Economic Perspectives

Transcription

1 A journal of the American Economic Association Winter 2018

2 A journal of the American Economic Association Editor Enrico Moretti, University of California at Berkeley Coeditors Gordon Hanson, University of California at San Diego Mark Gertler, New York University Associate Editors Nicholas Bloom, Stanford University Leah Boustan, Princeton University Dora Costa, University of California at Los Angeles Amy Finkelstein, Massachusetts Institute of Technology Seema Jayachandran, Northwestern University Guido Lorenzoni, Northwestern University Valerie Ramey, University of California at San Diego Fiona Scott Morton, Yale University Betsey Stevenson, University of Michigan Ebonya Washington, Yale University Catherine Wolfram, University of California Luigi Zingales, University of Chicago Managing Editor Timothy Taylor Assistant Editor Ann Norman Editorial offices: Journal of American Economic Association Publications 2403 Sidney St., #260 Pittsburgh, PA The Journal of gratefully acknowledges the support of Macalester College. Registered in the US Patent and Trademark Office ( ). Copyright 2018 by the American Economic Association; All Rights Reserved. Composed by American Economic Association Publications, Pittsburgh, Pennsylvania, USA. Printed by LSC Communications, Owensville, Missouri, 65066, USA. No responsibility for the views expressed by the authors in this journal is assumed by the editors or by the American Economic Association. THE JOURNAL OF ECONOMIC PERSPECTIVES (ISSN ), Winter 2018, Vol. 32, No. 1. The JEP is published quarterly (February, May, August, November) by the American Economic Association, 2014 Broadway, Suite 305, Nashville, TN Annual dues for regular membership are $20.00, $30.00, or $40.00 depending on income; for an additional $15.00, you can receive this journal in print. E-reader versions are free. For details and further information on the AEA go to Periodicals postage paid at Nashville, TN, and at additional mailing offices. POSTMASTER: Send address changes to the Journal of, 2014 Broadway, Suite 305, Nashville, TN Printed in the U.S.A.

3 Contents Volume 32 Number 1 Winter 2018 Symposia Housing Edward Glaeser and Joseph Gyourko, The Economic Implications of Housing Supply....3 Laurie S. Goodman and Christopher Mayer, Homeownership and the American Dream Gabriel Metcalf, Sand Castles Before the Tide? Affordable Housing in Expensive Cities Friedman s Natural Rate Hypothesis after 50 Years N. Gregory Mankiw and Ricardo Reis, Friedman s Presidential Address in the Evolution of Macroeconomic Thought Olivier Blanchard, Should We Reject the Natural Rate Hypothesis? Robert E. Hall and Thomas J. Sargent, Short-Run and Long-Run Effects of Milton Friedman s Presidential Address Articles Martin Lettau and Ananth Madhavan, Exchange-Traded Funds 101 for Economists Benjamin Handel and Joshua Schwartzstein, Frictions or Mental Gaps: What s Behind the Information We (Don t) Use and When Do We Care? Jonathan Brogaard, Joseph Engelberg, and Edward Van Wesep, Do Economists Swing for the Fences after Tenure? Features Johannes A. Schwarzer, Retrospectives: Cost-Push and Demand-Pull Inflation: Milton Friedman and the Cruel Dilemma Timothy Taylor, Recommendations for Further Reading Using JEP Articles as Course Readings? Tell Us About It!

4 Statement of Purpose The Journal of attempts to fill a gap between the general interest press and most other academic economics journals. The journal aims to publish articles that will serve several goals: to synthesize and integrate lessons learned from active lines of economic research; to provide economic analysis of public policy issues; to encourage cross-fertilization of ideas among the fields of economics; to offer readers an accessible source for state-of-the-art economic thinking; to suggest directions for future research; to provide insights and readings for classroom use; and to address issues relating to the economics profession. Articles appearing in the journal are normally solicited by the editors and associate editors. Proposals for topics and authors should be directed to the journal office, at the address inside the front cover. Policy on Data Availability It is the policy of the Journal of to publish papers only if the data used in the analysis are clearly and precisely documented and are readily available to any researcher for purposes of replication. Details of the computations sufficient to permit replication must be provided. The Editor should be notified at the time of submission if the data used in a paper are proprietary or if, for some other reason, the above requirements cannot be met. Policy on Disclosure Authors of articles appearing in the Journal of are expected to disclose any potential conflicts of interest that may arise from their consulting activities, financial interests, or other nonacademic activities. Journal of Advisory Board Kristen Butcher, Wellesley College Janet Currie, Princeton University Claudia Goldin, Harvard University Robert E. Hall, Stanford University Trevon Logan, Ohio State University Scott Page, University of Michigan Eduardo Porter, New York Times Paul Romer, World Bank David Sappington, University of Florida Elu von Thadden, University of Mannheim

