Shocks and Exchange Rates in Small Open Economies

By Vito Cormun and Pierre De Leo

American Economic Journal: Macroeconomics

We separately identify domestic and external sources of exchange rate fluctuations in a large sample of small open economies. We find that external shocks lead to large and predictable deviations from UIP, while domestic shocks do not. In addition, exter...

Sequential Sampling by Individuals and Groups: An Experimental Study

By Pëllumb Reshidi, Alessandro Lizzeri, Leeat Yariv, Jimmy Chan, and Wing Suen

American Economic Review: Insights, December 2025

Many committees—juries, political task forces, etc.—spend time gathering costly information before reaching a decision. We report results from lab experiments focused on such dynamic information-collection processes, as in sequential hypothesis testin...

Web Search Personalization during the US 2020 Election

By Ulrich Matter and Roland Hodler

American Economic Review: Insights, December 2025

We study the impact of web search personalization on ideological segregation in search results. We deploy 150 synthetic internet users with randomized partisan browsing preferences across 25 US cities. These users are active during the US 2020 election an...

Dynamics of Consumer Responses to Medical Price Changes

By Norihiro Komura and Shun-Ichiro Bessho

American Economic Review: Insights, December 2025

How individuals respond to coinsurance rates is fundamental for insurance market design, but most existing estimates speak only to short-run responses. We exploit a unique policy experiment that increased the coinsurance rate some elderly individuals face...

Optimal Mortgage Refinancing with Inattention

By David Berger, Konstantin Milbradt, Fabrice Tourre, and Joseph Vavra

American Economic Review: Insights, December 2025

We build a model of optimal fixed-rate mortgage refinancing with fixed costs and inattention and derive a new sufficient statistic that can be used to measure inattention frictions from simple moments of the rate gap distribution. In the model, borrowers ...

The Consumer Welfare Effects of Online Ads: Evidence from a Nine-Year Experiment

By Erik Brynjolfsson, Avinash Collis, Daniel Deisenroth, Haritz Garro, Daley Kutzman, Asad Liaqat, and Nils Wernerfelt

American Economic Review: Insights, December 2025

Research on the effects of online advertising on consumer welfare is limited due to challenges in running large-scale field experiments. We analyze a long-running field experiment on Facebook in which a random subset of users received no ads in their news...

Race and Economic Well-Being in the United States

By Jean-Félix Brouillette, Charles I. Jones, and Peter J. Klenow

American Economic Review: Insights, December 2025

We construct a measure of consumption-equivalent welfare for Black and White Americans, which incorporates life expectancy, consumption, leisure, and inequality. Based on these factors, welfare for Black Americans was 40 percent of that for White American...

Electric Vehicles and the Energy Transition: Unintended Consequences of Time-of-Use Pricing

By Megan R. Bailey, David P. Brown, Erica Myers, Blake Shaffer, and Frank A. Wolak

American Economic Review: Insights, December 2025

The growth of electric vehicles (EVs) raises new challenges for electricity systems. We implement a field experiment to assess the effect of time-of-use (TOU) pricing and managed charging on EV charging behavior. We find that while TOU pricing is effectiv...

Long-Term and Lasting Impacts of Personal Initiative Training on Entrepreneurial Success

By Francisco Campos, Michael Frese, Leonardo Iacovone, Hillary C. Johnson, David McKenzie, and Mona Mensmann

American Economic Review: Insights, December 2025

A randomized experiment in Togo found that personal initiative training for small businesses resulted in large and significant impacts for both men and women after two years. We revisit these entrepreneurs after seven years and find long-lasting average i...

Front Matter

American Economic Review: Insights, December 2025

Equal Pay for Similar Work

By Diego Gentile Passaro, Fuhito Kojima, and Bobak Pakzad-Hurson

American Economic Review

Equal pay laws increasingly require that workers with different group identities doing “similar” work are paid equal wages within firm. We study such “equal pay for similar work” (EPSW) policies theoretically and test our models’ predictions e...

The Long-Term Effects of Cash Assistance

By David J. Price and Jae Song

American Economic Journal: Applied Economics

We investigate the long-term effects of cash assistance on beneficiaries and their children among participants in the Seattle-Denver Income Maintenance Experiment. Treated families in this randomized experiment received thousands of dollars in extra go...

All Roads Lead to Rome: Global Air Connectivity and Bilateral Trade

By Zheng Wang, Feicheng Wang, and Zhuo Zhou

American Economic Journal: Applied Economics

Using itinerary-level global air traffic data, this paper proposes a novel instrumental variable to estimate the effect of in-person interactions on bilateral trade. By exploiting exogenous variations in air connectivity that are driven by third-countr...

Impacts of Corporate Tax Cuts on Firms and Workers: Evidence from Small Businesses

By Yige Duan and Terry S. Moon

American Economic Journal: Economic Policy

This paper assesses the effects of corporate tax cuts on small firms and their workers. Following a reform in Quebec, Canada, firms receiving tax cuts expand and their workers' earnings increase com- pared to workers and firms without tax cuts. We esti...

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Front Matter

American Economic Review, December 2025

Supply, Demand, Institutions, and Firms: A Theory of Labor Market Sorting and the Wage Distribution

By Daniel Haanwinckel

American Economic Review, December 2025

This paper examines how workforce composition, labor demand, and minimum wage jointly determine wages through their effects on worker-task assignments, firm wage premiums, and firm-worker sorting. Using an estimated model of monopsonistic local labor mark...

Downward Rigidity in the Wage for New Hires

By Jonathon Hazell and Bledi Taska

American Economic Review, December 2025

Wage rigidity is an important explanation for unemployment fluctuations. In benchmark models wages for new hires are key, but there is limited evidence on this margin. We use wages posted on vacancies, with job and establishment information, to measure th...

Gender Differences in Financial Advice

By Tabea Bucher-Koenen, Andreas Hackethal, Johannes Koenen, and Christine Laudenbach

American Economic Review, December 2025

Based on data gathered from 27,000 real-world meetings between financial advisors and clients of a large German bank, we show that advisors offer more self-serving advice to women, while men are more likely to receive sales fee rebates and less likely to ...