Knowledge that Transforms

Frölich (2004) compares the finite sample properties of reweighting and matching estimators of average treatment effects and concludes that reweighting performs far worse than even the simplest matching estimator. We argue that this conclusion is unjustified. Neither approach dominates the other uniformly across data-generating processes (DGPs). Expanding on Frölich's analysis, this paper analyzes empirical as well as hypothetical DGPs and also examines the effect of misspecification. We conclude that reweighting is competitive with the most effective matching estimators when overlap is good, but that matching may be more effective when overlap is sufficiently poor.

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 test the hypothesis that information and communication technologies (ICT) polarize labor markets by increasing demand for the highly educated at the expense of the middle educated, with little effect on low-educated workers. Using data on the United States, Japan, and nine European countries from 1980 to 2004, we find that industries with faster ICT growth shifted demand from middle-educated workers to highly educated workers, consistent with ICT-based polarization. Trade openness is also associated with polarization, but this is not robust to controlling for R&D. Technologies account for up to a quarter of the growth in demand for highly educated workers.

This report is confined to those items likely

The committee held the third Conference on Teaching and Research in Economic Education (CTREE) at the Renaissance Hotel in Chicago, IL, May 29–31, 2013. The program committee of Tisha Emerson (Chair), KimMarie McGoldrick, and Steven Cobb performed substantial work and put together an exemplary program. The third conference continued successes of the first two CTREE conferences. Four plenary speakers addressed the conference: Derek Neal (Chicago), John List (Chicago), Spencer Krane (Federal Reserve Bank of Chicago), and Justin Wolfers (Michigan). The conference also held a special morning presentation by Myles Boylan of the National Science Foundation. The title of the presentation was “NSF Funding Opportunities for Economic Education Research and Improvement.” The special NSF and plenary sessions were all well attended and received. The Chicago Federal Reserve hosted a dinner and a plenary talk from Spencer Krane of the Chicago Federal Reserve Bank. The Chicago Fed also provided a tour of their money museum to interested conference attendees. Cindy IvanacLillig and other staff of the Chicago Fed provided their time and resources to make this possible. Gail Hoyt worked with AEA staff to coordinate the presence of publishers at the conference. In addition to plenary sessions, 64 papers were presented at 21 sessions, and 5 panel discussions and 2 “how-to-do-it” workshops were offered. Registration for the conference was 290, about a 12 percent increase from the year before. The fourth conference will be May 28–30, 2014 at the Washington, DC, Marriott at Metro Center. The conference will feature plenary talks from Cecilia Rouse (Princeton), Alan Blinder (Princeton), and Ken Elzinga (Virginia). The Board of Governors of the Federal Reserve has committed to providing a speaker, but the speaker has not yet been identified. The Journal of Economic Education remains a co-sponsor of the conference. Those presenting papers were again given the opportunity to submit their papers from the conference for possible Committee on Economic Education

This year marked the twenty-seventh volume of the Journal of Economic Perspectives. Throughout its history, the Journal has sought to contribute to the economics profession along multiple dimensions: introducing readers to state-of-the-art thinking on theoretical and empirical research topics; encouraging cross-fertilization of ideas among the fields of economics; providing analyses of public policy issues; providing readings for students; offering illustrations that are useful in lectures; sparking discussion among colleagues; suggesting directions for future research; and analyzing features of the economics profession itself