Nobel Lecture: Creative Destruction and Economic Growth

By Peter Howitt

American Economic Review, July 2026

Front Matter

American Economic Review, July 2026

The Effect of Omitted Variables on the Sign of Regression Coefficients

By Matthew A. Masten and Alexandre Poirier

American Economic Review, July 2026

We show that, depending on how the impact of omitted variables is measured, it can be substantially easier for omitted variables to flip coefficient signs than to drive them to zero. This behavior occurs with "Oster's delta" (Oster 2019a), a widely report...

Understanding High-Wage Firms: Monopoly, Monopsony, and Bargaining Power

By Horng Chern Wong

American Economic Review, July 2026

I study how firm market power and worker bargaining power shape wages and welfare. Using French micro-data, I document patterns linking wages and firm market power that existing models cannot explain. A model in which firms produce vertically differentiat...

The Aggregate Costs of Uninsurable Business Risk

By Corina Boar, Denis Gorea, and Virgiliu Midrigan

American Economic Review, July 2026

We use firm-level data to document that private businesses experience large fluctuations in their profit shares. These are due to large, fat-tailed, and transitory changes in output that are not fully accompanied by changes in their inputs. We interpret t...

The Effect of High-Tech Clusters on the Productivity of Top Inventors: Comment

By Michael Wiebe

American Economic Review, July 2026

Moretti (2021) reports a positive elasticity between technology cluster size and patenting, and uses an event study and instrumental variables regressions to justify a causal interpretation. The event study does not use the variation generated by inventor...

Germs in the Family: The Short- and Long-Term Consequences of Intrahousehold Disease Spread

By N. Meltem Daysal, Hui Ding, Maya Rossin-Slater, and Hannes Schwandt

American Economic Review, July 2026

Preschool-aged children get sick frequently and spread disease to other family members. Despite the universality of this experience, there is limited causal evidence on the magnitudes and consequences of these externalities, especially for infant siblings...

Market Opacity and Fragility: Why Liquidity Evaporates When It Is Most Needed

By Giovanni Cespa and Xavier Vives

American Economic Review, July 2026

Lack of market transparency can impair the liquidity provision of nonstandard liquidity suppliers and make liquidity demand increasing in illiquidity. This can yield strategic complementarities and induce multiple equilibria. Then an initial dearth of liq...

Self-Fulfilling Fluctuations in HANK Economies

By Sushant Acharya and Jess Benhabib

American Economic Review, July 2026

We show that in heterogeneous agent New Keynesian (HANK) economies with countercyclical risk, the natural interest rate is endogenous and co-moves with output, leaving the economy susceptible to self-fulfilling fluctuations. Unlike in representative agent...

Ideological Alignment and Evidence-Based Policy Adoption

By Jorge García-Hombrados, Marcel Jansen, Ángel Martínez, Berkay Özcan, Pedro Rey-Biel, and Antonio Roldán- Monés

American Economic Review, July 2026

The implementation of evidence-based policies hinges on the dissemination of evidence to policymakers, a process influenced by the attributes of the sender. We conducted a nationwide RCT with ideologically opposite think tanks, major newspapers, and a res...

Monetary Policy without Commitment

By Hassan Afrouzi, Marina Halac, Kenneth Rogoff, and Pierre Yared

American Economic Review, July 2026

This paper studies the implications of central bank credibility for long-run inflation and inflation dynamics. We introduce central bank lack of commitment into a standard nonlinear New Keynesian economy with sticky-price monopolistically competitive firm...

A Welfare Analysis of Policies Impacting Climate Change

By Robert W. Hahn, Nathaniel Hendren, Robert D. Metcalfe, and Ben Sprung-Keyser

American Economic Review, July 2026

We study the welfare impacts of 96 climate-related tax and spending policies. We extend and apply the marginal value of public funds (MVPF) framework, most notably providing a new method for incorporating learning-by-doing spillovers. We find subsidies fo...

The Effect of High-Tech Clusters on the Productivity of Top Inventors

By Enrico Moretti

American Economic Review, October 2021

The high-tech sector is concentrated in a small number of cities. The ten largest clusters in computer science, semiconductors, and biology account for 69 percent, 77 percent, and 59 percent of all US inventors, respectively. Using longitudinal data on 10...

Conducting Research

[Page]

Committee Spotlight: Q&A with the CSMGEP Co-Chairs Gary Hoover and Ebonya Washington

[News]

March 29, 2022

The CSMGEP Co-Chairs Gary Hoover and Ebonya Washington answer some questions about the committee's mission and activities.

Views on the dollar shortage controversy

[Research Highlight]

July 01, 2026

Harris Dellas and George Tavlas discuss the postwar dollar shortage debate between Charles Kindleberger and Milton Friedman.

Combinatorial Discrete Choice: Theory and Application to Multinational Production

By Costas Arkolakis, Fabian Eckert, and Rowan Shi

American Economic Review

In general, finding the optimal combination among N items requires evaluating all 2^N possibilities. We develop a method applicable whenever items are complements or substitutes that uses this structure to discard suboptimal combinations without evalua...

Effects of Domestic Production Tax Incentives on Workers and Firms: Evidence from US Employee-Employer-Matched Tax Filings

By Christine L. Dobridge, Paul Landefeld, and Jacob Mortenson

American Economic Journal: Economic Policy

This paper examines the effects of a corporate tax cut aimed at incentivizing domestic production on the within-firm distribution of worker earnings, firm employment, and firm capital investment. We use employee-employer-matched U.S. tax filings and find ...

Climate Policies and Electricity Prices: Why Abate When You Can Generate?

By Kathrine von Graevenitz and Elisa Rottner

American Economic Journal: Economic Policy

Climate policies often increase electricity prices by more than they increase prices of fossil fuels. Using administrative data on German manufacturing plants from 2009 to 2017, we provide evidence that these price changes induce plants to generate ele...

Taxing Top Incomes in the Emerging World—Fiscal and Economic Impact under the Microscope

By Christopher Axelson, Antonia Hohmann, Jukka Pirttilä, Roxanne Raabe, and Nadine Riedel

American Economic Journal: Economic Policy

This paper studies taxpayer responses to an increase in the top marginal tax rate in South Africa, drawing on rich administrative data and a transparent identification strategy. We show that treated taxpayers strongly reduced their reported taxable inc...