The Impact of Trade Liberalization in the Presence of Political Distortions

By Sebastian Jävervall and Roza Khoban

American Economic Journal: Applied Economics, July 2025

Political distortions are prevalent in many developing countries, implying substantial productivity losses. This paper investigates the impact of trade liberalization on political distortions in India. First, using variation in political turnover, we iden...

Information Systems, Service Delivery, and Corruption: Evidence from the Bangladesh Civil Service

By Martin Mattsson

American Economic Journal: Applied Economics, July 2025

Slow public service delivery and corruption are common problems in low- and middle-income countries. Can better management information systems improve delivery speed? Does improving the delivery speed reduce corruption? In a large-scale experiment with th...

Targeting Social Assistance: The Evolution of College Financial Aid in Colombia

By Juliana Londoño-Vélez, Catherine Rodríguez, Fabio Sánchez, and Luis Esteban Álvarez- Arango

AEA Papers and Proceedings, May 2025

College financial aid programs often target individuals based on a combination of academic merit and socioeconomic status. The design of these programs can also be influenced by social preferences and political factors. This paper analyzes the evolution o...

Cross-State Strategic Voting

By Gordon B. Dahl, Joseph Engelberg, Runjing Lu, and William Mullins

American Economic Journal: Economic Policy

We estimate that 3.1% of US voters, or 6.1 million individuals, were registered to vote in two states in 2020, opening up the possibility for them to choose where to vote. Double registrants are concentrated in the wealthiest zipcodes and respond to bo...

Fiscal Procyclicality in Commodity Exporting Countries: How Much Does It Pour and Why?

By Francisco Arroyo Marioli and Carlos A. Vegh

American Economic Journal: Economic Policy

A large literature has documented that fiscal policy is procyclical in emerging markets/developing countries and acyclical/countercyclical in advanced economies. This paper analyzes fiscal procyclicality in commodity-exporting countries. The paper makes...

Consensus building and mobilization

[Research Highlight]

June 26, 2025

Myanmar's labor unions show how local leaders can shape social movements.

Leaders in Social Movements: Evidence from Unions in Myanmar

By Laura Boudreau, Rocco Macchiavello, Virginia Minni, and Mari Tanaka

American Economic Review, June 2025

Social movements are catalysts for crucial institutional changes. To succeed, they must coordinate members' views (consensus building) and actions (mobilization). We study union leaders within Myanmar's burgeoning labor movement. Union leaders are positiv...

Front Matter

American Economic Journal: Macroeconomics, July 2025

The Aggregate-Demand Doom Loop: Precautionary Motives and the Welfare Costs of Sovereign Risk

By Francisco Roldán

American Economic Journal: Macroeconomics, July 2025

I examine the role of households' precautionary savings motive in amplifying and propagating movements in sovereign spreads. I study this mechanism in a model where the government of a small open economy borrows from foreigners, but the debt is then parti...

Economic Winners versus Losers and the Unequal Pandemic Recession

By Fernando Cirelli and Mark Gertler

American Economic Journal: Macroeconomics, July 2025

During the pandemic recession, firms directly exposed to the virus—i.e. the "contact" sector—contracted sharply and recovered slowly relative to the rest of the economy. Less understood is how firms that "won" by offering safer substitutes for contact...

Domestic Policies and Sovereign Default

By Emilio Espino, Julian Kozlowski, Fernando M. Martin, and Juan M. Sánchez

American Economic Journal: Macroeconomics, July 2025

A model with two essential elements—sovereign default and distortionary fiscal and monetary policies—explains the interaction between sovereign debt, default risk, and inflation in emerging countries. We derive conditions under which monetary policy i...

Uncertainty Shocks, Adjustment Costs, and Firm Beliefs: Evidence from a Representative Survey

By Andreas Dibiasi, Heiner Mikosch, and Samad Sarferaz

American Economic Journal: Macroeconomics, July 2025

This paper studies the dynamic effects of an uncertainty shock on firm expectations. We conduct a survey that confronts managers from a representative firm sample with a model-consistent uncertainty shock scenario. An exogenous increase in uncertainty sig...

Fiscal Backing for Price Stability in a Monetary Union

By Bartosz Maćkowiak and Sebastian Schmidt

American Economic Journal: Macroeconomics, July 2025

Fiscal backing is the idea that for the price level to be uniquely determined, fiscal policy must be active at least in some states of the world. We extend the fiscal theory of the price level to a heterogenous monetary union. Different combinations of na...

Nominal Devaluations, Inflation, and Inequality

By Andrés Blanco, Andrés Drenik, and Emilio Zaratiegui

American Economic Journal: Macroeconomics, July 2025

We study the distribution of labor income during large devaluations. Across countries, inequality falls after large devaluations within the context of a surge in inflation and a fall and subsequent recovery of real labor income. To better understand inequ...

Estimating Macrofiscal Effects of Climate Shocks from Billions of Geospatial Weather Observations

By Berkay Akyapı, Matthieu Bellon, and Emanuele Massetti

American Economic Journal: Macroeconomics, July 2025

The literature studying the macroeconomics of weather has focused on temperature and precipitation annual averages, while microstudies have focused more on extreme weather measures. We construct hundreds of variables from high-frequency, high-spatial-reso...

What Caused the US Pandemic-Era Inflation?

By Ben Bernanke and Olivier Blanchard

American Economic Journal: Macroeconomics, July 2025

We estimate a simple dynamic model of prices, wages, and short-run and long-run inflation expectations that allows us to analyze and quantify the sources of recent US inflation. We find that, contrary to early concerns that inflation would be spurred by o...

An American Macroeconomic Picture: Supply and Demand Shocks in the Frequency Domain

By Mario Forni, Luca Gambetti, Antonio Granese, Luca Sala, and Stefano Soccorsi

American Economic Journal: Macroeconomics, July 2025

We provide a few new empirical facts that theoretical models should feature in order to be consistent with the data. (i) There are two classes of shocks: demand and supply. Supply shocks have long-run effects on economic activity; demand shocks do not. (i...

Search, Screening, and Sorting

By Xiaoming Cai, Pieter Gautier, and Ronald Wolthoff

American Economic Journal: Macroeconomics, July 2025

We examine how search frictions impact labor market sorting by constructing a model consistent with evidence that employers interview a subset of a pool of applicants. We derive necessary and sufficient conditions for sorting in applications and matches. ...

Call for Papers: IDB Young Economist Award

[News]

June 27, 2025

The submission deadline is July 15, 2025.

Front Matter

American Economic Review, July 2025