American Economic Review

Simon Johnson · Lukasz Rachel · Catherine Wolfram

This paper asks what the optimal response of an exhaustible-resource producer is to sanctions in the form of a price cap, and how a sanctioning coalition should set the cap. The motivation is the …

Patrick J. Kennedy · Christine L. Dobridge · Paul Landefeld · Jacob Mortenson

This paper estimates the firm- and worker-level effects of the corporate income tax cuts in the 2017 Tax Cuts and Jobs Act (TCJA) — the largest corporate tax cut in U.S. history — to inform the …

Giovanni Cespa · Xavier Vives

The paper asks why market liquidity sometimes behaves in a stabilizing way (an illiquidity hike curbs liquidity demand and attracts liquidity supply) but on other occasions "evaporates when it is most …

Hassan Afrouzi · Marina Halac · Kenneth Rogoff · Pierre Yared

Post-pandemic inflation across advanced economies rose to levels not seen since the early 1980s, reviving interest in central bank credibility. The standard quantitative macro models used to interpret …

Ferdinando Monte · Charly Porcher · Esteban Rossi-Hansberg

Monte, Porcher, and Rossi-Hansberg ask why remote work surged abruptly and permanently after COVID-19 despite information-technology advances raising it only marginally between 1980 and 2019, why the …

Sushant Acharya · Jess Benhabib

Research question and motivation: A central tenet of monetary policy is that aggressively raising nominal rates more than one-for-one with inflation (the Taylor principle) nips self-fulfilling …

Katrine Jakobsen · Henrik Kleven · Jonas Kolsrud · Camille Landais · Mathilde Muñoz

Proposals to tax top wealth (e.g., Saez and Zucman, 2019) face a recurring objection in public debate: that the wealthy will emigrate en masse and, because many are entrepreneurs, their departure will …

Corina Boar · Denis Gorea · Virgiliu Midrigan

Research question and motivation. A large literature argues that credit constraints are the dominant financial friction holding private businesses below their optimal scale, so that easing credit …

Rüdiger Bachmann · Kai Carstensen · Stefan Lautenbacher · Manuel Menkhoff · Martin Schneider

A large literature shows that firms perceiving more uncertainty make more cautious intertemporal decisions (investment, hiring, price setting), but it is far less clear what makes firms uncertain in …

Horng Chern Wong

Why do some firms pay persistently higher wages for observably similar workers, and what role do firms' product-market power (monopoly/markups), labor-market power (monopsony/markdowns), and workers' …

Atif Mian · Ludwig Straub · Amir Sufi

This paper develops a tractable continuous-time model to study the fiscal sustainability of government deficits and the joint dynamics of public debt, with two main ingredients: an endogenous interest …

Markus K. Brunnermeier · Yuliy Sannikov

This paper solves the full, global equilibrium dynamics (not just a linearization around the steady state) of an economy in which financially constrained "experts" intermediate capital, showing that …

Zhiguo He · Arvind Krishnamurthy · Konstantin Milbradt

What makes a sovereign bond a safe asset is not the strength of its fundamentals in absolute terms but their strength relative to the alternatives, together with the size of the debt outstanding -- …

Christina D. Romer · David H. Romer

This 2004 American Economic Review paper by Christina D. Romer and David H.

Pierre-Olivier Gourinchas · Walker Ray · Dimitri Vayanos

The paper develops a two-country preferred-habitat model in which currency and bond markets are populated by different investor clienteles — currency traders with price-elastic demand for foreign …

Maurice Allais

This 1966 American Economic Review paper by Maurice Allais asks whether the quantity theory of money can be given a single operational formulation that holds uniformly across normal times and …

Régis Barnichon · Geert Mesters

This 2023 American Economic Review paper by Régis Barnichon and Geert Mesters develops a theoretical framework, with an empirical application to U.S. monetary policy, for evaluating whether current …

