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Showing papers in "The American Economic Review in 2017"


Book ChapterDOI
TL;DR: In this article, the authors used the Cobb-Douglas technology to determine what will happen to consumption if only the rents from exhaustible resources are invested in reproducible capital goods.
Abstract: The present generation's ethical dilemma over shortchanging future generations by overconsuming exhaustible resources could be relieved by a program of converting the capital from these resources into machines and living off the current flow of machines and labor If the stock of machines is assumed not to depreciate, then the stock of productive capital and resources is not depleted Cobb-Douglas technology is used to determine what will happen to consumption if only the rents from exhaustible resources are invested in reproducible capital goods An important feature of Cobb-Douglas technology is that input in the form of minerals from an exhaustible resource is needed to get a positive output of the single produced commodity Results of the model indicate that a savings investment rule will not provide for the maintenance of per capita consumption constant over time Further studies have explored the effects of depreciations and intergenerational equity 7 references

1,622 citations



Journal ArticleDOI
TL;DR: The Journal of Comparative Economics (JCE) as discussed by the authors has published a survey on comparative economics in 2012, 2012, 2013, 2014, 2015, 2016, 2016 and 2017.
Abstract: 王璐航系厦门大学经济学科2012年新引进的助理教授,博士毕业于加拿大多伦多大学经济系,主要研究兴趣为中国经济、国际贸易与应用微观经济学。其论文曾在比较经济学国际重要期刊Journal of Comparative Economics上发表。本次王璐航发表在《美国经济评论》的论文利用中国加入WTO带来的关税变化研究中国最终产品以及中间投入品的市场开放对于制造业绩效的影响。研究发现最终产品关税的降低一方面压缩了大企业的价格加成,另一方面推动了行业生产效率的提高。与其他国家的经验不同,中国行业效率提升的主要原因是竞争机制的强化进而筛选出了更好的新企业进入。伴随着中间品关税的降低,中国的中间品进口增长有限,但是中间品价格大幅下降。得益于由此带来的成本降低,企业提高了加成率。中间品市场的变化也对新进入企业的生产效率有正的贡献。该文也是厦大经济学科“海归”教师在国际顶级期刊发表研究中国经济问题的众多学术论文的一个典型代表。

452 citations


Journal ArticleDOI
TL;DR: In this article, the authors discuss an explanation for the fall in share of labour in GDP based on the rise of "superstar firms" and find that sales will increasingly concentrate in a small number of firms and that industries where concentration rises most will have the largest declines in the labour share.
Abstract: In this paper, we discuss an explanation for the fall in share of labour in GDP based on the rise of “superstar firms.” If globalization or technological changes advantage the most productive firms in each industry, product market concentration will rise as industries become increasingly dominated by superstar firms with high profit margins and a low share of labor in firm value-added and sales. As the importance of superstar firms increases, the aggregate labour share will fall. This hypothesis suggeststhat sales will increasingly concentrate in a small number of firms and that industries where concentration rises most will have the largest declines in the labour share. We find support for these predictions aggregating up micro-data from the US Census 1982-2012.

430 citations


Journal ArticleDOI
TL;DR: The authors employ a discrete choice experiment in the employment process for a national call center to estimate the willingness to pay distribution for alternative work arrangements relative to tranformations relative to the traditional work arrangements.
Abstract: We employ a discrete choice experiment in the employment process for a national call center to estimate the willingness to pay distribution for alternative work arrangements relative to tr...

424 citations


Journal ArticleDOI
TL;DR: The authors examined the impact of policy uncertainty on trade, prices, and real income through firm entry investments in general equilibrium, and found that reduced policy uncertainty lowered US prices and increased its consumers' income by the equivalent of a 13 percentage-point permanent tariff decrease.
Abstract: We examine the impact of policy uncertainty on trade, prices, and real income through firm entry investments in general equilibrium. We estimate and quantify the impact of trade policy on China's export boom to the United States following its 2001 WTO accession. We find the accession reduced the US threat of a trade war, which can account for over one-third of that export growth in the period 2000– 2005. Reduced policy uncertainty lowered US prices and increased its consumers' income by the equivalent of a 13-percentage-point permanent tariff decrease. These findings provide evidence of large effects of policy uncertainty on economic activity and the importance of agreements for reducing it. (JEL D72, F13, F14, O19, P33)

398 citations


Journal ArticleDOI
TL;DR: This article conducted the first large-sample, quasi-experimental evaluation of R&D subsidies and used data on ranked applicants to evaluate the effectiveness of the subsidies and the quality of the applications.
Abstract: Governments regularly subsidize new ventures to spur innovation. This paper conducts the first large-sample, quasi-experimental evaluation of R&D subsidies. I use data on ranked applicants...

