{"title":"Liquidity Constraints, Income Variance, and Buffer Stock Savings: Experimental Evidence","authors":"John Duffy, Andreas Orland","doi":"10.1111/iere.12784","DOIUrl":"https://doi.org/10.1111/iere.12784","url":null,"abstract":"<p>We test the buffer stock model of savings behavior using a three-period intertemporal model. In one treatment, liquidity in the second period is constrained (borrowing not possible), while the unconstrained treatment has no such constraint. The buffer stock model predicts that a second-period liquidity constraint increases first-period savings. We also vary the variance of stochastic income (high or low) in a <span></span><math>\u0000 <semantics>\u0000 <mrow>\u0000 <mn>2</mn>\u0000 <mo>×</mo>\u0000 <mn>2</mn>\u0000 </mrow>\u0000 <annotation>$2 times 2$</annotation>\u0000 </semantics></math> design. While we find no evidence for the predicted liquidity constraint effect, most other predictions hold, for example, income variance effects. Observed departures can be explained by some combination of debt aversion, cognitive heterogeneity, and/or learning.</p>","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"66 3","pages":"1153-1174"},"PeriodicalIF":1.3,"publicationDate":"2025-06-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/iere.12784","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145228076","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Recombinant Innovation, Novel Ideas, and the Start of Nobel Prize–Winning Work","authors":"John C. Ham, Brian Quistorff, Bruce A. Weinberg","doi":"10.1111/iere.12768","DOIUrl":"https://doi.org/10.1111/iere.12768","url":null,"abstract":"<div>\u0000 \u0000 <p>We draw on a recombinant view of innovation, where being in a new location and/or multiple locations leads to exposure to novel combinations of ideas that increase the creativity of top scientists. Using a rich, unique data set we helped assemble, we estimate the empirical relationship between being in a new location and/or multiple locations and the expected interval before an eventual Nobel laureate (ENL) commences their prize-winning work. We find that being in a new location and in multiple locations are substantially and significantly associated with a shorter expected interval before ENLs commence their prize-winning work.</p>\u0000 </div>","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"66 2","pages":"965-979"},"PeriodicalIF":1.5,"publicationDate":"2025-05-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143950138","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Francesco Agostinelli, Morteza Saharkhiz, Matthew Wiswall
{"title":"Home and School in the Development of Children","authors":"Francesco Agostinelli, Morteza Saharkhiz, Matthew Wiswall","doi":"10.1111/iere.12774","DOIUrl":"https://doi.org/10.1111/iere.12774","url":null,"abstract":"<p>We develop an empirical framework integrating Child Development and Education Production Function literature. It accounts for classroom and parental influences, skill measurement issues, and cognitive/noncognitive interactions. Both home and school investments shape children's skills by kindergarten, with low-skill children benefiting most from improvements. While classrooms are generally more productive, reducing disparities in home investments is more effective in closing income-related skill gaps. This stems from greater inequality in home investments than in school quality across socioeconomic groups.</p>","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"66 2","pages":"527-566"},"PeriodicalIF":1.5,"publicationDate":"2025-04-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/iere.12774","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143950219","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Consumer Bankruptcy, Mortgage Default, and Labor Supply","authors":"Wenli Li, Costas Meghir, Florian Oswald","doi":"10.1111/iere.12771","DOIUrl":"https://doi.org/10.1111/iere.12771","url":null,"abstract":"<p>We specify and estimate a life-cycle model of consumption, housing demand, and labor supply in an environment where individuals can file for bankruptcy and/or default on their mortgages in the presence of house price shock, income shock, and catastrophic expenditure events. A key feature of the model is that individuals differ by education, which dictates their income process and preference. We estimate the model using data on credit reports and mortgages combined with Census data. Our model demonstrates that current bankruptcy and foreclosure laws have significant distributional impact. Specifically, Chapter 7 bankruptcy benefits low educated individuals but imposes large welfare costs on those with high education. Chapter 13 bankruptcy also benefits the low education group and affects the high education group little. Recourse laws, by contrast, are costly to low education groups, but beneficial to the high education group.