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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Revisiting Event Study Designs: Robust and Efficient Estimation

Kirill Borusyak, Xavier Jaravel, and Jann Spiess

We develop a framework for difference-in-differences designs with staggered treatment adoption and heterogeneous causal effects. We show that conventional regression-based estimators fail to provide unbiased estimates of relevant estimands absent strong restrictions on treatment-effect homogeneity. We then derive the efficient estimator addressing this challenge, which takes an intuitive “imputation” form when treatment-effect heterogeneity is unrestricted. We characterize the asymptotic behavior of the estimator, propose tools for inference, and develop tests for identifying assumptions.

Information and Bargaining through Agents: Experimental Evidence from Mexico’s Labor Courts

Joyce Sadka, Enrique Seira, and Christopher Woodruff

Well-functioning courts are essential for the health of both financial and real economies. Courts function poorly in most lower-income countries, but the root causes of poor performance are not well understood. We use field experiments with ongoing cases to analyze sources of dysfunction in Mexico’s largest labor court. We provide parties with personalized predictions for case outcomes and show that this information nearly doubles settlement rates and reduces average case duration.

Granular Search, Market Structure, and Wages

Gregor Jarosch, Jan Sebastian Nimczik, and Isaac Sorkin

We develop a model of size-based market power in a frictional labor market. In the canonical search environment, competition for workers is encoded in outside options. In our granular setting, large employers remove their own job postings from their workers’ outside option. Thus, size gives market power and a more concentrated market structure depresses wages because it reduces competition for workers.

Strategic Foundations of Efficient Rational Expectations

Paulo Barelli, Srihari Govindan, and Robert Wilson

We study an economy with traders whose payoffs are quasilinear and whose private signals are informative about an unobserved state parameter. The limit economy has infinitely many traders partitioned into a finite set of symmetry classes called types. Market mechanisms in a class that includes auctions yield the same outcome as the Walrasian rational expectations equilibrium if and only if the efficient allocation has a monotonicity property. Examples illustrate cases where they differ. Monotonicity restricts the heterogeneity among traders’ types.

Measuring Diffusion over a Large Network

Xiaoqi He and Kyungchul Song

This paper introduces a measure of the diffusion of binary outcomes over a large, sparse network, when the diffusion is observed in two time periods. The measure captures the aggregated spillover effect of the state-switches in the initial period on their neighbors’ outcomes in the second period. This paper introduces a causal network that captures the causal connections among the cross-sectional units over the two periods. It shows that when the researcher’s observed network contains the causal network as a subgraph, the measure of diffusion is identified as a simple, spatio-temporal dependence measure of observed outcomes.

Migration and the Value of Social Networks

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.

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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

https://www.restud.com/latent-heterogeneity-in-the-marginal-propensity-to-consume/
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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."

New paper by @PaolaManzini, @MarcoMa75263273 & @ulkulev

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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/

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