Social Capital and Political Accountability

By Tommaso Nannicini, Andrea Stella, Guido Tabellini, and Ugo Troiano

American Economic Journal: Economic Policy, May 2013

We investigate a channel through which social capital may improve economic well-being and the functioning of institutions: political accountability. The main idea is that voters who share values and beliefs that foster cooperation are more likely to vo...

Feeling the Florida Heat? How Low-Performing Schools Respond to Voucher and Accountability Pressure

By Cecilia Elena Rouse, Jane Hannaway, Dan Goldhaber, and David Figlio

American Economic Journal: Economic Policy, May 2013

While numerous studies have found that school accountability boosts test scores, it is uncertain whether estimated test score gains reflect genuine improvements or merely "gaming" behaviors. This paper brings to bear new evidence from a unique five-yea...

Can Owning a Home Hedge the Risk of Moving?

By Todd Sinai and Nicholas Souleles

American Economic Journal: Economic Policy, May 2013

For households that face a possibility of moving across MSAs, the risk of home owning depends on the covariance of the sale prices of their current houses with the purchase prices of their likely future houses. We find empirically that households tend ...

The Contagion Effect of Neighboring Foreclosures

By Charles Towe and Chad Lawley

American Economic Journal: Economic Policy, May 2013

We examine the contagion effect of residential foreclosures and find strong evidence of a social interactions influence on default decisions where the interaction is based on neighbors' behavior in a previous period. Using a unique spatially explicit p...

Front Matter

American Economic Journal: Economic Policy, May 2013

The Growth of Finance

[Symposium: The Growth of the Financial Sector]

By Robin Greenwood and David Scharfstein

Journal of Economic Perspectives, Spring 2013

The US financial services industry grew from 4.9 percent of GDP in 1980 to 7.9 percent of GDP in 2007. A sizeable portion of the growth can be explained by rising asset management fees, which in turn were driven by increases in the valuation of tradable a...

Finance: Function Matters, Not Size

[Symposium: The Growth of the Financial Sector]

By John H. Cochrane

Journal of Economic Perspectives, Spring 2013

It's fun to pass judgment on waste, size, usefulness, complexity, and excessive compensation. But as economists, we have an analytical structure for thinking about these questions. "I don't understand it" doesn't mean "it's bad," or "regulation will impro...

Moore's Law versus Murphy's Law: Algorithmic Trading and Its Discontents

[Symposium: The Growth of the Financial Sector]

By Andrei A. Kirilenko and Andrew W. Lo

Journal of Economic Perspectives, Spring 2013

Financial markets have undergone a remarkable transformation over the past two decades due to advances in technology. These advances include faster and cheaper computers, greater connectivity among market participants, and perhaps most important of all, m...

An International Look at the Growth of Modern Finance

[Symposium: The Growth of the Financial Sector]

By Thomas Philippon and Ariell Reshef

Journal of Economic Perspectives, Spring 2013

We study the rise of finance across a set of now-industrial economies. The long-run pattern of the growth of the income share of finance from the nineteenth century to current times in the United States is similar to some economies, but not all economies ...

Asset Management Fees and the Growth of Finance

[Symposium: The Growth of the Financial Sector]

By Burton G. Malkiel

Journal of Economic Perspectives, Spring 2013

From 1980 to 2006, the financial services sector of the US economy grew from 4.9 percent to 8.3 percent of GDP. A substantial share of that increase was comprised of increases in the fees paid for asset management. This paper examines the significant incr...

Investing in Preschool Programs

[Symposium: Early and Later Interventions]

By Greg J. Duncan and Katherine Magnuson

Journal of Economic Perspectives, Spring 2013

We summarize the available evidence on the extent to which expenditures on early childhood education programs constitute worthy social investments in the human capital of children. We provide an overview of existing early childhood education programs, an...

What Can Be Done to Improve Struggling High Schools?

[Symposium: Early and Later Interventions]

By Julie Berry Cullen, Steven D. Levitt, Erin Robertson, and Sally Sadoff

Journal of Economic Perspectives, Spring 2013

In spite of decades of well-intentioned efforts targeted at struggling high schools, outcomes today are little improved. A handful of innovative programs have achieved great success on a small scale, but more generally, the economic futures of the student...

Beyond BA Blinders: Lessons from Occupational Colleges and Certificate Programs for Nontraditional Students

[Symposium: Early and Later Interventions]

By James E. Rosenbaum and Janet Rosenbaum

Journal of Economic Perspectives, Spring 2013

Postsecondary education mostly focuses on the four-year BA degree. Community colleges are often promoted as the first step toward the ultimate goal of a four-year degree. However, community colleges have extremely poor degree completion rates. There is ev...

Economics versus Politics: Pitfalls of Policy Advice

By Daron Acemoglu and James A. Robinson

Journal of Economic Perspectives, Spring 2013

The standard approach to policy making and advice in economics implicitly or explicitly ignores politics and political economy and maintains that if possible, any market failure should be rapidly removed. This essay explains why this conclusion may be inc...

Latin America's Social Policy Challenge: Education, Social Insurance, Redistribution

By Santiago Levy and Norbert Schady

Journal of Economic Perspectives, Spring 2013

Long regarded as a region beset by macroeconomic instability, high inflation, and excessive poverty and inequality, Latin America has undergone a major transformation over the last 20 years. The region has seen improved macroeconomic management and substa...

The Investment Strategies of Sovereign Wealth Funds

By Shai Bernstein, Josh Lerner, and Antoinette Schoar

Journal of Economic Perspectives, Spring 2013

Sovereign wealth funds have emerged as major investors in corporate and real resources worldwide. After an overview of their magnitude, we consider the institutional arrangements under which many of the sovereign wealth funds operate. We focus on a specif...

Recommendations for Further Reading

By Timothy Taylor

Journal of Economic Perspectives, Spring 2013

Front Matter

Journal of Economic Perspectives, Spring 2013

Correspondence: Are Cognitive Functions Localizable? Colin Camerer et al. versus Marieke van Rooij and John G. Holden

Journal of Economic Perspectives, Spring 2013

Notes

Journal of Economic Perspectives, Spring 2013