343 citations


Journal ArticleDOI
Shengwu Li1
TL;DR: In this article, the authors propose a new solution concept: a mechanism is obviously strategy-proof (OSP) if it has an equilibrium in obviously dominant strategies, i.e., a strategy is obviously dominant if and only if a cognitively limited agent can recognize it as weakly dominant.
Abstract: What makes some strategy-proof mechanisms easier to understand than others? To address this question, I propose a new solution concept: A mechanism is obviously strategy-proof (OSP) if it has an equilibrium in obviously dominant strategies. This has a behavioral interpretation: A strategy is obviously dominant if and only if a cognitively limited agent can recognize it as weakly dominant. It also has a classical interpretation: A choice rule is OSP-implementable if and only if it can be carried out by a social planner under a particular regime of partial commitment. I fully characterize the set of OSP mechanisms in a canonical setting, with one-dimensional types and transfers. A laboratory experiment tests and corroborates the theory.

312 citations


Journal ArticleDOI
TL;DR: In this paper, the authors study the evolution of trade liberalization's effects on Brazilian local labor markets and find that regions facing larger tariff cuts experienced prolonged declines in formal sector employment.
Abstract: We study the evolution of trade liberalization's effects on Brazilian local labor markets. Regions facing larger tariff cuts experienced prolonged declines in formal sector employment and ...

307 citations


Journal ArticleDOI
TL;DR: This article measured the persuasive effects of slanted news and tastes for like-minded news, exploiting cable channel positions as exogenous shifters of cable news viewership, and estimated that Fox News increases Republican vote shares by 0.3 points among viewers induced into watching 2.5 additional minutes per week by variation in position.
Abstract: We measure the persuasive effects of slanted news and tastes for like-minded news, exploiting cable channel positions as exogenous shifters of cable news viewership. Channel positions do not correlate with demographics that predict viewership and voting, nor with local satellite viewership. We estimate that Fox News increases Republican vote shares by 0.3 points among viewers induced into watching 2.5 additional minutes per week by variation in position. We then estimate a model of voters who select into watching slanted news, and whose ideologies evolve as a result. We use the model to assess the growth over time of Fox News influence, to quantitatively assess media-driven polarization, and to simulate alternative ideological slanting of news channels.

291 citations


Journal ArticleDOI
TL;DR: This article found evidence that women, more than men, volunteer, and accept requests to volunteer for low-proclivity tasks with low promotability as an important driver of these differences.
Abstract: Gender differences in task allocations may sustain vertical gender segregation in labor markets. We examine the allocation of a task that everyone prefers be completed by someone else (writing a report, serving on a committee, etc.) and find evidence that women, more than men, volunteer, are asked to volunteer, and accept requests to volunteer for such tasks. Beliefs that women, more than men, say yes to tasks with low promotability appear as an important driver of these differences. If women hold tasks that are less promotable than those held by men, then women will progress more slowly in organizations. (JEL I23, J16, J44, J71, M12, M51)

Journal ArticleDOI
TL;DR: In this paper, the authors model the equilibrium risk sharing between countries with varying financial development and provide evidence that financial net worth plays a crucial role in understanding this asymmetric risk sharing, where the more financially developed country consumes more and runs a trade deficit financed by the higher financial income that it earns as compensation for taking greater risk.
Abstract: I model the equilibrium risk sharing between countries with varying financial development. The most financially developed country takes greater risks because its financial intermediaries deal with funding problems better. In good times, the more financially developed country consumes more and runs a trade deficit financed by the higher financial income that it earns as compensation for taking greater risk. During global crises, it suffers heavier losses. Its currency emerges as the reserve currency because it appreciates during crises, thus providing a good hedge. I provide evidence that financial net worth plays a crucial role in understanding this asymmetric risk sharing. (JEL E44, F14, F32, G01, G15, G21)

Journal ArticleDOI
TL;DR: In this paper, the authors exploit variation in the timing of resets of adjustable-rate mortgages (ARMs) to find that a sizable decline in mortgage payments (up to 50 percent) induces a significant increase in c...
Abstract: Exploiting variation in the timing of resets of adjustable-rate mortgages (ARMs), we find that a sizable decline in mortgage payments (up to 50 percent) induces a significant increase in c...

