Call for Applications: Institute of Advanced Study School of Social Sciences

[News]

July 29, 2021

The deadline for applications is November 1, 2021.

The spread of the Women’s Temperance Crusade

[Research Highlight]

February 02, 2022

How is collective action shaped by networked information technologies?

Nobel Lecture: Banking, Credit, and Economic Fluctuations

By Ben S. Bernanke

American Economic Review, May 2023

Credit markets, including the market for bank loans, are characterized by imperfect and asymmetric information. These informational frictions can interact with other economic forces to produce periods of credit-market stress, in which intermediation is un...

Front Matter

American Economic Review, May 2023

The Cost of Information: The Case of Constant Marginal Costs

By Luciano Pomatto, Philipp Strack, and Omer Tamuz

American Economic Review, May 2023

We develop an axiomatic theory of information acquisition that captures the idea of constant marginal costs in information production: the cost of generating two independent signals is the sum of their costs, and generating a signal with probability half ...

Information, Mobile Communication, and Referral Effects

By Panle Jia Barwick, Yanyan Liu, Eleonora Patacchini, and Qi Wu

American Economic Review, May 2023

This paper uses the universe of cellphone records from a Chinese telecommunication provider for a northern Chinese city to examine the role of information exchange in urban labor markets. We provide the first direct evidence of increased communication amo...

The Costs of Job Displacement over the Business Cycle and Its Sources: Evidence from Germany

By Johannes F. Schmieder, Till von Wachter, and Jörg Heining

American Economic Review, May 2023

We document the sources behind the costs of job loss over the business cycle using administrative data from Germany. Losses in annual earnings after displacement are large, persistent, and highly cyclical, nearly doubling in size during downturns. A large...

Social Exclusion and Social Preferences: Evidence from Colombia's Leper Colony

By Diego Ramos-Toro

American Economic Review, May 2023

This paper explores the intergenerational consequences of social exclusion on prosociality. A lab-in-the-field approach in the historical region of Colombia's leper colony reveals that descendants of socially excluded individuals are locally altruistic an...

Law and Norms: Empirical Evidence

By Tom Lane, Daniele Nosenzo, and Silvia Sonderegger

American Economic Review, May 2023

A large theoretical literature argues laws exert a causal effect on norms, but empirical evidence remains scant. Using a novel identification strategy, we provide a compelling empirical test of this proposition. We use incentivized vignette experiments to...

Smart Contracts and the Coase Conjecture

By Thomas Brzustowski, Alkis Georgiadis-Harris, and Balázs Szentes

American Economic Review, May 2023

This paper reconsiders the problem of a durable-good monopolist who cannot make intertemporal commitments. The buyer's valuation is binary and his private information. The seller has access to dynamic contracts and, in each period, decides whether to depl...

Front Matter

American Economic Journal: Economic Policy, May 2023

Externalities in International Tax Enforcement: Theory and Evidence

By Thomas Tørsløv, Ludvig Wier, and Gabriel Zucman

American Economic Journal: Economic Policy, May 2023

We show that the fiscal authorities of high-tax countries can lack the incentives to combat profit shifting to tax havens. Instead, they have incentives to focus their enforcement efforts on relocating profits booked by multinationals in other high-tax co...

Peer Effects in Police Use of Force

By Justin E. Holz, Roman G. Rivera, and Bocar A. Ba

American Economic Journal: Economic Policy, May 2023

We study the link between police officers' on-duty injuries and their peers' force use using a network of officers who attended the police academy together through a random lottery. On-duty injuries increase the probability of officers using force by 7 pe...

Can Forward Commodity Markets Improve Spot Market Performance? Evidence from Wholesale Electricity

By Akshaya Jha and Frank A. Wolak

American Economic Journal: Economic Policy, May 2023

Forward markets are believed to aggregate information about future spot prices and reduce the cost of producing the commodity. We develop a measure of the extent to which forward and spot prices agree in markets with transaction costs. Using this measure,...

How Do Institutions of Higher Education Affect Local Invention? Evidence from the Establishment of US Colleges

By Michael J. Andrews

American Economic Journal: Economic Policy, May 2023

I use narrative historical data on site selection decisions for a subset of US colleges to identify runner-up locations that were strongly considered to become the sites of new colleges. Using runner-up counties as counterfactuals in a difference-in-diffe...

Pensions and Fertility: Microeconomic Evidence

By Alexander M. Danzer and Lennard Zyska

American Economic Journal: Economic Policy, May 2023

This study identifies the causal effect of pension generosity on women's fertility behavior. It capitalizes on Brazil's expansion of the pension system to rural workers, whose pension wealth subsequently more than tripled. Difference-in-difference, instru...

No Spending without Representation: School Boards and the Racial Gap in Education Finance

By Brett Fischer

American Economic Journal: Economic Policy, May 2023

This paper provides causal evidence that greater minority representation on school boards translates into greater investment in minority students. Focusing on California school boards, I instrument for minority (specifically, Hispanic) representation usin...

Taxing Billionaires: Estate Taxes and the Geographical Location of the Ultra-Wealthy

By Enrico Moretti and Daniel J. Wilson

American Economic Journal: Economic Policy, May 2023

We contribute to the literature on the effect of taxes on the locational choices of wealthy individuals by examining the geographical sensitivity of the Forbes 400 richest Americans to state estate taxes. Though we find billionaires' effective tax rates a...

Profiting from Most-Favored-Customer Procurement Rules: Evidence from Medicaid

By Josh Feng, Thomas Hwang, and Luca Maini

American Economic Journal: Economic Policy, May 2023

Using a difference-in-difference approach, we find that an increase to Medicaid's minimum drug rebate under the Affordable Care Act in 2010 lowered non-Medicaid drug spending by 2.5 percent. A stylized bargaining model shows that this is likely driven by ...

Go with the Politician

By Yongwei Nian and Chunyang Wang

American Economic Journal: Economic Policy, May 2023

Chinese local leaders are frequently moved across prefectures. By combining local leader rotation data and comprehensive firm land parcel purchase data across prefectures from 2006 to 2016, this paper examines how firm-politician connections affect resour...