Martin Ellison, Sang Seok Lee, Kevin Hjortshøj O'Rourke
How did countries recover from the Great Depression? In this paper, we explore the argument that leaving the gold standard helped by boosting inflationary expectations, lowering real interest rates, and stimulating interest-sensitive expenditures. We do so for a sample of 27 countries, using modern nowcasting methods and a new data-set containing more than 230,000 monthly and quarterly observations for over 1,500 variables. In those cases where the departure from gold happened on well-defined dates, inflationary expectations clearly rose in the wake of departure. Instrumental variable, difference-in-difference, and synthetic matching techniques suggest that the relationship is causal. (JEL E31, E32, E42, E43, F30, N10, N20)
{"title":"The Ends of 27 Big Depressions","authors":"Martin Ellison, Sang Seok Lee, Kevin Hjortshøj O'Rourke","doi":"10.1257/aer.20221479","DOIUrl":"https://doi.org/10.1257/aer.20221479","url":null,"abstract":"How did countries recover from the Great Depression? In this paper, we explore the argument that leaving the gold standard helped by boosting inflationary expectations, lowering real interest rates, and stimulating interest-sensitive expenditures. We do so for a sample of 27 countries, using modern nowcasting methods and a new data-set containing more than 230,000 monthly and quarterly observations for over 1,500 variables. In those cases where the departure from gold happened on well-defined dates, inflationary expectations clearly rose in the wake of departure. Instrumental variable, difference-in-difference, and synthetic matching techniques suggest that the relationship is causal. (JEL E31, E32, E42, E43, F30, N10, N20)","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"42 2","pages":""},"PeriodicalIF":10.7,"publicationDate":"2024-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139127977","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
While many real-world principal-agent problems have both moral hazard and adverse selection, existing tools largely analyze only one at a time. Do the insights from the separate analyses survive when the frictions are combined? We develop a simple method—decoupling—to study both problems at once. When decoupling works, everything we know from the separate analyses carries over, but interesting interactions also arise. We provide simple tests for whether decoupling is valid. We develop and numerically implement an algorithm to calculate the decoupled solution and check its validity. We also provide primitives for decoupling to work and analyze several extensions. (JEL D82, D86)
{"title":"Disentangling Moral Hazard and Adverse Selection","authors":"Hector Chade","doi":"10.1257/aer.20220100","DOIUrl":"https://doi.org/10.1257/aer.20220100","url":null,"abstract":"While many real-world principal-agent problems have both moral hazard and adverse selection, existing tools largely analyze only one at a time. Do the insights from the separate analyses survive when the frictions are combined? We develop a simple method—decoupling—to study both problems at once. When decoupling works, everything we know from the separate analyses carries over, but interesting interactions also arise. We provide simple tests for whether decoupling is valid. We develop and numerically implement an algorithm to calculate the decoupled solution and check its validity. We also provide primitives for decoupling to work and analyze several extensions. (JEL D82, D86)","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"28 13","pages":""},"PeriodicalIF":10.7,"publicationDate":"2024-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139126268","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
During World War II, the US government’s Office of Scientific Research and Development (OSRD) supported one of the largest public investments in applied R&D in US history. Using data on all OSRD-funded invention, we show this shock had a formative impact on the US innovation system, catalyzing technology clusters across the country, with accompanying increases in high-tech entrepreneur-ship and employment. These effects persist until at least the 1970s and appear to be driven by agglomerative forces and endogenous growth. In addition to creating technology clusters, wartime R&D permanently changed the trajectory of overall US innovation in the direction of OSRD-funded technologies. (JEL H56, N42, N72, O31, O33, O38, R11)
