The American Economic Review

ARTICLES

CHARLES W.CALOMIRIS AND JONATHAN PRITCHETT Betting on Secession: Quantifying Political Events Surrounding Slavery and the Civil War

EMMANUEL SAEZ AND STEFANIE STANTCHEVA Generalized Social Marginal Welfare Weights for Optimal Tax Theory

KAIVAN MUNSHI AND MARK ROSENZWEIG Networks and Misallocatlon: Insurance, Migration,and the Rural-Urban Wage Gap

MARK DUGGAN, CRAIG GARTHWAITE,AND APARAJITA GOYAL The Market Impacts of Pharmaceutical Product Patents in Developing Countries: Evidence from India

IAIN M. COCKBURN,JEAN O. LANJOUW,AND MARK SCHANKERMAN Patents and the Global Diffusion of New Drugs

YURIV GORODNICHENKO AND MICHAEL WEBER Are Sticky Prices Costly? Evidence from the Stock Market

GEORGE-MARIOS ANGELETOS. LUIGl lOVINO, AND JENNIFER LA'O Real Rigidity, Nominal Rigidity, and the Social Value of Information

JANUARY 2016 THE AMERICAN ECONOMIC REVIEW

Editor February 2016 PlNELOPt KOUJIANOU GOLDBERG Coedilors VOLUME 106, NUMBER 2 MARKAGUIAR ROLAND BENABOU MARIANNE BERTRAND HILARY HOYNES JOHN LEAHY LUIGI PISTAFERRI DEB RAJ RAY Articles LARRY SAMUELSON Managing Editor STEVEN M. STELLING The Politics of Compromise Associate Managing Editor KELLY MARKEL Alcsscindro Bonatti and Heikki Rantakari 229 Assistant Managing Editor MATTHEW A. ROBERSON Poverty and Economic Decision-Making: Evidence Board ol Editors from Changes in Financial Resources at Payday NAGEEB ALI Leandro S. Carvalho, Stephan Meier, MANUELAMADOR and Stephanie W. Wang 260 MARCO BASSETTO SIMON BOARD LEAH BOUSTAN On Communication and Collusion CRAIG BURNSIDE Yn Awaya and Vijay Krishna 285 ARIEL BURSTEIN STEVEN CALLANDER SYLVAIN CHASSANG Anatomy of a Contract Change ARNAUD COSTINOT Rajshri Jayaraman. Debraj Ray, MATTHIAS DOEPKE DAVE DONALDSON and Francis de Vericourt 316 JEFFREY ELY DIRK ENGELMANN Redistribution and Social Insurance ROLAND FRYER GAUTAM GOWRISANKARAN Mikhail Golosov, Maxim Troshkin, VERONICA GUERRIERI and Aleh Tsyvinski 359 ERIK HURST SEEMA JAYACHANDRAN NAVIN KARTIK Consumption Inequality and Family Labor Supply BRIAN KNIGHT Richard Blitndell, Liiigi Pistaferri, ARVIND KRISHNAMURTHY and hay Saporta-Eksten 387 GILAT LEVY BART LIPMAN HAMISH LOW Exchange Rates, Interest Rates, and the Risk JENS LUDWIG Premium GIUSEPPE MOSCARINI TEDODONOGHUE Charles Engel 436 PHILIP OREOI'OULOS JONATHAN PARKER The Housing Market Impacts of Shale Gas PARAG PATHAK NINA PAVCNIK Development: Corrigendum FABRIZIO PF.RRI Lucija Muehienhachs, Elisheba Spiller, and JESSE ROTHSTEIN Christopher Timmins 475 EDWARD SCHLEE RAJIV SETHI JON STEINSSON Just Luck: An Experimental Study of AMIR SUFI Risk-Taking and Fairness: Erratum CHRISTOPHER TIMMINS Alexander W. Cappelen, James Konow, SARAH TURNER ERIC VERHOOGF.N Erik 0. S0rensen. and Bertil Tiingodden 476 LEEATYARIV THE AMERICAN ECONOMIC REVIEW