Joel P. Flynn · George Nikolakoudis · Karthik A. Sastry

Modern macroeconomic models of aggregate supply universally restrict firms to price-setting — committing to a price and supplying whatever quantity the market demands. Flynn, Nikolakoudis, and Sastry …

Robert W. Hahn · Nathaniel Hendren · Robert D. Metcalfe · Ben Sprung-Keyser

This paper extends and applies the marginal value of public funds (MVPF) framework to evaluate the welfare consequences of 96 climate-related tax and spending policies in the United States. The MVPF …

Jesús Fernández-Villaverde · Juan F. Rubio-Ramírez · Thomas J. Sargent · Mark W. Watson

This 2007 American Economic Review paper by Fernández-Villaverde, Rubio-Ramírez, Sargent, and Watson asks when the structural economic shocks in a DSGE model's state-space representation can be …

Gaurav Khanna · Emir Murathanoglu · Caroline Theoharides · Dean Yang

This paper asks how persistent increases in international migrant income prospects affect long-run economic development in migrant-origin areas. The central question is whether Philippine provinces …

Jonas Hjort · Xuan Li · Heather Sarsons

Many multinationals do not fully adjust wages to the local context of their foreign establishments; instead, they partially link the wages of foreign workers in a given position to the wages paid in …

Karl M. Aspelund · Anna Russo

This paper investigates the problem of additionality — the likelihood that a conservation action is marginal to (i.e., caused by) an incentive — in the United States Department of Agriculture's …

Eric Chyn · Diego Daruich

How should governments design neighborhood-based policies to improve long-run outcomes for children, once one accounts for general equilibrium (GE) forces—endogenous rents, neighborhood quality, …

Luca Gagliardone · Mark Gertler · Simone Lenzu · Joris Tielens

This paper addresses a fundamental puzzle in macroeconomics: why do estimates of the New Keynesian Phillips curve (NKPC) slope differ sharply depending on whether real marginal cost or the output gap …

Andrew B. Abel

A one-parameter-family utility function nests time-separable preferences, "catching up with the Joneses" (utility depends on own consumption relative to lagged aggregate consumption per capita) and …

Elliot Anenberg · Tess Scharlemann · Eileen van Straelen

Does monetary policy stimulate household borrowing and consumption by enabling cash-out mortgage refinancing ("the cash-out refinance channel"), or does it primarily induce substitution across …

Felipe Gonçalves · Elisa Jácome · Emily Weisburst

This paper studies how immigration enforcement affects public safety, asking two questions: (1) what is the effect of increased enforcement on criminal victimization, and (2) how does increased …

Fernando Alvarez · Katarína Borovičková · Robert Shimer

This paper asks two related questions. First, can one develop a robust, distribution-free estimator for the discrete-time mixed proportional hazard (MPH) model of duration with unobserved …

Kristine W. Hankins · Morteza Momeni · David Sovich

Do import tariffs affect consumer credit terms, and does focusing solely on goods prices understate tariff pass-through to consumers? The paper also asks whether vertical integration -- specifically, …

Andreas Haupt · Zoë Hitzig

Haupt and Hitzig introduce a framework for comparing the privacy properties of different mechanism protocols. The core research question is: when a designer commits to implementing a social choice …

Simon Gilchrist · Egon Zakrajšek

This 2012 American Economic Review paper by Simon Gilchrist and Egon Zakrajšek constructs a new corporate-bond credit spread index -- the "GZ spread" -- from a large panel of secondary-market bond …

Taha Choukhmane

Does automatic enrollment (auto-enrollment) in retirement savings plans increase lifetime wealth accumulation and welfare? The prior literature established large short-run participation effects but …

Cristina Arellano

In a small open economy where a risk-averse government borrows from risk-neutral lenders using only non-contingent one-period bonds, default happens in equilibrium and happens in *recessions* -- the …

Amanda Dahlstrand

This paper asks whether digital platforms can improve healthcare outcomes by enabling needs-based matching between patients and physicians unconstrained by geography. Amanda Dahlstrand studies digital …

