International Economic Review最新文献

We study information design in a single-agent allocation problem with costly verification, where the principal has a positive reservation value. The agent learns privately a signal about the principal's allocation value, drawn from a distribution controlled by an information designer. Given the signal distribution, the principal designs a mechanism to maximize her net value. We show that the agent-optimal information pools high values at a signal just worth verification, whereas the principal-optimal information features full disclosure. Moreover, any agent-optimal information is principal-worst, despite their partially aligned interests and the absence of transfers.

What is the role of production networks in inducing self-fulfilling business cycles? We construct a multisector business cycle model that features both input–output linkages and credit constraints. Our theoretical framework demonstrates that a single aggregate financial multiplier is sufficient to characterize equilibrium determinacy, which hinges on the network structure. By quantitatively assessing the possibility of indeterminate equilibria in the United States from 2000 to 2020, we discover that the economy was prone to self-fulfilling fluctuations in the period of pre-2007.

I examine how migration frictions shape the effects of trade policy by analyzing the impact of tariff reductions on labor allocation in China and the role of hukou-based migration frictions. Trade liberalization induces significant labor reallocation, greater in regions with lower hukou frictions. Quantitatively, trade liberalization increases China's welfare by 0.72%. Abolishing the hukou system directly improves welfare by 1.75% but reduces gains from tariff reductions by 18% and amplifies negative distributional effects. In the process, I develop a novel measure of hukou-related migration frictions.

Wage transparency rules arguably enable workers better to assess their contribution to firm value, allowing them to make wage demands that more accurately reflect their value for the employing firm. This article contains a formal analysis of transparency rules and their effects on wages and the payoffs of the targeted workers. We find that these rules induce firms to behave strategically with the aim of manipulating the information workers receive. We identify a large class of rules that yield an identical equilibrium outcome. For productivity distributions with decreasing (increasing) hazard rate, transparency rules increase (potentially decrease) workers' payoffs.

This article studies information manipulation during a democratic election. In our model, candidates manipulate public signals about their welfare impact, and a fraction of the electorate naively ignores manipulation. We derive three main findings. First, information manipulation is detrimental to candidate selection and aggravates the dispersion of political attitudes. Second, both educating voters and creating institutions to eliminate false information may involve a trade-off between improving candidate selection and aggravating the dispersion of political attitudes. Third, if and only if the share of naive voters is sufficiently large, information manipulation and the dispersion of political attitudes are mutually reinforcing.

I develop a general equilibrium model to explore heterogeneous bank liquidity management. Smaller banks, driven by stronger precautionary motives, tend to accumulate capital and liquidity buffers, rendering them less susceptible to liquidity risk than larger banks. Whereas negative productivity shocks affect all banks' loans similarly, liquidity shocks result in lending responses that vary by bank size. Mapping the model to panel data, I argue that initially, liquidity shocks were the primary driver of the Great Recession, followed by negative demand shocks that accounted for approximately 60% of the recession's greatest fall in aggregate loans.

Privacy protection is among the key features to consider in the design of central bank digital currency (CBDC). Using a nationally representative sample of over 3,500 participants, we conduct a randomized online survey experiment to examine how the willingness to use CBDC as a means of payment varies with the degree of privacy protection and information provision on the privacy benefits of using CBDC. We find that both factors significantly increase participants’ willingness to use CBDC by up to 64% when purchasing privacy-sensitive products. Our findings provide useful insights regarding the design and the public's adoption of CBDC.

Using a unique microaggregated data set on firm-level productivity in 13 countries from 1995 to 2014, this article provides new evidence on technology- and knowledge-diffusion barriers for laggard firms. We show that, although the least productive firms benefit from a catch-up effect, their speed of catchup is lower in digital- and skill-intensive industries. This is especially true in countries with high skill mismatch, high financing frictions, and low absorptive capacity. These barriers to diffusion, combined with the rising importance of tacit knowledge and intangibles, could help explain the productivity growth slowdown observed in the last decades.

Integration agreements (IAs) are contracts between the employment agency and the unemployed, nudging the latter to comply with rules on search behavior. We designed and implemented a randomized controlled trial involving thousands of newly unemployed workers, randomizing at the individual level both the timing of the IA and whether it is announced in advance. Administrative records provide outcomes. Novel theoretical and methodological insights provide tools to detect anticipation and suggest estimation by individual baseline employability. The positive effect on entering employment is driven by individuals with adverse prospects. For them, early IA increase reemployment within a year from 53% to 61%.

We present a macro view of China's financial system where a monopolistic banking sector coexists endogenously with bonds and private loans. In equilibrium smaller firms raise finance from private lending, larger firms through bank loans, and the largest by issuing bonds. The model predicts that expanding credit supply increases bank loans but reduces bond finance and private lending, in absolute terms and relative to total credit. In addition, removing the interest rate ceiling on bank lending—a recent reform in China—induces larger loans and higher lending rates, lowering the share of bank loans in total credit. Empirical evidence is presented to support these predictions.