Self-Fulfilling Prophecies in the Transition to Clean Technology

By Sjak Smulders and Sophie Zhou

American Economic Journal: Macroeconomics, July 2026

Technological lock-in has been a standard explanation for the slow take-off of clean innovation, but is hard to reconcile with forward-looking investors who anticipate the eventual switch to clean technologies. We provide an alternative explanation: strat...

The Economic Consequences of Effective Carbon Taxes

By Felix Kapfhammer

American Economic Journal: Macroeconomics, July 2026

This paper studies the sectoral and macroeconomic consequences of carbon taxes in four Nordic countries using a novel monthly measure of effective carbon tax rates. The suggested measure accounts for the time-varying emission coverage of taxes that are bo...

Import Liberalization as Export Destruction? Evidence from the United States

By Holger Breinlich, Elsa Leromain, Dennis Novy, and Thomas Sampson

American Economic Journal: Macroeconomics, July 2026

In trade models with scale economies, import liberalization reduces exports within industries by shrinking real market potential. We find this export destruction mechanism reduced US export growth following the permanent normalization of trade relations w...

Selection, Structural Transformation, and the Cost Disease of Services

By Martin Shu

American Economic Journal: Macroeconomics, July 2026

Labor productivity growth in the service sector may be mismeasured if workers with heterogeneous skills self-select into sectors. I document with US data that workers reallocated from manufacturing earn more than incumbent workers in professional services...

An Analytical Model of Behavior and Policy in an Epidemic

By Lukasz Rachel

American Economic Journal: Macroeconomics, July 2026

This paper examines the behavior of individuals susceptible to a deadly disease in a tractable equilibrium setting. We analytically characterize individually optimal mitigation behavior and the resulting equilibrium trajectory. Analysis is facilitated by ...

Expecting Floods: Firm Entry, Employment, and Aggregate Implications

By Ruixue Jia, Xiao Ma, and Victoria Wenxin Xie

American Economic Journal: Macroeconomics, July 2026

Using county-level and zip-code-level data from the United States during the period 1998–2018, we document: (i) Increased flood risk has a large negative impact on firm entry, employment, and output in the long run; (ii) Flood events reduce output in th...

The Life Cycle Implications of Temporary Employment Contracts

By Rosemary Kaiser

American Economic Journal: Macroeconomics, July 2026

Employment protections often create two-tiered labor markets with substantial differences in job security. I estimate the effects of removing these protections using a quantitative life cycle model, where younger workers are more likely to select into pre...

University Research and the Market for Higher Education

By Titan Alon, Damien Capelle, and Kazushige Matsuda

American Economic Journal: Macroeconomics, July 2026

This paper develops a framework in which university research depends endogenously on competition for tuition and talented students in the market for higher education. When students are highly stratified across colleges, or when tuition rises sharply with ...

Central Banks as Dollar Lenders of Last Resort: Implications for Regulation and Reserve Holdings

By Mitali Das, Gita Gopinath, Helene Hall, Taehoon Kim, and Jeremy C. Stein

American Economic Journal: Macroeconomics, July 2026

We explore how foreign central banks behave when firms engage in currency mismatch, borrowing heavily in dollars. A central bank can deal with risky private-sector mismatch in two ways: (i) with financial regulation or (ii) by accumulating reserves to bet...

Inverse Selection

By Markus K. Brunnermeier, Rohit Lamba, and Carlos Segura-Rodriguez

American Economic Review: Insights

Big data and AI invert classical adverse selection: insurers can now infer statistical correlations that consumers cannot, overturning the traditional informational advantage. We study insurance contracting where a two-dimensional state determines risk,...

Nobel Lecture: The Past and Future of Innovation: Can Progress Be Sustained?

By Joel Mokyr

American Economic Review, July 2026

Nobel Lecture: The Economics of Creative Destruction

By Philippe Aghion

American Economic Review, July 2026

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...