The Limits of Price Discrimination

By Dirk Bergemann, Benjamin Brooks, and Stephen Morris

American Economic Review, March 2015

We analyze the welfare consequences of a monopolist having additional information about consumers' tastes, beyond the prior distribution; the additional information can be used to charge different prices to different segments of the market, i.e., carry ou...

Credit Supply and the Price of Housing

By Giovanni Favara and Jean Imbs

American Economic Review, March 2015

An exogenous expansion in mortgage credit has significant effects on house prices. This finding is established using US branching deregulations between 1994 and 2005 as instruments for credit. Credit increases for deregulated banks, but not in placebo sam...

The Cyclicality of Sales, Regular and Effective Prices: Business Cycle and Policy Implications

By Olivier Coibion, Yuriy Gorodnichenko, and Gee Hee Hong

American Economic Review, March 2015

We study the cyclical properties of sales, regular price changes, and average prices paid by consumers ("effective" prices) using data on prices and quantities sold for numerous retailers across many US metropolitan areas. Inflation in the effective price...

Adverse Selection and an Individual Mandate: When Theory Meets Practice

By Martin B. Hackmann, Jonathan T. Kolstad, and Amanda E. Kowalski

American Economic Review, March 2015

We develop a model of selection that incorporates a key element of recent health reforms: an individual mandate. Using data from Massachusetts, we estimate the parameters of the model. In the individual market for health insurance, we find that premiums a...

The War on Poverty's Experiment in Public Medicine: Community Health Centers and the Mortality of Older Americans

By Martha J. Bailey and Andrew Goodman-Bacon

American Economic Review, March 2015

This paper uses the rollout of the first Community Health Centers (CHCs) to study the longer-term health effects of increasing access to primary care. Within ten years, CHCs are associated with a reduction in age-adjusted mortality rates of 2 percent amon...

New Trade Models, New Welfare Implications

By Marc J. Melitz and Stephen J. Redding

American Economic Review, March 2015

We show that endogenous firm selection provides a new welfare margin for heterogeneous firm models of trade (relative to homogeneous firm models). Under some parameter restrictions, the trade elasticity is constant and is a sufficient statistic for welfar...

The Virtues of Hesitation: Optimal Timing in a Non-stationary World

By Urmee Khan and Maxwell B. Stinchcombe

American Economic Review, March 2015

In many economic, political, and social situations, circumstances change at random points in time, reacting is costly, and reactions appropriate to present circumstances may become inappropriate upon future changes, requiring further costly reaction. Wait...

Measuring Uncertainty

By Kyle Jurado, Sydney C. Ludvigson, and Serena Ng

American Economic Review, March 2015

This paper exploits a data rich environment to provide direct econometric estimates of time-varying macroeconomic uncertainty. Our estimates display significant independent variations from popular uncertainty proxies, suggesting that much of the variation...

Inequality, Leverage, and Crises

By Michael Kumhof, Romain Rancière, and Pablo Winant

American Economic Review, March 2015

The paper studies how high household leverage and crises can be caused by changes in the income distribution. Empirically, the periods 1920-1929 and 1983-2008 both exhibited a large increase in the income share of high-income households, a large increase ...

Preferences for Flexibility and Randomization under Uncertainty

By Kota Saito

American Economic Review, March 2015

An uncertainty-averse agent prefers betting on an event whose probability is known, to betting on an event whose probability is unknown. Such an agent may randomize his choices to eliminate the effects of uncertainty. For what sort of preferences does a r...

Debt Relief and Debtor Outcomes: Measuring the Effects of Consumer Bankruptcy Protection

By Will Dobbie and Jae Song

American Economic Review, March 2015

Consumer bankruptcy is one of the largest social insurance programs in the United States, but little is known about its impact on debtors. We use 500,000 bankruptcy filings matched to administrative tax and foreclosure data to estimate the impact of Chapt...

Vehicle Scrappage and Gasoline Policy

By Mark R. Jacobsen and Arthur A. van Benthem

American Economic Review, March 2015

We estimate the sensitivity of scrap decisions to changes in used car values and show how this "scrap elasticity" produces emissions leakage under fuel efficiency standards, a process known as the Gruenspecht effect. We first estimate the effect of gasoli...

Envirodevonomics: A Research Agenda for an Emerging Field

By Michael Greenstone and B. Kelsey Jack

Journal of Economic Literature, March 2015

Environmental quality in many developing countries is poor and generates substantial health and productivity costs. However, the few existing measures of marginal willingness to pay (MWTP) for environmental quality improvements indicate low valuations by ...

Robert E. Lucas Jr.'s Collected Papers on Monetary Theory

By Thomas J. Sargent

Journal of Economic Literature, March 2015

This paper is a critical review of and a reader's guide to a collection of papers by Robert E. Lucas, Jr. about fruitful ways of using general equilibrium theories to understand measured economic aggregates. These beautifully written and wisely argued pap...

Jon Elster's Securities against Misrule: Juries, Assemblies, Elections: A Review Essay

By David Austen-Smith

Journal of Economic Literature, March 2015

The standard economic approach to designing institutions for collective decision making recognizes individuals' strategically rational motivations for misrepresentation and asks how best, given an objective function, to design a set of incentives and cons...

The Science, Economics, and Politics of Global Climate Change: A Review of The Climate Casino by William Nordhaus

By Adam B. Jaffe and Suzi Kerr

Journal of Economic Literature, March 2015

The problem of global climate change presents overwhelming factual, analytical, and normative challenges. Nordhaus surveys this terrain bravely and mostly successfully. He explains the scientific/economic consensus that the planet is warming, that people ...

A Review of William Easterly's The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor

By Carol Graham

Journal of Economic Literature, March 2015

William Easterly marshals yet another brilliant critique of established development policies, with a focus on the experts' excessive focus on state-led policies and goals (a la Myrdal) and ignorance of bottom-up solutions, including technology and individ...

A Review of Angus Deaton's The Great Escape: Health, Wealth, and the Origins of Inequality

By David N. Weil

Journal of Economic Literature, March 2015

This book explores the relationship between the material standard of living and health, both across countries and over time. Above all, Deaton is interested in the question of whether income growth contributes significantly to better health. His answer is...

Book Reviews

Journal of Economic Literature, March 2015

Front Matter

Journal of Economic Literature, March 2015