Agreeing to disagree

[Research Highlight]

March 26, 2020

Why can’t professional forecasters come to a consensus even with the same information?

Who Pays for the Minimum Wage?

By Peter Harasztosi and Attila Lindner

American Economic Review, August 2019

This paper provides a comprehensive assessment of the margins along which firms responded to a large and persistent minimum wage increase in Hungary. We show that employment elasticities are negative but small even four years after the reform; that around...

The Price of Growth: Consumption Insurance in China 1989–2009

By Raül Santaeulàlia-Llopis and Yu Zheng

American Economic Journal: Macroeconomics, October 2018

We exploit a novel and unique opportunity to document the transmission of income risk to consumption in a growing economy. Our laboratory is China, an economy that has witnessed enormous and sustained growth. We build a long panel of household-level consu...

Minimum Wages, Morality, and Efficiency: A Choice Experiment

By Conor Lennon, Jose Fernandez, Stephan Gohmann, and Keith Teltser

AEA Papers and Proceedings, May 2019

We use a choice experiment to examine public support for minimum wages. We first elicit respondents' moral assessment of two labor market systems: one with a minimum wage and one without. Then, we present four pairs of hypothetical employment outcomes and...

The State of New Keynesian Economics: A Partial Assessment

[Symposium: Macroeconomics a Decade after the Great Recession]

By Jordi Galí

Journal of Economic Perspectives, Summer 2018

In August 2007, when the first signs emerged of what would come to be the most damaging global financial crisis since the Great Depression, the New Keynesian paradigm was dominant in macroeconomics. Ten years later, tons of ammunition has been fired again...

Measuring Success in Education: The Role of Effort on the Test Itself

By Uri Gneezy, John A. List, Jeffrey A. Livingston, Xiangdong Qin, Sally Sadoff, and Yang Xu

American Economic Review: Insights, December 2019

US students often rank poorly on standardized tests that estimate and compare educational achievements. We investigate whether this might reflect not only differences in ability but also differences in effort on the test. We experimentally offer students ...

Beliefs about Gender

By Pedro Bordalo, Katherine Coffman, Nicola Gennaioli, and Andrei Shleifer

American Economic Review, March 2019

We conduct laboratory experiments that explore how gender stereotypes shape beliefs about ability of oneself and others in different categories of knowledge. The data reveal two patterns. First, men's and women's beliefs about both oneself and others exce...

Is This Tax Reform, or Just Confusion?

[Symposium: The Tax Cuts and Jobs Act]

By Joel Slemrod

Journal of Economic Perspectives, Fall 2018

Based on the experience of recent decades, the United States apparently musters the political will to change its tax system comprehensively about every 30 years, so it seems especially important to get it right when the chance arises. Based on the strong ...

Policy Evolution under the Clean Air Act

[Symposium: Fiftieth Anniversary of the Clean Air and Water Acts]

By Richard Schmalensee and Robert N. Stavins

Journal of Economic Perspectives, Fall 2019

The US Clean Air Act, passed in 1970 with strong bipartisan support, was the first environmental law to give the federal government a serious regulatory role, established the architecture of the US air pollution control system, and became a model for su...

Life after Lead: Effects of Early Interventions for Children Exposed to Lead

By Stephen B. Billings and Kevin T. Schnepel

American Economic Journal: Applied Economics, July 2018

Lead pollution is consistently linked to cognitive and behavioral impairments, yet little is known about the benefits of public health interventions for children exposed to lead. This paper estimates the long-term impacts of early-life interventions (e.g....

On DSGE Models

[Symposium: Macroeconomics a Decade after the Great Recession]

By Lawrence J. Christiano, Martin S. Eichenbaum, and Mathias Trabandt

Journal of Economic Perspectives, Summer 2018

The outcome of any important macroeconomic policy change is the net effect of forces operating on different parts of the economy. A central challenge facing policymakers is how to assess the relative strength of those forces. Economists have a range of to...

Women in Economics: Stalled Progress

[Symposium: Women in Economics]

By Shelly Lundberg and Jenna Stearns

Journal of Economic Perspectives, Winter 2019

Women are still a minority in the economics profession. By the mid-2000s, just under 35 percent of PhD students and 30 percent of assistant professors were female, and these numbers have remained roughly constant ever since. Over the past two decades, w...

Projections and Uncertainties about Climate Change in an Era of Minimal Climate Policies

By William Nordhaus

American Economic Journal: Economic Policy, August 2018

Climate change remains one of the major international environmental challenges facing nations. Up to now, nations have adopted minimal policies to slow climate change. Moreover, there has been no major improvement in emissions trends as of the latest data...

Optimal Climate Policy When Damages Are Unknown

By Ivan Rudik

American Economic Journal: Economic Policy, May 2020

Integrated assessment models (IAMs) are economists' primary tool for analyzing the optimal carbon tax. Damage functions, which link temperature to economic impacts, have come under fire because of their assumptions that may be incorrect in significant but...

Dissecting monetary policy

[Research Highlight]

April 16, 2020

How much of the reaction to Fed policy is based on what officials say versus what they do?

Deconstructing Monetary Policy Surprises—The Role of Information Shocks

By Marek Jarociński and Peter Karadi

American Economic Journal: Macroeconomics, April 2020

Central bank announcements simultaneously convey information about monetary policy and the central bank's assessment of the economic outlook. This paper disentangles these two components and studies their effect on the economy using a structural vector au...

Research Transparency Is on the Rise in Economics

By Nicholas Swanson ⓡ Garret Christensen ⓡ Rebecca Littman ⓡ David Birke ⓡ Edward Miguel ⓡ Elizabeth Levy Paluck ⓡ Zenan Wang

AEA Papers and Proceedings, May 2020

This study provides a first assessment of awareness of, attitudes toward, perceived norms regarding, and adoption of open science practices within a broadly representative sample of active economics researchers. We observe a steep increase in adoption ove...

Provider Discretion and Variation in Resource Allocation: The Case of Triage Decisions

By David C. Chan and Jonathan Gruber

AEA Papers and Proceedings, May 2020

One of the most challenging environments in health care is the emergency department (ED) A key decision-maker in that context is triage nurses, who assess patient illness severity and influence wait times for medical attention. We gather novel data on the...

The Polarization of Reality

By Alberto Alesina, Armando Miano, and Stefanie Stantcheva

AEA Papers and Proceedings, May 2020

Americans are polarized not only in their views on policy issues and attitudes toward government and society but also in their perceptions of the same factual reality. We conceptualize how to think about the "polarization of reality" and review recent pap...

Front-Loading the Unemployment Benefit: An Empirical Assessment

By Attila Lindner and Balázs Reizer

American Economic Journal: Applied Economics, July 2020

We estimate the effect of front-loading unemployment benefit payments on nonemployment duration and reemployment wages. Exploiting a sharp change in the path of benefits for those who claimed unemployment benefits after November 1, 2005 in Hungary, we sho...