Pushing on a String: US Monetary Policy Is Less Powerful in Recessions

By Silvana Tenreyro and Gregory Thwaites

American Economic Journal: Macroeconomics, October 2016

We investigate how the response of the US economy to monetary policy shocks depends on the state of the business cycle. The effects of monetary policy are less powerful in recessions, especially for durables expenditure and business investment. The asymme...

The Aggregate Impact of Household Saving and Borrowing Constraints: Designing a Field Experiment in Uganda

By Joseph P. Kaboski, Molly Lipscomb, and Virgiliu Midrigan

American Economic Review, May 2014

We develop a model of households with multiple needs (smoothing shocks, financing investment) and constraints (limited credit, self-control issues) in order to examine the nature of household's financing constraints in a developing country, and the impact...

Does a Bank's History Affect Its Risk-Taking?

By Christa H. S. Bouwman and Ulrike Malmendier

American Economic Review, May 2015

We ask whether past macro-economic and bank-specific shocks experienced and survived by a bank affect its current capitalization and risk-taking. Using Call Report data from 1984 to 2010, we find that a bank's experience shapes its capital structure and r...

The Negative Income Tax and the Evolution of U.S. Welfare Policy

By Robert A. Moffitt

Journal of Economic Perspectives, Summer 2003

The negative income tax proposed by Milton Friedman represents one of the fundamental ideas of modern welfare policy. However, the academic literature has raised two difficulties with it, one challenging its purported work incentives and the other suggest...

Inspecting the Mechanism: Leverage and the Great Recession in the Eurozone

By Philippe Martin and Thomas Philippon

American Economic Review, July 2017

We provide a comprehensive account of the dynamics of eurozone countries from 2000 to 2012. We analyze private leverage, fiscal policy, labor costs, and spreads, and we propose a model and an identification strategy to separate the impact of credit cycles...

Minutes of the Executive Committee Meetings

By John J. Siegfried

American Economic Review, May 2009

Maturity, Indebtedness, and Default Risk

By Satyajit Chatterjee and Burcu Eyigungor

American Economic Review, October 2012

We advance quantitative-theoretic models of sovereign debt by proving the existence of a downward sloping equilibrium price function for long-term debt and implementing a novel method to accurately compute it. We show that incorporating long-term debt al...

Raising the Barcode Scanner: Technology and Productivity in the Retail Sector

By Emek Basker

American Economic Journal: Applied Economics, July 2012

Barcodes and barcode scanners transformed the grocery industry in the 1970s. I use store-level data from the 1972, 1977, and 1982 Census of Retail Trade, matched to data on store scanner installations, to estimate scanners' effect on labor productivity. I...

Public Provision of Private Goods and Nondistortionary Marginal Tax Rates

By Sören Blomquist, Vidar Christiansen, and Luca Micheletto

American Economic Journal: Economic Policy, May 2010

Using an optimal taxation model combined with a previously neglected scheme of public provision of private goods, we show that there is an efficiency gain if public provision of selected goods replaces market purchases and that efficiency requires margina...

Identification of Social Interactions through Partially Overlapping Peer Groups

By Giacomo De Giorgi, Michele Pellizzari, and Silvia Redaelli

American Economic Journal: Applied Economics, April 2010

In this paper, we demonstrate that, in a context where peer groups do not overlap fully, it is possible to identify all the relevant parameters of the standard linear-in-means model of social interactions. We apply this novel identification structure t...

Maps of Bounded Rationality: Psychology for Behavioral Economics

By Daniel Kahneman

American Economic Review, December 2003

Deciphering the Liquidity and Credit Crunch 2007-2008

[Symposium: Early Stages of the Credit Crunch]

By Markus K. Brunnermeier

Journal of Economic Perspectives, Winter 2009

The financial market turmoil in 2007 and 2008 has led to the most severe financial crisis since the Great Depression and threatens to have large repercussions on the real economy. The bursting of the housing bubble forced banks to write down several hundr...

On the Optimal Inflation Rate

By Markus K. Brunnermeier and Yuliy Sannikov

American Economic Review, May 2016

In our incomplete markets economy households choose portfolios consisting of risky (uninsurable) capital and money. Money is a bubble, it has positive value even though it yields no payoff. The market outcome is constrained Pareto inefficient due to a pec...

Lost in Transit: Product Replacement Bias and Pricing to Market

By Emi Nakamura and Jón Steinsson

American Economic Review, December 2012

In the microdata underlying US trade price indexes, 40 percent of products are replaced before a single price change is observed and 70 percent are replaced after two price changes or fewer. A price index that focuses on price changes for identical ite...

General versus Specific Skills in Labor Markets with Search Frictions and Firing Costs

By Etienne Wasmer

American Economic Review, June 2006

Human capital investments are not independent of the aggregate state of labor markets: frictions and slackness of the labor market raise the returns to specific human capital investments relative to general investments. We build a macroeconomic model with...

Preferences for Truthfulness: Heterogeneity among and within Individuals

By Rajna Gibson, Carmen Tanner, and Alexander F. Wagner

American Economic Review, February 2013

We conduct an experiment assessing the extent to which people trade off the economic costs of truthfulness against the intrinsic costs of lying. The results allow us to reject a type-based model. People's preferences for truthfulness do not identify them ...

Centralized Decision Making and Informed Lobbying

By Rafael Costa Lima, Humberto Moreira, and Thierry Verdier

American Economic Journal: Microeconomics, November 2017

We address the trade-off between centralized and decentralized decision making subject to influence from privately informed lobbies. We focus on informative equilibria with separating differentiable contribution schedules and identify an information trans...

When and Why Incentives (Don't) Work to Modify Behavior

By Uri Gneezy, Stephan Meier, and Pedro Rey-Biel

Journal of Economic Perspectives, Fall 2011

First we discuss how extrinsic incentives may come into conflict with other motivations. For example, monetary incentives from principals may change how tasks are perceived by agents, with negative effects on behavior. In other cases, incentives might hav...

Is a Cambrian Explosion Coming for Robotics?

[Symposium: Automation and Labor Markets]

By Gill A. Pratt

Journal of Economic Perspectives, Summer 2015

About half a billion years ago, life on earth experienced a short period of very rapid diversification called the "Cambrian Explosion." Many theories have been proposed for the cause of the Cambrian Explosion, one of the most provocative being the evolu...

The School-to-Work Transition: A Cross-National Perspective

By Paul Ryan

Journal of Economic Literature, March 2001

School-to-work patterns and issues are discussed for seven economies (France, Germany, Japan, the Netherlands, Sweden, the United Kingdom, and the United States). The emphasis is placed on differences across countries in the current labor market position ...