Editor March 2016 PINELOPI KOUJIANOU GOLDBERG Cocditors VOLUME 106, NUMBER 3 MARK AGUIAR ROLAND BENABOU MARIANNE BERTRAND HILARY HOYNES JOHN LEAHY LUIGl PISTAFERRI DEBRAJ RAY Articles LARRY SAMUELSON Managing Editor The Determinants and Welfare Implications of US STEVEN M. STEELING Workers' Diverging Location Choices by Skill: Associate Managing Editor 1980-2000 KELLY MARKEL Rebecca Diamond 479 Assistant Managing Editor MATTHEW A. ROBERSON

Board of Editors University Differences in the Graduation of NAGEEB ALI Minorities in STEM Fields: Evidence from MANUEL AMADOR California MARCO BASSETTO Peter Arcidiacono, Esteban M. Aucejo, SIMON BOARD LEAH BOUSTAN and V. Joseph Hotz 525 CRAIG BURNSIDE ARIEL BURSTEIN STEVEN CALLANDER Search Design and Broad Matching SYLVAIN CHASSANG Kfir Eliaz and Ran Spiegler 563 ARNAUD COSTINOT MATTHIAS DOEPKE DAVE DONALDSON How Do Electricity Shortages Affect Industry? JEFFREY ELY Evidence from India DIRK ENGELMANN Hunt Allcott, Allan Collard-Wexler, ROLAND FRYER and Stephen D. O'Connell 587 GAUTAM GOWRISANKARAN VERONICA GUERRIERi ERIK HURST Firm Dynamics, Job Tbrnover, and Wage SEEMA JAYACHANDRAN Distributions in an Open Economy NAVIN KARTIK BRIAN KNIGHT A. Kerem Co§ar, Nezih Gtiner, ARVIND KRISHNAMURTHY and James Tybout 625 GILAT LEVY BART LIPMAN HAMISH LOW Parameter Learning in General Equilibrium: The JENS LUDWIG Asset Pricing Implications GIUSEPPE MOSCARINI Pierre Collin-Dufresne, Michael Johannes, TEDODONOGHUE and Lars A. Lochstoer 664 PHILIP OREOPOULOS JONATHAN PARKER PARAG PATHAK Liquidity Trap and Excessive Leverage NINA PAVCNIK 699 FABRIZIO PERRI Anton Korinek and Alp Simsek JESSE ROTHSTEIN EDWARD SCHLEE The Effect of Unemployment Benefits and RAJIV SETHI Nonempioyment Durations on Wages JON STEINSSON AMIR SUFI Johannes F. Schmieder, Till von Wachter, CHRISTOPHER TIMMINS and Stefan Bender 739 SARAH TURNER ERIC VERHOOGEN LEEATYARIV Shorter Papers

The Value of Postsecondary Credentials in the Labor Market: An Experimental Study David J. Denting, Noam Yuchtman, Amira Abulafi, Claudia Goldin, and Lawrence F. Katz 778

Taxpayer Confusion: Evidence from the Child Tax Credit Naomi E. Feldman, Peter Katuscdk, and Laura Kawano 807

Dictating the Risk: Experimental Evidence on Giving in Risky Environments: Comment Michai Krawczyk and Fabrice Le Lec 836

Dictating the Risk: Experimental Evidence on Giving in Risky Environments: Reply J. Michelle Brock, Andreas Lange, and Erkut Y. Ozbay 840

A Balls-and-Bins Model of Trade: Comment Bernardo S. Blum, Sebastian Claro, and Ignatius J. Horstmann 843

A Balls-and-Bins Model of Trade: Reply Roc Armenter and Miklds Koren 852

Information on how to submit a manuscript is available online: http://www.aeaweb.org/aer/submissions.php It is the policy of The American Economic Review to publish papers only if the data used in the analysis are clearly and precisely documented and are readily available to any researcher for purposes of replication. Details of the computations sufficient to permit replication must be provided. The Editor should be notified at the time of submission,if the data used m a paper are proprietary or if, for some other reason, the requirements above cannot be met. THE AMERICAN ECONOMIC REVIEW

