A growing number of countries have established programs to attract immigrants who can contribute to their economy. Research suggests that an immigrant's initial arrival location plays a key role in shaping their economic success. Yet immigrants currently lack access to personalized information that would help them identify optimal destinations. Instead, they often rely on availability heuristics, which can lead to the selection of sub-optimal landing locations, lower earnings, elevated outmigration rates, and concentration in the most well-known locations.
One of the most puzzling findings in asset pricing is that expected returns dominate variation in the dividend-to-price ratio, leaving little room for dividend growth rates. Even more puzzling is that this dominance only emerged after 1945. We develop a present value model to argue that a general increase in equity duration can explain these findings. As cash flows to investors accrue further into the future, shocks to highly persistent expected returns become relatively more important than shocks to growth rates.
We establish an impossibility result for New Keynesian models with a frictionless labor market: these models cannot simultaneously match plausible estimates of marginal propensities to consume (MPCs), marginal propensities to earn (MPEs), and fiscal multipliers. A HANK model with sticky wages provides a solution to this trilemma.
Standard mortgage contracts include periodic debt repayment plans (amortization schedules) designed to build-up illiquid savings in the form of home equity, which can be substantial even from a macroeconomic standpoint. For example, U.S. households invest hundreds of ($) billions each year in mortgage amortization plans – comparable in size to pension program contributions. We provide the first empirical evidence on the causal effects of mortgage amortization on wealth accumulation. Ex-ante, effects are unclear.
This paper empirically examines recently declassified tariff bargaining data from the GATT/WTO. Focusing on the Torquay Round (1950–1951), we document stylized facts about these interconnected high-stakes international negotiations that suggest a lack of strategic behavior among the participating governments and an important multilateral element to the bilateral bargains.
We develop a model of financial crises with both a financial amplification mechanism, via frictional intermediation, and a role for sentiment, via time-varying beliefs about an illiquidity state. We confront the model with data on credit spreads, equity prices, credit, and output across the financial crisis cycle. In particular, we ask the model to match data on the frothy pre-crisis behavior of asset markets and credit, the sharp transition to a crisis where asset values fall, disintermediation occurs and output falls, and the post-crisis period characterized by a slow recovery in output.
The recent digitization of complete count census data is an extraordinary opportunity for social scientists to create large longitudinal datasets by linking individuals from one census to another or from other sources to the census. We evaluate different automated methods for record linkage, performing a series of comparisons across methods and against hand linking. We have three main findings that lead us to conclude that automated methods perform well. First, a number of automated methods generate very low (less than 5%) false positive rates.
We study a program that funded 39,000 Jewish households in New York City to leave enclave neighborhoods circa 1910. Compared to their neighbors with the same occupation and income score at baseline, program participants earned 4 percent more ten years after removal, and these gains persisted to the next generation. Men who left enclaves also married spouses with less Jewish names, but they did not choose less Jewish names for their children. Gains were largest for men who spent more years outside of an enclave.
Slavery, colonialism and emancipation are important aspects of archaeological research in the Atlantic region, but the lifeways of colonial populations remain understudied in the Indian Ocean World. Here, we help to redress this imbalance by undertaking stable isotope analysis (C, N and O) on human remains from Mauritius, a location which played an important role in the movement of people across the Indian Ocean and beyond.
Dutch-Caribbean plantations attracted substantial outside funding in the 1760s. This came to an abrupt end after the 1773 credit crisis. We use one banker’s detailed archives to analyze how bankers and investors were initially able to overcome asymmetric information problems, and why the system eventually broke down. Bankers oversaw plantations’ cash flows and placed debt with investors in the form of mortgage-backed securities. Strong growth led to lax screening and an oversupply of credit. After a fall in commodity prices, plantation debts were unsustainable.
Political scientists have increasingly deployed conjoint survey experiments to understand multi-dimensional choices in various settings. We begin with a general framework for analyzing voter preferences in multi-attribute elections using conjoints. With this framework, we demonstrate that the Average Marginal Component Effect (AMCE) is well-defined in terms of individual preferences and represents a central quantity of interest to empirical scholars of elections: the effect of a change in an attribute on a candidate or party's expected vote share.
We document that, in the early twentieth century, children of immigrants who were given more-foreign first names completed fewer years of schooling, earned less, and married less assimilated spouses. However, we find few differences in the adult outcomes of brothers with more/less foreign-sounding first names. This pattern suggests that the negative association between ethnic names and adult outcomes in this era does not stem from discrimination on the basis of first names but instead reflects household differences associated with cultural assimilation.
Where does the state come from? Two canonical answers have been interstate wars and contracts between rulers and the ruled in the early modern period. New scholarship has pushed back the historical origins of the European state to the Middle Ages, and focused on domestic institutions such as parliaments, universities, the law, inheritance rules, and cities. It has left open questions of the causes of territorial fragmentation, the structural similarities in state administrations, and the policy preoccupations of the state.
A weasel word is a term used in academic or political discourse whose meaning is so imprecise or badly defined that it impedes the formulation of coherent thought on the subject to which it is applied, or leads to unsubstantiated conclusions. In this symposium we consider several key terms central to the study of postcommunist politics and discuss the extent to which they fall into this category. The terms discussed here include regime terminology, the notion of postcommunism, the geographic entity “Eurasia,” socialism, populism, and neoliberalism.
This paper uses a Lagrangian approach to provide sufficient conditions under which money burning expenditures are used in an optimal delegation contract. For comparison, we also establish simple sufficient conditions for the optimality of a cap allocation under a restricted set of preferences for a benchmark setting in which money burning is not allowed. We also apply our findings to a model of cooperation and to a model with quadratic preferences and families of distribution functions. In addition, we provide several comparative statics results.
What explains the sharp divide in European public attitudes toward Grexit? We explore this question using original surveys from four of the largest European economies. We contend that differences in economic self-interest, and the often-mentioned chasm between supporters of mainstream and extremist parties, provide little insight into the public divide over Grexit. Instead, we show that the key factor is the split between the left and the right. We then develop and test a set of theoretical explanations for the prominence of this cleavage.
Conjoint experiments enjoy increasing popularity in political and social science, but there is a paucity of research on respondents' underlying decision-making processes. We leverage eye-tracking methodology and a conjoint experiment, administered to a subject pool consisting of university students and local community members, to examine how respondents process information when completing conjoint surveys. Our study has two main findings.
We study the impact of marital property legislation passed in the US South in the 1840s on households’ investment in risky, entrepreneurial projects. These laws protected the assets of newly married women from creditors in a world of virtually unlimited liability. We compare couples married after the passage of a marital property law with couples from the same state who were married before. Consistent with a simple model of household borrowing that trades off agency costs against risk sharing, the effect on investment was heterogeneous.
Using millions of historical census records and modern birth certificates, we document that immigrants assimilated into US society at similar rates in the past and present. We measure cultural assimilation as immigrants giving their children less foreign names after spending more time in the United States, and show that immigrants erase about one-half of the naming gap with natives after 20 years both historically and today. Immigrants from poorer countries choose more foreign names upon first arrival in both periods but are among the fastest to shift toward native-sounding names.