AEA Research Highlights

The amount of money in politics seems to grow every year. Spending by outside groups reached a record of half billion dollars in the 2016 elections cycle, and lobbying expenditures regularly exceed $3 billion annually.

But economists Marianne Bertrand and Matilde Bombardini argue that a lot of corporate influence is still overlooked.

In the July issue of the American Economic Review, they estimate that as much as $1 billion a year of corporate philanthropy is used to sway congressional representatives. For a typical year, that's over twice as much as contributions form political action committees (PAC).

Money from corporate foundations could be having a far reaching effect on how our laws and regulations get written. But unlike traditional lobbying, there are few transparency requirements for such charitable spending.

Professors Bertrand and Bombardini recently spoke with the AEA's Tyler Smith about the political influence that corporations wield through their charities and what can be done about it.

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Even before there was President Trump, there was "the wall."

America has spent billions on border enforcement, which includes a barrier between the US and Mexico. And the current administration's nationalistic promises to put "America first" have given the border wall heightened symbolic importance. But it's not clear just how effective it is in actually preventing migrants from entering the US.

Ben Feigenberg says the wall does, in fact, have a substantial impact on the number of people crossing the border. In the July issue of the American Economic Journal: Applied Economics, he says that construction of a border fence reduced migration by up to 35 percent. However, that doesn't seem to be any more cost-effective than hiring more border patrol agents.

The AEA's Chris Fleisher spoke with Feigenberg about what his research says about the effectiveness of border walls, potential unintended consequences, and how economics can inform debates around policing and criminal justice.

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The world has been adjusting to the information age for the last 50 years now. And so have its autocracies, according to our guest today.

Daniel Treisman, political scientist at UCLA, says that illiberal leaders are building modern authoritarian regimes with a new set of tools to keep themselves in power.

In the Fall 2019 issue of the Journal of Economic Perspectives, Treisman and his coauthor Sergei Guriev described these so-called informational autocrats, which no longer terrorize their citizens like traditional autocrats—if they can avoid it.

Instead, these dictators suppress widespread knowledge of their own incompetence and criminal activity by manipulating major media outlets, disguising themselves as democracies, and hiding their violence.

In such an atmosphere, unflattering stories about leaders tend not to reach the general public.

Professor Treisman recently spoke with the AEA's Tyler Smith about how informational autocrats retain their power, why they had to adapt, and how new coalitions may be able to fight back.

Swarthmore professor Amanda Bayer has worked much of her career to address diversity in economics. She has published papers about it, served on the AEA's Committee on the Status of Minority Groups in the Economics Profession, and co-organized a national summit on the topic with the Federal Reserve. She is also the creator and editor of Diversifying Economic Quality, a widely read online resource that promotes inclusive, innovative, and evidence-based teaching practices in economics. She also helped develop the AEA's "Best Practices for Economists" aimed at building a more diverse and inclusive profession.

In this 2017 interview, the AEA's Chris Fleisher and Diana Schoder talk with Bayer about the severity of the gender gap in economics, why addressing it is more than an issue of fairness, and her own experiences as she advanced her career.

The economics profession is in a moment of racial reckoning.

A field still dominated by white men is rethinking long-held notions about racial discrimination and its impact on the profession. That includes the way that the issue is studied.

Harvard professor Mario Small says that sociology can help. There is a lot about how institutional discrimination works that traditional economic models miss. In the latest issue of the Journal of Economic Perspectives, he and his co-author, the late Devah Pager, say that limiting the study of discrimination to the actions of prejudiced individuals "dramatically understates" the impact on social inequality, on labor markets, credit, housing, and many other contexts.

Professor Small recently spoke with the AEA's Chris Fleisher about how economists should broaden their notions of discrimination, how the lack of diversity in economics constrains the research, and some big questions he would like to see economists take on.

Few economists have shed as much light on the long-run impact of institutions as Melissa Dell.

Her efforts, which earned her this year's John Bates Clark Medal, have helped pinpoint some of the root causes of poverty and insecurity around the world. Her research stands out for the novel datasets she's collected and the innovative ways she's put them to use.

Notably, the Harvard professor has shown how Peru's history of colonialism shaped the economy it has today. Her work ranges from state-building in Vietnam to the unintended consequences of crackdowns on drug-trafficking in Mexico.

Dell is deeply interested in untangling the complicated role that coercive state actions have had on societies.

Co-hosts Tyler Smith and Chris Fleisher spoke with Dell about the through line to her research, the insights she's gained from first-hand experience, and what advice she has for young economists.

For-profit colleges hope to be profitable again.

Years of intense regulatory scrutiny over high student loan default rates and lawsuits over boiler room recruiting tactics resulted in rapid enrollment declines, revenue losses, and a wave of closings.

But now, with a sympathetic Education Department and skyrocketing demand for online education amid the Covid-19 pandemic, for-profit schools are preparing for a comeback.

Our guest today says that could be a cause for concern.

Stephanie Riegg Cellini has studied the industry for more than a decade. She says that, despite claims that for-profits are serving people ignored by traditional schools, students at for-profit schools are generally better off in less expensive community colleges and public institutions.

There is little reason to believe that for-profit colleges have learned from their past mistakes, and yet we may see many laid off workers flocking back to these schools amid a poor economy.

Her most recent paper, with coauthors Leslie Turner and Rajeev Darolia, appears in the May issue of the American Economic Journal: Economic Policy. Cellini spoke with us about that research, whether for-profits could get a boost if the US heads back into recession, and why policymakers must remain vigilant.

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There's little doubt that the US has entered a recession. Stock markets have been continuously rattled since February, and over 20 million people filed for unemployment last month.

Fortunately, economists have learned a lot about fighting recessions since the 2008 financial crisis, according to our guest today.

Valerie Ramey is a leader in the field of fiscal-policy research. She has spent her career trying to pin down multipliers that measure the impact of government spending and taxing on the overall economy.

She says there are many worthwhile steps the government can take to support households and business during a slump, but the timing and circumstances can't be ignored. That's especially true of the current situation.

(If you think back to the financial crisis, things seemed to be moving so quickly then. Well, that was a snail's pace compared to the pace at which things are moving now.)

Ramey summarized the outpouring of fiscal research over the last ten years in the Spring 2019 issue of the Journal of Economic Perspectives.

The American Economic Association spoke with her about why economists were caught off guard by the last recession, the best tools for fighting the current downturn, and what we should expect from the government's fiscal response so far.

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Anyone who has ever taken Econ 101 will likely be familiar with our guest Gregory Mankiw.

The Harvard professor's Principles of Economics is in its ninth edition and is perhaps the most widely used textbook in introductory courses throughout the country.

Now, in an essay published in the Journal of Economic Literature, Mankiw reflects on some of the big questions he's confronted during the three decades since his career as a textbook author began.

He says that textbook authors, especially introductory ones, are like "ambassadors" for the profession. They should strive to present the relevant issues in economics fairly, doing their best to keep their biases in check, even if they're not always successful.

The AEA's Chris Fleisher and Tyler Smith spoke with Mankiw in March via Skype, when he was at home working on the 11th edition of his intermediate macroeconomics textbook amid the COVID-19 outbreak.

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Five years ago, the American Economic Association began posting short, readable summaries of the research published in our journals. We called them Research Highlights, and in that time, we've really seen the audience for these grow to include thousands of tenured professors, students, and everyday people who just want to learn more about economics.

Now, we're hoping to keep growing our audience by giving you something to listen to, as well.