This paper examines how politically connected firms shape housing supply in U.S. cities. Using new data on campaign donations to U.S. mayors and a regression discontinuity design, I present three findings. First, developers connected to the mayor sell more new housing units. Second, more sales of new housing by connected developers coincide with higher local housing supply: cities where mayors received more developer donations issue nearly 70 percent more permits for new housing units. Third, differences in mayors’ pre-existing policy stances—rather than connections to developers—is a quantitatively larger determinant of local housing supply.

Since the term structure of interest rates embodies information about future economic activity, we extract relative Nelson-Siegel (1987) factors from cross-country yield curve differences to proxy expected movements in future exchange rate fundamentals. Using monthly data for the United Kingdom, Canada, Japan, and the United States, we show that the yield curve factors predict exchange rate movements and explain excess currency returns one month to two years ahead. Our results provide support for the asset pricing formulation of exchange rate determination and offer an intuitive explanation to the uncovered interest parity puzzle by relating currency risk premiums to inflation and business cycle risks.

We examine price negotiation in the payment card industry by exploiting a unique merchant-, industry-, and city-level data set. Motivated by the substantial variation in acquirer fees and heterogeneous merchant card transactions, we use Nash bargaining to model the negotiation over the acquirer fee between an acquirer and a merchant. We find that the merchants secure a larger incremental surplus than the acquirer on average. Moreover, merchants might face upward pressure on acquirer fees as the card penetration rate rises over time, and policies that weaken the acquirer's bargaining power could relieve the upward fee pressure.

We investigate how the presence of a college affects local educational attainment. As counterfactuals for current college locations, we use historical “runner-up” locations that were strongly considered to become college sites but were ultimately not chosen. We find that winning counties today have college degree attainment rates 56% higher than runner-up counties and more private-sector employment in human-capital-intensive industries. These effects are not driven primarily by recent in-migration of educated adults, and alternative public investments did not have similar effects on local educational attainment. The results indicate that colleges played an important role in shaping long-run local outcomes.

A substantial proportion of individuals who complete the widely used multiple price list (MPL) instrument switch back and forth between the safe and the risky choice columns, behavior that is believed to indicate low-quality decision making. We develop a conceptual framework to formally define decision-making quality, test explanations for the nature of low-quality decision making, and introduce a novel “nudge” treatment that reduced multiple switching behavior and increased decision-making quality. We find evidence in support of task-specific miscomprehension of the MPL and that non-multiple switchers and relatively high-cognitive-ability individuals are not immune to low-quality decision making.

We propose a Cramér–von Mises–type test for testing whether the mean potential outcome given a specific treatment level has a weakly monotonic relationship with the continuous treatment under unconfoundedness. To flexibly control for a possibly high-dimensional set of covariates, our test is based on a double debiased machine learning method. We show that our test controls asymptotic size and is consistent against any fixed alternative. We apply our test to evaluate the Job Corps program and reject a weakly negative relationship between the treatment (hours in academic and vocational training) and labor market performance among relatively low treatment values.

This paper examines why credit constraints for domestic and exporting firms arise in a setting where banks do not observe firms' productivities. To maintain incentive compatibility, banks lend below the amount that firms need for optimal production. The longer time needed for export shipments induces a tighter credit constraint on exporters than on purely domestic firms. In our application to Chinese firms, we find that the credit constraint is more stringent as a firm's export share grows, as the time to ship for exports is lengthened, and as there is greater dispersion of firms' productivities, reflecting more incomplete information.

We highlight a lesser-known consequence of China’s integration into the world economy: the rise of services trade. We demonstrate how the United States’ trade deficit in goods cycles back as a surplus in U.S. exports of education services. Focusing on China’s accession to the World Trade Organization, we show that Chinese cities more exposed to trade liberalization sent more students to U.S. universities. Growth in housing income and wealth allowed Chinese families to afford U.S. tuition, and more students financed their studies using personal funds. Our estimates suggest that recent trade wars could cost U.S. universities around $1.1 billion in annual tuition revenue.