A Fast Literature Search Engine based on top-quality journals, by Dr. Mingze Gao.

• Alessandria, G., Kaboski, J. P., & Midrigan, V. (2010). Inventories, Lumpy Trade, and Large Devaluations. American Economic Review, 100, 2304–2339.

  We document that delivery lags and transaction-level economics of scale matter for international trade, leading importers to import infrequently and hold additional inventory. In a model with these frictions calibrated to empirical measures of inventory and trade lumpiness, these frictions have a large (20 percent) tariff equivalent, mostly due to inventory carrying costs. These frictions also alter the dynamics of imports and prices. Consistent with evidence from large devaluation episodes in six developing economies, following terms-of-trade and interest rate shocks, the model generates a short-term implosion of imports and a gradual increase in the retail price of imports. (JEL D92, F14, G31, L81, M11)

  View on www.aeaweb.org
• Algan, Y., & Cahuc, P. (2010). Inherited Trust and Growth. American Economic Review, 100, 2060–2092.

  This paper develops a new method to uncover the causal effect of trust on economic growth by focusing on the inherited component of trust and its time variation. We show that inherited trust of descendants of US immigrants is significantly influenced by the country of origin and the timing of arrival of their forebears. We thus use the inherited trust of descendants of US immigrants as a time-varying measure of inherited trust in their country of origin. This strategy allows to identify the sizeable causal impact of inherited trust on worldwide growth during the twentieth century by controlling for country fixed effects. (JEL N11, N12, N31, N32, O47, Z13)

  View on www.aeaweb.org
• Anderson, J. E., & Yotov, Y. V. (2010). The Changing Incidence of Geography. American Economic Review, 100, 2157–2186.

  The incidence of bilateral trade costs is calculated here using neglected properties of the structural gravity model, disaggregated by commodity and region, and re-aggregated into forms useful for economic geography. For Canada's provinces, 1992-2003, sellers' incidence is on average some five times higher than buyers' incidence. Sellers' incidence falls over time due to specialization, despite constant gravity coefficients. This previously unrecognized globalizing force drives big reductions in "constructed home bias," the disproportionate predicted share of local trade; and large but varying gains in real GDP. (JEL F11, F14, R12)

  View on www.aeaweb.org
• Apesteguia, J., & Palacios-Huerta, I. (2010). Psychological Pressure in Competitive Environments: Evidence from a Randomized Natural Experiment. American Economic Review, 100, 2548–2564.

  Emotions can have important effects on performance and socioeconomic outcomes. We study a natural experiment where two teams of professionals compete in a tournament taking turns in a sequence. As the sequential order is determined by the random outcome of a coin flip, the treatment and control groups are determined via explicit randomization. Hence, absent any psychological effects, both teams should have the same probability of winning. Yet, we find a systematic first-mover advantage. Further, professionals are self-aware of their own psychological effects and, when given the chance, they rationally react by systematically taking advantage of these effects. (JEL C93, D03, D82, L83)

  View on www.aeaweb.org
• Ashraf, N., Berry, J., & Shapiro, J. M. (2010). Can Higher Prices Stimulate Product Use? Evidence from a Field Experiment in Zambia. American Economic Review, 100, 2383–2413.

  The controversy over how much to charge for health products in the developing world rests, in part, on whether higher prices can increase use, either by targeting distribution to high-use households (a screening effect), or by stimulating use psychologically through a sunk-cost effect. We develop a methodology for separating these two effects. We implement the methodology in a field experiment in Zambia using door-to-door marketing of a home water purification solution. We find evidence of economically important screening effects. By contrast, we find no consistent evidence of sunk-cost effects. (JEL C93, D12, I11, M31, O12)

  View on www.aeaweb.org
• Avery, C., & Levin, J. (2010). Early Admissions at Selective Colleges. American Economic Review, 100, 2125–2156.

  Early admissions are widely used by selective colleges and universities. We identify some basic facts about early admissions policies, including the admissions advantage enjoyed by early applicants and patterns in application behavior, and propose a game-theoretic model that matches these facts. The key feature of the model is that colleges want to admit students who are enthusiastic about attending, and early admissions programs give students an opportunity to signal this enthusiasm. (JEL C78, I23)

  View on www.aeaweb.org
• Becker, S. O., & Muendler, M.-A. (2010). Margins of Multinational Labor Substitution. American Economic Review, 100, 1999–2030.

  Employment at a multinational enterprise (MNE) responds to wages at the extensive margin, when an MNE enters a foreign location, and at the intensive margin, when an MNE operates existing affiliates. We present an MNE model and conditions for parametric and nonparametric identification. Prior studies rarely found wages to affect MNE employment. Our integrated approach documents salient labor substitution for German manufacturing MNEs and removes bias. In Central and Eastern Europe, most employment responds at the extensive margin, while in Western Europe the extensive margin accounts for around two-thirds of employment shifts. At distant locations, MNEs respond to wages only at the extensive margin. (JEL F23, J23, J31, R32)

  View on www.aeaweb.org
• Cabrales, A., Miniaci, R., Piovesan, M., & Ponti, G. (2010). Social Preferences and Strategic Uncertainty: An Experiment on Markets and Contracts. American Economic Review, 100, 2261–2278.

  This paper reports a three-phase experiment on a stylized labor market. In the first two phases, agents face simple games, which we use to estimate subjects' social and reciprocity concerns. In the last phase, four principals compete by offering agents a contract from a fixed menu. Then, agents "choose to work" for a principal by selecting one of the available contracts. We find that (i) (heterogeneous) social preferences are significant determinants of choices, (ii) for both principals and agents, strategic uncertainty aversion is a stronger determinant of choices than fairness, and (iii) agents display a marked propensity to work for principals with similar distributional concerns. (JEL D82, D86, J41)

  View on www.aeaweb.org
• Chakraborty, A., & Harbaugh, R. (2010). Persuasion by Cheap Talk. American Economic Review, 100, 2361–2382.

  We consider the credibility, persuasiveness, and informativeness of multidimensional cheap talk by an expert to a decision maker. We find that an expert with state-independent preferences can always make credible comparative statements that trade off the expert's incentive to exaggerate on each dimension. Such communication benefits the expert–cheap talk is "persuasive"–if her preferences are quasiconvex. Communication benefits a decision maker by allowing for a more informed decision, but strategic interactions between multiple decision makers can reverse this gain. We apply these results to topics including product recommendations, voting, auction disclosure, and advertising. (JEL D44, D72, D82, D83, M37)

  View on www.aeaweb.org
• Chone, P., & Laroque, G. (2010). Negative Marginal Tax Rates and Heterogeneity. American Economic Review, 100, 2532–2547.

  Heterogeneity is an important determinant of the shape of optimal tax schemes. This is shown here in a model a la Mirrlees. The agents differ in their productivities and opportunity costs of work, but their labor supplies depend only on a given unidimensional combination of these two characteristics. Conditions are provided under which marginal tax rates are everywhere nonnegative. This is the case when work opportunity costs are distributed independently of income. But one can also get negative marginal tax rates, in particular at the bottom of the income distribution. A numerical illustration is given, based on UK data. (JEL H21, H24, H31, J22)

  View on www.aeaweb.org