AIG in Hindsight

[Symposium: The Bailouts of 2007-2009]

By Robert McDonald and Anna Paulson

Journal of Economic Perspectives, Spring 2015

The near-failure on September 16, 2008, of American International Group (AIG) was an iconic moment in the financial crisis. Two large bets on real estate made with funding vulnerable to bank-run-like dynamics pushed AIG to the brink of bankruptcy. AIG use...

Legal, Political, and Institutional Constraints on the Financial Crisis Policy Response

[Symposium: The Bailouts of 2007-2009]

By Phillip Swagel

Journal of Economic Perspectives, Spring 2015

As the financial crisis manifested itself and peaked in 2007 and 2008, the response of US policymakers and regulators was shaped in important ways by legal and political constraints. Policymakers lacked certain legal authorities that would have been usefu...

Understanding the Increase in Disability Insurance Benefit Receipt in the United States

[Symposium: Disability Insurance]

By Jeffrey B. Liebman

Journal of Economic Perspectives, Spring 2015

The share of working-age Americans receiving disability benefits from the federal Disability Insurance (DI) program has increased significantly in recent decades, from 2.2 percent in the late 1970s to 3.6 percent in the years immediately preceding the 200...

The Rise and Fall of Disability Insurance Enrollment in the Netherlands

[Symposium: Disability Insurance]

By Pierre Koning and Maarten Lindeboom

Journal of Economic Perspectives, Spring 2015

As recently as 15 years ago, the high level of Disability Insurance (DI) enrollment was considered to be one of the major social and economic problems of the Netherlands; indeed, the Netherlands was characterized as the country with the most out-of-contro...

Disability Benefit Receipt and Reform: Reconciling Trends in the United Kingdom

[Symposium: Disability Insurance]

By James Banks, Richard Blundell, and Carl Emmerson

Journal of Economic Perspectives, Spring 2015

The UK has enacted a number of reforms to the structure of disability benefits that has made it a major case study for other countries thinking of reform. The introduction of Incapacity Benefit in 1995 coincided with a strong decline in disability benefit...

Reforming LIBOR and Other Financial Market Benchmarks

By Darrell Duffie and Jeremy C. Stein

Journal of Economic Perspectives, Spring 2015

LIBOR is the London Interbank Offered Rate: a measure of the interest rate at which large banks can borrow from one another on an unsecured basis. LIBOR is often used as a benchmark rate—meaning that the interest rates that consumers and businesses ...

Bitcoin: Economics, Technology, and Governance

By Rainer Böhme, Nicolas Christin, Benjamin Edelman, and Tyler Moore

Journal of Economic Perspectives, Spring 2015

Bitcoin is an online communication protocol that facilitates the use of a virtual currency, including electronic payments. Bitcoin's rules were designed by engineers with no apparent influence from lawyers or regulators. Bitcoin is built on a transaction ...

Systematic Bias and Nontransparency in US Social Security Administration Forecasts

By Konstantin Kashin, Gary King, and Samir Soneji

Journal of Economic Perspectives, Spring 2015

We offer an evaluation of the Social Security Administration demographic and financial forecasts used to assess the long-term solvency of the Social Security Trust Funds. This same forecasting methodology is also used in evaluating policy proposals put fo...

Recommendations for Further Reading

By Timothy Taylor

Journal of Economic Perspectives, Spring 2015

Front Matter

Journal of Economic Perspectives, Spring 2015

Foreword

By Richard Thaler

American Economic Review, May 2015

Editors' Introduction

By William R. Johnson and Kelly Markel

American Economic Review, May 2015

Behavioral Economics and Public Policy: A Pragmatic Perspective

By Raj Chetty

American Economic Review, May 2015

The debate about behavioral economics—the incorporation of insights from psychology into economics—is often framed as a question about the foundational assumptions of economic models. This paper presents a more pragmatic perspective on behavio...

Capital and Wealth in the Twenty-First Century

By David N. Weil

American Economic Review, May 2015

In Capital in the Twenty-First Century, Thomas Piketty uses the market value of tradable assets to measure both productive capital and wealth. As a measure of wealth this is problematic because it ignores the value of human capital and transfer w...

Capital Taxation in the Twenty-First Century

By Alan J. Auerbach and Kevin Hassett

American Economic Review, May 2015

In his influential book, Capital in the Twenty-First Century, Thomas Piketty argues forcefully that rising wealth and wealth inequality is an inherent characteristic of capitalist economies and calls for strong policy responses, in particular a s...

Yes, r > g. So What?

By N. Gregory Mankiw

American Economic Review, May 2015

Piketty argues that r > g is the "the central contradiction of capitalism" and that it will lead to an "endless inegalitarian spiral." As a result, he argues for a new global tax on capital. In this brief essay, I explain why I am not persuaded b...

About Capital in the Twenty-First Century

By Thomas Piketty

American Economic Review, May 2015

In this article, I present three key facts about income and wealth inequality in the long run emerging from my book, Capital in the Twenty-First Century, and seek to sharpen and refocus the discussion about those trends. In particular, I clarify ...

Secular Stagnation: A Supply-Side View

By Robert J. Gordon

American Economic Review, May 2015

Secular stagnation on the supply side takes the form of a slow 1.6 percent annual growth rate of US potential real GDP, roughly half the 3.1 percent annual growth rate of actual real GDP realized from 1972 to 2004. This slowdown stems from a sharp decline...

Demand Side Secular Stagnation

By Lawrence H. Summers

American Economic Review, May 2015

The experience of first Japan and now Europe and the USA suggests that Hansen's concept of secular stagnation is highly relevant. Recovery has been anemic and follows a generation of financially unsustainable and often lackluster growth. Investment demand...

Secular Stagnation: The Long View

By Barry Eichengreen

American Economic Review, May 2015

Four explanations for secular stagnation are distinguished: a rise in global saving, slow population growth that makes investment less attractive, adverse trends in technology and productivity growth, and a decline in the relative price of investment good...