Ingrid Huitfeldt · Victoria Marone · Daniel Waldinger

This paper studies the design of dynamic reassignment mechanisms—centralized systems that must not only provide good initial matches but also accommodate changes in agents' preferences over time. The …

Daniel L. Greenwald · Adam Guren

To what extent did an expansion and contraction of credit drive the 2000s housing boom and bust? The existing literature offers sharply divergent answers — ranging from credit explaining virtually …

Hanno Lustig · Adrien Verdelhan

Even the most extreme departure from complete international asset markets -- one in which investors can hold nothing abroad but the foreign risk-free bond -- fails to match the smoothness of exchange …

Gita Gopinath · Emine Boz · Camila Casas · Federico J. Díez · Pierre-Olivier Gourinchas · Mikkel Plagborg-Møller

Because most trade is invoiced in a few dominant currencies rather than in the producer's or the destination's currency, it is the dollar exchange rate and not the bilateral one that drives import …

Jonathon Hazell · Bledi Taska

Hazell and Taska use wages posted on online job vacancies — matched to job titles and establishment identifiers from Burning Glass Technologies — to measure the wage for new hires at the job level …

Verónica Bäcker-Peral · Jonathon Hazell · Atif Mian

Each month a fraction of UK property leases are extended by 90 years or more, creating thousands of natural experiments in which the same property's rent and capital value are revealed simultaneously. …

John Sturm Becko · André Sztutman

Can income tax schedules be justified as utilitarian-optimal without adopting extreme normative assumptions about how household welfare should be measured? The paper proposes a welfare criterion …

Gautam Gowrisankaran · Ashley Langer · Mar Reguant

This paper asks how rate-of-return (RoR) regulation in U.S. electricity markets affects the speed and efficiency of energy transitions, specifically the transition from coal to combined-cycle natural …

Diego Gentile Passaro · Fuhito Kojima · Bobak Pakzad-Hurson

This paper studies the labor market effects of "Equal Pay for Similar Work" (EPSW) policies — laws that require firms to pay equal wages to workers of different protected-class identities (e.g., …

Òscar Jordà

This 2005 American Economic Review paper by Òscar Jordà introduces "local projections" (LP) — a way to estimate impulse responses directly from a sequence of single-horizon regressions of the future …

Philip R Lane · Jay C Shambaugh

This paper builds a database of international currency exposures for a large panel of countries over 1990-2004 and uses it to construct financially-weighted exchange rate indices, showing that …

Renato Faccini · Seungcheol Lee · Ralph Luetticke · Morten O. Ravn · Tobias Renkin

How do consumer credit spreads — the gap between household borrowing rates and deposit rates — affect aggregate business cycle dynamics and the distribution of consumption across the wealth …

Emmanuel Dhyne · Ayumu Ken Kikkawa · Toshiaki Komatsu · Magne Mogstad · Felix Tintelnot

The paper asks three related questions in the context of Belgium, a small open economy: (1) What do firms' responses to demand shocks reveal about their cost structures? (2) What are the worker and …

N. Meltem Daysal · Hui Ding · Maya Rossin-Slater · Hannes Schwandt

This paper studies the short- and long-term consequences of intra-household respiratory disease transmission from older to younger siblings in Danish families. The central research questions are: (1) …

Carmen M Reinhart · Kenneth S Rogoff

Sorting about 3,700 annual observations from 44 countries over roughly two centuries into four debt-to-GDP buckets, the authors find little relationship between public debt and growth below 90 percent …

Jeffrey C. Fuhrer

Standard optimising consumption models make spending jump on impact when a shock hits, which the data flatly contradict; replacing time-separable utility with habit formation gives consumers a motive …

Hengjie Ai · Ravi Bansal · Hongye Guo · Amir Yaron

This paper develops a revealed-preference theory that uses asset-market data to identify whether investors have a preference for early resolution of uncertainty (PER), a property of non-expected …

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

This paper investigates how the ideological alignment between knowledge-disseminating institutions and policymakers affects the adoption of evidence-based policies. The core research question is …

