Pre-production Papers

The following papers, listed alphabetically by the first author's last name, have been accepted for publication in JEEA, and can be downloaded in in the EEA membership log in area. 

Absenteeism, Productivity, and Relational Contracts Inside the Firm

Achyuta Adhvaryu
, Jean-François Gauthier, Anant Nyshadham
, Jorge Tamayo

We study relational contracts among managers using unique data that tracks transfers of workers across teams in Indian ready-made garment factories. We focus on how relational contracts help managers cope with worker absenteeism shocks, which are frequent, often large, weakly correlated across teams, and which substantially reduce team productivity.

Cardinal Sins? Conspicuous Consumption, Cardinal Status and Inequality

Ed Hopkins

This paper analyzes the social dilemma arising when a large population of individuals with differing incomes have concerns over relative deprivation in terms of visible or conspicuous consumption. These relative concerns are cardinal - people care about the size of the gap between own and others’ consumption - and include inequity aversion, where negative comparisons are more important than positive, rivalrous preferences, and comparison with mean consumption.

Downside and Upside Uncertainty Shocks

Mario Forni, 
Luca Gambetti
, Luca Sala

An increase in uncertainty is not contractionary per se. What is contractionary is a widening of the left tail of the GDP growth forecast distribution, the downside uncertainty. On the contrary, an increase of the right tail, the upside uncertainty, is mildly expansionary.

Immigration and Business Dynamics: Evidence from U.S. Firms

Parag Mahajan

This paper studies the impact of immigration on U.S. local business dynamics using a comprehensive collection of survey and administrative data. It finds heterogeneous impacts across the employer productivity distribution that favor higher-productivity firms and lead to increases in average local earnings.

Make Hay while the Sun Shines: An Empirical Study of Maximum Price, Regret and Trading Decisions

Julia Brettschneider, 
Giovanni Burro
, Vicky Henderson

Time-constant trading thresholds are optimal for a large class of preferences and asset price dynamics, including Expected Utility and the S-shaped reference-dependent utility of Prospect Theory. Such thresholds imply selling stocks at the maximum price since purchase. We use a large discount brokerage dataset containing US households’ trading records between 1991 and 1996 to document that in 31.6% of cases the stocks sold for a gain are sold on the day when the maximum since purchase occurs.

Risk Gravity

Luciana Juvenal, Paulo Santos Monteiro

We consider the canonical trade model with heterogeneous firms, love for variety and trade costs, and integrate it in the consumption CAPM model. This yields a structural gravity equation that includes an additional factor related to risk premia. Empirical evidence based on firm-level data confirms the importance of cross-sectional heterogeneity in risk and time-varying risk premia to shape bilateral trade flows.

Smart Cap

Larry Karp
, Christian Traeger

Policymakers’ imperfect knowledge about firms’ abatement costs leads to inefficient regulation, reducing the welfare gains from carbon markets around the world. We introduce a “smart” cap and trade system that eliminates these costs. This cap responds endogenously to technology or macroeconomic shocks, relying on the market price of certificates to aggregate information.

Strategic Fertility, Education Choices, and Conflicts in Deeply Divided Societies

Emeline Bezin
, Bastien Chabé-Ferret
, David de la Croix

Fertility becomes a strategic choice for minorities when having a larger share of the population helps to increase power. If parents invest resources to educate their children, raising fertility for strategic reasons might be at the cost of future human capital. We dispel this view using census data from several developing countries. We show that religious and ethnic minorities in Indonesia, China and Malaysia tend to invest more in both education and fertility compared to larger groups.

The Effectiveness of Environmental Provisions in Regional Trade Agreements

Ryan Abman, 
Clark Lundberg, 
Michele Ruta

Trade liberalization can spur environmental degradation. Concerns over these adverse impacts have led to a debate over the need for environmental provisions in regional trade agreements (RTAs), however the effectiveness of such provisions is unknown. In this paper, we provide new plausibly causal evidence that environmental provisions are effective in limiting deforestation following the entry into force of RTAs.