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Summer 2021 Journal of Economic Perspectives Available Online

Summary:
I have been the Managing Editor of the Journal of Economic Perspectives since the first issue in Summer 1987. The JEP is published by the American Economic Association, which decided about a decade ago–to my delight–that the journal would be freely available on-line, from the current issue all the way back to the first issue. You can download individual articles or the entire issue, and it is available in various e-reader formats, too. Here, I’ll start with the Table of Contents for the just-released Summer 2021 issue, which in the Taylor household is known as issue #137. Below that are abstracts and direct links for all of the papers. I will probably blog more specifically about some of the papers in the next week or two, as well.

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I have been the Managing Editor of the Journal of Economic Perspectives since the first issue in Summer 1987. The JEP is published by the American Economic Association, which decided about a decade ago–to my delight–that the journal would be freely available on-line, from the current issue all the way back to the first issue. You can download individual articles or the entire issue, and it is available in various e-reader formats, too. Here, I’ll start with the Table of Contents for the just-released Summer 2021 issue, which in the Taylor household is known as issue #137. Below that are abstracts and direct links for all of the papers. I will probably blog more specifically about some of the papers in the next week or two, as well.

Summer 2021 Journal of Economic Perspectives Available Online

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Symposium on COVID-19
“Effects of the COVID-19 Recession on the US Labor Market: Occupation, Family, and Gender,” by Stefania Albanesi and Jiyeon Kim
The economic crisis associated with the emergence of the novel corona virus is unlike standard recessions. Demand for workers in high contact and inflexible service occupations has declined while parental supply of labor has been reduced by lack of access to reliable child care and in-person schooling options. This has led to a substantial and persistent drop in employment and labor force participation for women, who are typically less affected by recessions than men. We examine real-time data on employment, unemployment, labor force participation and gross job flows to document the impact of the pandemic by occupation, gender and family status. We also discuss the potential long-term implications of this crisis, including the role of automation in depressing the recovery of employment for the worst hit service occupations.
Full-Text Access | Supplementary Materials
“The Great Unequalizer: Initial Health Effects of COVID-19 in the United States,” by Marcella Alsan, Amitabh Chandra and Kosali Simon
We measure inequities from the COVID-19 pandemic on mortality and hospitalizations in the United States during the early months of the outbreak. We discuss challenges in measuring health outcomes and health inequality, some of which are specific to COVID-19 and others that complicate attribution during most large health shocks. As in past epidemics, preexisting biological and social vulnerabilities profoundly influenced the distribution of disease. In addition to the elderly, Hispanic, Black and Native American communities were disproportionately affected by the virus, particularly when assessed using the years of potential life lost metric. We provide a conceptual framework and initial empirical analysis that seek to shed light on contributors to pandemic-related health inequality, and we suggest areas for future research.
Full-Text Access | Supplementary Materials
“Tracking the Pandemic in Real Time: Administrative Micro Data in Business Cycles Enters the Spotlight,” by Joseph Vavra
In this paper I discuss the increasingly prominent role of administrative micro data in macroeconomics research. This type of data proved important for interpreting the causes and consequences of the Great Recession, and it has played a crucial role in shaping economists’ understanding of the COVID-19 pandemic in near real-time. I discuss a number of specific insights from this research while also illustrating some of the broader opportunities and challenges of working with administrative data.
Full-Text Access | Supplementary Materials
Symposium on the Washington Consensus Revisited
“Some Thoughts on the Washington Consensus and Subsequent Global Development Experience,” by Michael Spence
This paper discusses the Washington Consensus, its origins, and its insights in terms of subsequent development experience in a broad range of countries. I continue to find that when properly interpreted as a guide to the formulation of country-specific development strategies, the Washington Consensus has withstood the test of time quite well. In my view, subsequent experience, especially in Asia, reveals a number of places where a shift in emphasis would be warranted. Finally, I try to identify some misuses of the Washington Consensus and suggest that it was vulnerable to misuse due to the absence of an accompanying and explicit development model.