Editor April 2016 PINELOPI KOUJIANOU GOLDBERG Coeditors VOLUME 106, NUMBER 4 MARK AGUIAR ROLAND BENABOU MARIANNE BERTRAND HILARY HOVNES JOHN LEAHY LUIGI PISTAFERRI DEBRAJ RAY Articles LARRY SAMUELSON Managing Editor The Effects of Exposure to Better Neighborhoods STEVEN M. STELLINO on Children: New Evidence from the Moving Associate Managing Editor KELLY MARKEL to Opportunity Experiment Raj Chetty, Nathaniel Hendren, Assistant Managing Editor MATTHEW A. ROBERSON and Lawrence F. Katz 855

Board of Editors NAGEEB ALI Long-Run Impacts of Childhood Access MANUEL AMADOR to the Safety Net MARCO BASSETTO Hilary Hoynes, Diane Whitmore PAUL BEAUDRY SIMON BOARD Schanzenbach, and Douglas Almond 903 LEAH BOUSTAN CRAIG BURNSIDE The Long-Run Impact of Cash Transfers ARIEL BURSTEIN STEVEN CALLANDER to Poor Families ALESSANDRA CASELLA Anna Aizer, Shari Eli, Joseph Ferrie, SYLVAIN CHASSANG and Adriana Lleras-Muney 935 ARNAUD COSTINOT MATTHIAS DOEPKE DAVE DONALDSON Bounding the Labor Supply Responses to a JEFFREY ELY Randomized Welfare Experiment: DIRK ENGELMANN ROLAND FRYER A Revealed Preference Approach GAUTAM GOWRISANKARAN Patrick Kline and Melissa Tartari 972 VERONICA GUERRIERI ERIK HURST SEEMA JAYACHANDRAN Presidents and the US Economy: NAVIN KARTIK an Econometric Exploration BRIAN KNIGHT Alan S. Blinder and Mark W. Watson 1015 ARVIND KRISHNAMURTHY GILAT LEVY BART LIPMAN The Evolution of Strategic Sophistication HAMISH LOW Nikolaiis Robalino and A rthur Robson 1046 JENS LUDWIG GIUSEPPE MOSCARINI TEDODONOGHUE Group Strategy-Proofness in Private Good Economies PHILIP OREOPOULOS Salvador Barberd. Dolors Berga. JONATHAN PARKER and Bernardo Moreno 1073 PARAG PATHAK NINA PAVCNIK FABRIZIO PERRI Fiscal Policy and Economic Recovery: JESSE ROTHSTEIN The Case of the 1936 Veterans' Bonus EDWARD SC HLEE RAJIV SETHI Joshua K. Hausinan 1100 JON STEINSSON TOMASZ STRZALECKI AMIR SUFI CHRISTOPHER TIMMINS SARAH 1URNER JOHN VAN ri;i;nen ERIC VERHOOGEN LEEATYARIV Shorter Papers

The Caloric Costs of Culture: Evidence from Indian Migrants David Atkin 1144

The Bidder's Curse: Comment Henry S. Schneider 1182

The Bidder's Curse: Reply Ulrike Mahnendier 1195

Search, Liquidity, and the Dynamics of House Prices and Construction: Corrigendum Allen Head. Haw Uoyd-Elli.s, and Hon^fei Sun 1214 CONTENTS

President's Foreword xi

Editors' Introduction xiii

PAPERS Richard T. Ely Lecture Restoring Rational Choice: The Challenge of Consumer Financial Regulation John Y. Campbell 1

The United States Economy: Where To from Here? The Phillips Curve: Back to the '60s? Olivier Blanchard 31 Dealing with Long-Term Deficits Martin Feidstein 35 Monetary Policy. Financial Stability, and the Zero Lower Bound Stanley Fischer 39 How to Restore Equitable and Sustainable Economic Growth in the United States Joseph E. Stiglilz 43 Can We Restart the Recovery All Over Again? John B. Taylor 48

