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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A Model of Online Misinformation

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.

Endogenous Uncertainty and Credit Crunches

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

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.

Bargaining as a Struggle Between Competing Attempts at Commitment

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.

How Credit Constraints Impact Job Finding Rates, Sorting & Aggregate Output

Kyle Herkenhoff, Gordon Phillips, and Ethan Cohen-Cole

How do consumer credit markets affect the allocation of workers to firms, output, and labor productivity? We address this question in two steps. First, we use new microdata to estimate empirical elasticities of job search patterns to credit. Second, we estimate our novel theory of sorting under risk aversion to match these elasticities, and then we conduct aggregate counterfactuals.

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A new paper by @THEdanjlewis & Mertens makes the Stock-Yogo test for weak instruments with multiple HAC robust endogenous regressors, propose tests for bias in a single coefficients, and extend to test general rank deficiency in the first stage

https://www.restud.com/a-robust-test-for-weak-instruments-for-2sls-with-multiple-endogenous-regressors/

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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.

https://www.restud.com/firm-quality-dynamics-and-the-slippery-slope-of-credit-intervention/

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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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https://www.restud.com/choice-and-opportunity-costs/

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