Closing the Gap: The Effect of Reducing Complexity and Uncertainty in College Pricing on the Choices of Low-Income Students

By Susan Dynarski, CJ Libassi, Katherine Michelmore, and Stephanie Owen

American Economic Review, June 2021

High-achieving, low-income students attend selective colleges at far lower rates than upper-income students with similar achievement. Behavioral biases, intensified by complexity and uncertainty in the admissions and aid process, may explain this gap. In ...

Digital Dystopia

By Jean Tirole

American Economic Review, June 2021

Autocratic regimes, democratic majorities, private platforms, and religious or professional organizations can achieve social control by managing the flow of information about individuals' behavior. Bundling the agents' political, organizational, or religi...

Submissions open for the 2021 TIAA Paul A. Samuelson Award

[News]

May 28, 2021

The submission deadline is September 10, 2021.

News Uncertainty in Brexit United Kingdom

By Renato Faccini and Edoardo Palombo

American Economic Review: Insights, June 2021

After the Brexit referendum, the behavior of the UK economy defied widespread expectations, as it did not exhibit a V-shaped recession but a slow decline in production. We show that this pattern of propagation arises when uncertainty is about future, rath...

Information Validates the Prior: A Theorem on Bayesian Updating and Applications

By Navin Kartik, Frances Xu Lee, and Wing Suen

American Economic Review: Insights, June 2021

We develop a result on expected posteriors for Bayesians with heterogenous priors, dubbed information validates the prior (IVP). Under familiar ordering requirements, Anne expects a (Blackwell) more informative experiment to bring Bob's posterior mean clo...

Leaning against the Wind and Crisis Risk

By Moritz Schularick, Lucas ter Steege, and Felix Ward

American Economic Review: Insights, June 2021

Can central banks defuse rising stability risks in financial booms by leaning against the wind with higher interest rates? This paper studies the state-dependent effects of monetary policy on financial crisis risk. Based on the near-universe of advanced e...

Antitrust Policies and Profitability in Nontradable Sectors

By Timothy Besley, Nicola Fontana, and Nicola Limodio

American Economic Review: Insights, June 2021

Firms in tradable sectors are more likely to be subject to external competition to limit market power, while nontradable firms are more dependent on domestic policies and institutions. This paper combines an antitrust index available for multiple countrie...

Endogenous Education and Long-Run Factor Shares

By Gene M. Grossman, Elhanan Helpman, Ezra Oberfield, and Thomas Sampson

American Economic Review: Insights, June 2021

We study the determinants of factor shares in a neoclassical environment with capital-skill complementarity and endogenous education. In this environment estimates of the elasticity of substitution between capital and labor that fail to account for human ...

Front Matter

American Economic Review: Insights, June 2021

Enforcing Wealth Taxes in the Developing World: Quasi-experimental Evidence from Colombia

By Juliana Londoño-Vélez and Javier Ávila-Mahecha

American Economic Review: Insights, June 2021

This paper investigates the feasibility of wealth taxation in developing countries. It uses rich administrative data from Colombia and leverages a government-designed program for voluntary disclosures of hidden wealth as well as the threat of detection tr...

Unemployment Insurance Generosity and Aggregate Employment

By Christopher Boone, Arindrajit Dube, Lucas Goodman, and Ethan Kaplan

American Economic Journal: Economic Policy, May 2021

This paper examines the impact of unemployment insurance (UI ) on aggregate employment by exploiting cross-state variation in the maximum benefit duration during the Great Recession. Comparing adjacent counties located in neighboring states, there is no s...

An Experiment in Candidate Selection

By Katherine Casey, Abou Bakarr Kamara, and Niccoló F. Meriggi

American Economic Review, May 2021

Are ordinary citizens or political party leaders better positioned to select candidates? While the American primary system lets citizens choose, most democracies rely instead on party officials to appoint or nominate candidates. The consequences of these ...

Signaling Candidate Survey

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Signaling Employer Survey

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Boosting health coverage with better information

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Why do ACA insurance exchanges have such low take-up rates?

Welfare generosity and work

[Research Highlight]

May 28, 2021

How much does extending unemployment insurance affect employment?

On the Finding of an Equilibrium: Düppe–Weintraub and the Problem of Scientific Credit

By M. Ali Khan

Journal of Economic Literature, June 2021

In this review article, I read a book that revolves around two papers published in 1954, one by Lionel McKenzie, and the other by Kenneth Arrow and Gérard Debreu—Till Düppe and E. Roy Weintraub's Finding Equilibrium: Arrow, Debreu, McKenzie and...

Global Public Goods: A Survey

By Wolfgang Buchholz and Todd Sandler

Journal of Economic Literature, June 2021

This survey investigates the increasing importance of global public goods (GPGs) in today's interdependent world, driven by ever-growing, cross-border externalities and public good spillovers. Novel technologies, enhanced globalization, and population i...

What Limits College Success? A Review and Further Analysis of Holzer and Baum's Making College Work

By Philip Oreopoulos

Journal of Economic Literature, June 2021

Harry J. Holzer and Sandy Baum's recent book, Making College Work: Pathways to Success for Disadvantaged Students, provides an excellent up-to-date review of higher education. My review first summarizes its key themes: (i) who gains from college ...

Foreign Influence and Domestic Policy

By Toke S. Aidt, Facundo Albornoz, and Esther Hauk

Journal of Economic Literature, June 2021

In an interconnected world, economic and political interests inevitably reach beyond national borders. Since policy choices generate external economic and political costs, foreign state and non-state actors have an interest in influencing policy actions i...