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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U.S. Market Concentration and Import Competition

Mary Amiti and Sebastian Heise

Many studies have documented that the sales concentration of U.S. producers has risen in recent decades. In this paper, we show that this increase was accompanied by more entry and growth of foreign competitors. Using confidential census data covering the universe of all firm sales in the U.S. manufacturing sector, we find that rising import competition increased concentration among U.S. firms by reallocating sales from smaller to larger U.S. firms and by causing firm exit. However, this increase in production concentration was counteracted by the expansion of foreign firms, which reduced domestic firms’ share of the U.S. market inclusive of foreign firms’ sales.

Structural Change, Elite Capitalism, and the Emergence of Labor Emancipation

Quamrul H. Ashraf, Francesco Cinnirella, Oded Galor, Boris Gershman, and Erik Hornung

This study argues that the decline of coercive labor institutions over the course of industrialization was partly driven by complementarity between physical capital and effective labor in manufacturing. Given the difficulty of extracting labor effort in care-intensive industrial tasks through monitoring and punishment, capital-owning elites ultimately chose to emancipate workers to induce their supply of effective labor and, thus, boost the return to physical capital. This hypothesis is empirically examined in the context of serf emancipation in nineteenth-century Prussia.

Wage Risk and Government and Spousal Insurance

Mariacristina De Nardi, Giulio Fella, and Gonzalo Paz-Pardo

The extent to which households can self-insure depends on family structure and wage risk. We calibrate a model of couples and singles’ savings and labor supply under two types of wage processes. The first wage process is the canonical—age-independent, linear—one that is typically used to evaluate government insurance provision. The second wage process is a flexible one. We use our model to evaluate the optimal mix of the two most common types of means-tested benefits—in-work versus income floor.

Policy Targeting under Network Interference

Davide Viviano

This paper studies the problem of optimally allocating treatments in the presence of spillover effects, using information from a (quasi-)experiment. I introduce a method that maximizes the sample analog of average social welfare when spillovers occur. I construct semi-parametric welfare estimators with known and unknown propensity scores and cast the optimization problem into a mixed-integer linear program, which can be solved using off-the-shelf algorithms. I derive a strong set of guarantees on regret, i.e., the difference between the maximum attainable welfare and the welfare evaluated at the estimated policy.

Shallow Meritocracy

Peter Andre

Meritocracies aspire to reward hard work and promise not to judge individuals by the circumstances into which they were born. However, circumstances often shape the choice to work hard. I show that people’s merit judgments are “shallow” and insensitive to this effect. They hold others responsible for their choices, even if these choices have been shaped by unequal circumstances. In an experiment, US participants judge how much money workers deserve for the effort they exert. Unequal circumstances disadvantage some workers and discourage them from working hard. Nonetheless, participants reward the effort of disadvantaged and advantaged workers identically, regardless of the circumstances under which choices are made.

Dynamic Perturbation

Alessandro Mennuni, Juan Rubio-Ramirez, and Serhiy Stepanchuk

We present a novel algorithm called Dynamic Perturbation for solving large-scale macroeconomic models. Our approach involves computing first-order Taylor expansions of the policy functions along the entire equilibrium path. This method applies to a wide range of models and offers significantly higher accuracy than traditional perturbation approaches. Remarkably, even when utilizing first-order approximations, our method can effectively handle models with strong nonlinearities and occasionally binding constraints, such as the zero lower bound.

Interview Sequences and the Formation of Subjective Assessments

Jonas Radbruch and Amelie Schiprowski

Interviewing is a decisive stage of most processes that match candidates to firms and organizations. This paper studies how and why a candidate’s interview outcome depends on the other candidates interviewed by the same evaluator. We use large-scale data from high-stakes admission and hiring processes, where candidates are quasi-randomly assigned to evaluators and time slots. We find that the individual assessment decreases as the quality of other candidates assigned to the same evaluator increases. The influence of the previous candidate stands out, leading to a negative autocorrelation in evaluators’ votes of up to 40% and distorting final admission and hiring decisions.

The Macroeconomics of Supply Chain Disruptions

Daron Acemoglu and Alireza Tahbaz-Salehi

This paper develops a model to study the macroeconomic implications of supply chain disruptions with three key ingredients: (i) a firm-level network of customized supplier-customer links that generate relationship-specific productivity gains; (ii) bargaining over these relationship-specific surpluses; and (iii) an extensive margin of adjustment, whereby firms decide to form or sever relations with suppliers and customers.

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New paper by @pilossopher, @davide_melc & Lewis estimates the distribution of spending responses to stimulus payments. MPCs are heterogeneous, with observables explaining 8% of the variation, highlighting the crucial role of latent heterogeneity

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New paper, "Firm Quality Dynamics and the Slippery Slope of Credit Intervention" by @wenhaoli111 & Li shows that direct government and central bank lending can distort firm quality and fuel future interventions.

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"We show how opportunity costs, a core economic concept, can explain seemingly non-rational behaviour (like cyclical choices) within a preference-maximising framework."

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

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