Critiquing Robert J. Gordon's The Rise and Fall ofAmerican Growth A Century of Growth and Improvement Benjamin M. Friedntan 52 The Rise and Fall of American Growth: Exploring the Numbers Nicholas Crafts 57 State Capacity and American Technology: Evidence from the Nineteenth Century Daron Acemoglii. Jacob Moscona, and Jantes A. Robinson 61 Winter Is Coming: Robert Gordon and the Future of Economic Growth Gregory Clark 68 Perspectives on The Rise and Fall of American Growth Robert J. Gordon 72

Infrastructure and Development

Infrastructure, Incentives, and Institutions Nava Ashraf. Edward L. Glaeser, and Giacomo A. M. Ponzetto 77

Guns. Latrines, and Land Reform: Dynamic Pigouvian Taxation Michael Kremer and Jack Willis 83 Appliance Ownership and Aspirations among Electric Grid and Home Solar Households in Rural Kenya Kenneth Lee, Edward Miguel, and Catherine Wolfram 89

Productivity, Regulation, and Allocation: Macro, Industry- and Firm-Level Evidence Firm-Level Dispersion in Productivity: Is the Devil in the Details? Lucia Foster, Cheryl Grim, John Haltiwanger, and Zoltan Wolf 95 Productivity Dispersion in Medicine and Manufacturing Amitabh Chandra, Amy Finkelstein, Adam Sacarny, and Chad Syverson 99 Market Regulations. Prices, and Productivity .,, Gilbert Cette, Jimmy Lopez, atid Jacqties Mairesse 104 Regulation. Institutions, and Productivity: New Macroeconomic Evidence from OECD Countries Baldzs Egert 109 Iv AEA PAPERS AND PROCEEDINGS M,\ y 201ft

Predictive Cities Crowdsourcing City Government: Using Tournaments to Improve Inspection Accuracy Edward L. Glaeser. Andrew Hillis, Scntt Duke Kominers, and Michael Liica 114 Personalized Risk Assessments in the Criminal Justice System Sliarad Gael. Justin M. Ran. and Ravi Shroff 119 Productivity and Selection of Human Capital with Machine Learning Aaron Chaljin, Oren Danieli, Andrew Hillis, Zuhin Jelveh, Michael Luca, Jens Ludwi^, and Sendhil Mullainathan 124 Cities Are Physical Too: Using Computer Vision to Measure the Quality and Impact of Urban Appearance Nikhil Naik, Ramcsh Raskar. and Cesar A. Hidalgo 128

Digitization and Innovation The Rapid Adoption of Data-Drivcn Decision-Making... Erik Brynjolfsson and Kristina McElheran 133 Copyright Infringement in the Market for Digital Images Hong Luo and Julie Holland Mortimer 140 Agglomeration of Invention in the Bay Area: Not Just ICT Chris Fonnan, Avi Goldfarh, and Shane Greenstein 146

Private Dafa International Data on Measuring Management Practices Nicholas Bloom, Renata Lemos, Raffaella Sadun, Daniela Scur, and John Van Reenen 152 Making Private Data Accessible in an Opaque Industry: The Experience of the Private Capital Research Institute Leslie Jeng and Josh Lerner 157 Modernizing Federal Economic Statistics William G, Bostic, Jr., Ron S, Jarmin, and Brian Mover 161

Labor Markets with Occupational Licensing: Their Economic Effects Battling over Jobs: Occupational Licensing in Health Care Morris M. Kleiner 165 Should the US Eliminate Entry Barriers to the Practice of Law? Perspectives Shaped by Industry Deregulation Clifford Winston and Quentin Karpilow 171 Disruptive Change in the Taxi Business: The Case of Uber Judd Cramer and Alan B, Krueger 177

The Design and Use of Patents Patents and Research Investments: Assessing the Empirical Evidence Eric Budish. Benjamin N. Roin, and Heidi Williams 183 Patent Licensing. Technology Transfer, and Innovation Mark A. Lemley and Rohin Feldman 188 Patent Quality and Examination in Europe Dietmar Harhoff 193 Patent Remedies Carl Shapiro 198 VOL. 106 NO. 5 CONTENTS v