</p>","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"66 3","pages":"1019-1042"},"PeriodicalIF":1.3,"publicationDate":"2025-04-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/iere.12771","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145228115","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Sovereign Spreads and the Political Leaning of Nations","authors":"Johnny Cotoc, Alok Johri, César Sosa-Padilla","doi":"10.1111/iere.12767","DOIUrl":"https://doi.org/10.1111/iere.12767","url":null,"abstract":"<div>\u0000 \u0000 <p>Nations with a higher propensity to elect left governments tend to pay higher and more volatile sovereign spreads. We build a sovereign default model with elections between left and right policymakers. Reelection probabilities increase with government spending, with the left having a small advantage (consistent with the data). We use variation in “election efficiency” to create model economies that elect the left more (left leaning) or less frequently (right leaning) in equilibrium. The left-leaning economy has a higher reluctance for fiscal austerity than the right-leaning economy, chooses higher government spending, and faces higher spreads, resulting in lower welfare.</p></div>","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"66 2","pages":"687-709"},"PeriodicalIF":1.5,"publicationDate":"2025-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143950002","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Optimal Taxation of Capital in the Presence of Declining Labor Share","authors":"Orhan Erem Atesagaoglu, Hakki Yazici","doi":"10.1111/iere.12766","DOIUrl":"https://doi.org/10.1111/iere.12766","url":null,"abstract":"<p>We analyze the implications of the decline in labor's share in national income for optimal Ramsey taxation. It is optimal to accompany the decline in labor share by raising capital taxes only if the labor share is falling because of a decline in competition or other mechanisms that raise the share of pure profits. This result holds under various alternative institutional arrangements that are relevant for optimal taxation of capital income. A quantitative application to the US economy shows that soaring profit shares since the 1980s can justify a significantly increasing path of capital income taxes.</p>","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"66 3","pages":"1079-1097"},"PeriodicalIF":1.3,"publicationDate":"2025-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/iere.12766","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145228235","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Yifan Gong, Todd Stinebrickner, Ralph Stinebrickner, Yuxi Yao
{"title":"The Role of Nonpecuniary Considerations: Location Decisions of College Graduates From Low-Income Backgrounds","authors":"Yifan Gong, Todd Stinebrickner, Ralph Stinebrickner, Yuxi Yao","doi":"10.1111/iere.12763","DOIUrl":"https://doi.org/10.1111/iere.12763","url":null,"abstract":"<p>We examine the initial postcollege geographic location decisions of students from low-income backgrounds, focusing on the role of nonpecuniary considerations. Novel survey questions, in the spirit of the contingent valuation approach, allow us to characterize the full nonpecuniary benefits of each relevant location in dollar equivalents. Supplementing data on perceived location choice probabilities and wage expectations with our nonpecuniary measures allows us to estimate a stylized location choice model and obtain a comprehensive understanding of the importance of pecuniary and nonpecuniary factors. We also combine the nonpecuniary measures with realized location and earnings outcomes to characterize inequality in overall welfare.</p>","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"66 2","pages":"903-931"},"PeriodicalIF":1.5,"publicationDate":"2025-03-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/iere.12763","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143950220","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Political Economy of School Finance Systems With Endogenous State and Local Tax Policies","authors":"Stephen Calabrese, Dennis Epple, Richard Romano","doi":"10.1111/iere.12762","DOIUrl":"https://doi.org/10.1111/iere.12762","url":null,"abstract":"<div>\u0000 \u0000 <p>Beginning in the 1970s, many state courts declared the widespread inequality in education spending across schools a violation of their state's constitution. Funding systems then emerged providing differing approaches to state and local support of education. We develop a theoretical framework and characterize outcomes under alternative systems. Our framework has voting over policies in both state and local elections. A counterpart computational model compares equilibrium outcomes under the alternative school finance systems and examines across state differences in expenditures. The model predicts that voters prefer systems with mixed state and local finance with designs mirroring those observed in practice.</p>\u0000 </div>","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"66 3","pages":"1363-1389"},"PeriodicalIF":1.3,"publicationDate":"2025-03-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145228231","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}