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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(Successful) Democracies Breed Their Own Support

Daron Acemoglu, Nicolás Ajzenman, Cevat Giray Aksoy, Martin Fiszbein, and Carlos Molina

Using large-scale survey data covering more than 110 countries and exploiting within-country variation across cohorts and surveys, we show that individuals with longer exposure to democracy display stronger support for democratic institutions, and that this effect is almost entirely driven by exposure to democracies with successful performance in terms of economic growth, control of corruption, peace and political stability, and public goods provision.

A Theory of Socially Responsible Investment

Martin Oehmke and Marcus M. Opp

We characterize the conditions under which a socially responsible (SR) fund induces firms to reduce externalities, even when profit-seeking capital is in perfectly elastic supply. Such impact requires that the SR fund’s mandate permits the fund to trade off financial performance against reductions in social costs — relative to the counterfactual in which the fund does not invest in a given firm. Based on such an impact mandate, we derive the social profitability index (SPI), an investment criterion that characterizes the optimal ranking of impact investments when SR capital is scarce.

Tapping into Talent: Coupling Education and Innovation Policies for Economic Growth

Ufuk Akcigit, Jeremy Pearce, and Marta Prato

How do innovation and education policy affect individual career choices and aggregate productivity? This paper analyzes the effect of R&D subsidies and higher education policy on productivity growth through the supply of innovative talent. We put scarce talent, higher education attainment, and career choice at the center of a new endogenous growth framework with individual-level heterogeneity in talent, financial resources, and preferences. We link the model to micro-level data from Denmark on the backgrounds of who obtains a PhD and becomes an inventor and the outcomes of a set of policy interventions.

Talent, Geography, and Offshore R&D

Jingting Fan

I model and quantify the impact of a new dimension of globalization: offshore R&D. In the model, firms employ researchers across the globe to develop new product blueprints and then engage in offshore production and exporting. Frictions impeding trade and the separation of production from R&D lead to a ‘market-access’ motive for offshore R&D, while cross-country differences in the distributions of firm knowhow and worker ability generate a ‘talent-acquisition’ motive. I discipline the model using empirical facts derived from a new firm-level dataset. Counterfactual experiments show that the two motives can account for a significant portion of the observed offshore R&D.

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.

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"Capital flowed to high-inflation countries during recent surge, worsening the output-inflation tradeoff. Reversing flows would have reduced volatility & tightening needs."

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We are pleased to welcome @andreamoro (Vanderbilt University) as our new Data Editor, effective 1 January 2026. We look forward to collaborating with him in this new role.

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"Free markets failed for 700 years. When poor farmers couldn't pay, a simple quota beat auctions. Sometimes the invisible hand needs handcuffs."

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Patent term boosts long run innovation, but policy anticipation creates surprising, medium term dynamics: innovation rises before expected cuts and remains high due to spillovers.

New paper by @EconFaber:

https://www.restud.com/patent-term-innovation-and-the-role-of-technology-disclosure-externalities/

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