The Value of Working Conditions in the United States and the Implications for the Structure of Wages

By Nicole Maestas, Kathleen J. Mullen, David Powell, Till von Wachter, and Jeffrey B. Wenger

American Economic Review, July 2023

We document variation in working conditions in the United States, present estimates of how workers value these conditions, and assess the impact of working conditions on estimates of wage inequality. We conduct a series of stated-preference experiments to...

Optimal Monetary Policy According to HANK

By Sushant Acharya, Edouard Challe, and Keshav Dogra

American Economic Review, July 2023

We study optimal monetary policy in an analytically tractable heterogeneous agent New Keynesian model with rich cross-sectional heterogeneity. Optimal policy differs from a representative agent benchmark because monetary policy can affect consumption ineq...

Optimal Policy under Dollar Pricing

By Konstantin Egorov and Dmitry Mukhin

American Economic Review, July 2023

Empirical evidence shows that most international prices are sticky in dollars. This paper studies the policy implications of this fact in the context of an open economy model with general preferences, technologies, asset markets, nominal rigidities, and a...

Prudential Policy with Distorted Beliefs

By Eduardo Dávila and Ansgar Walther

American Economic Review, July 2023

This paper studies leverage regulation when equity investors and/or creditors have distorted beliefs relative to a planner. We characterize how the optimal regulation responds to arbitrary changes in investors'/creditors' beliefs, relating our results to ...

The Old Boys' Club: Schmoozing and the Gender Gap

By Zoë Cullen and Ricardo Perez-Truglia

American Economic Review, July 2023

Offices are social places. Employees and managers take breaks together and talk about family and hobbies. In this study, we show that employees' social interactions with their managers can be advantageous for their careers, and that this phenomenon contri...

Heroes and Villains: The Effects of Heroism on Autocratic Values and Nazi Collaboration in France

By Julia Cagé, Anna Dagorret, Pauline Grosjean, and Saumitra Jha

American Economic Review, July 2023

We measure how a network of heroes can legitimize and diffuse extreme political behaviors. We exploit newly declassified intelligence files, novel voting data, and regimental histories to show that home municipalities of French line regiments arbitrarily ...

Confidence, Self-Selection, and Bias in the Aggregate

By Benjamin Enke, Thomas Graeber, and Ryan Oprea

American Economic Review, July 2023

The influence of behavioral biases on aggregate outcomes depends in part on self-selection: whether rational people opt more strongly into aggregate interactions than biased individuals. In betting market, auction and committee experiments, we document th...

Dividend Taxes and the Allocation of Capital: Comment

By Laurent Bach, Antoine Bozio, Arthur Guillouzouic, and Clément Malgouyres

American Economic Review, July 2023

Boissel and Matray (2022) find that investment increased after 2013 in French firms facing higher dividend taxes. We identify an alteration in the code plotting the event study of the effect of this reform on investment. Using identical data and removing ...

RETRACTED BY THE AUTHORS: Dividend Taxes and the Allocation of Capital

By Charles Boissel and Adrien Matray

American Economic Review, September 2022

This paper investigates the 2013 threefold increase in the French dividend tax rate. Using administrative data covering the universe of firms from 2008 to 2017 and a quasi-experimental setting, we find that firms swiftly cut dividend payments and used thi...

Front Matter

American Economic Journal: Macroeconomics, July 2023

Labor Market Responses to Unemployment Insurance: The Role of Heterogeneity

By Serdar Birinci and Kurt See

American Economic Journal: Macroeconomics, July 2023

We document considerable scope of heterogeneity within the unemployed, especially when they are divided along eligibility for and receipt of unemployment insurance (UI). We study the implications of this heterogeneity on UI's insurance-incentive trade-off...

Has the Information Channel of Monetary Policy Disappeared? Revisiting the Empirical Evidence

By Lukas Hoesch, Barbara Rossi, and Tatevik Sekhposyan

American Economic Journal: Macroeconomics, July 2023

Does the Federal Reserve have an "information advantage" in forecasting macroeconomic variables beyond what is known to private sector forecasters? And are market participants reacting only to monetary policy shocks or also to information on the future st...

Efficient Consolidation of Incentives for Education and Retirement Savings

By Radoslaw Paluszynski and Pei Cheng Yu

American Economic Journal: Macroeconomics, July 2023

We study optimal tax policies with human capital investment and retirement savings for present-biased agents. Agents are heterogeneous in their innate ability and make risky education investments, which determines their labor productivity. We demonstrate ...

Estimating the Optimal Inflation Target from Trends in Relative Prices

By Klaus Adam and Henning Weber

American Economic Journal: Macroeconomics, July 2023

We derive closed-form expressions for the optimal inflation target under Calvo and menu-cost frictions in a model featuring a product life cycle and multiple sources of heterogeneity across goods. We show that both frictions deliver the same optimal targe...

How Does Consumption Respond to News about Inflation? Field Evidence from a Randomized Control Trial

By Olivier Coibion, Dimitris Georgarakos, Yuriy Gorodnichenko, and Maarten van Rooij

American Economic Journal: Macroeconomics, July 2023

We implement a survey of Dutch households in which random subsets of respondents receive information about inflation. The resulting exogenously generated variation in inflation expectations is used to assess how expectations affect consumption decisions. ...

Measuring the Cost of Living in Mexico and the United States

By David Argente, Chang-Tai Hsieh, and Munseob Lee

American Economic Journal: Macroeconomics, July 2023

We use a dataset with prices and spending on consumer packaged goods matched at the bar code level across the United States and Mexico to measure the price index in Mexico relative to the United States. Mexican prices relative to the United States are 23 ...

Human Capital Accumulation at Work: Estimates for the World and Implications for Development

By Remi Jedwab, Paul Romer, Asif M. Islam, and Roberto Samaniego

American Economic Journal: Macroeconomics, July 2023

We (i) study wage-experience profiles and obtain measures of returns to potential work experience using data from about 24 million individuals in 1,084 surveys and census samples across 145 countries; (ii) show that workers in developed countries accumula...

Macroeconomic Implications of Uniform Pricing

By Diego Daruich and Julian Kozlowski

American Economic Journal: Macroeconomics, July 2023

We compile a new database of grocery prices in Argentina. We find uniform pricing both within and across regions—i.e., prices almost do not vary within the stores of a chain. In line with uniform pricing, prices in stores of chains operating in one regi...

The Macroeconomic Impact of Europe's Carbon Taxes

By Gilbert E. Metcalf and James H. Stock

American Economic Journal: Macroeconomics, July 2023

We estimate the macroeconomic impacts of carbon taxes on GDP and employment growth rates using 30 years of data on carbon taxation in various European countries. We find no evidence for a negative impact on employment or GDP growth but rather find a zero ...

The Intensive Margin in Trade: How Big and How Important?

By Ana M. Fernandes, Peter J. Klenow, Sergii Meleshchuk, Martha Denisse Pierola, and Andrés Rodríguez-Clare

American Economic Journal: Macroeconomics, July 2023

In benchmark trade models that feature a constant trade elasticity, bilateral exports vary entirely on the intensive margin (exports per firm) or entirely on the extensive margin (number of firms). Our empirical analysis documents that roughly one-half of...