Fernando Alvarez · Robert E. Lucas · Warren E. Weber

Reconciling the consensus view that raising short rates fights inflation with the quantity-theoretic evidence that inflation and interest rates move together with money growth in the long run, this …

Esther Duflo · Pascaline Dupas · Elizabeth Spelke · Mark Walsh

This paper provides experimental evidence on the intergenerational impacts of secondary education subsidies in a low-income context, leveraging a randomized controlled trial (RCT) conducted in rural …

Mathilde Muñoz

This paper asks whether differences in labor market regulations — specifically payroll taxes and minimum wages — shape countries' comparative advantage in the cross-border provision of labor-intensive …

Jeremy Greenwood · Zvi Hercowitz · Gregory W. Huffman

Keynes's idea that shocks to the marginal efficiency of investment drive fluctuations is placed inside a neoclassical model in which firms choose how hard to run their capital; a shock that raises the …

Kenneth R. French · James M. Poterba

At the end of 1989 Japanese investors held 1.9 percent of their equity abroad, US investors 6.2 percent and British investors 18 percent. Inverting a standard portfolio first-order condition, the …

Christoph Albert · Albrecht Glitz · Joan Llull

Why have immigrant-native wage gaps widened substantially across arrival cohorts in the United States since the 1960s, and why has the speed of wage convergence slowed? The paper argues that the …

Daniel Björkegren · Joshua E. Blumenstock · Samsun Knight

This paper addresses the problem of algorithmic manipulation: when consequential decisions are encoded in machine learning algorithms, individuals strategically alter their behavior to achieve desired …

Alberto Bisin · Giulia Tura

Bisin and Tura study the cultural integration of immigrants in Italy by estimating a structural model of marital matching embedded with intra-household decisions — fertility, socialization of …

Vivek Bhattacharya · Gastón Illanes · David Stillerman

This paper by Bhattacharya, Illanes, and Stillerman makes two contributions to the debate over US antitrust enforcement stringency. First, it documents the price, quantity, and assortment effects of a …

Luca Fornaro · Federica Romei

In a multicountry model with nominal wage rigidities, two sectors (tradable with convex supply, nontradable with flat supply), and free capital mobility, the paper studies optimal monetary policy …

Greg Kaplan · Benjamin Moll · Giovanni L. Violante

This paper builds a two-asset Heterogeneous Agent New Keynesian (HANK) model matching the empirical joint distribution of income, liquid, and illiquid wealth, and finds that the indirect effect of an …

Adrien Auclert

This paper shows that monetary policy affects aggregate consumption not only through the standard income and substitution channels but also through three redistribution channels -- earnings …

Athanasios Orphanides

This 2001 American Economic Review paper by Athanasios Orphanides asks how large the informational problem is when Taylor-type interest rate rules are implemented with the data actually available to …

Benjamin M. Friedman · Kenneth N. Kuttner

This 1992 American Economic Review paper by Benjamin Friedman and Kenneth Kuttner asks whether money remains a reliable indicator of future nominal and real activity, and whether the predictive …

Peter A. Diamond

This 1965 American Economic Review paper by Peter Diamond extends Samuelson's pure consumption-loan model by adding a produced, durable capital good, so that people can provide for retirement either …

Ben S. Bernanke

Complementing Friedman and Schwartz's monetary account of the Great Depression, Bernanke argues that the banking panics and pervasive debtor insolvency of 1930-33 independently raised the real cost of …

Sushant Acharya · Edouard Challe · Keshav Dogra

An analytically tractable heterogeneous-agent New Keynesian (HANK) model in which a utilitarian planner's optimal monetary policy departs from the representative-agent benchmark because interest rates …

Gabriel Kreindler · Arya Gaduh · Tilman Graff · Rema Hanna · Benjamin A. Olken

This paper studies how commuter preferences over wait times, travel times, and transfers should shape the design of urban bus networks, using the world's largest Bus Rapid Transit (BRT) system — …

