Accepted Papers

The Review of Economic Studies is one of the most highly respected academic journals in the field of economics. It is known for publishing leading research in all areas of economics, from microeconomics to macroeconomics. The journal is published by the Oxford University Press.

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New

Firm Quality Dynamics and the Slippery Slope of Credit Intervention

Wenhao Li and Ye Li

A salient trend in crisis intervention has emerged in recent decades: government and central banks have offered funding directly to nonfinancial firms, bypassing banks and other credit intermediaries. We analyze the long-term consequences of such policies by focusing on firm quality dynamics. In a laissez-faire economy, firms with high productivity are more likely to survive crises than those with low productivity.

New

Choice and Opportunity Costs

Paola Manzini, Marco Mariotti, and Levent Ülkü

We define the (physical) opportunity cost of a choice x as the alternative that would be chosen if x were not available, and the opportunity cost of any unchosen alternative as x itself. The agent has preferences over pairs consisting of alternatives and their opportunity costs. Because costs affect choice and vice-versa, choice results from an intrapersonal equilibrium rather than from simple maximisation.

New

Lifecycle Wages and Human Capital Investments: Selection and Missing Data

Laurent Gobillon, Thierry Magnac, and Sébastien Roux

We derive wage equations with individual specific coefficients from a structural model of human capital investment over the life cycle. This model allows for interruptions in labour market participation and deals with missing data and attrition problems. We propose a new framework that deals with missingness at random and is based on factor decompositions that allow for flexible control of selection.

New

Diversification, Market Entry, and the Global Internet Backbone

El Hadi Caoui and Andrew Steck

In many industries, buyers diversify their supplier base to manage supplier disruption risk. We investigate the importance of such diversification as a determinant of demand and supplier entry in the context of the internet backbone, the worldwide network of undersea fiber-optic cables that underpins the internet. We specify a model of international bandwidth demand and cable operators’ dynamic entry and supply choices. The model is estimated using novel data on cross-border data flows, prices, cable characteristics, and disruptions.

New

Demand Stimulus as Social Policy

Alan J. Auerbach, Yuriy Gorodnichenko, and Daniel Murphy

We exploit a panel of city-level data with rich demographic information to estimate the distributional effects of Department of Defense spending and its effects on a range of social outcomes. The income and employment generated by defense spending accrue predominantly to households without a bachelor’s degree. These households as well as Black and Hispanic households tend to disproportionately benefit from this spending.

New

Taxes Depress Corporate Borrowing: Evidence from Private Firms

Ivan T. Ivanov, Luke Pettit, and Toni M. Whited

We use variation in state corporate income tax rates to re-examine the relation between taxes and corporate leverage. Contrary to prior research, corporate leverage rises after tax cuts for small private firms. An estimated dynamic equilibrium model shows that tax cuts make capital more productive and spur the use of leverage. Tax cuts also produce more distant default thresholds and lower credit spreads.

New

All Along the Watchtower: Military Landholders and Serfdom Consolidation in Early Modern Russia

Andrea Matranga and Timur Natkhov

This article examines the emergence of coercive labor institutions using the case of serfdom in early modern Russia. We argue that serfdom consolidated under the pressure of landholding military elites who gained political influence due to the prolonged struggle with steppe nomads. To contain nomadic raids, the Russian state erected defense lines on the southern frontier, and granted land in the area to soldiers in charge of its defense. The soldiers could not farm while on defense duty, nor could they compete in the market for peasant labor, as the land had been selected for its defensive rather than agricultural value.

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"Supply disruptions shapes the global internet backbone: new paper shows diversification drives cable entry & surplus, but markets may underprovide diversity."

New Paper by @CaouiHadi & Steck:

https://www.restud.com/diversification-market-entry-and-the-global-internet-backbone/

#EconTwitter #REStud

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"Serfdom in early modern Russia wasn’t inevitable—it was driven by landholding soldiers on the southern frontier. To defend against nomads, the state tied peasants to land, cementing coercive labor."

New paper by @andreamatranga & @Natkhov:

https://www.restud.com/all-along-the-watchtower-military-landholders-and-serfdom-consolidation-in-early-modern-russia/
#econtwitter

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"A new method for identifying and estimating consumer preferences when choice sets are constrained due to selection or search, but are not observed"

New paper by Agarwal & Somaini:

https://www.restud.com/demand-analysis-under-latent-choice-constraints/

#econtwitter #REStud

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Cities surrounded by expensive farmland are denser and agricultural productivity growth has lowered urban density over time in France. Our multi-region structural change framework can explain it.

New paper by Coeurdacier, @teignier & @FlorianOswald

https://www.restud.com/structural-change-land-use-and-urban-expansion/

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