{"title":"America, Jump-Started: World War II R&D and the Takeoff of the US Innovation System","authors":"D. Gross, B. Sampat","doi":"10.1257/aer.20221365","DOIUrl":"https://doi.org/10.1257/aer.20221365","url":null,"abstract":"During World War II, the US government’s Office of Scientific Research and Development (OSRD) supported one of the largest public investments in applied R&D in US history. Using data on all OSRD-funded invention, we show this shock had a formative impact on the US innovation system, catalyzing technology clusters across the country, with accompanying increases in high-tech entrepreneur-ship and employment. These effects persist until at least the 1970s and appear to be driven by agglomerative forces and endogenous growth. In addition to creating technology clusters, wartime R&D permanently changed the trajectory of overall US innovation in the direction of OSRD-funded technologies. (JEL H56, N42, N72, O31, O33, O38, R11)","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"1057 ","pages":""},"PeriodicalIF":10.7,"publicationDate":"2023-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139019113","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A main focus in economics is how to design optimal policies in second-best situations, which often requires a trade-off between giving some individuals more than they deserve, false positives, and others less than they deserve, false negatives. This paper provides novel evidence on people’s second-best fairness preferences from large-scale experimental studies in the United States and Norway. The majority of people are more concerned with false negatives than with false positives, but we document substantial heterogeneity in second-best fairness preferences between the countries and across the political spectrum. The findings shed light on the political economy of social insurance and redistribution. (JEL D63, D72, D78, H23, I38)
{"title":"Second-Best Fairness: The Trade-Off between False Positives and False Negatives","authors":"A. Cappelen, Cornelius Cappelen, Bertil Tungodden","doi":"10.1257/aer.20211015","DOIUrl":"https://doi.org/10.1257/aer.20211015","url":null,"abstract":"A main focus in economics is how to design optimal policies in second-best situations, which often requires a trade-off between giving some individuals more than they deserve, false positives, and others less than they deserve, false negatives. This paper provides novel evidence on people’s second-best fairness preferences from large-scale experimental studies in the United States and Norway. The majority of people are more concerned with false negatives than with false positives, but we document substantial heterogeneity in second-best fairness preferences between the countries and across the political spectrum. The findings shed light on the political economy of social insurance and redistribution. (JEL D63, D72, D78, H23, I38)","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"29 1","pages":""},"PeriodicalIF":10.7,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84692769","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We analyze the consequences of noisy information aggregation for investment. Market imperfections create endogenous rents that cause overinvestment in upside risks and underinvestment in downside risks. In partial equilibrium, these inefficiencies are particularly severe if upside risks are coupled with easy scalability of investment. In general equilibrium, the shareholders’ collective attempts to boost value of individual firms leads to a novel externality operating through price that amplifies investment distortions with downside risks but offsets distortions with upside risks. (JEL D21, D25, D83, G14, G32, G41)
{"title":"Imperfect Financial Markets and Investment Inefficiencies","authors":"Elı́as Albagli, C. Hellwig, Aleh Tsyvinski","doi":"10.1257/aer.20170725","DOIUrl":"https://doi.org/10.1257/aer.20170725","url":null,"abstract":"We analyze the consequences of noisy information aggregation for investment. Market imperfections create endogenous rents that cause overinvestment in upside risks and underinvestment in downside risks. In partial equilibrium, these inefficiencies are particularly severe if upside risks are coupled with easy scalability of investment. In general equilibrium, the shareholders’ collective attempts to boost value of individual firms leads to a novel externality operating through price that amplifies investment distortions with downside risks but offsets distortions with upside risks. (JEL D21, D25, D83, G14, G32, G41)","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"35 1","pages":""},"PeriodicalIF":10.7,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90591218","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I study the economic value of obesity—a status symbol in poor countries associated with raised health risks. Randomizing decision-makers in Kampala, Uganda to view weight-manipulated portraits, I find that obesity is perceived as a reliable signal of wealth but not of beauty or health. Thus, leveraging a real-stakes experiment involving professional loan officers, I show that being obese facilitates access to credit. The large obesity premium, comparable to raising borrower self-reported earnings by over 60 percent, is driven by asymmetric information and drops significantly when providing more financial information. Notably, obesity benefits and wealth-signaling value are commonly overestimated, suggesting market distortions. (JEL D82, G21, G51, I12, O16, Z13)
