Accepted Papers

Migration and the Value of Social Networks

6 December 2023

Joshua E. Blumenstock, Guanghua Chi, and Xu Tan

How do social networks influence the decision to migrate? Prior work suggests two distinct mechanisms that have historically been difficult to differentiate: as a conduit of information, and as a source of social and economic support. We disentangle these mechanisms using a massive ‘digital trace’ dataset that allows us to observe the migration decisions made by millions of individuals over several years, as well as the complete social network of each person in the months before and after migration.

Credit Allocation and Macroeconomic Fluctuations

26 November 2023

Karsten Müller and Emil Verner

We study the relationship between credit expansions, macroeconomic fluctuations, and financial crises using a novel database on the sectoral distribution of private credit for 117 countries since 1940. We document that, during credit booms, credit flows disproportionately to the non-tradable sector. Credit expansions to the non-tradable sector, in turn, systematically predict subsequent growth slowdowns and financial crises. In contrast, credit expansions to the tradable sector are associated with sustained output and productivity growth without a higher risk of a financial crisis.

A Model of Online Misinformation

20 November 2023

Daron Acemoglu, Asuman Ozdaglar, and James Siderius

We present a model of online content sharing where agents sequentially observe an article and decide whether to share it with others. This content may or may not contain misinformation. Each agent starts with an ideological bias and gains utility from positive social media interactions but does not want to be called out for propagating misinformation. We characterize the (Bayesian-Nash) equilibria of this social media game and establish that it exhibits strategic complementarities.

Decomposing Duration Dependence in a Stopping Time Model

20 November 2023

Fernando Alvarez, Katarina Borovickova, and Robert Shimer

We develop an economic model of transitions in and out of employment. Heterogeneous workers switch employment status when the net benefit from working, a Brownian motion with drift, hits optimally-chosen barriers. This implies that the duration of jobless spells for each worker has an inverse Gaussian distribution.

Endogenous Uncertainty and Credit Crunches

20 November 2023

Ludwig Straub and Robert Ulbricht

We develop a theory of endogenous uncertainty in which the ability of investors to learn about firm-level fundamentals is impaired during financial crises. At the same time, higher uncertainty reinforces financial distress. Through this two-way feedback loop, a temporary financial shock can cause a persistent reduction in risky lending, output, and employment that coincides with increased uncertainty, default rates, credit spreads and disagreement among forecasters.

Repayment Flexibility and Risk Taking: Experimental Evidence from Credit Contracts

14 November 2023

Marianna Battaglia, Selim Gulesci, and Andreas Madestam

A widely held view is that small firms in developing countries are prevented from making profitable investments by lack of access to credit and insurance markets. One solution is to provide repayment flexibility in credit contracts. Repayment flexibility eases both the credit constraint, as it allows for increased spending during the startup phase, and offers insurance, in case of fluctuations in income.

Dollar Safety and the Global Financial Cycle

14 November 2023

Zhengyang Jiang, Arvind Krishnamurthy, and Hanno Lustig

We develop a model of the global financial cycle with one key ingredient: the international demand for safe dollar assets. The model matches patterns of dollar borrowing and currency mismatch, the U.S. external balance sheet, exorbitant privilege, spillovers of the U.S. monetary policy to the rest of the world, and the dollar as a global risk factor.

Bargaining as a Struggle Between Competing Attempts at Commitment

29 October 2023

Rohan Dutta

The strategic importance of commitment in bargaining is widely acknowledged. Yet disentangling its role from key features of canonical models, such as proposal power and reputational concerns, is difficult. This paper introduces a model of bargaining with strategic commitment at its core. Following Schelling (1956), commitment ability stems from the costly nature of concession and is endogenously determined by players’ demands.

The Review of Economic Studies Follow

The official account of the Review of Economic Studies, one of the world's top economics journals.

.@lindaawuu and coauthor study two estate tax reforms in Taiwan and find quick and asymmetric responses. Reported estates are more elastic to tax hikes than tax cuts. 👇

12/13

Reply on Twitter 1958996136070717593 Retweet on Twitter 1958996136070717593 3 Like on Twitter 1958996136070717593 14 Twitter 1958996136070717593

*** Meet REStud North American 2025 Tourists! ***

The REStud North American Tour recognizes the most promising graduating doctoral students in economics and finance from European universities, and introduces them and their research to audiences in North America,

🧵

1/13

Reply on Twitter 1958996095968977407 Retweet on Twitter 1958996095968977407 22 Like on Twitter 1958996095968977407 158 Twitter 1958996095968977407

"Sellers often choose sudden, unannounced price drops—unlike standard models with forward-looking, strategic buyers. We show why a seller would prefer this."

Recently accepted to #REStud, from Dilmé and Garrett:

https://www.restud.com/a-dynamic-theory-of-random-price-discounts/

#econtwitter