How Do Voters Respond to Information? Evidence from a Randomized Campaign

By Chad Kendall, Tommaso Nannicini, and Francesco Trebbi

American Economic Review, January 2015

In a large-scale controlled trial in collaboration with the reelection campaign of an Italian incumbent mayor, we administered (randomized) messages about the candidate's valence or ideology. Informational treatments affected both actual votes in the prec...

Institutional Corruption and Election Fraud: Evidence from a Field Experiment in Afghanistan

By Michael Callen and James D. Long

American Economic Review, January 2015

We investigate the relationship between political networks, weak institutions, and election fraud during the 2010 parliamentary election in Afghanistan combining: (i) data on political connections between candidates and election officials; (ii) a nationwi...

The Effect of the TseTse Fly on African Development

By Marcella Alsan

American Economic Review, January 2015

The TseTse fly is unique to Africa and transmits a parasite harmful to humans and lethal to livestock. This paper tests the hypothesis that the TseTse reduced the ability of Africans to generate an agricultural surplus historically. Ethnic groups inhabiti...

When Does Regulation Distort Costs? Lessons from Fuel Procurement in US Electricity Generation

By Steve Cicala

American Economic Review, January 2015

This paper evaluates changes in fuel procurement practices by coal and gas-fired power plants in the United States following state-level legislation that ended cost-of-service regulation of electricity generation. I find that deregulated plants substantia...

The Cost of Financial Frictions for Life Insurers

By Ralph S. J. Koijen and Motohiro Yogo

American Economic Review, January 2015

During the financial crisis, life insurers sold long-term policies at deep discounts relative to actuarial value. The average markup was as low as -19 percent for annuities and -57 percent for life insurance. This extraordinary pricing behavior was due to...

Front Matter

American Economic Review, January 2015

Conventional and Unconventional Monetary Policy with Endogenous Collateral Constraints

By Aloísio Araújo, Susan Schommer, and Michael Woodford

American Economic Journal: Macroeconomics, January 2015

We consider the effects of central bank purchases of a risky asset as an additional dimension of policy alongside "conventional" interest rate policy in a general-equilibrium model of asset pricing with endogenous collateral constraints. The effects of as...

Monetary Policy Surprises, Credit Costs, and Economic Activity

By Mark Gertler and Peter Karadi

American Economic Journal: Macroeconomics, January 2015

We provide evidence on the transmission of monetary policy shocks in a setting with both economic and financial variables. We first show that shocks identified using high frequency surprises around policy announcements as external instruments produce resp...

Monetary Policy and Real Borrowing Costs at the Zero Lower Bound

By Simon Gilchrist, David López-Salido, and Egon Zakrajšek

American Economic Journal: Macroeconomics, January 2015

This paper compares the effects of conventional monetary policy on real borrowing costs with those of the unconventional measures employed after the target federal funds rate hit the zero lower bound (ZLB). For the ZLB period, we identify two policy surpr...

Understanding the Great Recession

By Lawrence J. Christiano, Martin S. Eichenbaum, and Mathias Trabandt

American Economic Journal: Macroeconomics, January 2015

We argue that the vast bulk of movements in aggregate real economic activity during the Great Recession were due to financial frictions. We reach this conclusion by looking through the lens of an estimated New Keynesian model in which firms face moderate ...

Inflation in the Great Recession and New Keynesian Models

By Marco Del Negro, Marc P. Giannoni, and Frank Schorfheide

American Economic Journal: Macroeconomics, January 2015

Several prominent economists have argued that existing DSGE models cannot properly account for the evolution of key macroeconomic variables during and following the recent Great Recession. We challenge this argument by showing that a standard DSGE model w...

Is the Phillips Curve Alive and Well after All? Inflation Expectations and the Missing Disinflation

By Olivier Coibion and Yuriy Gorodnichenko

American Economic Journal: Macroeconomics, January 2015

We evaluate explanations for the absence of disinflation during the Great Recession and find popular explanations to be insufficient. We propose a new explanation for this puzzle within the context of a standard Phillips curve. If firms' inflation expecta...

The Effects of Monetary Policy on Stock Market Bubbles: Some Evidence

By Jordi Galí and Luca Gambetti

American Economic Journal: Macroeconomics, January 2015

We estimate the response of stock prices to monetary policy shocks using a time-varying coefficients VAR. Our evidence points to protracted episodes in which stock prices end up increasing persistently in response to an exogenous tightening of monetary po...

The Possible Unemployment Cost of Average Inflation below a Credible Target

By Lars E. O. Svensson

American Economic Journal: Macroeconomics, January 2015

If inflation expectations become firmly anchored at the inflation target even when average inflation deviates from the target, the long-run Phillips curve becomes nonvertical. During 1997-2011, average inflation expectations in Sweden have been close to t...

International Credit Flows and Pecuniary Externalities

By Markus K. Brunnermeier and Yuliy Sannikov

American Economic Journal: Macroeconomics, January 2015

This paper develops a dynamic two-country neoclassical stochastic growth model with incomplete markets. Short-term credit flows can be excessive and reverse suddenly. The equilibrium outcome is constrained inefficient due to pecuniary externalities. First...

Front Matter

American Economic Journal: Macroeconomics, January 2015

Six Randomized Evaluations of Microcredit: Introduction and Further Steps

By Abhijit Banerjee, Dean Karlan, and Jonathan Zinman

American Economic Journal: Applied Economics, January 2015

Causal evidence on microcredit impacts informs theory, practice, and debates about its effectiveness as a development tool. The six randomized evaluations in this volume use a variety of sampling, data collection, experimental design, and econometric stra...

The Miracle of Microfinance? Evidence from a Randomized Evaluation

By Abhijit Banerjee, Esther Duflo, Rachel Glennerster, and Cynthia Kinnan

American Economic Journal: Applied Economics, January 2015

This paper reports results from the randomized evaluation of a group-lending microcredit program in Hyderabad, India. A lender worked in 52 randomly selected neighborhoods, leading to an 8.4 percentage point increase in takeup of microcredit. Small busine...

The Impacts of Microcredit: Evidence from Ethiopia

By Alessandro Tarozzi, Jaikishan Desai, and Kristin Johnson

American Economic Journal: Applied Economics, January 2015

We use data from a randomized controlled trial conducted in 2003-2006 in rural Amhara and Oromiya (Ethiopia) to study the impacts of increasing access to microfinance on a number of socioeconomic outcomes, including income from agriculture, animal husband...

The Impacts of Microfinance: Evidence from Joint-Liability Lending in Mongolia

By Orazio Attanasio, Britta Augsburg, Ralph De Haas, Emla Fitzsimons, and Heike Harmgart

American Economic Journal: Applied Economics, January 2015

We present evidence from a randomized field experiment in rural Mongolia to assess the poverty impacts of a joint-liability microcredit program targeted at women. We find a positive impact of access to group loans on female entrepreneurship and household ...