Empirical Evidence on Inflation Expectations in the New Keynesian Phillips Curve

By Sophocles Mavroeidis, Mikkel Plagborg-Møller, and James H. Stock

Journal of Economic Literature, March 2014

We review the main identification strategies and empirical evidence on the role of expectations in the New Keynesian Phillips curve, paying particular attention to the issue of weak identification. Our goal is to provide a clear understanding of the role ...

A Flourishing Economist: A Review Essay on Edmund Phelps's Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change

By Joel Mokyr

Journal of Economic Literature, March 2014

In his recent Mass Flourishings, Edmund Phelps makes a strong and eloquent plea for a more dynamic economy, which he sees not only as a key for economic performance, but also as necessary for what he calls "the good life." This review essay evalu...

Rethinking the Principles of Bank Regulation: A Review of Admati and Hellwig's The Bankers' New Clothes

By Roger B. Myerson

Journal of Economic Literature, March 2014

In an important new book, Anat Admati and Martin Hellwig raise broad critical questions about bank regulation. These questions are reviewed and discussed here, with a focus on how the problems of maintaining a stable financial system depend on fundamental...

Book Reviews

Journal of Economic Literature, March 2014

Front Matter

Journal of Economic Literature, March 2014

Annotated Listing of New Books

Journal of Economic Literature, March 2014

JEL Classification System

Journal of Economic Literature, March 2014

Resolving Debt Overhang: Political Constraints in the Aftermath of Financial Crises

By Atif Mian, Amir Sufi, and Francesco Trebbi

American Economic Journal: Macroeconomics, April 2014

Countries become more politically polarized and fractionalized following financial crises, reducing the likelihood of major financial reforms precisely when they might have especially large benefits. The evidence from a large sample of countries provides...

Free Trade Agreements and the Consolidation of Democracy

By Xuepeng Liu and Emanuel Ornelas

American Economic Journal: Macroeconomics, April 2014

We study the relationship between participation in free trade agreements (FTAs) and the sustainability of democracy. Our model shows that FTAs can critically reduce the incentive of authoritarian groups to seek power by destroying protectionist rents, ...

Persistent Liquidity Effects and Long-Run Money Demand

By Fernando Alvarez and Francesco Lippi

American Economic Journal: Macroeconomics, April 2014

We present a monetary model with segmented asset markets that implies a persistent fall in interest rates after a once and for all increase in liquidity. The gradual propagation mechanism produced by our model is novel in the literature. We provide an ...

Fertility and Wars: The Case of World War I in France

By Guillaume Vandenbroucke

American Economic Journal: Macroeconomics, April 2014

During World War I the birth rate in France fell by 50%. Why? I build a model of fertility choices where the war implies a positive probability that a wife remains alone, a partially-compensated loss of a husband's income, and a temporary decline in pr...

How Frequent Are Small Price Changes?

By Martin Eichenbaum, Nir Jaimovich, Sergio Rebelo, and Josephine Smith

American Economic Journal: Macroeconomics, April 2014

Recent empirical work suggests that small price changes are relatively common. This evidence has been used to criticize classic menu-cost models. In this paper, we use scanner data from a national supermarket chain and micro data from the Consumer Pric...

Missing Import Price Changes and Low Exchange Rate Pass-Through

By Etienne Gagnon, Benjamin R. Mandel, and Robert J. Vigfusson

American Economic Journal: Macroeconomics, April 2014

A large body of empirical work has found that exchange rate movements have only modest effects on U.S. inflation. However, exchange rate pass-through may be underestimated because some price changes are missed when constructing price indexes. We invest...

The Effects of Global Shocks on Small Commodity-Exporting Economies: Lessons from Canada

By Valery Charnavoki and Juan J. Dolado

American Economic Journal: Macroeconomics, April 2014

We propose a structural dynamic factor model of a small commodity-exporting economy, using Canada as a representative case study. Combining large panel data sets of the global and do- mestic economies, sign restrictions are used to identify relevant d...

Front Matter

American Economic Journal: Macroeconomics, April 2014

Keeping It Simple: Financial Literacy and Rules of Thumb

By Alejandro Drexler, Greg Fischer, and Antoinette Schoar

American Economic Journal: Applied Economics, April 2014

Micro-entrepreneurs often lack the financial literacy required to make important financial decisions. We conducted a randomized evaluation with a bank in the Dominican Republic to compare the impact of two distinct programs: standard accounting trainin...

The Global Economics of Water: Is Water a Source of Comparative Advantage?

By Peter Debaere

American Economic Journal: Applied Economics, April 2014

With newly available data, I investigate to what extent countries' international trade exploits the very uneven water resources on a global scale. I find that water is a source of comparative advantage and that relatively water abundant countries expor...

Distortions in the International Migrant Labor Market: Evidence from Filipino Migration and Wage Responses to Destination Country Economic Shocks

By David McKenzie, Caroline Theoharides, and Dean Yang

American Economic Journal: Applied Economics, April 2014

We use an original panel dataset of migrant departures from the Philippines to identify the responsiveness of migrant numbers and wages to GDP shocks in destination countries. We find a large, significant response of migrant numbers to GDP shocks at d...

Demand Spillovers, Combative Advertising, and Celebrity Endorsements

By Craig L. Garthwaite

American Economic Journal: Applied Economics, April 2014

This paper studies the economic effects of endorsements. In the publishing sector, endorsements are found to be a business stealing form of advertising that raises title level sales without expanding the market size. If anything, the endorsements decre...