Natural Resource Booms, Human Capital, and Earnings: Evidence from Linked Education and Employment Records

By Alina Kovalenko

American Economic Journal: Applied Economics, April 2023

Using administrative panel data on the universe of Texas public school students, I analyze how shocks to local economic conditions affect education and employment decisions. I find that high school students at the bottom of the academic ability distributi...

Front Matter

American Economic Review, April 2023

Mobility and Congestion in Urban India

By Prottoy Akbar, Victor Couture, Gilles Duranton, and Adam Storeygard

American Economic Review, April 2023

We develop a methodology to estimate robust city-level vehicular speed indices, exactly decomposable into uncongested speed and congestion. We apply it to 180 Indian cities using 57 million simulated trips measured by a web mapping service. We verify the ...

How to Use Natural Experiments to Estimate Misallocation

By David Sraer and David Thesmar

American Economic Review, April 2023

We propose a method to estimate the effect of firm policies (e.g., bankruptcy laws) on allocative efficiency using (quasi-)experimental evidence. Our approach takes general equilibrium effects into account and requires neither a structural estimation nor ...

Globalization and Pandemics

By Pol Antràs, Stephen J. Redding, and Esteban Rossi-Hansberg

American Economic Review, April 2023

We provide theory and evidence on the relationship between globalization and pandemics. Business travel facilitates trade and travel leads to human interactions that transmit disease. Trade-motivated travel generates an epidemiological externality across ...

The Long and Short (Run) of Trade Elasticities

By Christoph E. Boehm, Andrei A. Levchenko, and Nitya Pandalai-Nayar

American Economic Review, April 2023

When countries change most favored nation (MFN) tariffs, partners that trade on MFN terms experience plausibly exogenous tariff changes. Using this variation, we estimate the trade elasticity at short and long horizons with local projections. We find that...

The Matching Multiplier and the Amplification of Recessions

By Christina Patterson

American Economic Review, April 2023

This paper shows that the unequal incidence of recessions in the labor market amplifies aggregate shocks. Using administrative data from the United States, I document a positive covariance between workers' marginal propensities to consume (MPCs) and their...

Is There Too Much Benchmarking in Asset Management?

By Anil K Kashyap, Natalia Kovrijnykh, Jian Li, and Anna Pavlova

American Economic Review, April 2023

We propose a tractable model of asset management in which benchmarking arises endogenously, and analyze its welfare consequences. Fund managers' portfolios are not contractible and they incur private costs in running them. Incentive contracts for fund man...

Why Do Households Leave School Value Added on the Table? The Roles of Information and Preferences

By Robert Ainsworth, Rajeev Dehejia, Cristian Pop-Eleches, and Miguel Urquiola

American Economic Review, April 2023

Romanian households could choose schools with one standard deviation worth of additional value added. Why do households leave value added "on the table"? We study two possibilities: (i) information and (ii) preferences for other school traits. In an exper...

What Happens When Employers Can No Longer Discriminate in Job Ads?

By Peter Kuhn and Kailing Shen

American Economic Review, April 2023

When employers' explicit gender requests were unexpectedly removed from a Chinese job board overnight, pools of successful applicants became more integrated: women's (men's) share of callbacks to jobs that had requested men (women) rose by 61 (146) percen...

Webinar: Choosing Macroeconomics in Graduate School: A Conversation with Women in Macro

[News]

March 30, 2023

The webinar is scheduled for April 21, 2023 at 10:00 am EST.

Front Matter

American Economic Journal: Macroeconomics, April 2023

Grounded by Gravity: A Well-Behaved Trade Model with Industry-Level Economies of Scale

By Konstantin Kucheryavyy, Gary Lyn, and Andrés Rodríguez-Clare

American Economic Journal: Macroeconomics, April 2023

We propose a model to study the role of industry-level external economies of scale in open economies. If the elasticity governing the strength of external economies is below the inverse of the trade elasticity in each industry, then specialization under f...

The Effect of Population Aging on Economic Growth, the Labor Force, and Productivity

By Nicole Maestas, Kathleen J. Mullen, and David Powell

American Economic Journal: Macroeconomics, April 2023

Population aging is expected to slow US economic growth. We use variation in the predetermined component of population aging across states to estimate the impact of aging on growth in GDP per capita for 1980–2010. We find that each 10 percent increase i...

Persistent Monetary Non-neutrality in an Estimated Menu Cost Model with Partially Costly Information

By Marco Bonomo, Carlos Carvalho, René Garcia, Vivian Malta, and Rodolfo Rigato

American Economic Journal: Macroeconomics, April 2023

We propose a model that reconciles microeconomic evidence of frequent and large price changes with sizable monetary non-neutrality. Firms incur separate lump-sum costs to change prices and to gather and process some information about marginal costs. Addit...

Self-Harming Trade Policy? Protectionism and Production Networks

By Alessandro Barattieri and Matteo Cacciatore

American Economic Journal: Macroeconomics, April 2023

Using monthly data on temporary trade barriers (TTBs), we estimate the dynamic employment effects of protectionism through vertical production linkages. First, exploiting high-frequency data and TTB procedural details, we identify trade policy shocks exog...

Learning-through-Survey in Inflation Expectations

By Gwangmin Kim and Carola Binder

American Economic Journal: Macroeconomics, April 2023

When surveys rely on repeat participants, this raises the possibility that survey participation may affect future responses, perhaps by prompting information acquisition between survey waves. We show that these "learning-through-survey" effects are large ...

The State-Dependent Effectiveness of Hiring Subsidies

By Sebastian Graves

American Economic Journal: Macroeconomics, April 2023

The responsiveness of job creation to shocks is procyclical, while the responsiveness of job destruction is countercyclical. This new finding can be explained by a heterogeneous-firm model in which hiring costs lead to lumpy employment adjustment. The mod...

Capital-Reallocation Frictions and Trade Shocks

By Andrea Lanteri, Pamela Medina, and Eugene Tan

American Economic Journal: Macroeconomics, April 2023

What are the short-term effects of an import-competition shock on capital reallocation and aggregate productivity? To address this question, we develop a quantitative model with heterogeneous firms and capital-reallocation frictions. We discipline the mod...

The Response of Consumer Spending to Changes in Gasoline Prices

By Michael Gelman, Yuriy Gorodnichenko, Shachar Kariv, Dmitri Koustas, Matthew D. Shapiro, Dan Silverman, and Steven Tadelis

American Economic Journal: Macroeconomics, April 2023

This paper estimates how overall consumer spending responds to changes in gasoline prices. It uses the differential impact across consumers of the sharp drop in gasoline prices in 2014 for identification. This estimation strategy is implemented using comp...