New Developments in Firm Dynamics in Understanding Business Dynamism Declining Business Dynamism: What We Know and the Way Forward Ryan A. Decker, John Haliiwanaer. Ron S. Jarmin, andJavier Miranda 203 Wage Posting and Business Cycles Giuseppe Moscarini and Fahicn Postel-Vinay 208 Firm Entry and Macroeconomic Dynamics: A State-Level Analysis Francois Gourio, Todd Messer, and Michael Siemer 214

The Role of Startups in Structural Transformation Robert C. Dent. Fatih Karahan, Benjamin Pugsley, and Ay^egiil ^hin 219

Attitudes, Markets, and Oligarchs in Russia Popular Attitudes toward Markets and Democracy: Russia and United States Compared 25 Years Later Maxim Boycko and Robert J. Shiller 224 War, Inflation, and Social Capital Sergei Guriev and Nikita Melnikov 230 Russia's Billionaires Daniel Treisman 236

The Economics of Gender Paid Parental Leave Laws in the United States: Does Short-Duration Leave Affect Women's Labor-Force Attachment? Tanya S. Byker 242 Has the Increased Attachment of Women to the Labor Market Changed a Family's Ability to Smooth Income Shocks? Olga Gorbachev 247 Evolution of the Marriage Earnings Gap for Women Chinhui Jidin and Kristin McCue 252 The Math Gender Gap: The Role of Culture Natalia Nollenberger, Niiria Rodriguez-Planas, and Almudena Sevilla 257

Gender in Corporation Management Does the Market Value CEO Styles? Antoinette Sclioar and Luo Zuo 262 Gender Diversity on Corporate Boards: Do Women Contribute Unique Skills? Daehyun Kim and Laura T Starks 267 Playing the Boys Game: Golf Buddies and Board Diversity Sumit Agarwal, Wenlan Qian, David M. Reeb, and Tien Foo Sing 272 Women on Boards in Finance and STEM Industries Rende B. Adams and Tom Kirchntaier 277

Gender Gaps in Childhood: Skills, Behavior, and Labor Market Preparedness Childhood Environment and Gender Gaps in Adulthood Raj Chetty, Nathaniel Hendren, Frina Lin, Jeremy Majerovitz, and Benjamin Scuderi 282 School Quality and the Gender Gap in Educational Achievement David Autor, David Figlio, Krzysztof Karbownik, Jeffrey Roth, and Melanie Wasserman 289 What Explains the Gender Gap in College Track Dropout? Experimental and Administrative Evidence,,, .Ingvild Almas, Alexander W. Cappelen, Kjell G. Salvane.s. Erik 0. Sprensen, and Bertil Tungodden 296 VI AEA PAPERS AND PROCEEDINGS MAY 2016

Evidence from Lab and Field Experiments on Discrimination Experimeiual Age Discrimination Evidence and the Heckman Critique David Netanark, km Burn, and Patrick Button 303 The Power of Eye Tracking in Economics Experiments Joanna N. Lalwy and Doualas Oxiey 309 Determinants of Callbacks to Job Applications: An Audit Study Henry S. Father. Dan Silverinan. and Till von Wachter 314 Supply and Demand for Discrimination: Strategic Revelation of Own Characteristics in a Trust Game Anthony Heyes and John A. List 319

Public Economics

Student Loan Information Provision and Academic Choices Maximilian Schmeiser. Christiana Stoddard, and Carly Urban 324 Birth Timing and Neonatal Health Cristina Borra, Lihertad Gonzalez, and Alinudena Sevilla 329 STEM Training and Early Career Outcomes of Female and Male Graduate Students: Evidence from UMETRICS Data Linked to the 2010 Census Catherine Buffington, Benjamin Cerf, Christina Jones, and Bruce A. Weiitberg 333 Medicare Part D and Portfolio Choice Padmaja Ayyagari and Daifeng He 339

Education, Earnings, and Redistribution Coordinated Admissions Program Rodney J, Andrews 343 Can Admissions Percent Plans Lead to Better Collegiate Fit for Minority Students? Kalena E. Cortes and Jane Arnold Lincove 348 Religious Workers' Density and the Racial Earnings Gap Fernando Lozano and Jessica Shiwen Cheng 355 Does the EITC Buffer against Neighborhood Transition? Evidence from Washington, DC LaTanya'Brown-Robertson, Marcus Casey, Bradley Hardy, and Daniel Muhammad 360