Jan Eeckhout · Chunyang Fu · Wenjian Li · Xi Weng

This paper asks whether and how optimal income taxation should change when firms have market power. The question is motivated by the documented rise in economy-wide markups since 1980, which has …

Cecile Gaubert · Patrick Kline · Damian Vergara · Danny Yagan

Should national governments redistribute income to residents of poor areas through place-based transfers, or should redistribution rely solely on place-blind (income-only) taxes? The longstanding view …

Emanuele Colonnelli · Valdemar Pinho Neto · Edoardo Teso

Do individual political views shape firm behavior and labor market outcomes in the private sector? Specifically, do business owners sort copartisan workers into their firms, and does employers' …

Kenan Huremović · Gabriel Jiménez · Enrique Moral-Benito · José-Luis Peydró · Fernando Vega-Redondo

This paper provides the first integrated empirical analysis of how bank credit supply shocks propagate through both the production network and the financial network simultaneously, using the universe …

Aaron Chalfin · Felipe Gonçalves

This paper studies how public sector workers balance professional motivations against private economic concerns, using arrest decisions by Dallas Police Department (DPD) officers as the empirical …

Gabriel Ehrlich · John Haltiwanger · Ron Jarmin · David Johnson · Ed Olivares · Luke Pardue · Matthew D. Shapiro · Laura Yi Zhao

This paper implements and evaluates methods for constructing quality-adjusted price indices from item-level retail scanner data at scale — across hundreds of product categories, heterogeneously …

Amir Kermani · Francis Wong

This paper estimates the racial/ethnic gap in realized housing returns using administrative data on individual housing transactions, and investigates the mechanisms that generate those gaps. The …

Haruki Kono · Kota Saito · Alec Sandroni

This paper addresses a foundational gap in the random utility model (RUM) literature: existing axiomatizations by Falmagne (1978) and McFadden and Richter (1990) assume that whenever a menu is …

Manasvini Singh · Atheendar Venkataramani

Singh and Venkataramani ask whether resource scarcity causes discriminatory rationing of health care by patient race, with patient death as the starkest possible outcome of biased allocation …

Pedro Bordalo · Nicola Gennaioli · Andrei Shleifer · Stephen J. Terry

This paper incorporates diagnostic expectations — beliefs that overweight the representativeness of recent data, formalized as $E_t^\theta(A_{t+1}) = E_t(A_{t+1}) + \theta[E_t(A_{t+1}) - …

Sebastian Di Tella

This paper builds a flexible-price model in which money's liquidity premium keeps real interest rates from falling when idiosyncratic risk rises, so money reduces investment rather than stabilizing …

Ethan Ligon

This paper identifies and corrects a fundamental flaw in the standard methodology for testing efficient risk-sharing when shocks are covariate (affecting common prices rather than only individual …

Dirk Bergemann · Tibor Heumann · Michael C. Wang

Bergemann, Heumann, and Wang study consumer surplus when a monopolist simultaneously engages in second-degree price discrimination (screening consumers within each market segment through …

Frank Smets · Rafael Wouters

A New Neoclassical Synthesis model of the US economy with seven structural shocks and a full set of real and nominal frictions is estimated on seven quarterly series by Bayesian methods, and shown to …

Harald Uhlig

In a calibrated neoclassical growth model with distortionary labor and capital taxes, an ARRA-style government spending increase produces short-run net-present-value fiscal multipliers above one, but …

Karl Brunner

This 1961 American Economic Association Papers and Proceedings essay by Karl Brunner argues that evaluating monetary policy's effectiveness requires separately and rigorously assessing two distinct …

Jeremy Bulow · Kenneth Rogoff

A sovereign that can still hold assets abroad after defaulting can always replace any reputation-based loan contract with a sequence of cash-in-advance insurance contracts collateralised out of the …

Enrique G. Mendoza

A standard small-open-economy business-cycle model, augmented with a collateral constraint that caps total debt -- including within-period working-capital loans -- at a fraction of the market value of …

