The Geography of Consumption and Local Economic Shocks: The Case of the Great Recession

By Abe Dunn and Mahsa Gholizadeh

American Economic Journal: Macroeconomics, April 2025

We estimate across-county spending flows between firms and consumers for every county in the United States, providing a new consumption link that has not been studied previously. We highlight the importance of this link by estimating the effect of changes...

Job Displacement and Earnings Losses: The Role of Joblessness

By Bruce Fallick, John Haltiwanger, Erika McEntarfer, and Matthew Staiger

American Economic Journal: Macroeconomics, April 2025

A large literature finds that workers displaced in mass layoffs experience persistent earnings losses. We find that the earnings penalty from job displacement is mediated by the length of the jobless spell after displacement. Workers who experience little...

Public Liquidity and Financial Crises

By Wenhao Li

American Economic Journal: Macroeconomics, April 2025

This paper studies the equilibrium effect of public liquidity on financial crises. Banks borrow from households via insured deposits and partially runnable debt and suffer endogenous funding withdrawals from households in crises. Holding public liquidity ...

Terms-of-Trade Shocks Are Not All Alike

By Federico Di Pace, Luciana Juvenal, and Ivan Petrella

American Economic Journal: Macroeconomics, April 2025

Terms of trade are an inaccurate empirical proxy for how fluctuations in international prices affect the economy. To capture the relevance of terms-of-trade fluctuations for the domestic business cycle, the role of export and import prices needs to be ana...

Skill Remoteness and Post-layoff Labor Market Outcomes

By Claudia Macaluso

American Economic Journal: Macroeconomics, April 2025

Local skill remoteness captures the dissimilarity between the skill profiles of a worker's last job and other jobs in a local labor market. Higher skill remoteness at layoff is associated with persistently lower earnings after layoff, a higher probability...

Does Unemployment Risk Affect Business Cycle Dynamics?

By Sebastian Graves

American Economic Journal: Macroeconomics, April 2025

In this paper, I show that the decline in consumption during unemployment depends on both liquid and illiquid wealth; that unemployment predicts illiquid asset withdrawal, primarily when households have few liquid assets; and that increased idiosyncratic ...

A Unified Model of Learning to Forecast

By George W. Evans, Christopher G. Gibbs, and Bruce McGough

American Economic Journal: Macroeconomics, April 2025

We propose a model of boundedly rational and heterogeneous expectations that unifies adaptive learning, k-level reasoning, and replicator dynamics. Level-0 forecasts evolve over time via adaptive learning. Agents revise over time their depth of reasoning ...

Optimal Fiscal and Monetary Policy with Distorting Taxes

By Christopher A. Sims

American Economic Journal: Macroeconomics, April 2025

When government debt pays a lower return than private assets, the reasoning in Friedman's (1969) essay on the optimal quantity of money suggests that it would be optimal to expand the debt until its return matched that on private assets. When the only oth...

CSMGEP: Past Members

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History of the CSMGEP Board

Presidential Address: The Economist as Designer in the Innovation Process for Socially Impactful Digital Products

By Susan Athey

American Economic Review, April 2025

This paper provides an economic perspective on data-driven innovation in digital products, focusing on the role of complex experiments in measuring and improving social impact. The discussion highlights how tools and insights from economics contribute to ...

Front Matter

American Economic Review, April 2025

Fragile New Economy: Intangible Capital, Corporate Savings Glut, and Financial Instability

By Ye Li

American Economic Review, April 2025

The transition toward an intangible-intensive economy reshapes financial systems by creating a self-perpetuating savings glut in the production sector. As intangibles become increasingly important, firms hoard liquidity to finance investment in intangible...

Trade Shocks and Credit Reallocation

By Stefano Federico, Fadi Hassan, and Veronica Rappoport

American Economic Review, April 2025

This paper identifies a credit-supply contraction that arises endogenously after trade liberalization. Banks with loan portfolios concentrated in sectors exposed to competition from China face an increase in nonperforming loans after China's entry into th...

Product Differentiation and Oligopoly: A Network Approach

By Bruno Pellegrino

American Economic Review, April 2025

I present a new theory of oligopoly and markups in general equilibrium, based on an innovative, scalable hedonic demand system, which I take to the data for the universe of US public firms. In my model, firms compete in a network of product market rivalri...

Weighted Linear Discrete Choice

By Christopher P. Chambers, Yusufcan Masatlioglu, Paulo Natenzon, and Collin Raymond

American Economic Review, April 2025

We introduce a new model of stochastic choice that assigns each choice option a utility, along with a salience parameter reflecting economic frictions. We characterize our model behaviorally and investigate its comparative statics properties. We show that...

Fighting Climate Change: International Attitudes toward Climate Policies

By Antoine Dechezleprêtre, Adrien Fabre, Tobias Kruse, Bluebery Planterose, Ana Sanchez Chico, and Stefanie Stantcheva

American Economic Review, April 2025

This paper explores global perceptions and understanding of climate change and policies, examining factors that influence support for climate action and the impact of different types of information. We conduct large-scale surveys with 40,000 respondents f...

When Money Dies: The Dynamics of Speculative Hyperinflations

By Guillaume Rocheteau

American Economic Review, April 2025

How quickly does a fiat money become valueless? I study the speculative hyperinflation equilibria of continuous-time economies with decentralized markets where money is essential. I establish necessary and sufficient conditions under which money dies in f...

Power, Property Rights, and the Dynamics of Local Wealth Appropriation

By Dan Cao, Roger Lagunoff, and Yingqi Xu

American Economic Journal: Microeconomics

We examine the dynamic connections between local wealth inequality and the local politics of property rights. A jurisdiction comprises a politically dominant in-group and a marginalized out-group. At each date, the jurisdiction exploits weaknesses in due ...

The Effects of Racial Segregation on Intergenerational Mobility: Evidence from Historical Railroad Placement

By Eric Chyn, Kareem Haggag, and Bryan A. Stuart

American Economic Journal: Applied Economics

This paper provides new evidence on the causal impacts of citywide racial segregation on intergenerational mobility. We use an instrumental variable approach that relies on plausibly exogenous variation in segregation due to the arrangement of railroad t...

Do Ordeals Work for Selection Markets? Evidence from Health Insurance Auto-Enrollment

By Mark Shepard and Myles Wagner

American Economic Review, March 2025

Are application hassles, or "ordeals," an effective way to limit public program enrollment? We provide new evidence by studying (removal of) an auto-enrollment policy for health insurance, adding an extra step to enroll. This minor ordeal has a major impa...