Do Consumers Respond to Marginal or Average Price? Evidence from Nonlinear Electricity Pricing

By Koichiro Ito

American Economic Review, February 2014

Nonlinear pricing and taxation complicate economic decisions by creating multiple marginal prices for the same good. This paper provides a framework to uncover consumers' perceived price of nonlinear price schedules. I exploit price variation at spatia...

Time to Build and Fluctuations in Bulk Shipping

By Myrto Kalouptsidi

American Economic Review, February 2014

This paper explores the nature of fluctuations in world bulk shipping by quantifying the impact of time to build and demand uncertainty on investment and prices. We examine the impact of both construction lags and their lengthening in periods of high i...

Time Allocation and Task Juggling

By Decio Coviello, Andrea Ichino, and Nicola Persico

American Economic Review, February 2014

A single worker allocates her time among different projects which are progressively assigned. When the worker works on too many projects at the same time, the output rate decreases and completion time increases according to a law which we derive. We call...

How Financial Incentives Induce Disability Insurance Recipients to Return to Work

By Andreas Ravndal Kostol and Magne Mogstad

American Economic Review, February 2014

Using a local randomized experiment that arises from a sharp discontinuity in Disability Insurance (DI) policy in Norway, we provide transparent and credible identification of how financial incentives induce DI recipients to return to work. We find that...

Outside Options and the Failure of the Coase Conjecture

By Simon Board and Marek Pycia

American Economic Review, February 2014

A buyer wishes to purchase a good from a seller who chooses a sequence of prices over time. Each period the buyer can also exercise an outside option, abandoning their search or moving on to another seller. We show there is a unique equilibrium in whic...

Raising Retailers' Profits: On Vertical Practices and the Exclusion of Rivals

By John Asker and Heski Bar-Isaac

American Economic Review, February 2014

Resale price maintenance (RPM), slotting fees, loyalty rebates, and other related vertical practices can allow an incumbent manufacturer to transfer profits to retailers. If these retailers were to accommodate entry, upstream competition could lead to ...

Are Private Markets and Filtering a Viable Source of Low-Income Housing? Estimates from a "Repeat Income" Model

By Stuart S. Rosenthal

American Economic Review, February 2014

While filtering has long been considered the primary mechanism by which markets supply low-income housing, direct estimates of that process have been absent. This has contributed to doubts about the viability of markets and to misplaced policy. I fill ...

Income and Democracy: Comment

By Matteo Cervellati, Florian Jung, Uwe Sunde, and Thomas Vischer

American Economic Review, February 2014

Acemoglu et al. (2008) document that the correlation between income per capita and democracy disappears when including time and country fixed effects. While their results are robust for the full sample, we find evidence for significant but heterogeneou...

Front Matter

American Economic Review, February 2014

US Manufacturing: Understanding Its Past and Its Potential Future

[Symposium: Manufacturing]

By Martin Neil Baily and Barry P. Bosworth

Journal of Economic Perspectives, Winter 2014

The development of the US manufacturing sector over the last half-century displays two striking and somewhat contradictory features: 1) the growth of real output in the US manufacturing sector, measured by real value added, has equaled or exceeded that ...

Competing in Advanced Manufacturing: The Need for Improved Growth Models and Policies

[Symposium: Manufacturing]

By Gregory Tassey

Journal of Economic Perspectives, Winter 2014

The United States has underinvested for several decades in a set of productivity-enhancing assets necessary for the long-term health of its manufacturing sector. Conventional characterizations of the process of bringing new advanced manufacturing produc...

Management Practices, Relational Contracts, and the Decline of General Motors

[Symposium: Manufacturing]

By Susan Helper and Rebecca Henderson

Journal of Economic Perspectives, Winter 2014

General Motors was once regarded as the best-managed and most successful firm in the world. However, between 1980 and 2009, GM's US market share fell from 46 to 20 percent, and in 2009 the firm went bankrupt. We argue that the conventional explanation f...

Global Biofuels: Key to the Puzzle of Grain Market Behavior

[Symposium: Agriculture]

By Brian Wright

Journal of Economic Perspectives, Winter 2014

In the last half-decade, sharp jumps in the prices of wheat, rice, and corn, which furnish about two-thirds of the calorie requirements of mankind, have attracted worldwide attention. These price jumps in grains have also revealed the chaotic state of e...

Agricultural Biotechnology: The Promise and Prospects of Genetically Modified Crops

[Symposium: Agriculture]

By Geoffrey Barrows, Steven Sexton, and David Zilberman

Journal of Economic Perspectives, Winter 2014

For millennia, humans have modified plant genes in order to develop crops best suited for food, fiber, feed, and energy production. Conventional plant breeding remains inherently random and slow, constrained by the availability of desirable traits in cl...

Agriculture in the Global Economy

[Symposium: Agriculture]

By Julian M. Alston and Philip G. Pardey

Journal of Economic Perspectives, Winter 2014

The past 50-100 years have witnessed dramatic changes in agricultural production and productivity, driven to a great extent by public and private investments in agricultural research, with profound implications especially for the world's poor. In this a...

American Farms Keep Growing: Size, Productivity, and Policy

[Symposium: Agriculture]

By Daniel A. Sumner

Journal of Economic Perspectives, Winter 2014

Commercial agriculture in the United States is comprised of several hundred thousand farms, and these farms continue to become larger and fewer. The size of commercial farms is sometimes best-measured by sales, in other cases by acreage, and in still ot...

From Sick Man of Europe to Economic Superstar: Germany's Resurgent Economy

By Christian Dustmann, Bernd Fitzenberger, Uta Schönberg, and Alexandra Spitz-Oener

Journal of Economic Perspectives, Winter 2014

In the late 1990s and into the early 2000s, Germany was often called "the sick man of Europe." Indeed, Germany's economic growth averaged only about 1.2 percent per year from 1998 to 2005, including a recession in 2003, and unemployment rates rose from ...

When Ideas Trump Interests: Preferences, Worldviews, and Policy Innovations

By Dani Rodrik

Journal of Economic Perspectives, Winter 2014

Ideas are strangely absent from modern models of political economy. In most prevailing theories of policy choice, the dominant role is instead played by "vested interests"—elites, lobbies, and rent-seeking groups which get their way at the expense of ...

An Economist's Guide to Visualizing Data

By Jonathan A. Schwabish

Journal of Economic Perspectives, Winter 2014

Once upon a time, a picture was worth a thousand words. But with online news, blogs, and social media, a good picture can now be worth so much more. Economists who want to disseminate their research, both inside and outside the seminar room, should inve...

Recommendations for Further Reading

By Timothy Taylor

Journal of Economic Perspectives, Winter 2014