{"title":"Worth Your Weight: Experimental Evidence on the Benefits of Obesity in Low-Income Countries","authors":"E. Macchi","doi":"10.1257/aer.20211879","DOIUrl":"https://doi.org/10.1257/aer.20211879","url":null,"abstract":"I study the economic value of obesity—a status symbol in poor countries associated with raised health risks. Randomizing decision-makers in Kampala, Uganda to view weight-manipulated portraits, I find that obesity is perceived as a reliable signal of wealth but not of beauty or health. Thus, leveraging a real-stakes experiment involving professional loan officers, I show that being obese facilitates access to credit. The large obesity premium, comparable to raising borrower self-reported earnings by over 60 percent, is driven by asymmetric information and drops significantly when providing more financial information. Notably, obesity benefits and wealth-signaling value are commonly overestimated, suggesting market distortions. (JEL D82, G21, G51, I12, O16, Z13)","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"36 1","pages":""},"PeriodicalIF":10.7,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83171292","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-08-28eCollection Date: 2024-03-01DOI: 10.1016/j.pld.2023.08.003
Jian-Feng Huang, Clive T Darwell, Yan-Qiong Peng
Hybridization plays a significant role in biological evolution. However, it is not clear whether ecological contingency differentially influences likelihood of hybridization, particularly at ecological margins where parental species may exhibit reduced fitnesses. Moreover, it is unknown whether future ecosystem change will increase the prevalence of hybridization. Ficus heterostyla and F. squamosa are closely related species co-distributed from southern Thailand to southwest China where hybridization, yielding viable seeds, has been documented. As a robust test of ecological factors driving hybridization, we investigated spatial hybridization signatures based on nuclear microsatellites from extensive population sampling across a widespread contact range. Both species showed high population differentiation and strong patterns of isolation by distance. Admixture estimates exposed asymmetric interspecific gene flow. Signatures of hybridization increase significantly towards higher latitude zones, peaking at the northern climatic margins. Geographic variation in reproductive phenology combined with ecologically challenging marginal habitats may promote this phenomenon. Our work is a first systematic evaluation of such patterns in a comprehensive, latitudinally-based clinal context, and indicates that tendency to hybridize appears strongly influenced by environmental conditions. Moreover, that future climate change scenarios will likely alter and possibly augment cases of hybridization at ecosystem scales.
{"title":"Enhanced and asymmetric signatures of hybridization at climatic margins: Evidence from closely related dioecious fig species.","authors":"Jian-Feng Huang, Clive T Darwell, Yan-Qiong Peng","doi":"10.1016/j.pld.2023.08.003","DOIUrl":"10.1016/j.pld.2023.08.003","url":null,"abstract":"<p><p>Hybridization plays a significant role in biological evolution. However, it is not clear whether ecological contingency differentially influences likelihood of hybridization, particularly at ecological margins where parental species may exhibit reduced fitnesses. Moreover, it is unknown whether future ecosystem change will increase the prevalence of hybridization. <i>Ficus heterostyla</i> and <i>F. squamosa</i> are closely related species co-distributed from southern Thailand to southwest China where hybridization, yielding viable seeds, has been documented. As a robust test of ecological factors driving hybridization, we investigated spatial hybridization signatures based on nuclear microsatellites from extensive population sampling across a widespread contact range. Both species showed high population differentiation and strong patterns of isolation by distance. Admixture estimates exposed asymmetric interspecific gene flow. Signatures of hybridization increase significantly towards higher latitude zones, peaking at the northern climatic margins. Geographic variation in reproductive phenology combined with ecologically challenging marginal habitats may promote this phenomenon. Our work is a first systematic evaluation of such patterns in a comprehensive, latitudinally-based clinal context, and indicates that tendency to hybridize appears strongly influenced by environmental conditions. Moreover, that future climate change scenarios will likely alter and possibly augment cases of hybridization at ecosystem scales.</p>","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"106 1","pages":"181-193"},"PeriodicalIF":4.8,"publicationDate":"2023-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.ncbi.nlm.nih.gov/pmc/articles/PMC11128846/pdf/","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88312657","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We examine international regulatory agreements that are negotiated under lobbying pressures from producer groups. The way in which lobbying influences the cooperative setting of regulatory policies, as well as the welfare impacts of international agreements, depend crucially on whether the interests of producers in different countries are aligned or in conflict. The former situation tends to occur for product standards, while the latter tends to occur for process standards. We find that, if producer lobbies are strong enough, agreements on product standards lead to excessive deregulation and decrease welfare, while agreements on process standards tighten regulations and enhance welfare. (JEL F13, F14, F15, L15, L51)
