An Index of Competitiveness and Cooperativeness for Normal-Form Games

By Thomas Demuynck, Christian Seel, and Giang Tran

American Economic Journal: Microeconomics, May 2022

We develop an index of competitiveness and cooperativeness that is based on the primitives of a normal-form game, i.e., players, strategies and payoffs. The index relies on the unique decomposition of a given game into a zero-sum game and a common interes...

Bad News Turned Good: Reversal under Censorship

By Aleksei Smirnov and Egor Starkov

American Economic Journal: Microeconomics, May 2022

Sellers often have the power to censor the reviews of their products. We explore the effect of these censorship policies in markets where some consumers are unaware of possible censorship. We find that if the share of such "naïve" consumers is not too la...

Hump-Shaped Cross-Price Effects and the Extensive Margin in Cross-Border Shopping

By Richard Friberg, Frode Steen, and Simen A. Ulsaker

American Economic Journal: Microeconomics, May 2022

This paper examines the effect of cross-border shopping on grocery demand in Norway using monthly store × category sales data from Norway's largest grocery chain 2012–2016. The sensitivity of demand to the foreign price is hump-shaped and greatest 30â€...

AEA News

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Barry Eichengreen, Distinguished Fellow 2022

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James Poterba, Distinguished Fellow 2022

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American Economic Association Announces Award Recipients for 2022

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March 17, 2022

View recipients of the 2022 awards, including the Clark Medalist, Distinguished Fellows, Foreign Honorary Members, and AEJ Best Paper Awards.

AEA Member Announcements: American Economic Association Announces Award Recipients for 2022

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April 26, 2022

View member announcements from April 27, 2022.

Carmen Reinhart, Distinguished Fellow 2022

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A Special Introduction

American Economic Review, May 2022

Front Matter

American Economic Review, May 2022

The Demand for Insurance and Rationale for a Mandate: Evidence from Workers' Compensation Insurance

By Marika Cabral, Can Cui, and Michael Dworsky

American Economic Review, May 2022

Workers' compensation insurance, which provides no-fault coverage for work-related injuries, is mandatory in nearly all states. We use administrative data from a unique market without a coverage mandate to estimate the demand for workers' compensation ins...

Signaling and Employer Learning with Instruments

By Gaurab Aryal, Manudeep Bhuller, and Fabian Lange

American Economic Review, May 2022

This paper considers the use of instruments to identify and estimate private and social returns to education within a model of employer learning. What an instrument identifies depends on whether it is hidden from, or transparent (i.e., observed) to, the e...

Multidimensional Auctions of Contracts: An Empirical Analysis

By Yunmi Kong, Isabelle Perrigne, and Quang Vuong

American Economic Review, May 2022

In this paper, we conduct a structural analysis of multi-attribute auctions of contracts with a general allocation rule when private information is multidimensional. Upon modeling bidders' contract value that accounts for their endogenous ex post actions,...

Bargaining over Contingent Contracts under Incomplete Information

By Geoffroy de Clippel, Jack Fanning, and Kareen Rozen

American Economic Review, May 2022

We study bargaining over contingent contracts in problems where private information becomes public or verifiable when the time comes to implement the agreement. We suggest a simple, two-stage game that incorporates important aspects of bargaining. We char...

Macroeconomic Implications of COVID-19: Can Negative Supply Shocks Cause Demand Shortages?

By Veronica Guerrieri, Guido Lorenzoni, Ludwig Straub, and Iván Werning

American Economic Review, May 2022

Motivated by the effects of the COVID-19 pandemic, we present a theory of Keynesian supply shocks: shocks that reduce potential output in a sector of the economy, but that, by reducing demand in other sectors, ultimately push aggregate activity below pote...

Supply and Demand in Disaggregated Keynesian Economies with an Application to the COVID-19 Crisis

By David Baqaee and Emmanuel Farhi

American Economic Review, May 2022

We study supply and demand shocks in a disaggregated model with multiple sectors, multiple factors, input-output linkages, downward nominal wage rigidities, credit-constraints, and a zero lower bound. We use the model to understand how the COVID-19 cris...

Rebel on the Canal: Disrupted Trade Access and Social Conflict in China, 1650–1911

By Yiming Cao and Shuo Chen

American Economic Review, May 2022

This paper examines the effects of the abandonment of China's Grand Canal—the world's largest and oldest artificial waterway—which served as a disruption to regional trade access. Using an original dataset covering 575 counties over 262 years, we show...

How Do National Firms Respond to Local Cost Shocks?

By R. Andrew Butters, Daniel W. Sacks, and Boyoung Seo

American Economic Review, May 2022

Recent research shows prices are insensitive to local demand conditions because national chains charge geographically uniform prices. We examine the price response to local cost shocks, including 68 excise tax changes, 76 sales tax changes, and other geog...

Effective Demand Failures and the Limits of Monetary Stabilization Policy

By Michael Woodford

American Economic Review, May 2022

The challenge for stabilization policy presented by the COVID-19 pandemic stems above all from disruption of the circular flow of payments, resulting in a failure of what Keynes (1936) calls "effective demand." As a consequence, economic activity in many ...