Daniel Haanwinckel

How do workforce composition (labor supply), labor demand, and minimum wage policy jointly determine the wage distribution in imperfectly competitive labor markets, and what were the quantitative …

Felipe Brugués

This paper studies the efficiency of self-enforced relational agreements in manufacturing supply chains when sellers have market power and contracts cannot be externally enforced. The setting is …

Ingrid Haegele

This paper provides the first empirical evidence of talent hoarding in organizations — the practice whereby managers deliberately suppress workers' internal mobility to retain productive team members, …

Mark Gertler · Christopher Huckfeldt · Antonella Trigari

This paper measures and models the role of temporary layoffs (TL) in cyclical unemployment dynamics, motivating the analysis by the extraordinary surge in temporary layoffs at the onset of the …

Benjamin Hébert · Jesse Schreger

US court rulings in Republic of Argentina v. NML Capital moved the market-implied probability that Argentina would default on its restructured bonds without carrying any news about the Argentine …

Michael Wiebe

This paper is a comment on Moretti (2021b), which studied agglomeration effects for innovation by testing whether the size of technology clusters causes patenting. The original paper (M21) used US …

Matthew A. Masten · Alexandre Poirier

Masten and Poirier demonstrate a previously unrecognized asymmetry in the coefficient stability literature: depending on how omitted variable bias is measured, it can be substantially easier for …

Luigi Iovino · Thorsten Martin · Julien Sauvagnat

This paper documents and quantifies an "environmental bias" embedded in the U.S. corporate income tax code: CO2-intensive ("dirty") firms systematically face lower effective tax rates than clean …

John H. Cochrane · Monika Piazzesi

This 2002 American Economic Review Papers and Proceedings essay by John Cochrane and Monika Piazzesi proposes a high-frequency alternative to monthly-VAR identification of monetary policy shocks, …

Iacopo Morchio · Christian Moser

This paper uses linked employer-employee data from Brazil (RAIS, 2007–2014, covering 267 million worker-years, 56 million unique workers, and 607,000 employers) to document that the gender pay gap of …

Alisdair McKay · Emi Nakamura · Jón Steinsson

This paper shows that the standard New Keynesian prediction that forward guidance about interest rates far in the future is at least as powerful as guidance about current rates -- and grows …

David Chan · Yiqun Chen

This paper studies the productivity of nurse practitioners (NPs) versus physicians performing overlapping tasks in Veterans Health Administration (VHA) emergency departments (EDs), exploiting a …

Milton Friedman

Delivered as Friedman's presidential address to the American Economic Association in December 1967, this paper argues that two decades of professional opinion had swung too far toward assigning …

Refet S. Gürkaynak · Brian Sack · Eric Swanson

This 2005 American Economic Review paper by Refet Gürkaynak, Brian Sack, and Eric Swanson asks whether long-term forward interest rates respond to daily macroeconomic and monetary-policy news, a …

Michael Woodford

Evaluating Taylor's interest-rate rule against an explicit optimizing New Keynesian model, this paper coins the "Taylor principle" -- that the nominal rate must eventually rise by more than any …

Timothy Cogley · Argia M. Sbordone

This 2008 American Economic Review paper by Timothy Cogley and Argia Sbordone asks whether the substantial persistence long observed in U.S. inflation reflects a genuine structural feature of …

Robert E. Lucas, Jr.

Using quarterly U.S. money, price, and interest-rate data smoothed with a two-sided exponentially weighted moving-average filter, Lucas shows that once high-frequency "business cycle" noise is …

Robert E. Lucas, Jr.

If two countries produce the same good with the same constant-returns technology, diminishing returns imply the poorer one has the higher marginal product of capital -- and on 1988 data, US output per …

Gordon B. Dahl · Matthew Knepper

Dahl and Knepper address the long-standing puzzle of why workplace sexual harassment is chronically underreported despite high estimated prevalence. Survey evidence indicates that no fewer than 1 in …