Research in Economic Education: Efficacy of Interventions in Economic Education Classroom Experiments: Is More More? Tisha L. N. Emerson and Linda English 363 Measuring the Effect of Blended Learning: Evidence from a Selective Liberal Arts College Aaron Swoboda and Lauren Feller 368 The Impact of Challenge Quizzes on Student Knowledge KimMarie McGoldrick and Peter W, Schuhmann 373 A Randomized Assessment of Online Learning William T Alpert, Kenneth A. Couch, and OskarR. Hantion 378

Value-Added Models: New Methods and Applications Sources of Inefficiency in Healthcare and Education Amitabh Chandra and Douglas Staiger 383 Interpreting Tests of School VAM Validity Joshua Angrist. Peter Hull, Parag Pathak, aitd Christopher Walters 388 Using Lagged Outcomes to Evaluate Bias in Value-Added Models Raj Chetty, John N. Friedman, and Jonah Rockoff 393 Fixed Effects. Invariance. and Spatial Variation in Inlergenerational Mobility ... Gary Chamberlain 400 VOL. 106 NO.5 CONTENTS vii

Identity Economics 2016

Identity Economics 2016; Where Do Social Distinctions and Norms Come From? Rachel E. Kranion 405 Identity-Based Organizations Jean-Paul Carvalho 410

"We Thinking" and Its Consequences Jtoberi Akerlof 415 Identity-Driven Cooperation versus Competition Dennis J. Snowerand Steven J. Boswortk 420

Unfamiliar Psychologies: Applications of Behavioral Science Not Commonly Used in Economics Option Awareness: The Psychology of What We Consider Anuj K. Shah and Jens Ludwig 425 Beyond Beta-Delta; The Emerging Economics of Personal Plans John Beshears, Katherine L. Milkman, and Joshua Schwartzstein 430 The Psychological Lives of the Poor Frank Schilbach, Heather Schofield, and Sendhil Mullainathan 435

60 Million Refugees Refugees, Asylum Seekers, and Policy in OECD Countries Timothy J. Hatton 441 Rethinking Protection of Those Displaced by Humanitarian Crises Susan F. Martin 446 Toward an International Miration Regime J^fff^y Sachs 451 The Economic Impact of Syrian Refugees on Host Countries: Quasi-Experimental Evidence from Tbrkey Semih Timen 456

Health Outcomes,Immigration, and Development Converging to American; Healthy Immigrant Effect in Children of Immigrants Mdnica Garcia-Pirez 461

Ethnic Attrition and the Observed Health of Later-Generation Mexican Americans Francisco Antman, Brian Duncan, and Stephen J. Trejo 467 HIV/AIDS and Development; A Reappraisal of the Productivity and Factor Accumulation Effects... Thdophiie T. Azomahou, RaoufBoucekkine, and Bity Diene All LEP Language Disability. Immigration Reform, and English-Language Acquisition Alberto Ddvila and Marie T. Mora 478

Money and Monetary Policy with Financial Frictions On the Optimal Inflation Rate Markus K. Brunnermeier and Yuliy Sannikov 484 Sooner or Later: Timing of Monetary Policy with Heterogeneous Risk-Taking Dong Beom Choi, Thomas M. Eisenbach. and Tanju Yorulmazer 490 Money and Asset Liquidity in Frictional Capital Markets Wei Cui and Soren Radde 496 AEA PAPERSAND PROCEEDINGS MAY2016

Global Reserve Assets in a Low Interest Rate World Secular Stagnation in the Open Economy Cattti B. Eggertsson, Neil R. Mehroira, and Lawrence H. Summers 503 The Sovereign-Bank Diabolic Loop and ESBies Markus K. Brunnermeier. Luis Garicano, Philip R. Lane, Marco Pagano, Ricardo Reis, Tano Santos. David Thesmar, Slijn Van Nieuwerburgh, and Dimitri Vayanos 508 Safe Asset Scarcity and Aggregate Demand Ricardo J. Cabaliero. Emmanuel Farhi, and Pierre-Olivier Gourincbas 513

