By Joseph S. Shapiro and Reed Walker

American Economic Review, December 2018

Between 1990 and 2008, air pollution emissions from U.S. manufacturing fell by 60 percent despite a substantial increase in manufacturing output. We show that these emissions reductions are primarily driven by within-product changes in emissions intensity...

Commuting, Migration, and Local Employment Elasticities

By Ferdinando Monte, Stephen J. Redding, and Esteban Rossi-Hansberg

American Economic Review, December 2018

We provide theory and evidence that the elasticity of local employment to a labor demand shock is heterogeneous depending on the commuting openness of the local labor market. We develop a quantitative general equilibrium model that incorporates spatial li...

The Nexus of Monetary Policy and Shadow Banking in China

By Kaiji Chen, Jue Ren, and Tao Zha

American Economic Review, December 2018

We study how monetary policy in China influences banks' shadow banking activities. We develop and estimate the endogenously switching monetary policy rule that is based on institutional facts and at the same time tractable in the spirit of Taylor (1993). ...

Front Matter

Journal of Economic Literature, December 2018

Skewed Wealth Distributions: Theory and Empirics

By Jess Benhabib and Alberto Bisin

Journal of Economic Literature, December 2018

Invariably across a cross-section of countries and time periods, wealth distributions are skewed to the right displaying thick upper tails, that is, large and slowly declining top wealth shares. In this survey we categorize the theoretical studies on th...

Islam and Economic Performance: Historical and Contemporary Links

By Timur Kuran

Journal of Economic Literature, December 2018

This essay critically evaluates the analytic literature concerned with causal connections between Islam and economic performance. It focuses on works since 1997, when this literature was last surveyed. Among the findings are the following: Ramadan fasti...

Childhood Circumstances and Adult Outcomes: Act II

By Douglas Almond, Janet Currie, and Valentina Duque

Journal of Economic Literature, December 2018

That prenatal events can have life-long consequences is now well established. Nevertheless, research on the fetal origins hypothesis is flourishing and has expanded to include the early childhood (postnatal) environment. Why does this literature have a ...

The Formation of Expectations, Inflation, and the Phillips Curve

By Olivier Coibion, Yuriy Gorodnichenko, and Rupal Kamdar

Journal of Economic Literature, December 2018

This paper argues for a careful (re)consideration of the expectations formation process and a more systematic inclusion of real-time expectations through survey data in macroeconomic analyses. While the rational expectations revolution has allowed for g...