Market Reasoning as Moral Reasoning: Why Economists Should Re-engage with Political Philosophy

[Symposium: Economics and Moral Virtues]

By Michael J. Sandel

Journal of Economic Perspectives, Fall 2013

In my book What Money Can't Buy: The Moral Limits of Markets (2012), I try to show that market values and market reasoning increasingly reach into spheres of life previously governed by nonmarket norms. I argue that this tendency is troubling; ...

Reclaiming Virtue Ethics for Economics

[Symposium: Economics and Moral Virtues]

By Luigino Bruni and Robert Sugden

Journal of Economic Perspectives, Fall 2013

Virtue ethics is an important strand of moral philosophy, and a significant body of philosophical work in virtue ethics is associated with a radical critique of the market economy and of economics. Expressed crudely, the charge sheet is this: The market...

Gifts of Mars: Warfare and Europe's Early Rise to Riches

By Nico Voigtländer and Hans-Joachim Voth

Journal of Economic Perspectives, Fall 2013

Western Europe surged ahead of the rest of the world long before technological growth became rapid. Europe in 1500 already had incomes twice as high on a per capita basis as Africa, and one-third greater than most of Asia. In this essay, we explain how ...

The Economics of Slums in the Developing World

By Benjamin Marx, Thomas Stoker, and Tavneet Suri

Journal of Economic Perspectives, Fall 2013

The global expansion of urban slums poses questions for economic research as well as problems for policymakers. We provide evidence that the type of poverty observed in contemporary slums of the developing world is characteristic of that described in th...

Recommendations for Further Reading

By Timothy Taylor

Journal of Economic Perspectives, Fall 2013

Correction: The Composition and Drawdown of Wealth in Retirement

By James Poterba, Steven Venti, and David Wise

Journal of Economic Perspectives, Fall 2013

Correspondence

Journal of Economic Perspectives, Fall 2013

Front Matter

Journal of Economic Perspectives, Fall 2013

Notes

Journal of Economic Perspectives, Fall 2013

Front Matter

American Economic Review, December 2013

Including: Janet L. Yellen: Distinguished Fellow 2012

Adverse Selection and Inertia in Health Insurance Markets: When Nudging Hurts

By Benjamin R. Handel

American Economic Review, December 2013

This paper investigates consumer inertia in health insurance markets, where adverse selection is a potential concern. We leverage a major change to insurance provision that occurred at a large firm to identify substantial inertia, and develop and estim...

Using Differences in Knowledge across Neighborhoods to Uncover the Impacts of the EITC on Earnings

By Raj Chetty, John N. Friedman, and Emmanuel Saez

American Economic Review, December 2013

We estimate the impacts of the Earned Income Tax Credit on labor supply using local variation in knowledge about the EITC schedule. We proxy for EITC knowledge in a Zip code with the fraction of individuals who manipulate reported self-employment incom...

Intertemporal Price Discrimination in Storable Goods Markets

By Igal Hendel and Aviv Nevo

American Economic Review, December 2013

We study intertemporal price discrimination when consumers can store for future consumption needs. We offer a simple model of demand dynamics, which we estimate using market-level data. Optimal pricing involves temporary price reductions that enable sell...

Two Perspectives on Preferences and Structural Transformation

By Berthold Herrendorf, Richard Rogerson, and Ákos Valentinyi

American Economic Review, December 2013

We assess the empirical importance of changes in income and relative prices for structural transformation in the postwar United States. We explain two natural approaches to the data: sectors may be categories of final expenditure or value added; e.g., ...

"Reverse Bayesianism": A Choice-Based Theory of Growing Awareness

By Edi Karni and Marie-Louise Vierø

American Economic Review, December 2013

This article introduces a new approach to modeling the expanding universe of decision makers in the wake of growing awareness, and invokes the axiomatic approach to model the evolution of decision makers' beliefs as awareness grows. The expanding unive...

Dynamic Deception

By Axel Anderson and Lones Smith

American Economic Review, December 2013

We characterize the unique equilibrium of a competitive continuous time game between a resource-constrained informed player and a sequence of rivals who partially observe his action intensity. Our game adds noisy monitoring and impatient players to Aum...

Debt Contracts with Partial Commitment

By Natalia Kovrijnykh

American Economic Review, December 2013

This paper analyzes a dynamic lending relationship where the borrower cannot be forced to make repayments, and the lender offers long-term contracts that are imperfectly enforced and repeatedly renegotiated. No commitment and full commitment by the len...

Information and Quality When Motivation Is Intrinsic: Evidence from Surgeon Report Cards

By Jonathan T. Kolstad

American Economic Review, December 2013

If profit maximization is the objective of a firm, new information about quality should affect firm behavior only through its effects on market demand. I consider an alternate model in which suppliers are motivated by a desire to perform well in additi...

When Do Secondary Markets Harm Firms?

By Jiawei Chen, Susanna Esteban, and Matthew Shum

American Economic Review, December 2013

To investigate whether secondary markets aid or harm durable goods manufacturers, we build a dynamic model of durable goods oligopoly with transaction costs in the secondary market. Calibrating model parameters using data from the US automobile industr...

Time as a Trade Barrier

By David L. Hummels and Georg Schaur

American Economic Review, December 2013

A large and growing share of world trade travels by air. We model exporters' choice between fast, expensive air cargo and slow, cheap ocean cargo, which depends on the price elasticity of demand and the value that consumers attach to fast delivery. We ...