Journal ArticleDOI
TL;DR: In this article, the effect of temporary tax incentives on equipment investment using shifts in accelerated depreciation was investigated for over 120,000 firms, and three findings were presented: 1) The effect of the temporary tax incentive on investment in equipment investment, 2)
Abstract: We estimate the effect of temporary tax incentives on equipment investment using shifts in accelerated depreciation. Analyzing data for over 120,000 firms, we present three findings. First...

Journal ArticleDOI
TL;DR: This paper showed that countries experiencing more rapid aging have grown more in recent decades and suggested that this counterintuitive finding might reflect the more rapid adoption of automation technologies in countries undergoing more pronounced demographic changes, and provide evidence and theoretical underpinnings for this argument.
Abstract: Several recent theories emphasize the negative effects of an aging population on economic growth, either because of the lower labor force participation and productivity of older workers or because aging will create an excess of savings over desired investment, leading to secular stagnation. We show that there is no such negative relationship in the data. If anything, countries experiencing more rapid aging have grown more in recent decades. We suggest that this counterintuitive finding might reflect the more rapid adoption of automation technologies in countries undergoing more pronounced demographic changes, and provide evidence and theoretical underpinnings for this argument.

Journal ArticleDOI
TL;DR: In this article, the authors focus on the trade-off between value screening and moral hazard, and characterizes optimal mechanisms for crowdfunding in terms of return on investment and the degree of moral hazard.
Abstract: Crowdfunding provides the innovation that, before the investment, entrepreneurs contract with consumers. Under demand uncertainty, this improves a screening for valuable projects. Entrepreneurial moral hazard threatens this benefit. Focusing on the trade-off between value screening and moral hazard, the paper characterizes optimal mechanisms. Current crowdfunding schemes reflect their salient features. Efficiency is sustainable only if returns exceed investment costs by a margin reflecting the degree of moral hazard. Constrained efficient mechanisms exhibit underinvestment. Crowdfunding blurs the distinction between finance and marketing, but complements rather than substitutes traditional entrepreneurial financing. As a screening tool for valuable projects, crowdfunding unambiguously promotes social welfare.

Journal ArticleDOI
TL;DR: In this article, the authors introduce liquidity frictions into an otherwise standard DSGE model with nominal and real rigidities and ask: can a shock to the liquidity of private paper lead to a collapse in short-term nominal interest rates and a recession like the one associated with the 2008 US financial crisis?
Abstract: We introduce liquidity frictions into an otherwise standard DSGE model with nominal and real rigidities and ask: can a shock to the liquidity of private paper lead to a collapse in short-term nominal interest rates and a recession like the one associated with the 2008 US financial crisis? Once the nominal interest rate reaches the zero bound, what are the effects of interventions in which the government provides liquidity in exchange for illiquid private paper? We find that the effects of the liquidity shock can be large, and show some numerical examples in which the liquidity facilities of the Federal Reserve prevented a repeat of the Great Depression in the period 2008–2009. (JEL E13, E31, E43, E44, E52, E58, G01)

Journal ArticleDOI
TL;DR: In this article, the impact of mining activity on the probability/intensity of conflict at the local level is investigated. And the authors find direct evidence that the appropriation of a mining area by a group increases the probability that this group perpetrates future violence elsewhere.
Abstract: This paper studies empirically the impact of mining on conflicts in Africa. Using novel data, we combine geo-referenced information over the 1997-2010 period on the location and characteristics of violent events and mining extraction of 27 minerals. Working with a grid covering all African countries at a spatial resolution of 0.5 0.5 degree, we find a sizeable impact of mining activity on the probability/intensity of conflict at the local level. This is both true for low-level violence (riots, protests), as well as for organized violence (battles). Our main identication strategy exploits exogenous variations in the minerals' world prices; however the results are robust to various alternative strategies, both in the cross-section and panel dimensions. Our estimates suggest that the historical rise in mineral prices observed over the period has contributed to up to 21 percent of the average country-level violence in Africa. The second part of the paper investigates whether minerals, by increasing the financial capacities of fighting groups, contribute to diffuse violence over time and space, therefore affecting the intensity and duration of wars. We find direct evidence that the appropriation of a mining area by a group increases the probability that this group perpetrates future violence elsewhere. This is consistent with feasibility theories of conflict. We also find that secessionist insurgencies are more likely in mining areas, which is in line with recent theories of secessionist conflict.