5 The American Economic Association Correspondence relating to advertising, business matters, permission to quote, or change of address should be sent to the AEA business office: Street address: American Economic Association, 2014 Broadway, Suite 305, Nashville, TN For membership, subscriptions, or complimentary JEP for your e-reader, go to the AEA website: Annual dues for regular membership are $20.00, $30.00, or $40.00, depending on income; for an additional fee, you can receive this journal, or any of the Association s journals, in print. Change of address notice must be received at least six weeks prior to the publication month. Copyright 2018 by the American Eco nomic Association. Permission to make dig ital or hard copies of part or all of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or direct commercial advantage and that copies show this notice on the first page or initial screen of a display along with the full citation, including the name of the author. Copyrights for components of this work owned by others than AEA must be honored. Abstracting with credit is permitted. The author has the right to republish, post on servers, redistribute to lists, and use any component of this work in other works. For others to do so requires prior specific permission and/or a fee. Per missions may be requested from the American Economic Association, 2014 Broadway, Suite 305, Nashville, TN 37203; aeainfo@vanderbilt.edu. Founded in 1885 EXECUTIVE COMMITTEE Elected Officers and Members President OLIVIER BLANCHARD, Peterson Institute for International Economics President-elect BEN S. BERNANKE, The Brookings Institution Vice Presidents SUSAN C. ATHEY, Stanford University PINELOPI KOUJIANOU GOLDBERG, Yale University Members JOHN Y. CAMPBELL, Harvard University HILARY HOYNES, University of California at Berkeley NICHOLAS BLOOM, Stanford University ERICA FIELD, Duke University ADRIANA LLERAS-MUNEY, University of California at Los Angeles BETSEY STEVENSON, University of Michigan Ex Officio Members ROBERT J. SHILLER, Yale University ALVIN E. ROTH, Stanford University Appointed Members Editor, The American Economic Review ESTHER DUFLO, Massachusetts Institute of Technology Editor, The American Economic Review: Insights AMY FINKELSTEIN, Massachusetts Institute of Technology Editor, The Journal of Economic Literature STEVEN N. DURLAUF, University of Wisconsin Editor, The Journal of ENRICO MORETTI, University of California at Berkeley Editor, American Economic Journal: Applied Economics ALEXANDRE MAS, Princeton University Editor, American Economic Journal: Economic Policy MATTHEW D. SHAPIRO, University of Michigan Editor, American Economic Journal: Macroeconomics SIMON GILCHRIST, New York University Editor, American Economic Journal: Microeconomics JOHANNES HÖRNER, Yale University Secretary-Treasurer PETER L. ROUSSEAU, Vanderbilt University OTHER OFFICERS Editor, Resources for Economists WILLLIAM GOFFE, Pennsylvania State University Director of AEA Publication Services JANE EMILY VOROS, Pittsburgh Managing Director of EconLit Product Design and Content STEVEN L. HUSTED, University of Pittsburgh Counsel TERRY CALVANI, Freshfields Bruckhaus Deringer LLP Washington, DC ADMINISTRATORS Director of Finance and Administration BARBARA H. FISER Convention Manager GWYN LOFTIS

6 Winter 2018, Volume 32, Number 1 Symposia Housing Edward Glaeser and Joseph Gyourko, The Economic Implications of Housing Supply Laurie S. Goodman and Christopher Mayer, Homeownership and the American Dream Gabriel Metcalf, Sand Castles Before the Tide? Affordable Housing in Expensive Cities Friedman s Natural Rate Hypothesis after 50 Years N. Gregory Mankiw and Ricardo Reis, Friedman s Presidential Address in the Evolution of Macroeconomic Thought Olivier Blanchard, Should We Reject the Natural Rate Hypothesis? Robert E. Hall and Thomas J. Sargent, Short-Run and Long-Run Effects of Milton Friedman s Presidential Address Articles Martin Lettau and Ananth Madhavan, Exchange-Traded Funds 101 for Economists Benjamin Handel and Joshua Schwartzstein, Frictions or Mental Gaps: What s Behind the Information We (Don t) Use and When Do We Care? Jonathan Brogaard, Joseph Engelberg, and Edward Van Wesep, Do Economists Swing for the Fences after Tenure? Features Johannes A. Schwarzer, Retrospectives: Cost-Push and Demand-Pull Inflation: Milton Friedman and the Cruel Dilemma Recommendations for Further Reading