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

• Deb, R., Pai, M. M., & Said, M. (2018). Evaluating Strategic Forecasters. American Economic Review, 108, 3057–3103.

  Motivated by the question of how one should evaluate professional election forecasters, we study a novel dynamic mechanism design problem without transfers. A principal who wishes to hire only high-quality forecasters is faced with an agent of unknown quality. The agent privately observes signals about a publicly observable future event, and may strategically misrepresent information to inflate the principal's perception of his quality. We show that the optimal deterministic mechanism is simple and easy to implement in practice: it evaluates a single, optimally timed prediction. We study the generality of this result and its robustness to randomization and noncommitment.

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• Fafchamps, M., & Shrinivas, A. (2018). Testing Efficient Risk Sharing with Heterogeneous Risk Preferences: Comment. American Economic Review, 108, 3104–3113.

  Mazzocco and Saini (2012) propose and implement a test of efficient risk sharing that allows for preference heterogeneity. They motivate their approach as yielding different results from those of standard efficiency test with homogeneous preferences. We show that the standard efficiency test results are misreported in their paper and that the correctly reported results do not present as compelling a case for the importance of accounting for heterogeneous preferences.

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• Kuziemko, I., & Washington, E. (2018). Why Did the Democrats Lose the South? Bringing New Data to an Old Debate. American Economic Review, 108, 2830–2867.

  A long-standing debate in political economy is whether voters are driven primarily by economic self-interest or by less pecuniary motives like ethnocentrism. Using newly available data, we reexamine one of the largest partisan shifts in a modern democracy: Southern whites' exodus from the Democratic Party. We show that defection among racially conservative whites explains the entire decline from 1958 to 1980. Racial attitudes also predict whites' earlier partisan shifts. Relative to recent work, we find a much larger role for racial views and essentially no role for income growth or (non-race-related) policy preferences in explaining why Democrats "lost" the South.

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• Mazzocco, M., & Saini, S. (2018). Testing Efficient Risk Sharing with Heterogeneous Risk Preferences: Reply. American Economic Review, 108, 3114–3115.
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• Powell, D., & Seabury, S. (2018). Medical Care Spending and Labor Market Outcomes: Evidence from Workers’ Compensation Reforms. American Economic Review, 108, 2995–3027.

  Medical care represents an important component of workers' compensation benefits with the potential to improve health and post- injury labor outcomes, but little is known about the relationship between medical care spending and the labor outcomes of injured workers. We exploit the 2003–2004 California workers' compensation reforms which reduced medical spending disproportionately for workers incurring low back injuries. We link administrative claims data to earnings records for injured workers and their uninjured coworkers. We find that workers with low back injuries experienced a 7.6% post-reform decline in medical care, and an 8.1% drop in post-injury earnings relative to other injured workers.

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• Wolitzky, A. (2018). Learning from Others’ Outcomes. American Economic Review, 108, 2763–2801.

  I develop a simple model of social learning in which players observe others' outcomes but not their actions. A continuum of players arrives continuously over time, and each player chooses once-and-for-all between a safe action (which succeeds with known probability) and a risky action (which succeeds with fixed but unknown probability, depending on the state of the world). The actions also differ in their costs. Before choosing, a player observes the outcomes of K earlier players. There is always an equilibrium in which success is more likely in the good state, and this alignment property holds whenever the initial generation of players is not well-informed about the state. In the case of an outcome-improving innovation (where the risky action may yield a higher probability of success), players take the correct action as K → ∞. In the case of a cost-saving innovation (where the risky action involves saving a cost but accepting a lower probability of success), inefficiency persists as K → ∞ in any aligned equilibrium. Whether inefficiency takes the form of under-adoption or over-adoption also depends on the nature of the innovation. Convergence of the population to equilibrium may be non-monotone.

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• Angeletos, G.-M., & Lian, C. (2018). Forward Guidance without Common Knowledge. American Economic Review, 108, 2477–2512.

  How does the economy respond to news about future policies or future fundamentals? Standard practice assumes that agents have common knowledge of such news and face no uncertainty about how others will respond. Relaxing this assumption attenuates the general-equilibrium effects of news and rationalizes a form of myopia at the aggregate level. We establish these insights within a class of games which nests, but is not limited to, the New Keynesian model. Our results help resolve the forward-guidance puzzle, offer a rationale for the front-loading of fiscal stimuli, and illustrate more broadly the fragility of predictions that rest on long series of forward-looking feedback loops.

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• Antecol, H., Bedard, K., & Stearns, J. (2018). Equal but Inequitable: Who Benefits from Gender-Neutral Tenure Clock Stopping Policies? American Economic Review, 108, 2420–2441.

  Many skilled professional occupations are characterized by an early period of intensive skill accumulation and career establishment. Examples include law firm associates, surgical residents, and untenured faculty at research-intensive universities. High female exit rates are sometimes blamed on the inability of new mothers to survive the sustained negative productivity shock associated with childbearing and early childrearing in these environments. Gender-neutral family policies have been adopted in some professions in an attempt to "level the playing field." The gender-neutral tenure clock stopping policies adopted by the majority of research-intensive universities in the United States in recent decades are an excellent example. But to date, there is no empirical evidence showing that these policies help women. Using a unique data set on the universe of assistant professor hires at top-50 economics departments from 1980-2005, we show that the adoption of gender-neutral tenure clock stopping policies substantially reduced female tenure rates while substantially increasing male tenure rates. However, these policies do not reduce the probability that either men or women eventually earn tenure in the profession.

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• Beaudry, P., Green, D. A., & Sand, B. M. (2018). In Search of Labor Demand. American Economic Review, 108, 2714–2757.

  We propose and estimate a novel specification of labor demand which encompasses search frictions and the role of entrepreneurs in new firm creation. Using city-industry variation over four decades, we estimate the wage elasticity of employment demand to be close to -1 at the industry-city level and -0.3 at the city level. We argue that the difference between these estimates reflects the congestion externalities predicted by the search literature. Our estimates also indicate that entrepreneurship should be treated as a scarce factor in the determination of labor demand. We use our estimates to evaluate the impact of large changes in the minimum wage on employment.

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• Bianchi, J., Hatchondo, J. C., & Martinez, L. (2018). International Reserves and Rollover Risk. American Economic Review, 108, 2629–2670.

  We study the optimal accumulation of international reserves in a quantitative model of sovereign default with long-term debt and a risk-free asset. Keeping higher levels of reserves provides a hedge against rollover risk, but this is costly because using reserves to pay down debt allows the government to reduce sovereign spreads. Our model, parameterized to mimic salient features of a typical emerging economy, can account for significant holdings of international reserves, and the larger accumulation of both debt and reserves in periods of low spreads and high income. We also show that income windfalls, improved policy frameworks, and an increase in the importance of rollover risk imply increases in the optimal holdings of reserves that are consistent with the upward trend in reserves in emerging economies. It is essential for our results that debt maturity exceeds one period.

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