From Immediate Acceptance to Deferred Acceptance: Effects on School Admissions and Achievement in England

By Camille Terrier, Parag A. Pathak, and Kevin Ren

American Economic Journal: Applied Economics, January 2026

Countries and cities around the world increasingly rely on centralized systems for student placement. Two algorithms, deferred acceptance (DA) and immediate acceptance (IA), are widespread. We investigate the effects of the national ban of IA in England. ...

Direct and Indirect Effects of Vaccines: Evidence from COVID-19

By Seth Freedman, Daniel W. Sacks, Kosali Simon, and Coady Wing

American Economic Journal: Applied Economics, January 2026

We estimate direct and indirect vaccine effectiveness and assess how far the infection-reducing externality extends from the vaccinated, a key input to policy decisions. Our empirical strategy uses nearly universal microdata from a single state and relies...

Disadvantaging Rivals: Vertical Integration in the Pharmaceutical Market

By Charles Gray, Abby Alpert, and Neeraj Sood

American Economic Journal: Applied Economics, January 2026

The pharmaceutical market has experienced a wave of vertical integration between pharmacy benefit managers (PBMs) and insurers in recent years. Using a unique dataset on insurer-PBM contracts, we document increasing vertical integration in Medicare Part D...

Divine Policy: The Impact of Religion in Government

By Jeanet Sinding Bentzen, Alessandro Pizzigolotto, and Lena Lindbjerg Sperling

American Economic Journal: Applied Economics, January 2026

Can policies shape personal values and beliefs? To examine, we exploit the staggered introduction of faith-based initiatives across US states. Our difference-in-differences analysis reveals that the initiatives strengthened religiosity and conservative-re...

Rising Concentration of Household Shopping, Superstar Firms, and the Implications for Retail Markups

By Justin H. Leung and Zhonglin Li

American Economic Journal: Applied Economics, January 2026

This paper documents an increase in the concentration of household shopping in the United States retail sector from 2004 to 2019. Despite a growing number of stores, households visit fewer stores, do more one-stop shopping, and increasingly shop at differ...

AEA-CEE Annual Reports

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Front Matter

American Economic Journal: Macroeconomics, January 2026

Accounting for Wealth Concentration in the United States

By Bariş Kaymak, David Leung, and Markus Poschke

American Economic Journal: Macroeconomics, January 2026

We assess the empirical relevance of different macroeconomic modeling approaches to wealth concentration, using the joint distribution of earnings, capital income, and net worth in combination with an OLG model of household heterogeneity. We find large ea...

From Deviations to Shortfalls: The Effects of the FOMC's New Employment Objective

By Brent Bundick and Nicolas Petrosky-Nadeau

American Economic Journal: Macroeconomics, January 2026

We analyze the effects of a monetary policy that stabilizes "shortfalls" rather than "deviations" of employment from its maximum level. A shortfalls-stabilization rule leads to expectations of more accommodative policy in expansions, raising average infla...

Uncertainty and the Economy: The Evolving Distributions of Aggregate Supply and Demand Shocks

By Geert Bekaert, Eric Engstrom, and Andrey Ermolov

American Economic Journal: Macroeconomics, January 2026

We estimate the time-varying distribution of aggregate supply (AS) and aggregate demand (AD) shocks. We distinguish between traditional Gaussian uncertainty and "bad" uncertainty, associated with negative skewness. The Great Moderation is driven by a redu...

Anatomy of the Greek Depression with Firm-Level Data: The Importance of Demand Shocks

By Stelios Giannoulakis and Plutarchos Sakellaris

American Economic Journal: Macroeconomics, January 2026

During the Greek Depression, which saw a 22 percent decline in output, young firms and small firms experienced significantly steeper declines in sales growth compared to their mature and larger counterparts. This disparity was largely driven by adverse de...

The Effects of Biased Labor Market Expectations on Consumption, Wealth Inequality, and Welfare

By Almut Balleer, Georg Duernecker, Susanne Forstner, and Johannes Goensch

American Economic Journal: Macroeconomics, January 2026

We analyze US survey data and document a substantial optimistic bias of households in their expectations about future labor market transitions. We find that low-skilled individuals tend to be strongly overoptimistic, whereas high-skilled individuals have ...

'Less Is More': Consumer Spending and the Size of Economic Stimulus Payments

By Michelle Andreolli and Paolo Surico

American Economic Journal: Macroeconomics, January 2026

We study how consumption responds to unexpected, transitory income gains of different sizes using hypothetical questions from the Italian Survey of Household Income and Wealth. Affluent households exhibit higher marginal propensities to consume (MPCs) out...

Bank Risk-Taking, Credit Allocation, and Monetary Policy Transmission: Evidence from China

By Xiaoming Li, Zheng Liu, Yuchao Peng, and Zhiwei Xu

American Economic Journal: Macroeconomics, January 2026

Using confidential loan-level data, we examine how Basel III influenced the responses of bank risk-taking to monetary policy shocks in China. We use a difference-in-differences (DID) approach, exploiting disparities in lending behavior between high- and l...

Mental Accounts and Consumption Sensitivity across the Distribution of Liquid Assets

By James Graham and Robert A. McDowall

American Economic Journal: Macroeconomics, January 2026

We study consumption spending responses to predictable income using household-level data from a US financial institution. Even for households with large liquid asset balances, we find no spending in anticipation of income receipt, substantial spending fol...

Parallel Digital Currencies and Sticky Prices

By Harald Uhlig and Taojun Xie

American Economic Journal: Macroeconomics, January 2026

The rise of digital currencies may result in domestic parallel currencies. Their exchange rate shocks present new challenges for monetary policy. We analyze these issues in a New Keynesian framework. Firms set prices in one of the currencies. A one-time a...

2025 in Research Highlights

[Research Highlight]

December 16, 2025

Economists addressed issues related to automation, climate change, industrial policy, and more.

Front Matter

American Economic Review, January 2026

Across-Country Wage Compression in Multinationals

By Jonas Hjort, Xuan Li, and Heather Sarsons

American Economic Review, January 2026

Many employers link wages at establishments outside of the home region to the level at headquarters. We show this using new data on 1,200 multinationals' establishments across the world and linked employee-level data on their establishments in Brazil. Hea...

The Opportunity Atlas: Mapping the Childhood Roots of Social Mobility

By Raj Chetty, John N. Friedman, Nathaniel Hendren, Maggie R. Jones, and Sonya R. Porter

American Economic Review, January 2026

We construct a public atlas of mean outcomes in adulthood by childhood census tract. Outcomes vary sharply across neighborhoods: For children whose parents earn $27,000, the standard deviation of mean household income in adulthood is $10,420 across tracts...