We present a dynamic cash-management model where agents choose whether to pay with cash or credit at every point in time. In the model credit usage depends on the current stock of cash, a novel result that matches recent micro evidence on household's payment choices. The optimality of such...

The high cost of capital for firms conducting medical research and development (R&D) has been partly attributed to the government risk facing investors in medical innovation. This risk slows down medical innovation because investors must be compensated for it. We propose new and simple financial...

We introduce a framework to evaluate the welfare effects of residential energy efficiency programs and estimate key parameters using a 100,000-household field experiment. Results generally contradict conventional wisdom: there is no evidence of informational or behavioral market failures,...

This paper investigates how tax changes for different income groups affect aggregate economic activity. I construct a measure of who received (or paid for) tax changes in the postwar period using tax return data from NBER's TAXSIM. I aggregate each tax change by income group and state. Variation...

A new survey of 745 small businesses shows little change in the size distribution of businesses between 2012 and 2016, except among businesses with 40–74 employees, in a way that is closely related to whether they offer health insurance coverage. Using measures of both size and voluntary...

This paper investigates the effects of the Medicaid expansion provision of the Affordable Care Act (ACA) on households' financial health. Our findings indicate that, in addition to reducing the incidence of unpaid medical bills, the reform provided substantial indirect financial benefits to...

Policy makers are increasingly tying payments for health care providers to their performance on quality measures, though there is little empirical evidence to guide the design of such incentives. I deploy administrative Medicare claims data to study a large federal program which penalizes...

This paper debunks three persistent myths: that creativity is greatest in youth, that wisdom hinders creativity, and that every discipline has a single peak age of creativity. These myths systematically neglect the achievements of experimental innovators – including such figures as Charles...

For most economists the terms “Chicago economics” and “institutionalism” denote clearly antithetical approaches to the discipline. Various members of the modern “Chicago School” have made highly dismissive remarks concerning American institutionalism. Coase has commented that...

We develop a new quantile-based panel data framework to study the nature of income persistence and the transmission of income shocks to consumption. Log-earnings are the sum of a general Markovian persistent component and a transitory innovation. The persistence of past shocks to earnings is...