Full-Text Access | Supplementary Materials
“The Baker Hypothesis: Stabilization, Structural Reforms, and Economic Growth,” by Anusha Chari, Peter Blair Henry and Hector Reyes
In 1985, James A. Baker III’s “Program for Sustained Growth” proposed a set of economic policy reforms including, inflation stabilization, trade liberalization, greater openness to foreign investment, and privatization, that he believed would lead to faster growth in countries then known as the Third World, but now categorized as emerging and developing economies (EMDEs). A country-specific, time-series assessment of the reform process reveals three clear facts. First, in the ten-year period after stabilizing high inflation, the average growth rate of real GDP in EMDEs is 2.6 percentage points higher than in the prior ten-year period. Second, the corresponding growth increase for trade liberalization episodes is 2.66 percentage points. Third, in the decade after opening their capital markets to foreign equity investment, the spread between EMDEs average cost of equity capital and that of the US declines by 240 basis points. The impact of privatization is less straightforward to assess, but taken together, the three central facts of reform provide empirical support for the Baker Hypothesis and suggest a simple neoclassical interpretation of the unprecedented increase in growth that has taken place in EMDEs since the early 1990s.
Full-Text Access | Supplementary Materials
“Washington Consensus in Latin America: From Raw Model to Straw Man,” by Ilan Goldfajn, Lorenza Martínez and Rodrigo O. Valdés
We take stock of three decades of a love-hate relationship between Latin American policies and the Washington Consensus, reviewing its implementation, national debate, and outcomes. Using regional data and case studies of Brazil, Chile, and Mexico, we discuss the various degrees of the Washington Consensus implementation and evaluate performance. We find mixed results: macroeconomic stability is much improved, but economic growth has been heterogeneous and generally disappointing, despite improvement relative to the 1980s. We discuss the risk that the region could revert parts of the Washington Consensus reforms, which are necessary building blocks for a new agenda more focused on social integration, a fairer and just society, and environmentally sustainable growth based on better education.
Full-Text Access | Supplementary Materials
“Washington Consensus Reforms and Lessons for Economic Performance in Sub-Saharan Africa,” by Belinda Archibong, Brahima Coulibaly and Ngozi Okonjo-Iweala
Over three decades after market-oriented structural reforms termed “Washington Consensus” policies were first implemented, we revisit the evidence on policy adoption and the effects of these policies on socio-economic performance in sub-Saharan African countries. We focus on three key ubiquitous reform policies around privatization, fiscal discipline, and trade openness and document significant improvements in economic performance for reformers over the past two decades. Following initial declines in per capita economic growth over the 1980s and 1990s, reform adopters experienced notable increases in per capita real GDP growth in the post–2000 period. We complement aggregate analysis with four country case studies that highlight important lessons for effective reform. Notably, the ability to implement pro-poor policies alongside market-oriented reforms played a central role in successful policy performance.
Full-Text Access | Supplementary Materials
Symposium on Statistical Significance
“Statistical Significance, p-Values, and the Reporting of Uncertainty,” by Guido W. Imbens
The use of statistical significance and p-values has become a matter of substantial controversy in various fields using statistical methods. This has gone as far as some journals banning the use of indicators for statistical significance, or even any reports of p-values, and, in one case, any mention of confidence intervals. I discuss three of the issues that have led to these often-heated debates. First, I argue that in many cases, p-values and indicators of statistical significance do not answer the questions of primary interest. Such questions typically involve making (recommendations on) decisions under uncertainty. In that case, point estimates and measures of uncertainty in the form of confidence intervals or even better, Bayesian intervals, are often more informative summary statistics. In fact, in that case, the presence or absence of statistical significance is essentially irrelevant, and including them in the discussion may confuse the matter at hand. Second, I argue that there are also cases where testing null hypotheses is a natural goal and where p-values are reasonable and appropriate summary statistics. I conclude that banning them in general is counterproductive. Third, I discuss that the overemphasis in empirical work on statistical significance has led to abuse of p-values in the form of p-hacking and publication bias. The use of pre-analysis plans and replication studies, in combination with lowering the emphasis on statistical significance may help address these problems.
