Air Pollution and Criminal Activity: Microgeographic Evidence from Chicago

By Evan Herrnstadt, Anthony Heyes, Erich Muehlegger, and Soodeh Saberian

American Economic Journal: Applied Economics, October 2021

A growing literature documents that air pollution adversely impacts health, productivity, and cognition. This paper provides the first evidence of a causal link between air pollution and aggressive behavior, as documented by violent crime. Using the geolo...

Different Strokes for Different Folks? Experimental Evidence on the Effectiveness of Input and Output Incentive Contracts for Health Care Providers with Varying Skills

By Manoj Mohanan, Katherine Donato, Grant Miller, Yulya Truskinovsky, and Marcos Vera-Hernández

American Economic Journal: Applied Economics, October 2021

A central issue in designing incentive contracts is the decision to reward agents' input use versus outputs. The trade-off between risk and return to innovation in production can also lead agents with varying skill levels to perform differentially under d...

Temperature, Labor Reallocation, and Industrial Production: Evidence from India

By Jonathan Colmer

American Economic Journal: Applied Economics, October 2021

To what degree can labor reallocation mitigate the economic consequences of weather-driven agricultural productivity shocks? I estimate that temperature-driven reductions in the demand for agricultural labor in India are associated with increases in nonag...

Teaching Labor Laws: Evidence from a Randomized Control Trial in South Africa

By Marianne Bertrand and Bruno Crépon

American Economic Journal: Applied Economics, October 2021

We assess whether imperfect knowledge of labor regulation hinders job creation at small and medium-sized firms. We partner with a labor law expert organization that provides information about labor regulation via newsletters and access to a specialized we...

"Too Young to Die": Deprivation Measures Combining Poverty and Premature Mortality

By Jean-Marie Baland, Guilhem Cassan, and Benoit Decerf

American Economic Journal: Applied Economics, October 2021

Most measures of deprivation concentrate on deprivation among the living population and, thus, ignore premature mortality. This omission leads to a severe bias in the evaluation of deprivation. We propose two different measures that combine information on...

Neoliberalism and Latin America

[Page]

Did Washington Consensus policies help developing economies emerge from crisis?

Front Matter

American Economic Journal: Macroeconomics, October 2021

The Extensive Margin of Exporting Products: A Firm-Level Analysis

By Costas Arkolakis, Sharat Ganapati, and Marc-Andreas Muendler

American Economic Journal: Macroeconomics, October 2021

To quantify trade frictions, we examine multiproduct exporters. We build a flexible general-equilibrium model and estimate market entry costs using Brazilian firm-product-destination data under rich demand and market access cost shocks. Our estimates show...

Micro-level Misallocation and Selection

By Mu-Jeung Yang

American Economic Journal: Macroeconomics, October 2021

How large are the aggregate productivity losses from the misallocation of resources across firms? With endogenous selection, microfrictions can induce extensive margin misallocation among firms: too many unproductive firms are active (Zombies), and too ma...

Financial Risk Capacity

By Saki Bigio and Adrien d'Avernas

American Economic Journal: Macroeconomics, October 2021

Financial crises are particularly severe and lengthy when banks fail to recapitalize after bearing large losses. We present a model that explains the slow recovery of bank capital and economic activity. Banks provide intermediation in markets with informa...

Why Are Banks Exposed to Monetary Policy?

By Sebastian Di Tella and Pablo Kurlat

American Economic Journal: Macroeconomics, October 2021

We propose a model of banks' exposure to movements in interest rates and their role in the transmission of monetary shocks. Since bank deposits provide liquidity, higher interest rates allow banks to earn larger spreads on deposits. Therefore, if risk ave...

Agglomeration, Misallocation, and (the Lack of) Competition

By Wyatt J. Brooks, Joseph P. Kaboski, and Yao Amber Li

American Economic Journal: Macroeconomics, October 2021

Industrial agglomeration policies may limit competition. We develop, validate, and apply a novel approach for measuring competition based on the comovement of markups and market shares among firms in the same location and industry. Then we develop a model...

Uncertainty and Business Cycles: Exogenous Impulse or Endogenous Response?

By Sydney C. Ludvigson, Sai Ma, and Serena Ng

American Economic Journal: Macroeconomics, October 2021

Uncertainty about the future rises in recessions. But is uncertainty a source of business cycles or an endogenous response to them, and does the type of uncertainty matter? We propose a novel SVAR identification strategy to address these questions via ine...

The Young, the Old, and the Government: Demographics and Fiscal Multipliers

By Henrique S. Basso and Omar Rachedi

American Economic Journal: Macroeconomics, October 2021

We document that government spending multipliers depend on the population age structure. Using the variation in military spending and birth rates across US states, we show that the local fiscal multiplier is 1.5 and increases with the population share of ...

MPC Heterogeneity and Household Balance Sheets

By Andreas Fagereng, Martin B. Holm, and Gisle J. Natvik

American Economic Journal: Macroeconomics, October 2021

We use sizable lottery prizes in Norwegian administrative panel data to explore how transitory income shocks are spent and saved over time and how households' marginal propensities to consume (MPCs) vary with household characteristics and shock size. We...

Long-Term Finance and Investment with Frictional Asset Markets

By Julian Kozlowski

American Economic Journal: Macroeconomics, October 2021

Trading frictions in financial markets affect more long-term than short-term bonds, generating an upward-sloping yield curve. Long-term financing is more expensive in economies with higher trading frictions so firms choose to borrow and invest in shorter ...

Money Mining and Price Dynamics

By Michael Choi and Guillaume Rocheteau

American Economic Journal: Macroeconomics, October 2021

We develop a random-matching model to study the price dynamics of monies produced privately according to a time-consuming mining technology. For our leading example, there exists a unique equilibrium where the value of money increases over time and reache...

Call for Papers: CSWEP at the Eastern Economic Association (EEA)

[News]

September 28, 2021

The deadline is October 25, 2021.

Call for Papers: CSWEP at the Midwest Economic Association (MEA)

[News]

September 28, 2021

The deadline is October 15, 2021.

Going from gasoline to electric

[Research Highlight]

September 28, 2021

Stephen Holland discusses the best strategy for transitioning to electric vehicles.