Behavioral CEOs: The Role of Managerial Overconfidence

[Symposium: Overconfidence]

By Ulrike Malmendier and Geoffrey Tate

Journal of Economic Perspectives, Fall 2015

In this paper, we provide a theoretical and empirical framework that allows us to synthesize and assess the burgeoning literature on CEO overconfidence. We also provide novel empirical evidence that overconfidence matters for corporate investment de...

Overconfident Investors, Predictable Returns, and Excessive Trading

[Symposium: Overconfidence]

By Kent Daniel and David Hirshleifer

Journal of Economic Perspectives, Fall 2015

The last several decades have witnessed a shift away from a fully rational paradigm of financial markets toward one in which investor behavior is influenced by psychological biases. Two principal factors have contributed to this evolution: a body of...

The Ongoing Evolution of US Retail: A Format Tug-of-War

[Symposium: The Future of Retail]

By Ali Hortaçsu and Chad Syverson

Journal of Economic Perspectives, Fall 2015

The past 15-20 years have seen substantial and visible changes in the way US retail business is conducted. Explanations about what is happening in the retail sector have been dominated by two powerful and not fully consistent narratives: a predictio...

Adolescence and the Path to Maturity in Global Retail

[Symposium: The Future of Retail]

By Bart J. Bronnenberg and Paul B. Ellickson

Journal of Economic Perspectives, Fall 2015

We argue that, over the past several decades, the adoption and diffusion of "modern retailing technology" represents a substantial advance in productivity, providing greater product variety, enhanced convenience, and lower prices. We first describe ...

Online Higher Education: Beyond the Hype Cycle

[Symposium: Online Higher Education]

By Michael S. McPherson and Lawrence S. Bacow

Journal of Economic Perspectives, Fall 2015

When two Silicon Valley start-ups, Coursera and Udacity, embarked in 2012 on a bold effort to supply college-level courses for free over the Internet to learners worldwide, the notion of the Massively Open Online Course (MOOC) captured the nation's ...

How Economics Faculty Can Survive (and Perhaps Thrive) in a Brave New Online World

[Symposium: Online Higher Education]

By Peter Navarro

Journal of Economic Perspectives, Fall 2015

The academy in which we toil is moving rapidly towards a greater role for online delivery of higher education, and both fans and skeptics offer strong reasons to believe this technological shock will have substantial disruptive effects on faculty. H...

Rewriting Monetary Policy 101: What's the Fed's Preferred Post-Crisis Approach to Raising Interest Rates?

By Jane E. Ihrig, Ellen E. Meade, and Gretchen C. Weinbach

Journal of Economic Perspectives, Fall 2015

For many years prior to the global financial crisis, the Federal Open Market Committee set a target for the federal funds rate and achieved that target through small purchases and sales of securities in the open market. In the aftermath of the finan...

Household Surveys in Crisis

By Bruce D. Meyer, Wallace K. C. Mok, and James X. Sullivan

Journal of Economic Perspectives, Fall 2015

Household surveys, one of the main innovations in social science research of the last century, are threatened by declining accuracy due to reduced cooperation of respondents. While many indicators of survey quality have steadily declined in recent d...

Seven Centuries of European Economic Growth and Decline

By Roger Fouquet and Stephen Broadberry

Journal of Economic Perspectives, Fall 2015

This paper investigates very long-run preindustrial economic development. New annual GDP per capita data for six European countries over the last seven hundred years paint a clearer picture of the history of European economic development. We confirm...

Recommendations for Further Reading

By Timothy Taylor

Journal of Economic Perspectives, Fall 2015

Front Matter

Journal of Economic Perspectives, Fall 2015

Capital Tax Reform and the Real Economy: The Effects of the 2003 Dividend Tax Cut

By Danny Yagan

American Economic Review, December 2015

This paper tests whether the 2003 dividend tax cut—one of the largest reforms ever to a US capital tax rate—stimulated corporate investment and increased labor earnings, using a quasi-experimental design and US corporate tax returns from years...

Market Externalities of Large Unemployment Insurance Extension Programs

By Rafael Lalive, Camille Landais, and Josef Zweimüller

American Economic Review, December 2015

We provide evidence that unemployment insurance affects equilibrium conditions in the labor market, which creates significant "market externalities." We provide a framework for identification of such equilibrium effects and implement it using the Regional...

Media Influences on Social Outcomes: The Impact of MTV's 16 and Pregnant on Teen Childbearing

By Melissa S. Kearney and Phillip B. Levine

American Economic Review, December 2015

This paper explores the impact of the introduction of the widely viewed MTV reality show 16 and Pregnant on teen childbearing. Our main analysis relates geographic variation in changes in teen childbearing rates to viewership of the show. We impl...

The Housing Market Impacts of Shale Gas Development

By Lucija Muehlenbachs, Elisheba Spiller, and Christopher Timmins

American Economic Review, December 2015

Using data from Pennsylvania and an array of empirical techniques to control for confounding factors, we recover hedonic estimates of property value impacts from nearby shale gas development that vary with water source, well productivity, and visibility. ...

Imported Inputs and Productivity

By László Halpern, Miklós Koren, and Adam Szeidl

American Economic Review, December 2015

We estimate a model of importers in Hungarian microdata and conduct counterfactual analysis to investigate the effect of imported inputs on productivity. We find that importing all input varieties would increase a firm's revenue productivity by 22 percent...

R&D, International Sourcing, and the Joint Impact on Firm Performance

By Esther Ann Bøler, Andreas Moxnes, and Karen Helene Ulltveit-Moe

American Economic Review, December 2015

This paper studies the impact of an R&D cost shock on R&D investments, imported inputs, and their joint impact on firm performance. We introduce imported inputs into a model of R&D and endogenous productivity, and show that R&D and international sourcing ...

A Seniority Arrangement for Sovereign Debt

By Satyajit Chatterjee and Burcu Eyigungor

American Economic Review, December 2015

A sovereign's inability to commit to a course of action regarding future borrowing and default behavior makes long-term debt costly (the problem of debt dilution). One mechanism to mitigate this problem is the inclusion of a seniority clause in debt contr...

Feedback Effects, Asymmetric Trading, and the Limits to Arbitrage

By Alex Edmans, Itay Goldstein, and Wei Jiang

American Economic Review, December 2015

We analyze strategic speculators' incentives to trade on information in a model where firm value is endogenous to trading, due to feedback from the financial market to corporate decisions. Trading reveals private information to managers and improves their...

Front Matter

American Economic Review, December 2015