Knowledge that Transforms

One of the dangers of high inflation is that it can cause individuals to pay close attention to it. This internalization of inflation can lead to an accelerationist regime, making inflation harder to control. We empirically assess the relationship between attention and inflation for 38 countries. Our measures of attention are constructed from Internet search behavior or the popularity of inflation mentions on Twitter. We find evidence that attention thresholds exist for most of the countries, and that they typically occur between 2% and 4% inflation. We also document interesting variability across countries and find similar thresholds in newspaper coverage of inflation.

This paper exploits the universe of credit- and debit-card transactions in China during 2013–2015 and provides the first nationwide analysis of the health care cost of PM2.5 for a developing country. We leverage spatial spillovers of PM2.5 from long-range transport to generate exogenous variation in local pollution, and we employ a flexible distributed lag model to capture semiparametrically the dynamic response of pollution exposure. We find significant impacts of PM2.5 on health care spending in both the short and medium terms. A 10 μg/m3 decrease in PM2.5 would reduce annual health care spending by over $9.2 billion, about 1.5% of China’s annual health care expenditure.

This paper reports causal evidence on how the extent of hybrid work—the number of days worked from home relative to days worked from office—affects employee attitudes and performance. Workers who spent around two days in the office each week on average self-reported greater work-life balance, more job satisfaction, and lower isolation from colleagues compared to workers who spent more or fewer days in the office. Employees in the intermediate hybrid condition received no different performance ratings compared to peers who spent more or fewer days in the office.

We study treatment-effect estimation using panel data. The treatment may be nonbinary, nonabsorbing, and the outcome may be affected by treatment lags. We make a parallel-trends assumption and propose event-study estimators of the effect of being exposed to a weakly higher treatment dose for ℓ periods. We also propose normalized estimators that estimate a weighted average of the effects of the current treatment and its lags. We also analyze commonly used two-way, fixed-effects regressions. Unlike our estimators, they can be biased in the presence of heterogeneous treatment effects. A local-projection version of those regressions is biased even with homogeneous effects.

We assess the effect of the built environment on low-cost helping behavior toward neighbors. The setting is households in Shanghai, China that, due to rapid development, were involuntarily, i.e. as good as randomly, relocated to different building structures. Using a natural field experiment of misdelivered mail, we test the causal effect of spatial proximity and the built environment on helping behavior. Living one floor apart reduces the willingness to help a neighbor by 16 percentage points, similar to adding one more apartment per floor. Small spatial barriers can profoundly shape social interactions, and helping behavior, in urban settings.

Platform-based information sharing among competing firms presents challenges for antitrust authorities, yet effective remedies remain unclear. Drawing inspiration from the Informed Sources retail gasoline antitrust case, we develop a theoretical model that offers policy guidance for disrupting anticompetitive coordination facilitated through price-sharing platforms. Removing only one firm from a platform may be ineffective for disrupting such coordination. However, competitive benefits can emerge if (i) at least two firms lack platform access, and (ii) the costs of price leadership are sufficiently high. More broadly, coordinating price increases becomes more difficult when multiple firms cannot quickly observe or respond to rivals' prices.

Dispersion in marginal revenue products of capital (MRPK) across firms may lower aggregate productivity through misallocation. Using firm-level panel data from China, I document that MRPK dispersion decreases substantially with firm age, particularly before age five. Building on this novel fact, I propose a new interpretation of MRPK dispersion as resulting from firm life-cycle learning. To formalize this idea, I develop a quantitative model in which firms learn about their fundamental productivity as they age in a frictional market with endogenous exits. I find that omitting learning can result in considerable overestimation of TFP losses from "distortions" .

Adolescents in Sub-Saharan Africa face high rates of intimate partner violence (IPV). This paper evaluates the impact of offering adolescent females a goal-setting inter- vention to improve sexual and reproductive health and offering their male partners a soccer-based intervention, which educates and inspires young men to make better sexual and reproductive health choices. Both interventions significantly reduce female reports of IPV. The soccer intervention improves male attitudes around violence and risky sexual behaviors. Females in the goal setting arm take control of their sexual and reproductive health by exiting violent relationships. Both mechanisms drive reductions in IPV.

The presence of pricing power in housing markets significantly impacts our understanding of the housing supply. It biases estimates of housing production functions, supply elasticities, the effects of land-use policies, and the results of quantitative spatial models. We test for the existence of pricing power in the New York City rental market. Using tax policy changes, we conduct complementary difference-in-differences and instrumental variable analyses. An idiosyncratic increase in a single building's costs leads to a proportional rent increase, holding market-level rents constant. Our findings support the existence of pricing power and challenge the prevailing perfect competition framework.

This study analyzes how multinational enterprises (MNEs) influence corporate labor share in their home countries, using the 2011 Thailand Floods as a natural experiment. Flood-related disruptions to Thai subsidiaries of Japanese MNEs generated a negative foreign productivity shock that raised labor share in Japan. We interpret this pattern using a model with international factor substitution and estimate the elasticity of substitution between domestic labor and foreign inputs using an instrument based on flood exposure. The estimated model quantifies the long-run e!ect of Thai productivity growth on Japan's labor share, indicating that expanding global production networks can shift labor–capital balances.