Full-Text Access | Supplementary Materials
“Of Forking Paths and Tied Hands: Selective Publication of Findings, and What Economists Should Do about It,” by Maximilian Kasy
A key challenge for interpreting published empirical research is the fact that published findings might be selected by researchers or by journals. Selection might be based on criteria such as significance, consistency with theory, or the surprisingness of findings or their plausibility. Selection leads to biased estimates, reduced coverage of confidence intervals, and distorted posterior beliefs. I review methods for detecting and quantifying selection based on the distribution of p-values, systematic replication studies, and meta-studies. I then discuss the conflicting recommendations regarding selection resulting from alternative objectives, in particular, the validity of inference versus the relevance of findings for decision-makers. Based on this discussion, I consider various reform proposals, such as deemphasizing significance, pre-analysis plans, journals for null results and replication studies, and a functionally differentiated publication system. In conclusion, I argue that we need alternative foundations of statistics that go beyond the single-agent model of decision theory.
Full-Text Access | Supplementary Materials
“Evidence on Research Transparency in Economics,” by Edward Miguel
A decade ago, the term “research transparency” was not on economists’ radar screen, but in a few short years a scholarly movement has emerged to bring new open science practices, tools and norms into the mainstream of our discipline. The goal of this article is to lay out the evidence on the adoption of these approaches—in three specific areas: open data, pre-registration and pre-analysis plans, and journal policies—and, more tentatively, begin to assess their impacts on the quality and credibility of economics research. The evidence to date indicates that economics (and related quantitative social science fields) are in a period of rapid transition toward new transparency-enhancing norms. While solid data on the benefits of these practices in economics is still limited, in part due to their relatively recent adoption, there is growing reason to believe that critics’ worst fears regarding onerous adoption costs have not been realized. Finally, the article presents a set of frontier questions and potential innovations.
Full-Text Access | Supplementary Materials
Articles and Features
“Why Is Growth in Developing Countries So Hard to Measure?” by Noam Angrist, Pinelopi Koujianou Goldberg and Dean Jolliffe
Occasional widely publicized controversies have led to the perception that growth statistics from developing countries are not to be trusted. Based on the comparison of several data sources and analysis of novel IMF audit data, we find no support for the view that growth is on average measured less accurately or manipulated more in developing than in developed countries. While developing countries face many challenges in measuring growth, so do higher-income countries, especially those with complex and sometimes rapidly changing economic structures. However, we find consistently higher dispersion of growth estimates from developing countries, lending support to the view that classical measurement error is more problematic in poorer countries and that a few outliers may have had a disproportionate effect on (mis)measurement perceptions. We identify several measurement challenges that are specific to poorer countries, namely limited statistical capacity, the use of outdated data and methods, the large share of the agricultural sector, the informal economy, and limited price data. We show that growth measurement based on the System of National Accounts (SNA) can be improved if supplemented with information from other data sources (for example, satellite-based data on vegetation yields) that address some of the limitations of SNA.
Full-Text Access | Supplementary Materials
“Retrospectives: James Buchanan: Clubs and Alternative Welfare Economics,” by Alain Marciano
James Buchanan wrote “An Economic Theory of Clubs” and invented clubs to support a form of welfare economics in which there is no social welfare function (SWF) and individual utility functions cannot be “read” by external observers. Clubs were a means to allow the implementation of individualized prices for public goods and services and to allow each individual to pay exactly the amount he wants to pay. He developed this project to answer and counter Paul Samuelson’s analysis of public goods, in which social welfare functions play a crucial role. Buchanan and Samuelson disagreed over the allocation of the costs of the public good to each individual. To Buchanan, it was by relying on individual’s preferences. To Samuelson, by using a SWF. Buchanan’s clubs are thus foreign and incompatible with the traditional Samuelson-style public economics in which they are used.
Full-Text Access | Supplementary Materials
“Recommendations for Further Reading,” by Timothy Taylor
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