Journal ArticleDOI
TL;DR: The authors track the geographic and temporal propagation of local economic shocks from new oil and gas production generated by hydrofracturing and show that new extraction increased aggregate US employment by as many as 640,000, and decreased the unemployment rate by 0.43 during the Great Recession.
Abstract: We track the geographic and temporal propagation of local economic shocks from new oil and gas production generated by hydrofracturing. Each million dollars of new production produces $80,000 in wage income and $132,000 in royalty and business income within a county. Within 100 miles, one million dollars of new production generates $257,000 in wages and $286,000 in royalty and business income. Roughly two-thirds of the wage income increase persists for two years. Assuming no general equilibrium effects, new extraction increased aggregate US employment by as many as 640,000, and decreased the unemployment rate by 0.43 during the Great Recession. (JEL D86, L14, L81, L82)

Journal ArticleDOI
TL;DR: The authors found that taking a course online, instead of in-person, reduces student success and progress in college, and that students are less likely to remain enrolled at the university after taking online courses.
Abstract: Online college courses are a rapidly expanding feature of higher education, yet little research identifies their effects relative to traditional in-person classes. Using an instrumental variables approach, we find that taking a course online, instead of in-person, reduces student success and progress in college. Grades are lower both for the course taken online and in future courses. Students are less likely to remain enrolled at the university. These estimates are local average treatment effects for students with access to both online and in-person options; for other students, online classes may be the only option for accessing college-level courses.

Journal ArticleDOI
TL;DR: The application of a generic double/de-biased machine learning approach for obtaining valid inferential statements about focal parameters, using Neyman-orthogonal scores and cross-fitting, in settings where nuisance parameters are estimated using ML methods is illustrated.
Abstract: Chernozhukov et al. (2016) provide a generic double/de-biased machine learning (ML) approach for obtaining valid inferential statements about focal parameters, using Neyman-orthogonal scores and cross-fitting, in settings where nuisance parameters are estimated using ML methods. In this note, we illustrate the application of this method in the context of estimating average treatment effects and average treatment effects on the treated using observational data.

Journal ArticleDOI
TL;DR: In this article, the authors quantify the size and nature of disturbances that pushed the US economy to the lower bound in late 2008 as well as the contribution of the lower-bound constraint to the resulting economic slump.
Abstract: Using Bayesian methods, we estimate a nonlinear DSGE model in which the interest-rate lower bound is occasionally binding. We quantify the size and nature of disturbances that pushed the US economy to the lower bound in late 2008 as well as the contribution of the lower bound constraint to the resulting economic slump. We find that the interest-rate lower bound was a significant constraint on monetary policy that exacerbated the recession and inhibited the recovery, as our mean estimates imply that the zero lower bound (ZLB) accounted for about 30 percent of the sharp contraction in US GDP that occurred in 2009 and an even larger fraction of the slow recovery that followed. (JEL C11, C32, E12, E23, E32, E43, E52, G01)

Journal ArticleDOI
TL;DR: In this article, the authors examined the relation between online prices and prices collected offline, where most retail transactions take place in the US. But little is known about their relation to prices collected online.
Abstract: Online prices are increasingly used for measurement and research applications, yet little is known about their relation to prices collected offline, where most retail transactions take pla...

Journal ArticleDOI
David McKenzie1
TL;DR: A large-scale national business plan competition in Nigeria is used to help provide evidence on these two questions as mentioned in this paper, which shows that winning the competition leads to greater firm entry, higher survival of existing businesses, higher profits and sales, and higher employment, including increases of over 20 percentage points in the likelihood of having 10 or more workers.
Abstract: Almost all firms in developing countries have fewer than 10 workers, with the modal firm consisting of just the owner. Are there potential high-growth entrepreneurs with the ability to grow their firms beyond this size? And, if so, can public policy help alleviate the constraints that prevent these entrepreneurs from doing so? A large-scale national business plan competition in Nigeria is used to help provide evidence on these two questions. The competition was launched with much fanfare, and attracted almost 24,000 entrants. Random assignment was used to select some of the winners from a pool of semi-finalists, with US$36 million in randomly allocated grant funding providing each winner with an average of almost US$50,000. Surveys tracking applicants over three years show that winning the business plan competition leads to greater firm entry, higher survival of existing businesses, higher profits and sales, and higher employment, including increases of over 20 percentage points in the likelihood of a firm having 10 or more workers. These effects appear to occur largely through the grants enabling firms to purchase more capital and hire more labor.

