A large literature in cognitive science studies the puzzling "Flynn effect" of rising fluid intelligence (reasoning skill) in rich countries. We develop an economic model in which a cohort's mix of skills is determined by different skills' relative returns in the labor market and by the...

We study the problem of learning about the effect of one market-level variable (e.g., price) on another (e.g., quantity) in the presence of shocks to unobservables (e.g., preferences). We show that economic intuitions about the plausible size of the shocks can be informative about the parameter...