Abstract Using a global dyadic panel from 1950 to 2021, we find a positive association between arms transfers from an exporter to an importer and general goods exports to that partner. The effects are short‐run: export responses peak around the transfer and fade within a few years. The arms‐trade linkage is smaller among highly institutionalized, high‐income partnerships and larger where security and commerce are more tightly bundled, especially in dyads linked by overseas military presence. Consistent with a political‐alignment channel, arms transfers are followed by lower United Nations voting disagreement. The associated trade increase does not reflect a symmetric improvement in relations.
Abstract We study whether awareness of monitoring or study participation affects racial discrimination. Online participants rated résumés signaling either a Black or White candidate under Control, Monitoring, and Experiment conditions. Across conditions, we unexpectedly find a small average preference for Black résumés, possibly reflecting temporarily heightened racial awareness. The Control condition exhibits greater racial bias in both directions. This pattern suggests that monitoring and awareness of being studied can suppress discriminatory behavior. The findings underscore the importance of credible cover stories in discrimination experiments and indicate that subtle accountability cues may reduce bias in evaluative settings such as hiring.
Abstract We examine whether law school alumni relationships between lawyers and judges are correlated with case outcomes. We show that, in the context of medical malpractice lawsuits filed in Florida, having a plaintiff's attorney who attended the same law school as a randomly assigned judge increases the chances of recovery by about 2 percentage points. We further show that the effect is more pronounced between lawyers and judges with a larger age gap, consistent with an age‐dependent effect. Our results suggest that case outcomes can be biased when lawyers and judges are part of the same affinity group.
This paper investigates how supply disruptions and economic slack affect the responsiveness of inflation to changes in aggregate demand. We propose and estimate a nonlinear Phillips curve, whereby the sensitivity of inflation to changes in demand varies with supply conditions and the amount of slack in the economy. We find evidence that supply disruptions and low unemployment both steepen the Phillips curve, thereby amplifying the inflationary effects of increased demand. Our results suggest that the effects of fiscal policy on inflation depend on the prevailing supply conditions and the level of unemployment in the economy.
This paper studies the impact of proxy advisors on shareholder decision-making. We posit two assumptions: (i) the board is at least as well informed as any individual shareholder; (ii) shareholders can condition their information acquisition on the proxy advisor's (PA) recommendation. If only (i) holds, shareholders optimally rubber-stamp the board's proposal and do not invest in private research. If (ii) additionally holds, disagreement between the board and the PA can trigger private information acquisition by some shareholders. We identify the conditions under which this mechanism restores value-of-information logic and improves the informational quality of shareholder voting outcomes.
Abstract We study the effects of horizontal mergers on product quality in a bilateral bargaining environment. In our model, a competition‐reducing merger reduces equilibrium quality as long as the buyer's marginal rate of substitution of quality for price declines with price, holding quality constant. This condition is closely related to quality being a normal good. This result holds when price and quality are jointly negotiated, and it extends to a sequential setting in which sellers first choose quality and then bargain with buyers over price. We discuss applications to procurement and healthcare markets, as well as several extensions.
This mixed-method study undertakes a comprehensive inquiry of the public discourse on social media surrounding quantitative easing (QE) across the US, the UK, and the European Union. Utilizing a unique tweet dataset, we reveal the sentiment polarity toward QE policy to be strongly negative, at 71.27%, with positive sentiment a mere 4.25%. Distilling the negative QE sentiment, we identify prominent themes of "anti-government," "anti-central bank," "inequality," "ineffectiveness," "inflation," and "asset inflation," and demonstrate a longitudinal association between perceived inequality and asset price inflation with an anti-establishment stance. We conclude with suggested central bank policy recommendations to restore and foster public trust.
We examine whether providing free school meals to all students causes changes in out-of-school suspensions for schools adopting those policies in the United States. Using updated data and modern difference-in-differences methods that account for staggered adoption, we show suspensions fall by approximately 10% in elementary schools and 6% in middle and high schools, with larger effects in schools that previously served fewer students eligible for free and reduced-price meals in preadoption periods. These findings contrast with earlier null results, primarily due to better methods that account for staggered program adoption as opposed to the updated dataset.
Emerging market and developing economies (EMDEs) can significantly improve their tax-to-GDP ratios by expanding the tax base and strengthening institutional quality. This paper develops a neoclassical growth model with heterogeneous agents- Ricardian and non-Ricardian households-to examine fiscal capacity using a Laffer curve framework. It highlights two key constraints in EMDEs: a large untaxed population-including exempt and informally employed individuals, and institutional weakness reflected in tax evasion, poor audits, and weak compliance norms. Non-Ricardians are untaxed; Ricardians may evade or pay taxes. Results show that raising tax rates alone is ineffective; broader compliance, limited exemptions, and institutional reforms are essential.
This paper examines the economic impact of intellectual property rights in the context of complementary vertical innovation by firms in upstream and downstream industries. Empirical patterns suggest that industry downstreamness is associated with a greater relative importance of patents versus trade secrecy in firm appropriation strategies. Using a novel model of endogenous growth, I show that strengthening patent protection generates downstream-biased technical change in most cases. The corresponding reallocation of resources creates distributional effects from patent policy that existing analysis do not account for. I examine the impact of these effects on economic growth, welfare, and optimal patent policy.
