Knowledge that Transforms

We assess whether men and women are treated differently when presenting their economics research. We collected data across thousands of seminars, job market talks, and conference presentations, leveraging human judgment and audio-processing algorithms to measure the number, tone, and type of interruptions. Within a seminar series, women are interrupted more than men. This holds when controlling for characteristics of the presenter, paper, and audience. Interruptions that are negative in tenor or tone or cut off the presenter mid-sentence increase for women presenters. We also find greater engagement of female audience members with female presenters, suggesting a potential role model effect. (JEL A11, C45, J16, J44)

We argue that consumer credit spreads matter for household choices and that time-varying spreads have important distributional consequences. Studying Danish household data, we show that consumer credit spreads have heterogeneous impact on asset dynamics and consumption choices across the wealth distribution and that time-varying spreads induce a countercyclical marginal propensity to consume. We study a HANK model where banks provide consumer credit and corporate loans. Through countercyclical credit spreads, frictional finance amplifies aggregate shocks and induces consumption inequality. Economies with less leveraged banks experience reduced aggregate volatility but may face higher volatility and lower welfare at the household level. (JEL D12, D31, E12, E21, E32, E52, G51)

We introduce an empirical framework for valuing markets in environmental offsets. Using newly-collected data on wetland conservation and offsets, we apply this framework to evaluate a set of decentralized markets in Florida, where land developers purchase offsets from long-lived producers who restore wetlands over time. We find that offsets led to substantial private gains from trade, creating $2.4 billion of net surplus from 1995–2020 relative to direct conservation. Offset trading also generated new hydrological externalities. A locally differentiated Pigouvian tax would have prevented $1.6 billion of new flood damage while preserving more than two-thirds of the private gains from trade.

Conflict along transportation routes during Somalia’s al-Shabaab insurgency significantly increases maize prices at distant locations, decreasing food security, health, and education. Estimated conflict risk has strong price effects independently of realized conflict, highlighting the importance of safety concerns. A model of least-cost route choice in the presence of conflict reveals that more and shorter alternative routes to circumvent conflict can lower prices but their effectiveness diminishes as violence becomes more correlated across routes. Alternatively, securing key transportation routes would alleviate price increases. A market access approach suggests spatial spillovers of conflict also matter for prices of more general baskets of food and nonfood items. (JEL D74, I15, I25, O15, O17, Q11, R41)

Policy choices often create trade-offs between workers and consumers. I examine how foreign competition alters the consumer welfare and domestic employment effects of mergers. I construct a model incorporating consumer demand, endogenous product portfolios, and employment decisions. Applying the model to Whirlpool’s acquisition of Maytag in the appliance industry, I compare the observed merger to a counterfactual acquisition by a foreign buyer. Although Whirlpool’s acquisition decreased consumer welfare by $271 million annually, it preserved 797 domestic jobs. These jobs must therefore be valued at more than $344, 000 per year for the domestic employment benefits to offset the consumer harm. (JEL E24, F23, G34, J30, L13, L68, R23)

Should optimal income taxation change when firms have market power? We analyze how the planner can optimally tax labor income of workers and profits of entrepreneurs. We derive optimal tax rates that depend on markups and identify four distinct components: the Mirrleesian incentive effect, the Pigouvian tax correction of the negative externality of market power, redistribution through altered factor prices, and reallocation of output toward the most productive firms. We quantify the optimal tax for the US economy and provide concrete proposals how to use income taxation to redistribute income while incentivizing production in the presence of market power. (JEL D24, D31, D43, H21, H23, H24, H25)

We show that bank shocks to firms propagate along the production network with stronger upstream than downstream effects. Our identification relies on (i) administrative datasets from Spain covering supplier-customer transactions and bank loans, (ii) bank credit supply shocks from the global financial crisis, and (iii) a general equilibrium model of a production network with financial frictions, estimated structurally. We find network propagation amplifies the impact of bank shocks on GDP growth by nearly 50 percent. Moreover, bank shocks to firms’ distant suppliers and customers contribute similarly to this aggregate effect as bank shocks to firms’ direct customers and suppliers. (JEL D22, D85, E23, G01, G21, G32, L14)

We provide a model to explain how the interaction between the spot and lending markets for stocks can lead to abrupt changes in short selling activity. Furthermore, rational short sellers may choose to abandon the market even as mispricing widens. We document empirically that the dynamics of short selling are fat tailed and subject to abrupt changes, especially for the stocks that the model identifies as susceptible to such dynamics. (JEL G11, G12, G14, G41)

Modern theories of aggregate supply are built on the foundation that firms set prices and commit to producing whatever the market demands. We remove this strategic restriction and allow firms to choose supply functions, mappings that describe the prices charged at each quantity of production. Theoretically, we characterize firms’ optimal supply function choices in general equilibrium and study the resulting implications for aggregate supply. Aggregate supply flattens under lower inflation uncertainty, higher idiosyncratic demand uncertainty, and less elastic demand. Quantitatively, our theory can rationalize the flattening of aggregate supply during the Great Moderation and steepening during the 1970s and 2020s. (JEL D21, D43, E13, E23, E31, E32)

We study the effects of intensifying competition for contracts in the context of US Defense procurement. Leveraging a discontinuous regulation that mandates agencies to publicize certain contract opportunities, we document that expanding the set of bidders reduces award prices but deteriorates post-award performance in terms of cost overruns and delays. We develop and estimate an auction model with endogenous entry and stochastic execution performance, in which the buyer endogenously chooses the intensity of competition. Model estimates indicate substantial heterogeneity in performance across contractors and show that simple adjustments to the current regulation could provide significant savings in procurement spending. (JEL D22, D24, D44, D82, D86, H56, H57)