We estimate the impact of compulsory schooling on earnings using changes in compulsory schooling laws in West Germany after World War II. Most estimates in the literature indicate returns in the range of 10% to 15%. While our research design is very similar to studies for various other...

Forward-looking behavior on the part of the monetary authority makes it difficult to estimate the effect of monetary policy interventions on output. We present instrumental variables estimates of the impact of interest rates on quarterly real output for several European countries, using German...

We measure unit value electricity prices using 2 million annual observations on U.S. manufacturing plants from 1963 to 2000. These prices display tremendous cross-sectional dispersion, 85–95% of which reflects differences by plant location and purchase quantity. Spatial differentials decline...

We construct a life cycle model that delivers realistic behavior for both equity holdings and borrowing. The key model ingredient is a wedge between the cost of borrowing and the risk-free investment return. Borrowing can either raise or lower equity demand, depending on the cost of borrowing. A...