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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Markups and Inequality

Corina Boar and Virgiliu Midrigan

We characterize optimal product market policy in an unequal economy in which firm ownership is concentrated and markups increase with firm market shares. We study the problem of a utilitarian regulator who designs revenue-neutral interventions in the product market. We show that optimal policy increases product market concentration. This is because policies that encourage larger producers to expand improve allocative efficiency, increase the demand for labor and equilibrium wages.

The Child Penalty Atlas

Henrik Kleven, Camille Landais, and Gabriel Leite Mariante

This paper builds a world atlas of child penalties in employment based on micro data from 134 countries. The estimation of child penalties is based on pseudo-event studies of first child birth using cross-sectional data. The pseudo-event studies are validated against true event studies using panel data for a subset of countries. Most countries display clear and sizable child penalties: men and women follow parallel trends before parenthood, but diverge sharply and persistently after parenthood. While this pattern is pervasive, there is enormous variation in the magnitude of the effects across different regions of the world.

On the family origins of human capital formation: Evidence from donor children

Petter Lundborg, Erik Plug, and Astrid Würtz-Rasmussen

We introduce a novel strategy to study the intergenerational transmission of human capital skills, net of genetic skill transfers. For this purpose, we use unique Danish data on children conceived through sperm and egg donation in IVF treatments to estimate the relationship between child test scores and parental years of schooling. Because the assignment of donors is not selective, these parental schooling estimates allow for a causal nurture interpretation.

Firm Inattention and the Efficacy of Monetary Policy: A Text-Based Approach

Wenting Song and Samuel Stern

This paper provides empirical evidence of the importance of firm attention to macroeconomic dynamics. We construct a text-based measure of attention to macroeconomic news and document that attention is polarized across firms and countercyclical. Differences in attention lead to asymmetric responses to monetary policy: expansionary monetary shocks raise market values of attentive firms more than those of inattentive firms, and contractionary shocks lower values of attentive firms by less.

Standard Errors for Calibrated Parameters

Matthew D. Cocci and Mikkel Plagborg-Møller

Calibration, the practice of choosing the parameters of a structural model to match certain empirical moments, can be viewed as minimum distance estimation. Existing standard error formulas for such estimators require a consistent estimate of the correlation structure of the empirical moments, which is often unavailable in practice. Instead, the variances of the individual empirical moments are usually readily estimable. Using only these variances, we derive conservative standard errors and confidence intervals for the structural parameters that are valid even under the worst-case correlation structure.

Who Bears the Welfare Costs of Monopoly? The Case of the Credit Card Industry

Kyle Herkenhoff and Gajendran Raveendranathan

We measure the distribution of welfare losses from non-competitive behavior in the U.S. credit card industry during the 1970s and 1980s. The early credit card industry was characterized by regional monopolies. Ensuing legal decisions led to competitive reforms that resulted in greater, but still limited, oligopolistic competition. We measure the distributional consequences of these reforms by developing and estimating a heterogeneous agent, defaultable debt framework with oligopolistic lenders.

Moment Conditions for Dynamic Panel Logit Models with Fixed Effects

Bo Honore and Martin Weidner

This paper investigates the construction of moment conditions in discrete choice panel data with individual specific fixed effects. We describe how to systematically explore the existence of moment conditions that do not depend on the fixed effects, and we demonstrate how to construct them when they exist. Our approach is closely related to the numerical “functional differencing” construction in Bonhomme (2012), but our emphasis is to find explicit analytic expressions for the moment functions.

Wealth Taxation and Household Saving: Evidence from Assessment Discontinuities in Norway

Marius A. K. Ring

Neither theory nor existing empirical evidence support the notion that wealth taxation reduces saving. Theoretically, the effect is ambiguous due to opposing income and substitution effects, and empirically, the effect may be masked by misreporting responses. Using geographic discontinuities in the Norwegian annual net-wealth tax and third-party-reported data on savings, I find that wealth taxation causes households to save more. Each additional NOK of wealth tax increases annual net financial saving by 3.76, implying that households increase saving enough to offset both current and future wealth taxes.

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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/

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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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🏠Transaction taxes don’t just cool housing—they reshape it. Same rate, different impact: investors buy more, households less. Result: lower ownership and welfare losses of 111% of tax revenue.

New paper from Han, Ngai & Sheedy:

https://www.restud.com/to-own-or-to-rent-the-effects-of-transaction-taxes-on-housing-markets/

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Slum upgrading is a common policy to help residents, but it can delay redevelopment into formal neighborhoods. Evidence from the largest program highlights the tradeoff: central upgrading can entail long-run opportunity costs.

New paper by Harari & Wong:
https://www.restud.com/slum-upgrading-and-long-run-urban-development-evidence-from-indonesia/

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