In cooperative property rights systems, workers jointly own and manage production, whereas in outside-ownership systems, an owner contracts workers. Despite a rich literature on how the allocation of property rights matters for specialization, efficiency, and equity, little causal evidence exists. During a land reform in El Salvador in 1980, the military government reorganized properties owned by individuals with cumulative landholdings over 500 hectares into cooperatives; properties below this threshold remained as outside-owned properties. Using the discontinuous probability of cooperative formation, I provide evidence on the effects of cooperative property rights relative to outside ownership on specialization, productivity, and worker equity.

We model asset management as a continuum between active and passive: managers can deviate from benchmark indices to exploit noise trader–induced distortions, but agency frictions constrain these deviations. Because constraints force managers to buy assets that they underweight when these assets appreciate, overvalued assets have high volatility, and the risk-return relationship becomes inverted. Distortions are more severe for overvalued assets than for undervalued ones because trading against the former entails more risk and tighter constraints. We provide empirical evidence supporting our model’s main mechanisms. Using the data, we infer the constraints’ tightness and compute a measure of effective arbitrage capital.

A model of banking and means of payment is constructed to analyze the effects of the introduction of central bank digital currency (CBDC). That CBDC is interest bearing is not an advantage, as replacement of physical currency with CBDC does not expand the attainable set of equilibrium allocations. CBDC can increase welfare by competing with private means of payment and shifting safe assets from the private banking sector to what is effectively a narrow banking facility. This uses the aggregate stock of safe collateral more efficiently, given incentive problems in private banking.

Despite substantial evidence that resources and outcomes are transmitted across generations, there has been limited inquiry into the extent to which antipoverty programs actually disrupt the cycle of bad outcomes. We leverage the rollout of the United States’s largest early-childhood program, Head Start, to estimate the effect of early-childhood exposure among mothers on their children’s long-term outcomes. We find evidence of intergenerational transmission of effects in the form of increased educational attainment, reduced teen pregnancy, and reduced criminal engagement in the second generation. These effects correspond to an estimated increase in discounted second-generation wages of 6%–11%, depending on specification. Exploration of earlier outcomes suggests an important role for changes in parenting behavior and potential noncognitive channels.

We investigate how childhood cognitive skills affect strategic sophistication and adult outcomes, and we emphasize the importance of childhood theory of mind. Experimental data show that (i) theory-of-mind ability and cognitive ability both predict level k behavior, (ii) older children respond to information about the cognitive ability of their opponent, and (iii) theory of mind (but not cognitive ability) predicts whether children respond to intentions. Using longitudinal data, we find that childhood theory of mind and cognitive ability are both associated with enhanced adult social skills, higher educational participation, better educational attainment, and lower fertility in young adulthood. Finally, we provide evidence that school spending improves theory of mind.

This paper endogenizes intervention in financial crises as the strategic negotiation between a regulator and creditors of distressed banks. Incentives for banks to contribute to a voluntary bail-in arise from their exposure to financial contagion. In equilibrium, a bail-in is possible only if the regulator’s threat to not bail out insolvent banks is credible. Contrary to models without intervention or with government bailouts only, sparse networks enhance welfare for two main reasons: they improve the credibility of the regulator’s no-bailout threat for large shocks, and they reduce free-riding incentives among bail-in contributors when the threat is credible

Feeding America allocates donated food to over 200 food banks. In 2005, it transitioned from a queueing mechanism to one where food banks use a specialized currency to bid for food. Food banks chose very different food than they received before. Small food banks acquired 72% more pounds per client than large food banks at little nutritional cost. This reallocation of food is estimated to have increased its value by 21%, or $115 million per annum. Food banks also sourced food much closer, saving an additional $16 million per annum. Finally, donations of food rose by over 100 million pounds.

We examine the nature of consumer demand for government-controlled online news outlets in Russia, testing whether such demand reflects a preference for progovernment ideological coverage or other factors unrelated to outlets’ ideological positions. We detect government-sensitive topics and measure outlets’ news-reporting decisions from news article texts, and we estimate a structural model of demand for news, using detailed browsing data that traces individual-level consumption. The average consumer has a distaste for progovernment ideology but a strong, persistent taste for state-owned outlets, primarily driven by third-party referrals and nonsensitive news content. We discuss implications for online media control and media power.

International audience

We use option prices and realized returns to decompose risk premia into different parts of the return state space. In the data, 8/10 of the average equity premium is attributable to monthly returns below −10%, but returns below −30% matter very little. In contrast, prominent asset pricing models based on habits, long-run risks, rare disasters, undiversifiable idiosyncratic risk, and constrained intermediaries attribute the premium predominantly to returns above −10% or to the extreme left tail. We show that the discrepancy arises from an unrealistically small price of risk for stock market tail events in the models.