{"title":"The Political Economy of International Regulatory Cooperation","authors":"G. Maggi, Ralph Ossa","doi":"10.1257/aer.20200780","DOIUrl":"https://doi.org/10.1257/aer.20200780","url":null,"abstract":"We examine international regulatory agreements that are negotiated under lobbying pressures from producer groups. The way in which lobbying influences the cooperative setting of regulatory policies, as well as the welfare impacts of international agreements, depend crucially on whether the interests of producers in different countries are aligned or in conflict. The former situation tends to occur for product standards, while the latter tends to occur for process standards. We find that, if producer lobbies are strong enough, agreements on product standards lead to excessive deregulation and decrease welfare, while agreements on process standards tighten regulations and enhance welfare. (JEL F13, F14, F15, L15, L51)","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"84 1","pages":""},"PeriodicalIF":10.7,"publicationDate":"2023-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81766377","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
L. Bach, Antoine Bozio, Arthur Guillouzouic, C. Malgouyres
Boissel and Matray (2022) find that investment increased after 2013 in French firms facing higher dividend taxes. We identify an alteration in the code plotting the event study of the effect of this reform on investment. Using identical data and removing this alteration, we find differential pre-trends between treated and control firms. We also establish that the controls referred to as “size growth,” used in all the difference-in-difference specifications, effectively are controls for lagged investment, i.e., the main outcome variable. Removing such controls attenuates differential pre-trends but leaves no clear event study evidence of a positive effect of dividend taxation on investment. (JEL D22, G31, G35, H25, H32)
{"title":"Dividend Taxes and the Allocation of Capital: Comment","authors":"L. Bach, Antoine Bozio, Arthur Guillouzouic, C. Malgouyres","doi":"10.1257/aer.20221432","DOIUrl":"https://doi.org/10.1257/aer.20221432","url":null,"abstract":"Boissel and Matray (2022) find that investment increased after 2013 in French firms facing higher dividend taxes. We identify an alteration in the code plotting the event study of the effect of this reform on investment. Using identical data and removing this alteration, we find differential pre-trends between treated and control firms. We also establish that the controls referred to as “size growth,” used in all the difference-in-difference specifications, effectively are controls for lagged investment, i.e., the main outcome variable. Removing such controls attenuates differential pre-trends but leaves no clear event study evidence of a positive effect of dividend taxation on investment. (JEL D22, G31, G35, H25, H32)","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"145 1","pages":""},"PeriodicalIF":10.7,"publicationDate":"2023-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79941431","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This notice explains the authors’ reasons for retracting the published paper, Boissel and Matray (2022b). The authors are grateful for the data and code policies at the AER that make it possible to be entirely transparent. The code that accompanies the paper (Boissel and Matray 2022a) fully reproduces all of the published results and had been independently replicated under the AER’s policies prior to publication. The errors described in this notice, which are responsible for the retraction, are visible in that code and were brought to the authors’ attention by Bach et al. (2023). Boissel and Matray (2022b) studied the financial and real effects of a dividend tax policy change on firms in France. It contained four main results: first, firms exposed to the tax hike (treated firms) significantly reduced their dividend payouts; second, the increase in internal liquidity led treated firms to significantly increase their capital and labor; third, treated firms grew in other ways including in their average wages and sales; fourth, the investment effects were larger for firms with more profitable opportunities and with higher marginal product of capital ex ante. The authors are retracting the paper because Figure 4 of the published paper, which pertains to the second result on the increase in investment and which plots the event study difference-in-difference coefficients of the within-firm change in year-to-year investment flows by treated firms, relative to control firms, differs from the figure that was conditionally accepted by the handling editor in two ways. First, the firm size control variable in the