You Owe Me

By Ulrike Malmendier and Klaus M. Schmidt

American Economic Review, February 2017

In business and politics, gifts are often aimed at influencing the recipient at the expense of third parties. In an experimental study, which removes informational and incentive confounds, subjects strongly respond to small gifts even though they understa...

Does Extending Unemployment Benefits Improve Job Quality?

By Arash Nekoei and Andrea Weber

American Economic Review, February 2017

Contrary to standard search models predictions, past studies have not found a positive effect of unemployment insurance (UI) on reemployment wages. We estimate a positive UI wage effect exploiting an age-based regression discontinuity design in Austria. A...

Detecting Potential Overbilling in Medicare Reimbursement via Hours Worked

By Hanming Fang and Qing Gong

American Economic Review, February 2017

We propose a novel and easy-to-implement approach to detect potential overbilling based on the hours worked implied by the service codes which physicians submit to Medicare. Using the Medicare Part B Fee-for-Service (FFS) Physician Utilization and Payment...

Misallocation and the Distribution of Global Volatility

By Maya Eden

American Economic Review, February 2017

Decreasing returns at the macro level are an outcome of efficiency at the micro level. When inputs are scarce, an efficient economy carries out only the most productive projects; when inputs are abundant, the economy implements less productive projects as...

The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit: Comment

By Samuel Lundstrom

American Economic Review, February 2017

In a recent article in the American Economic Review, Dahl and Lochner (2012) use changes in the Earned Income Tax Credit to estimate the causal effect of family income on child achievement. Their instrumental variable (IV) estimates imply that a ...

The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit: Reply

By Gordon B. Dahl and Lance Lochner

American Economic Review, February 2017

Dahl and Lochner (2012) provides some of the first causal evidence of the effects of family income on child achievement using changes in the Earned Income Tax Credit. Unfortunately, a coding error in the creation of total family income affects the first s...

Front Matter

American Economic Review, March 2017

Nonparametric Counterfactual Predictions in Neoclassical Models of International Trade

By Rodrigo Adao, Arnaud Costinot, and Dave Donaldson

American Economic Review, March 2017

We develop a methodology to construct nonparametric counterfactual predictions, free of functional form restrictions on preferences and technology, in neoclassical models of international trade. First, we establish the equivalence between such models and ...

Evidence Games: Truth and Commitment

By Sergiu Hart, Ilan Kremer, and Motty Perry

American Economic Review, March 2017

An evidence game is a strategic disclosure game in which an informed agent who has some pieces of verifiable evidence decides which ones to disclose to an uninformed principal who chooses a reward. The agent, regardless of his information, prefers the rew...

Gender Differences in Accepting and Receiving Requests for Tasks with Low Promotability

By Linda Babcock, Maria P. Recalde, Lise Vesterlund, and Laurie Weingart

American Economic Review, March 2017

Gender differences in task allocations may sustain vertical gender segregation in labor markets. We examine the allocation of a task that everyone prefers be completed by someone else (writing a report, serving on a committee, etc.) and find evidence that...

Using a Free Permit Rule to Forecast the Marginal Abatement Cost of Proposed Climate Policy

By Kyle C. Meng

American Economic Review, March 2017

This paper develops a method for forecasting the marginal abatement cost (MAC) of climate policy using three features of the failed Waxman-Markey bill. First, the MAC is revealed by the price of traded permits. Second, the permit price is estimated using ...

Inflation Dynamics during the Financial Crisis

By Simon Gilchrist, Raphael Schoenle, Jae Sim, and Egon Zakrajšek

American Economic Review, March 2017

Using a novel dataset, which merges good-level prices underlying the PPI with the respondents' balance sheets, we show that liquidity constrained firms increased prices in 2008, while their unconstrained counterparts cut prices. We develop a model in whic...

The Great Escape? A Quantitative Evaluation of the Fed's Liquidity Facilities

By Marco Del Negro, Gauti Eggertsson, Andrea Ferrero, and Nobuhiro Kiyotaki

American Economic Review, March 2017

We introduce liquidity frictions into an otherwise standard DSGE model with nominal and real rigidities and ask: can a shock to the liquidity of private paper lead to a collapse in short-term nominal interest rates and a recession like the one associated ...

A Structural Model of the Retail Market for Illicit Drugs

By Manolis Galenianos and Alessandro Gavazza

American Economic Review, March 2017

We estimate a model of illicit drugs markets using data on purchases of crack cocaine. Buyers are searching for high-quality drugs, but they determine drugs' quality (i.e., their purity) only after consuming them. Hence, sellers can rip off first-time buy...

Modeling the Revolving Revolution: The Debt Collection Channel

By Lukasz A. Drozd and Ricardo Serrano-Padial

American Economic Review, March 2017

We investigate the role of information technology (IT) in the collection of delinquent consumer debt. We argue that the widespread adoption of IT by the debt collection industry in the 1990s contributed to the observed expansion of unsecured risky lending...

Unplanned Purchases and Retail Competition

By Justin P. Johnson

American Economic Review, March 2017

I propose a framework in which asymmetric multiproduct retailers compete for one-stop shoppers who have biased beliefs about their future purchase probabilities (and so make unplanned purchases). One firm carries a full portfolio of products while the oth...

Front Matter

Journal of Economic Literature, March 2017

Criminal Deterrence: A Review of the Literature

By Aaron Chalfin and Justin McCrary

Journal of Economic Literature, March 2017

We review economics research regarding the effect of police, punishments, and work on crime, with a particular focus on papers from the last twenty years. Evidence in favor of deterrence effects is mixed. While there is considerable evidence that crime is...

The Economic Consequences of Social-Network Structure

By Matthew O. Jackson, Brian W. Rogers, and Yves Zenou

Journal of Economic Literature, March 2017

We survey the literature on the economic consequences of the structure of social networks. We develop a taxonomy of "macro" and "micro" characteristics of social-interaction networks and discuss both the theoretical and empirical findings concerning the r...

Information Avoidance

By Russell Golman, David Hagmann, and George Loewenstein

Journal of Economic Literature, March 2017

We commonly think of information as a means to an end. However, a growing theoretical and experimental literature suggests that information may directly enter the agent's utility function. This can create an incentive to avoid information, even when it is...