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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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.

Credit Allocation and Macroeconomic Fluctuations

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

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.

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How do currencies become international?

Bahaj & Reis(@R2Rsquared) show that PBoC swap lines boosted RMB use abroad, revealing a policy lever to jumpstart a currency’s international status.

https://www.restud.com/jumpstarting-an-international-currency/

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Editorial update:
Gabriel Chodorow-Reich @gchodorowreich (Harvard University) has stepped down as a Foreign Editor of The Review of Economic Studies. We are grateful to Gabe for his excellent service and contributions to the journal and the REStud Tour.

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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."

New paper by @LouphouC & Bengui:

https://www.restud.com/destabilizing-capital-flows-amid-global-inflation/

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Announcement📢:

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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