conditionally accepted manuscript was coded in changes but was incorrectly written in the baseline specification as levels. This error was caught in the replication process when the data were rebuilt from scratch, and the variable was redescribed accordingly in the paper. This change in the baseline specification was not requested by the handling editor, and the authors did not notify the handling editor nor the data editor of the update. The authors used firm capital as a proxy for firm size so that in practice, the specification controlled for the change in capital, i.e., investment, in the pre-period. The authors regret that they did not recognize the significance of the modification at the time. Second, the code that plots Figure 4 in the publicly available code repository includes an alteration of two coefficients by a factor of 1.8, which was incorrect. This alteration affects the rendering of the figure, but not the underlying data. All the results reported in the tables and other figures are unaffected. The error in the rendering of the figure was not intentional. The data and the code for the analysis
本通知解释了作者撤回已发表论文Boissel and Matray (2022b)的原因。作者对AER的数据和代码策略表示感谢，这使得完全透明成为可能。论文附带的代码(Boissel和Matray 2022a)完全再现了所有已发表的结果，并在发表前根据AER的政策进行了独立复制。本通知中描述的错误是导致撤稿的原因，这些错误在该代码中可见，并且由Bach等人(2023)提请作者注意。Boissel和Matray (2022b)研究了法国股息税政策变化对公司的财务和实际影响。它包含了四个主要结果:首先，受增税影响的公司(被征税的公司)显著减少了派息;第二，内部流动性的增加导致被治疗企业显著增加资本和劳动力;第三，接受治疗的公司以其他方式增长，包括平均工资和销售额;第四，对于盈利机会越多、事前资本边际产出越高的企业，投资效应越大。作者撤回论文的原因是，发表论文的图4与投资增加的第二个结果有关，它绘制了被处理公司相对于控制公司的年度投资流动的公司内部变化的事件研究差异系数，与处理编辑在两个方面有条件地接受的数字不同。首先，在有条件接受的稿件中，公司规模控制变量被编码为变更，但在基线规范中被错误地写为级别。这个错误是在从头开始重建数据的复制过程中发现的，并且在论文中对变量进行了相应的重新描述。基线规范中的此更改不是由处理编辑器请求的，并且作者没有将更新通知处理编辑器或数据编辑器。作者使用公司资本作为公司规模的代理，因此在实践中，该规范控制了资本的变化，即投资，在前期。作者感到遗憾的是，他们当时没有认识到修改的重要性。其次，在公开可用的代码存储库中绘制图4的代码包括对两个系数的1.8倍的修改，这是不正确的。这种改变会影响图形的呈现，但不会影响底层数据。表格和其他数据中报告的所有结果不受影响。渲染图中的错误不是故意的。用于分析的数据和代码
{"title":"Retraction of “Dividend Taxes and the Allocation of Capital”","authors":"Adrien Matray, Charles Boissel","doi":"10.1257/aer.113.7.2053","DOIUrl":"https://doi.org/10.1257/aer.113.7.2053","url":null,"abstract":"This notice explains the authors’ reasons for retracting the published paper, Boissel and Matray (2022b). The authors are grateful for the data and code policies at the AER that make it possible to be entirely transparent. The code that accompanies the paper (Boissel and Matray 2022a) fully reproduces all of the published results and had been independently replicated under the AER’s policies prior to publication. The errors described in this notice, which are responsible for the retraction, are visible in that code and were brought to the authors’ attention by Bach et al. (2023). Boissel and Matray (2022b) studied the financial and real effects of a dividend tax policy change on firms in France. It contained four main results: first, firms exposed to the tax hike (treated firms) significantly reduced their dividend payouts; second, the increase in internal liquidity led treated firms to significantly increase their capital and labor; third, treated firms grew in other ways including in their average wages and sales; fourth, the investment effects were larger for firms with more profitable opportunities and with higher marginal product of capital ex ante. The authors are retracting the paper because Figure 4 of the published paper, which pertains to the second result on the increase in investment and which plots the event study difference-in-difference coefficients of the within-firm change in year-to-year investment flows by treated firms, relative to control firms, differs from the figure that was conditionally accepted by the handling editor in two ways. First, the firm size control variable in the conditionally accepted manuscript was coded in changes but was incorrectly written in the baseline specification as levels. This error was caught in the replication process when the data were rebuilt from scratch, and the variable was redescribed accordingly in the paper. This change in the baseline specification was not requested by the handling editor, and the authors did not notify the handling editor nor the data editor of the update. The authors used firm capital as a proxy for firm size so that in practice, the specification controlled for the change in capital, i.e., investment, in the pre-period. The authors regret that they did not recognize the significance of the modification at the time. Second, the code that plots Figure 4 in the publicly available code repository includes an alteration of two coefficients by a factor of 1.8, which was incorrect. This alteration affects the rendering of the figure, but not the underlying data. All the results reported in the tables and other figures are unaffected. The error in the rendering of the figure was not intentional. The data and the code for the analysis","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"41 1","pages":""},"PeriodicalIF":10.7,"publicationDate":"2023-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74659456","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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