This paper provides a theoretical analysis of salary history bans, which prohibit firms from inquiring about applicants' prior wages. When salary histories are banned, firms cannot tailor their wage offers to the applicants' prior wages and thus offer the same wage to each group of workers. While this benefits relatively low earners, the wage gap between groups may widen. Salary history bans also affect (young) workers' behavior in initial negotiations, where they act less aggressively and demand lower wages. Finally, salary history bans are shown to reduce worker turnover, but to increase the hiring of younger workers.
This study develops an open economy version of the health deficit model to examine how rising health expenditures affect international capital flows, external balances, and welfare. The government issues bonds in international capital markets, linking health policy to international financial dynamics. Calibrated to the UK, the model evaluates income growth, medical innovation, and population aging shocks under balanced budget and deficit spending regimes. Results show that the source of health spending growth determines the direction of capital flows, and that deficit-financed health spending generally yields higher welfare by enabling additional health investment without higher domestic taxation.
This study systematically evaluates forecasting performance of 11 Dynamic Stochastic General Equilibrium (DSGE) and 2 Bayesian Vector Autoregression (BVAR) models during recessions and expansions in the US and the euro area. Results show that no single model dominates: parsimonious models perform well in stable periods and at short horizons, while richer DSGE specifications with financial frictions, flexible inflation targeting, or labor market dynamics improve forecasts during recessions. BVARs excel in interest rate forecasting, especially in expansions. Crisis-specific extensions, such as COVID-related shocks, yield temporary gains. Forecast accuracy depends on the economic state, variable, horizon, and evaluation metric, underscoring the need for a diversified, context-dependent modeling toolkit.
We examine whether a uniform monetary policy effectively addresses diverse state-level economic conditions in the U.S. Using quarterly data from 1989 to 2017 for 33 states, we construct state-optimal interest rates based on Taylor rule frameworks incorporating local inflation and unemployment gaps. Deviations from the federal funds rate are large, persistent, and cluster regionally. Local projections show that a 1 pp positive deviation is associated with a 0.6 pp decline in headline inflation and an increase in unemployment, with the strongest effects in non-tradable sectors. State-specific deviation shocks elicit larger and longer-lasting responses than aggregate shocks, underscoring the importance of cross-sectional heterogeneity.
Asymmetric punishment of partners in crime, intended to incentivize whistle-blowing, may increase detection and deterrence. The idea is age-old but its use against corruption is not frequent. We study a 1997 Chinese reform that strengthened such asymmetries for some forms of bribery. Using a game-theoretic model and prosecution data, we show that combining leniency for both bribe-givers and bribe-takers can backfire by weakening incentives to report, and document a sharp decline in corruption prosecutions after the reform. Our findings suggest that the reform may have reflected increased tolerance for small bribes, and draw lessons for the design of anti-corruption policies.
We find that Dutch disease effects on unemployment are small even in a commodity-rich economy like Australia. Using an estimated open-economy model with frictional unemployment, we quantify how business-cycle shocks and structural changes shape aggregate unemployment. A permanent rise in commodity prices in the 2000s appreciated the real exchange rate and temporarily increased unemployment, but its effect was offset by a gradual, secular decline in the disutility of work in the non-tradable sector, a key driver of long-run structural change. Shifting preferences toward non-tradables, together with non-commodity shocks, account for most of the observed unemployment dynamics.
Does the gender composition of high school peers affect whether students pursue a science, technology, engineering, and mathematics (STEM) major at university? Using administrative data from British Columbia, Canada, I exploit idiosyncratic within-school variation in gender composition. I find that having larger proportions of female peers has large and strong effects on students' STEM major choice. Such effects differ in both sign and magnitude across gender, high school type, and stage of high school education.
Which fundraising strategy is more effective and how donation behavior changes with different monetary amounts are still open questions. This study compares the effectiveness of two fundraising strategies-suggested donation and social information-and examines how different monetary amounts affect donation behavior. We implemented a field experiment on voluntary donations among visitors to a national park. Both fundraising strategies affect donation behavior. However, the donation pattern differs significantly depending on the monetary amounts shown. Our findings provide important insights for designing fundraising campaigns and show how suggested donation and social information affect economic behavior.
We assume that lottery participants are poor relative to their target income. Reference dependence with loss aversion can render the marginal utility of income non-monotonic in line with the Friedman-Savage hypothesis. As a result, lottery participation can be rationalized without invoking probability weighting. The theoretical implications align with recent empirical evidence on lottery spending.
This paper studies the revenue-maximizing selling mechanism with a continuum of buyers who have two-dimensional private information: valuation and entry cost. Using optimal control methods, we solve this two-dimensional screening problem with endogenous entry and derive sufficient conditions under which the optimal mechanism is a posted price. These conditions reduce the original problem to a one-dimensional one in which a buyer's type is net valuation, and the optimal posted price matches that of the transformed environment. Finally, under mild conditions, revenue maximization implies underselling relative to the efficient allocation.
