Knowledge that Transforms

Using daily consumer survey data, we analyze the transmission of gas prices to consumer beliefs and expectations about the economy. We exploit the high frequency and geographic disaggregation of our data set to facilitate identification. Consumer sentiment becomes more pessimistic with rising gas prices. This effect is strongest for consumers who lived through the recessionary oil crises in the 1970s, consistent with models of learning from personal experience. For younger respondents, the sensitivity of sentiment to gas prices is stronger for college-educated respondents. Sensitivity is also higher in states with greater gas expenditures per capita.

This paper identifies the extent to which knowledge from U.S. universities drives industry agglomeration. Establishment-level data indicate faster growth in employment, wages, and corporate innovation after the 1980 Bayh-Dole Act's shock to the spread of innovation from universities in industries more closely related to the nearby university's innovative strengths. Federal research funding amplified the effect. University knowledge spillovers strengthen with geographic proximity, density, and local skills. Consistent with spatial equilibrium models, the growth effect is driven by nearby entry in university-linked industries, especially of multiunit expansions; these firms disproportionately partner with universities in R&D, transfer IP, and innovate.

It is surprisingly difficult to find economic variables that strongly comove with exchange rates, a phenomenon codified in a large literature as “exchange rate disconnect.” We demonstrate that a variety of common proxies for global risk appetite, which did not comove with exchange rates prior to 2007, have provided significant in-sample explanatory power for currencies since then. Furthermore, during the 2007–2012 period, U.S. purchases of foreign bonds were highly correlated with these risk measures and with exchange rates. Our results support the narrative that the U.S. dollar's role as an international and safe-haven currency has surged since the global financial crisis.

What are the medium- to long-term effects of pandemics? Do they differ from other economic disasters? We study major pandemics using rates of return on assets stretching back to the fourteenth century. Significant macroeconomic after-effects of pandemics persist for decades, with rates of return substantially depressed. The responses are in stark contrast to what happens after wars. Our findings also accord with wage and output responses, using more limited data, and are consistent with the neoclassical growth model: capital is destroyed in wars but not in pandemics; pandemics instead may induce more labor scarcity or more precautionary savings, or both.

Previous articleNext article FreeJPE Turnaround TimesPDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreSummary Statistics of Turnaround Times, Current JPE EditorsOutcome of 1st Round DecisionsDays to DecisionMeanMedianDesk Rejection55%76Reject with Reviews40%9282Revise5%125111View Table Image Previous articleNext article DetailsFiguresReferencesCited by Journal of Political Economy Volume 130, Number 12December 2022 Article DOIhttps://doi.org/10.1086/723278 Views: 643Total views on this site © 2022 The University of Chicago. All rights reserved.PDF download Crossref reports no articles citing this article.

Previous articleNext article FreeRecent RefereesPDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreJournal of Political Economy acknowledges the assistance of:Diane AlexanderKartik AthreyaRüdiger BachmannSandeep BaligaMarco BassettoMartin BerajaChristopher BlattmanJörn BoehnkeEsther BolerJohn BoundNina BoyarchenkoMeta BrownDavid ByrneOdilon CâmaraMatteo CamboniFilipe CampanteDavide CantoniLorenzo CasaburiJimmy ChanChaoran ChenYili ChienOlivier CoibionChris ConlonJavier CravinoGordon DahlPedro Dal BóOlivier DarmouniAdrien d’AvernasJoshua DeanTommaso DentiPablo D’ErasmoEllora DerenoncourtErika DeserrannoMark DinceccoTomás Domínguez-IinoJanice EberlyEmre EkıncıRicardo EstradaAndreas FagerengJack FanningBenjamin FeigenbergChaim FershtmanAndrew FosterJane Cooley FruehwirthChao FuJuan Sebastián GalánAlberto GalassoAlex GershkovMichael GerusoMichela GiorcelliVincent GlodeJeff GroggerJessie HandburyBenjamin HébertLeander HeldringDavid HémousJonas HjortMitchell HoffmanAllan HsiaoChong HuangShota IchihashiRyota IijimaAyelet IsraeliKoichiro ItoRuixue JiaYizhou JinÒscar JordàAnne KaringAyca KayaMichael KeaneFuhito KojimaJames KungPablo KurlatDavid LagakosStephan LauermannHongbin LiChen LianZhipeng LiaoErnest LiuCorinne LowAlexey MakarinJohn MaluccioCésar MartinelliCharles MasonLaurent MathevetRory McGeeMoritz Meyer-ter-VehnGuy MichaelsJeanine Miklós-ThalEduardo MonteroEmily MoschiniJack MountjoyRoger MyersonCharles NathansonPaul NovosadJuan OrtnerAleksei OskolkovNitya Pandalai-NayarYoungmin ParkAndreas PeichlLoriana PelizzonJesse PerlaRodrigo PintoEric PlugMattias PolbornJulien PratCanice PrendergastVictoria ProwseNatalia RamondoGautam RaoManaswini RaoStephen ReddingJulian ReifPascual RestrepoAna ReynosoFrédéric Robert-NicoudAlexandra RosatiKjell SalvanesAna Maria SantacreuTodd SchoellmanHannes SchwandtPaul ScottAwa Ambra SeckRajiv SethiBradley SetzlerJoseph ShapiroHenrik SigstadAndrew SimonPablo SlutzkyLones SmithEduardo Souza-RodriguesCarolyn SteinDan StoneMaria Micaela SviatschiBalázs SzentesMatías TapiaMathieu Taschereau-DumouchelNeil ThakralAlexander TorgovitskyDaan van SoestEmil VernerRajiv VohraHans VothLulu WangOlivier WangMichael WeberEyal WinterAlexander WolitzkyMichael WoodfordRandall WrightDavid YangYves ZenouJun ZhangOwen Zidar Previous articleNext article DetailsFiguresReferencesCited by Journal of Political Economy Volume 130, Number 12December 2022 Article DOIhttps://doi.org/10.1086/723419 Views: 234Total views on this site © 2022 The University of Chicago. All rights reserved.PDF download Crossref reports no articles citing this article.

Previous articleNext article FreeJPE Turnaround TimesPDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreSummary Statistics of Turnaround Times, Current JPE Editors Outcome of 1st Round DecisionsDays to Decision MeanMedianDesk Rejection55%76Reject with Reviews40%9282Revise5%125111View Table Image Previous articleNext article DetailsFiguresReferencesCited by Journal of Political Economy Volume 130, Number 11November 2022 Article DOIhttps://doi.org/10.1086/722926 Views: 664Total views on this site © 2022 The University of Chicago. All rights reserved.PDF download Crossref reports no articles citing this article.