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How Do National Firms Respond to Local Cost Shocks?

By R. Andrew Butters, Daniel W. Sacks, and Boyoung Seo

òòò½Íø Review, May 2022

Recent research shows prices are insensitive to local demand conditions because national chains charge geographically uniform prices. We examine the price response to local cost shocks, including 68 excise tax changes, 76 sales tax changes, and other geog...

Effective Demand Failures and the Limits of Monetary Stabilization Policy

By Michael Woodford

òòò½Íø Review, May 2022

The challenge for stabilization policy presented by the COVID-19 pandemic stems above all from disruption of the circular flow of payments, resulting in a failure of what Keynes (1936) calls "effective demand." As a consequence, economic activity in many ...

Bargaining over a Divisible Good in the Market for Lemons

By Dino Gerardi, Lucas Maestri, and Ignacio ²Ñ´Ç²Ô³úó²Ô

òòò½Íø Review, May 2022

We study bargaining with divisibility and interdependent values. A buyer and a seller trade a divisible good. The seller is privately informed about its quality, which can be high or low. Gains from trade are positive and decreasing in quantity. The buyer...

Call for Papers: Cambridge Elements in Law, Economics and Politics

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April 28, 2022

Front Matter

òòò½Íø Journal: Economic Policy, May 2022

Mortality, Temperature, and Public Health Provision: Evidence from Mexico

By ¹ó°ù²¹²Ôç´Ç¾±²õ Cohen and Antoine ¶Ù±ð³¦³ó±ð³ú±ô±ð±è°ùê³Ù°ù±ð

òòò½Íø Journal: Economic Policy, May 2022

We examine the impact of temperature on mortality in Mexico using daily data over the period 1998–2017 and find that 3.8 percent of deaths in Mexico are caused by suboptimal temperature (26,000 every year). However, 92 percent of weather-related deaths ...

Does Hospital Crowding Matter? Evidence from Trauma and Orthopedics in England

By Thomas P. Hoe

òòò½Íø Journal: Economic Policy, May 2022

This paper estimates the impact of hospital crowding on medical treatment decisions and patient health outcomes. Exploiting pseudorandom variation in emergency admissions, I find that a one-standard-deviation admission shock increases the unplanned readmi...

The Labor Market Impacts of Universal and Permanent Cash Transfers: Evidence from the Alaska Permanent Fund

By Damon Jones and Ioana Marinescu

òòò½Íø Journal: Economic Policy, May 2022

Since 1982, all Alaskan residents have received a yearly cash dividend from the Alaska Permanent Fund. Using the Current Population Survey and a synthetic control method, this paper shows that the dividend had no effect on employment and increased part-ti...

The Long-Term Effects of Measles Vaccination on Earnings and Employment

By Alicia Atwood

òòò½Íø Journal: Economic Policy, May 2022

The measles vaccine was introduced in 1963. Take-up of the vaccine in the United States occurred quickly and universally, leading to reductions in morbidity and mortality. New biological evidence on how the measles virus interacts with our immune system i...

Raising the Bar: Minimum Wages and Employers' Hiring Standards

By Sebastian Butschek

òòò½Íø Journal: Economic Policy, May 2022

Many scholars have studied the employment effects of minimum wages, but little is known about effects on the composition of hires. I investigate whether Germany's minimum wage introduction raised hiring standards, using worker fixed effects as a proxy for...

Mentoring and the Dynamics of Affirmative Action

By ²Ñ¾±³¦³óè±ô±ð ²Ñ³Ü̈±ô±ô±ð°ù-±õ³Ù³Ù±ð²Ô and Aniko Ö°ù²â

òòò½Íø Journal: Economic Policy, May 2022

We analyze the long-term workforce composition when the quality of mentoring available to majority and minority juniors depends on their representation in the workforce. A workforce with at least 50 percent majority workers invariably converges to one whe...

When Does Product Liability Risk Chill Innovation? Evidence from Medical Implants

By Alberto Galasso and Hong Luo

òòò½Íø Journal: Economic Policy, May 2022

Liability laws designed to compensate for harms caused by defective products may also affect innovation. We examine this issue by exploiting a major quasi-exogenous increase in liability risk faced by US suppliers of polymers used to manufacture medical i...

Drug Diffusion through Peer Networks: The Influence of Industry Payments

By Leila Agha and Dan Zeltzer

òòò½Íø Journal: Economic Policy, May 2022

Pharmaceutical companies market to physicians through individual detailing accompanied by monetary or in-kind transfers. Large compensation payments to a small number of physicians account for most of this promotional spending. Studying US promotional pay...

Homeownership, Labor Supply, and Neighborhood Quality

By Naomi Hausman, Tamar Ramot-Nyska, and Noam Zussman

òòò½Íø Journal: Economic Policy, May 2022

This paper provides evidence on the external benefits of homeownership among low-income populations. A natural experiment in Israel generated large changes in neighborhood homeownership rates while holding fixed the residents and housing stock, two primar...

Do Environmental Regulations Affect the Decision to Export?

By Jevan Cherniwchan and Nouri Najjar

òòò½Íø Journal: Economic Policy, May 2022

This paper investigates how a common form of environmental regulation—air quality standards—affects exporters. We develop a simple theoretical model to show how the design of these standards causes (i) some firms to stop exporting and (ii) a reduction...

The Electric Gini: Income Redistribution through Energy Prices

By Arik Levinson and Emilson Silva

òòò½Íø Journal: Economic Policy, May 2022

In theory, regulators concerned about inequality will deviate from efficient two-part tariffs, charging lower-than-efficient fixed monthly fees and higher-than-efficient per-kilowatt-hour prices. To quantify that relationship, we develop a measure of the ...

How Do Beliefs about the Gender Wage Gap Affect the Demand for Public Policy?

By Sonja Settele

òòò½Íø Journal: Economic Policy, May 2022

I conduct a survey experiment to study the relationship between people's beliefs about the size of the gender wage gap and their demand for policies aimed at mitigating it. Beliefs causally affect support for equal pay legislation and affirmative action p...

The Valuation of Local School Quality under School Choice

By Angela Zheng

òòò½Íø Journal: Economic Policy, May 2022

School choice programs break the link between residential location and school attendance, and should weaken the capitalization of school quality into house prices. For the first time, I quantify the effect of one such program—charter school expansionsâ€...

Minimum-Wage Increases and Low-Wage Employment: Evidence from Seattle

By Ekaterina Jardim, Mark C. Long, Robert Plotnick, Emma van Inwegen, Jacob Vigdor, and Hilary Wething

òòò½Íø Journal: Economic Policy, May 2022

Seattle raised its minimum wage to as much as $11 in 2015 and as much as $13 in 2016. We use Washington State administrative data to conduct two complementary analyses of its impact. Relative to outlying regions of the state identified by the synthetic ...

The Effect of Charter School Openings on Traditional Public Schools in Massachusetts and North Carolina

By Kirsten Slungaard Mumma

òòò½Íø Journal: Economic Policy, May 2022

The rapid expansion of charter schools has fueled concerns about their impact on traditional public schools. I estimate the effect of charter openings on traditional public schools in Massachusetts and North Carolina by comparing schools near actual chart...