Journal ArticleDOI
TL;DR: In this paper, a rich quasi-experiment suggests that the Nitrogen Oxides (NOx) Budget Program (NBP), a cap-and-trade market, decreased NOx emissions, ambient ozone concentrations, pharmaceutical expenditures, and mortality rates.
Abstract: Author(s): Deschenes, O; Greenstone, M; Shapiro, JS | Abstract: The demand for air quality depends on health impacts and defensive investments, but little research assesses the empirical importance of defenses. A rich quasi-experiment suggests that the Nitrogen Oxides (NOx) Budget Program (NBP), a cap-and-trade market, decreased NOx emissions, ambient ozone concentrations, pharmaceutical expenditures, and mortality rates. The annual reductions in pharmaceutical purchases, a key defensive investment, and mortality are valued at about $800 million and $1.3 billion, respectively, suggesting that defenses are over one-third of willingness-to-pay for reductions in NOx emissions. Further, estimates indicate that the NBP's benefits easily exceed its costs and that NOx reductions have substantial benefits.

Journal ArticleDOI
TL;DR: The authors used data on academic publication records to test whether demographic traits like gender influence how credit is allocated under such uncertainty, finding that men are tenured at roughly the same rate regardless of coauthoring choices, while women are less likely to receive tenure the more they coauthor.
Abstract: How is credit for group work allocated when individual contributions are not observed? I use data on academics' publication records to test whether demographic traits like gender influence how credit is allocated under such uncertainty While solo-authored papers send a clear signal about ability, coauthored papers are noisy, providing no specific information about each contributor's skills I find that men are tenured at roughly the same rate regardless of coauthoring choices Women, however, are less likely to receive tenure the more they coauthor The result is much less pronounced among women who coauthor with other women

Journal ArticleDOI
TL;DR: The authors found that skill requirements in job vacancy postings differentially increased in MSAs that were hit hard by the Great Recession, relative to less hard-hit areas, and that these increases persist through at least the end of 2015 and are correlated with increases in capital investments, both at the MSA and firm levels.
Abstract: We show that skill requirements in job vacancy postings differentially increased in MSAs that were hit hard by the Great Recession, relative to less hard-hit areas. These increases persist through at least the end of 2015 and are correlated with increases in capital investments, both at the MSA and firm levels. We also find that effects are most pronounced in routine-cognitive occupations, which exhibit relative wage growth as well. We argue that this evidence is consistent with the restructuring of production toward routine-biased technologies and the more-skilled workers that complement them, and that the Great Recession accelerated this process.

Journal ArticleDOI
TL;DR: According to the leading view of unemployment, when the incentive for job creation falls, the labor market slackens and unemployment rises as discussed by the authors, and thus high discount rates imply high unemployment.
Abstract: Unemployment is high when financial discounts are high. In recessions, the stock market falls and all types of investment fall, including employers' investment in job creation. The discount rate implicit in the stock market rises, and discounts for other claims on business income also rise. A higher discount implies a lower present value of the benefit of a new hire to an employer. According to the leading view of unemployment--the Diamond-Mortensen-Pissarides model--when the incentive for job creation falls, the labor market slackens and unemployment rises. Thus high discount rates imply high unemployment.

Journal ArticleDOI
TL;DR: In this paper, the authors developed and estimated an empirical model of the U.S. banking sector using a new data set covering the largest U. S. banks over the period 2002-2013.
Abstract: PRELIMINARY AND INCOMPLETE, PLEASE DO NOT CITE WITHOUT PERMISSION. We develop and estimate an empirical model of the U.S. banking sector using a new data set covering the largest U.S. banks over the period 2002-2013. Our model incorporates insured depositors and run-prone uninsured depositors who have rich preferences over dierentiated banks. Banks compete for deposits in the spirit of Matutes and Vives (1996) and can endogenously default. We estimate demand for uninsured

Journal ArticleDOI
TL;DR: In this paper, a prior predictive analysis of five nested DSGE models suggests that model specifications and prior distributions tightly circumscribe the range of possible government spending multipliers, revealing less about fiscal effects in data than about the lenses through which researchers choose to interpret data.
Abstract: Bayesian prior predictive analysis of five nested DSGE models suggests that model specifications and prior distributions tightly circumscribe the range of possible government spending multipliers. Multipliers are decomposed into wealth and substitution effects, yielding uniform comparisons across models. By constraining the multiplier to tight ranges, model and prior selections bias results, revealing less about fiscal effects in data than about the lenses through which researchers choose to interpret data. When monetary policy actively targets inflation, output multipliers can exceed one, but investment multipliers are likely to be negative. Passive monetary policy produces consistently strong multipliers for output, consumption, and investment.