The Willingness to Pay for a Cooler Day: Evidence from 50 Years of Major League Baseball Games

By Kevin Kuruc, Melissa LoPalo, and Sean O'Connor

American Economic Journal: Applied Economics, January 2025

The climate economy literature has documented adverse effects of extreme temperatures on well-being through mechanisms such as mortality, productivity, and conflict. Impacts due simply to discomfort are less well understood. This paper investigates indivi...

Wealth Tax Mobility and Tax Coordination

By David R. Agrawal, Dirk Foremny, and Clara Martínez-Toledano

American Economic Journal: Applied Economics, January 2025

We study the effects of decentralized wealth taxation on mobility and the effectiveness of tax coordination at mitigating tax competition. We exploit the reintroduction of the Spanish wealth tax, after which all regions except Madrid levied positive tax r...

Staggered Difference-in-Differences in Gravity Settings: Revisiting the Effects of Trade Agreements

By Arne J. Nagengast and Yoto V. Yotov

American Economic Journal: Applied Economics, January 2025

We nest an extended two-way fixed effect (ETWFE) estimator for staggered difference-in-differences within the structural gravity model. To test the ETWFE, we estimate the effects of regional trade agreements (RTAs). The results suggest that RTA estimates ...

Trade Disruptions and Reshoring

By Anindya S. Chakrabarti, Kanika Mahajan, and Shekhar Tomar

American Economic Journal: Applied Economics, January 2025

Firms are increasingly concerned about the resilience of their sales and sourcing decisions. Using administrative data, we show that a temporary disruption in trade due to state border closures in India led to a persistent trade collapse within the countr...

Better Alone? Evidence on the Costs of Intermunicipal Cooperation

By Clemence Tricaud

American Economic Journal: Applied Economics, January 2025

This paper provides new evidence on why municipalities are often reluctant to integrate. Exploiting a French reform that made intermunicipal cooperation mandatory, I find that municipalities forced to integrate experienced a large increase in construction...

Careers and Intergenerational Income Mobility

By Catherine Haeck and Jean-William Laliberté

American Economic Journal: Applied Economics, January 2025

This paper uses census microdata linked with tax records to quantify the contribution of occupations to intergenerational income mobility. We document substantial segregation into occupations by parental income. Children of high-income parents are signifi...

Betting on the House: Subjective Expectations and Market Choices

By Nicolas Bottan and Ricardo Perez-Truglia

American Economic Journal: Applied Economics, January 2025

Home price expectations play a central role in macroeconomics and finance. However, there is little direct evidence on their effect on market choices. We provide causal evidence using a large-scale, high-stakes field experiment in the United States. We se...

Front Matter

American Economic Journal: Macroeconomics, January 2025

Spatial Integration and Agricultural Productivity: Quantifying the Impact of New Roads

By Tasso Adamopoulos

American Economic Journal: Macroeconomics, January 2025

I study the effects of Ethiopia's 1997–2014 road expansion program on agricultural productivity and structural change by combining a quantitative spatial sectoral framework with novel district-level panel data on agricultural production and geocoded tra...

Singles, Couples, and Their Labor Supply: Long-Run Trends and Short-Run Fluctuations

By Jonna Olsson

American Economic Journal: Macroeconomics, January 2025

Women's increased involvement in the economy has been an important change in labor markets during the past century. I show that a macroeconomic model taking into account gender and household composition in an otherwise parsimonious off-the-shelf setting c...

US Treasury Auctions: A High-Frequency Identification of Supply Shocks

By Maxime Phillot

American Economic Journal: Macroeconomics, January 2025

We identify Treasury supply shocks using auction data, interpreting changes in futures prices around announcements as shocks to expected supply. We isolate the component of futures price variations pertaining to US Treasury announcements between 1998 and ...

Wealth Inequality, Aggregate Consumption, and Macroeconomic Trends under Incomplete Markets

By Byoungchan Lee

American Economic Journal: Macroeconomics, January 2025

I construct an incomplete market model featuring a closed-form expression for optimal consumption. In the model, individual consumption is an isoelastic function of wealth, inclusive of income, yielding partial consumption smoothing based on borrowing and...

From Blue- to Steel-Collar Jobs: The Decline in Employment Gaps?

By Benjamin Lerch

American Economic Journal: Macroeconomics, January 2025

I investigate how the introduction of industrial robots is shaping the demographic composition of the US labor force between 1993 and 2014. I find that robots decreased employment of men and women by 3.7 and 1.6 percentage points, contributing to the secu...

State-Dependent Government Spending Multipliers: Downward Nominal Wage Rigidity and Sources of Business Cycle Fluctuations

By Yoon Joo Jo and Sarah Zubairy

American Economic Journal: Macroeconomics, January 2025

In a New Keynesian model with downward nominal wage rigidity (DNWR), we show that government spending is more effective in stimulating output in a low-inflation recession relative to a high-inflation recession. The government spending multiplier is large ...

Permanent Income Shocks, Target Wealth, and the Wealth Gap

By Tullio Jappelli and Luigi Pistaferri

American Economic Journal: Macroeconomics, January 2025

We test the key implication of the buffer-stock model, namely that any revision in permanent income leads to a proportionate revision in target wealth. We use panel data on the amount of wealth that people think they must hold for precautionary purposes. ...

Estimating Hysteresis Effects

By Francesco Furlanetto, Antoine Lepetit, Ørjan Robstad, Juan Rubio-Ramírez, and Pål Ulvedal

American Economic Journal: Macroeconomics, January 2025

In this paper we identify demand shocks that can have a permanent effect on output through hysteresis effects. We call these shocks permanent demand shocks. They are found to be quantitatively important in the United States, in particular in samples start...

Rational Inattention and the Business Cycle Effects of Productivity and News Shocks

By Bartosz Maćkowiak and Mirko Wiederholt

American Economic Journal: Macroeconomics, January 2025

We solve a real business cycle model with rational inattention (an RI-RBC model). In the RI-RBC model, the growth rates of employment, investment, and output are about as persistent as in the data, with an amount of inattention consistent with survey data...

Medical Expenses and Saving in Retirement: The Case of the United States and Sweden

By Makoto Nakajima and Irina A. Telyukova

American Economic Journal: Macroeconomics, January 2025

Many US households have significant wealth late in life, contrary to the predictions of a simple life-cycle model. By comparison, retirees in Sweden decumulate wealth more quickly while facing smaller out-of-pocket medical expense risks late in life. In t...

The Evolution of US Retail Concentration

By Dominic A. Smith and Sergio Ocampo

American Economic Journal: Macroeconomics, January 2025

Increasing national concentration has contributed to market power concerns. Yet local trends are more informative about market power in retail, where consumers have traditionally shopped at nearby stores. Using novel product-level census data for all US r...

Optimal Bank Reserve Remuneration and Capital Control Policy

By Chun-Che Chi, Stephanie Schmitt-Grohé, and Martín Uribe

American Economic Journal: Macroeconomics, January 2025

A central prediction of open economy models with a pecuniary externality due to a collateral constraint is that the unregulated economy overborrows relative to what occurs under optimal policy. A maintained assumption in this literature is that households...