The Impact of Medical and Nursing Home Expenses on Savings

By Karen A. Kopecky and Tatyana Koreshkova

American Economic Journal: Macroeconomics, July 2014

We consider a life-cycle model with idiosyncratic risk in earnings, out-of-pocket medical and nursing home expenses, and survival. Partial insurance is available through welfare, Medicaid, and social security. Calibrating the model to the United States we...

Public Communication and Information Acquisition

By Ryan Chahrour

American Economic Journal: Macroeconomics, July 2014

This paper models the tradeoff, perceived by central banks and other public actors, between providing the public with useful information and the risk of overwhelming it with excessive communication. An information authority chooses how many signals to pro...

Growth and Capital Flows with Risky Entrepreneurship

By Damiano Sandri

American Economic Journal: Macroeconomics, July 2014

We show that the behavior of entrepreneurs facing incomplete financial markets and risky investment can explain why accelerations of productivity growth in developing countries tend to be associated with current account improvements. Under uninsurable inv...

Competition as a Discovery Procedure: Schumpeter Meets Hayek in a Model of Innovation

By Pedro Bento

American Economic Journal: Macroeconomics, July 2014

I incorporate an insight of Friedrich Hayek—that competition allows a thousand flowers to bloom, and discovers the best among them—into a model of Schumpeterian innovation. Firms face uncertainty about the optimal direction of innovation, so m...

The Global Welfare Impact of China: Trade Integration and Technological Change

By Julian di Giovanni, Andrei A. Levchenko, and Jing Zhang

American Economic Journal: Macroeconomics, July 2014

This paper evaluates the global welfare impact of China's trade integration and technological change in a multi-country quantitative Ricardian-Heckscher-Ohlin model. We simulate two alternative growth scenarios: a "balanced" one in which China's productiv...

Accounting for Crises

By Venky Nagar and Gwen Yu

American Economic Journal: Macroeconomics, July 2014

We provide among the first empirical evidence, consistent with recent macro global game crisis models, that shows that the precision of public signals can coordinate crises. In these models, self-fulfilling crises independent of fundamentals can occur onl...

"Fisher Dynamics" in US Household Debt, 1929-2011

By J. W. Mason and Arjun Jayadev

American Economic Journal: Macroeconomics, July 2014

The evolution of debt-income ratios over time depends on income growth, inflation, and interest rates, independent of any changes in borrowing. We examine the effect of these "Fisher dynamics" on household debt-income ratios in the United States over the ...

Front Matter

American Economic Journal: Macroeconomics, July 2014

Default Tips

By Kareem Haggag and Giovanni Paci

American Economic Journal: Applied Economics, July 2014

We examine the role of defaults in high-frequency, small-scale choices using unique data on over 13 million New York City taxi rides. Using a regression discontinuity design, we show that default tip suggestions have a large impact on tip amounts. These r...

Race and College Success: Evidence from Missouri

By Peter Arcidiacono and Cory Koedel

American Economic Journal: Applied Economics, July 2014

Conditional on enrollment, African American students are substantially less likely to graduate from four-year public universities than white students. Using administrative micro-data from Missouri, we decompose the graduation gap into racial differences i...

The Impact of Attending a School with High-Achieving Peers: Evidence from the New York City Exam Schools

By Will Dobbie and Roland G. Fryer Jr.

American Economic Journal: Applied Economics, July 2014

This paper uses data from three prominent exam high schools in New York City to estimate the impact of attending a school with high-achieving peers on college enrollment and graduation. Our identification strategy exploits sharp discontinuities in the adm...

Wells, Water, and Welfare: The Impact of Access to Groundwater on Rural Poverty and Conflict

By Sheetal Sekhri

American Economic Journal: Applied Economics, July 2014

This paper evaluates the impact of access to groundwater on poverty using data from rural India. The estimation exploits the fact that the technology required to access groundwater changes exogenously due to constraints imposed by laws of physics at a dep...

Cross-Border Media and Nationalism: Evidence from Serbian Radio in Croatia

By Stefano DellaVigna, Ruben Enikolopov, Vera Mironova, Maria Petrova, and Ekaterina Zhuravskaya

American Economic Journal: Applied Economics, July 2014

How do nationalistic media affect animosity between ethnic groups? We consider one of Europe's deadliest conflicts since WWII, the Serbo-Croatian conflict. We show that, after a decade of peace, cross-border nationalistic Serbian radio triggers ethnic hat...

Child-Adoption Matching: Preferences for Gender and Race

By Mariagiovanna Baccara, Allan Collard-Wexler, Leonardo Felli, and Leeat Yariv

American Economic Journal: Applied Economics, July 2014

This paper uses a new dataset on child-adoption matching to estimate the preferences of potential adoptive parents over US-born and unborn children relinquished for adoption. We identify significant preferences favoring girls and against African American ...

Meet the Press: How Voters and Politicians Respond to Newspaper Entry and Exit

By Francesco Drago, Tommaso Nannicini, and Francesco Sobbrio

American Economic Journal: Applied Economics, July 2014

This paper uses an original dataset covering the presence of local news in medium-large Italian cities in the period 1993–2010 to evaluate the effects of newspaper entry and exit on electoral participation, political selection, and government effici...

Persistence of Population Shocks: Evidence from the Occupation of West Germany after World War II

By Abel Schumann

American Economic Journal: Applied Economics, July 2014

In the immediate aftermath of World War II, millions of German expellees were resettled into the new borders of Germany, but not into the parts of Germany that were occupied by France. Using a spatial regression discontinuity framework, I estimate the per...

Learning about an Infrequent Event: Evidence from Flood Insurance Take-Up in the United States

By Justin Gallagher

American Economic Journal: Applied Economics, July 2014

I examine the learning process that economic agents use to update their expectation of an uncertain and infrequently observed event. I use a new nation-wide panel dataset of large regional floods and flood insurance policies to show that insurance take-up...

Effects of School Quality on Student Achievement: Discontinuity Evidence from Kenya

By Adrienne M. Lucas and Isaac M. Mbiti

American Economic Journal: Applied Economics, July 2014

The most desirable Kenyan secondary schools are elite government schools that admit the best students from across the country. We exploit the random variation generated by the centralized school admissions process in a regression discontinuity design to o...

Front Matter

American Economic Journal: Applied Economics, July 2014

The Role of Entrepreneurship in US Job Creation and Economic Dynamism

[Symposium: Entrepreneurship]

By Ryan Decker, John Haltiwanger, Ron Jarmin, and Javier Miranda

Journal of Economic Perspectives, Summer 2014

An optimal pace of business dynamics—encompassing the processes of entry, exit, expansion, and contraction—would balance the benefits of productivity and economic growth against the costs to firms and workers associated with reallocation of pr...