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Estimation and Inference of Impulse Responses by Local Projections

By Ã’²õ³¦²¹°ù ´³´Ç°ù»åà

òòò½Íø Review, March 2005

This paper introduces methods to compute impulse responses without specification and estimation of the underlying multivariate dynamic system. The central idea consists in estimating local projections at each period of interest rather than extrapolating i...

Strategy-Proofness versus Efficiency in Matching with Indifferences: Redesigning the NYC High School Match

By Atila ´¡²ú»å³Ü±ô°ì²¹»å¾±°ù´ÇÄŸ±ô³Ü, Parag A. Pathak, and Alvin E. Roth

òòò½Íø Review, December 2009

The design of the New York City (NYC) high school match involved trade-offs among efficiency, stability, and strategy-proofness that raise new theoretical questions. We analyze a model with indifferences — ties — in school preferences. Simulations ...

Transaction Cost Economics: The Natural Progression

By Oliver E. Williamson

òòò½Íø Review, June 2010

The Hidden Advantage of Delegation: Pareto Improvements in a Gift Exchange Game

By Gary Charness, ¸é²¹³¾Ã³²Ô Cobo-Reyes, Natalia ´³¾±³¾Ã©²Ô±ð³ú, Juan A. Lacomba, and Francisco Lagos

òòò½Íø Review, August 2012

This paper analyzes the effect on performance and earnings of delegating the wage choice to employees. Our results show that such delegation significantly increases effort levels. Moreover, we observe a Pareto improvement, as the earnings of both employer...

Constitutional Rules and Fiscal Policy Outcomes

By Torsten Persson and Guido Tabellini

òòò½Íø Review, March 2004

We investigate the effect of electoral rules and forms of government on fiscal policy outcomes in a large sample of democracies. We rely on different estimation methods to address prospective problems of statistical inference, due to nonrandom selection o...

Behavioral Contract Theory

By Botond Koszegi

Journal of Economic Literature, December 2014

This review provides a critical survey of psychology-and-economics ("behavioral-economics") research in contract theory. First, I introduce the theories of individual decision making most frequently used in behavioral contract theory, and formally illustr...

What Do Emissions Markets Deliver and to Whom? Evidence from Southern California's NOx Trading Program

By Meredith Fowlie, Stephen P. Holland, and Erin T. Mansur

òòò½Íø Review, April 2012

An advantage of cap-and-trade programs over more prescriptive environmental regulation is that compliance flexibility and cost effectiveness can make more stringent emissions reductions politically feasible. However, when markets (versus regulators) deter...

Inflation and Unemployment in the Long Run

By Aleksander Berentsen, Guido Menzio, and Randall Wright

òòò½Íø Review, February 2011

We study the long-run relation between money (inflation or interest rates) and unemployment. We document positive relationships between these variables at low frequencies. We develop a framework where money and unemployment are modeled using explicit micr...

What Can Economists Learn from Happiness Research?

By Bruno S. Frey and Alois Stutzer

Journal of Economic Literature, June 2002

In recent years, there has been a steadily increasing interest on the part of economists in happiness research. We argue that reported subjective well-being is a satisfactory empirical approximation to individual utility and that happiness research is abl...

Policy Watch: U.S. Disability Policy in a Changing Environment

By Richard V. Burkhauser and Mary C. Daly

Journal of Economic Perspectives, Winter 2002

In this paper we provide a context for evaluating the goals and effectiveness of current disability policy. We review the Social Security Disability Insurance and Supplemental Security Income programs and examine trends in disability benefit receipt and e...

The Impact of Pollution on Worker Productivity

By Joshua Graff Zivin and Matthew Neidell

òòò½Íø Review, December 2012

This paper assesses the impact of pollution on worker productivity by relating exogenous daily variations in ozone with productivity of agricultural workers as recorded under piece rate contracts. We find robust evidence that ozone levels well below feder...

On the Size of U.S. Government: Political Economy in the Neoclassical Growth Model

By Per Krusell and Jose-Victor Rios-Rull

òòò½Íø Review, December 1999

We study a dynamic version of Meltzer and Richard's median-voter model of the size of government. Taxes are proportional to total income, and they are redistributed as equal lump-sum transfers. Voting takes place periodically over time, and each consumer ...

Consumer Response to Tax Rebates

By Matthew D. Shapiro and Joel Slemrod

òòò½Íø Review, March 2003

US Trade and Inventory Dynamics

By George Alessandria, Joseph P. Kaboski, and Virgiliu Midrigan

òòò½Íø Review, May 2011

We examine the source of the large fall and rebound in US trade in the recent recession. While trade fell and rebounded more than expenditures or production of traded goods, we find that relative to the magnitude of the downturn, these trade fluctuations ...

Health and Wealth among the Poor: India and South Africa Compared

By Anne Case and Angus Deaton

òòò½Íø Review, May 2005

Riding the South Sea Bubble

By Peter Temin and Hans-Joachim Voth

òòò½Íø Review, December 2004

This paper presents a case study of a well-informed investor in the South Sea bubble. We argue that Hoare's Bank, a fledgling West End London bank, knew that a bubble was in progress and nonetheless invested in the stock: it was profitable to "ride the bu...

Fiscal Policy, Profits, and Investment

By Alberto Alesina, Silvia Ardagna, Roberto Perotti, and Fabio Schiantarelli

òòò½Íø Review, June 2002

This paper evaluates the effects of fiscal policy on investment using a panel of OECD countries. We find a sizeable negative effect of public spending—and in particular of its wage component—on profits and on business investment. This result is consis...

Facts and Challenges from the Great Recession for Forecasting and Macroeconomic Modeling

By Serena Ng and Jonathan H. Wright

Journal of Economic Literature, December 2013

This paper provides a survey of business cycle facts, updated to take account of recent data. Emphasis is given to the Great Recession, which was unlike most other postwar recessions in the United States in being driven by deleveraging and financial mar...

International Institutions for Reducing Global Financial Instability

[Symposium: Global Financial Instability]

By Kenneth Rogoff

Journal of Economic Perspectives, Fall 1999

This paper asks how recent developments in research on banking and sovereign lending can help inform the debate on choosing a new international financial architecture. A broad range of plans is considered, including a global lender of last resort facility...

Efficient Pollution Regulation: Getting the Prices Right: Reply

By Nicholas Z. Muller and Robert Mendelsohn

òòò½Íø Review, February 2012

Fraas and Lutter raise two important points in their comment on Muller and Mendelsohn (2009): How to design policies for sources that yield negative marginal damages? How does statistical uncertainty in the marginal damages affect the trading ratios acros...