What Makes US Government Bonds Safe Assets? Zhiguo He, Arvind Krisiinamurthy, and Konstantin Milbradt 519

Historical Perspectives on Financial Crisis, Banks,and Regulation Crises and the Development of Economic Institutions: Some Microeconomic Evidence Raghuram Rajan and Rodney Ranicharan 524 Too Big to Fail Before the Fed Gary Gorton and Ellis IV. Tailnian 528 Interbank Markets and Banking Crises: New Evidence on the Establishment and Impact of the Federal Reserve Mark Carlson and David C. Wlieelock 533 Bank Leverage and Regulatory Regimes: Evidence from the Great Depression and Great Recession.... Christoffer Koch, Gary Richardson, and Patrick Van Horn 538

Quantitative Modeling of the Financial Crisis A Simplo Model of Subprime Borrowers and Credit Growth Alejandro Justiniano, Giorgio E. Primiceri, and Andrea Tambalotti 543 Debt Constraints and the Labor Wedge Patrick Kehoe, Virgiliu Midrigan, and Elena Pasiorino 548 Anticipated Banking Panics Mark Gertler, Nolmhiro Kiyotaki, and Andrea Prestipino 554 Bank Leverage and Social Welfare Lawrence Christiano and Daisuke Ikeda 560

Do Capital Flows Need to be Tamed? Capital Flows: Expansionary or Contractionary? Olivier Blanchard, Jonathan D. Ostry, Atish R. Ghosh, and Marcos Chamon 565 The Macroprudential Role of International Reserves Olivier Jeanne 570 Global Cycles: Capital Flows, Commodities, and Sovereign Defaults, 1815-2015 Carmen M. Reinhart, Vincent Reinhart, and Christoph Trebesch 574 When Do Capital Inflow Surges End in Tears? Atish R. Ghosh, Jonathan D. Ostry, and Mahvash S. Qureshi 581

Information Design and Bayesian Persuasion Information Design, Bayesian Persuasion, and Bayes Correlated Equilibrium Dirk Bergemann attd Stephen Morris 586 Bayesian Persuasion in Coordination Games hay Goldstein and Chong Huang 592 A Rothschild-Stiglitz Approach to Bayesian Persuasion ....Matthew Gentzkow and Emir Kamenica 597 VOL. 106 NO.5 CONTENTS "

Valuing Climate Change Catastrophes Shutiing Down the Thermohaline Circulation David Anthoff. Francisco Estrada, and Richard S. J. Tol 602 A Potential Disintegration of the West Antarctic Ice Sheet: Implications for Economic Analyses of Climate Policy Delavane Diaz and Klaus Keller 607 The Ecosystem Impacts of Severe Warming Robert Mendelsohn, lain C. Prentice. Oswald Schmitz. Benjamin Stacker. Robert Buchkowski. and Benjamin Daw.son 612 Economic Effects of an Ocean Acidification Catastrophe Stephen G. Colt and Gunnar P. Knapp 615

Homeownership and the American Dream How Mortgage Finance Reform Could Affect Housing John V. Duca, John Muellbaiier, and Anthony Murphy 620 Borrowing Constraints and Homeownership Arthur Acolin. Jesse Bricker, Paul Calem. and Susan Wachter 625 A Lost Generation? Education Decisions and Employment Outcomes during the US Housing Boom-Bust Cycle of the 2000s Luc Laeven and Ale.xander Popov 630 To Buy or Not to Buy: Consumer Constraints in the Housing Market Andreas Faster and Basit Zafar 636

Measuring Top Wealth Shares Estimating Top Income and Wealth Shares: Sensitivity to Data and Methods je.

Estate Taxation and the Intergenerational Transmission of Wealth The Role of Bequests in Shaping Wealth Inequality: Evidence from Danish Wealth Records Simon H. Boserup. Wojciech Kopczuk. and Glaus T. Kreiner 656 Revenue and Incentive Effects of Basis Step-Up at Death: Lessons from the 2010 "Voluntary" Estate Tax Regime Robert Gordon. David Joulfaian. and James Poterba 662

PROCEEDINGS Minutes of the Annual Business Meeting,San Francisco, CA,January 3,2016 671 Reports ^.^2 Report of the Secretary Report of the Treasurer •; American Economic Association Universal Academic Questionnaire Summary Statistics List of Online Reports THE AMERICAN ECONOMIC REVIEW

Editor August 2016 PINELOPI KOUJIANOU GOLDBERG Coeditors VOLUME 106, NUMBER 8 MARK AGUIAR ROLAND BENABOU MARIANNE BERTRAND JEFFREY ELY HILARY HOYNES Articles JOHN LEAHY LUIGl PISTAFERRI DEBRAJ RAY Dynamic Delegation of Experimentation Board of Editors Yingni Guo 1969 NAGEEB ALI MANUEL AMADOR HESKl BAR-ISAAC Marijuana on Main Street? Estimating Demand in MARCO BASSETTO PAUL BEAUDRY Markets with Limited Access SIMON BOARD Liana Jacobi and Michelle Sovinsky 2009 LEAH BOUSTAN CRAIG BURNSIDE ARIEL BURSTEIN Endogenous Skill Acquisition and Export STEVEN CALLANDER Manufacturing in Mexico ALESSANDRA CASELLA SYLVAIN CHASSANG David Atkin 2046 ARNAUD COSTINOT MATTHIAS DOEPKE DAVE DONALDSON The Realization Effect: Risk-Taking after Realized DIRK ENGELMANN versus Paper Losses ROLAND FRYER Alex Imas 2086 GAUTAM GOWRISANKARAN VERONICA GUERRIERI ERJK HURST SEEMA JAYACHANDRAN Health Care Exceptionalism? Performance and NAVIN KARTIK Allocation in the US Health Care Sector BRIAN KNIGHT Amitabh Chandra, Amy Finkelstein, ARVIND KRISHNAMURTHY Adam Sacarny, and Chad Syverson 2110 GILAT LEVY BART LIPMAN HAMISH LOW JENS LUDWIG Evolving Choice Inconsistencies in Choice GIUSEPPE MOSCARINI of Prescription Drug Insurance TED O'DONOGHUE Jason Abaluck and Jonathan Gruber 2145 PHILIP OREOPOULOS JONATHAN PARKER PARAG PATHAK Effects of Deregulation and Consolidation NINA PAVCNIK FABRIZIO PERRI of the Broadcast Television Industry JESSE ROTHSTEIN Jessica Calfee Stahl 2185 EDWARD SCHLEE RAJIV SETHI j6n STEINSSON Macroeconomic Effects of Bankruptcy and TOMASZ STRZALECKI Foreclosure Policies AMIR sun CHRISTOPHER TIMMINS Kurt Mitman 2219 SARAH TURNER JOHN VAN REENEN ERIC VERHOOGEN Financial Intermediation, Investment Dynamics, LEEATYARIV and Business Cycle Fluctuations Managing Editor Andrea Ajello 2256 STEVEN M.STELLING Associate Managing Editor KELLY/4ARKEL Capital Taxation under Political Constraints Assistant Managing Editor Florian Scheuer and Alexander Wolitzky 2304 MATTHEW A. ROBERSON Shorter Papers

Ostracism and Forgiveness S. Nafieeb Alt and David A. Miller 2329

Moderating Political Extremism: Single Round versus Runoff Elections under Plurality Rule Massimo Bordi^non, Tommaso Nannicini, and Gnido Tabellini -349

Monitoring Corruptible Politicians Gustavo J. Bobonis. Lais R. Cdniara Fiiertes. and Rainer Schwabe -371

Information on how to submit a manuscript is available online: http://www.aeaweb.org/aei7submissions.php It is the policy of The American Economic Review to publish papers only if the data used in the analysis are clearly and precisely documented and are readily available to any reseaithei for purposes of replication. Details of the computations sullicient to permit replication mus be provided. The Editor should be notified at the time of submission if the data used m a paper are proprietary or if. for some other reason, the requirements above cannot be met.