The Review of Economic Studies is one of the core journals in economics. It is essential reading for economists, consistently ranking among the top five journals.

In many industries, buyers diversify their supplier base to manage supplier disruption risk. We investigate the importance of such diversification as a determinant of demand and supplier entry in the context of the internet backbone, the worldwide network of undersea fiber-optic cables that underpins the internet. We specify a model of international bandwidth demand and cable operators’ dynamic entry and supply choices. The model is estimated using novel data on cross-border data flows, prices, cable characteristics, and disruptions.

We exploit a panel of city-level data with rich demographic information to estimate the distributional effects of Department of Defense spending and its effects on a range of social outcomes. The income and employment generated by defense spending accrue predominantly to households without a bachelor’s degree. These households as well as Black and Hispanic households tend to disproportionately benefit from this spending.

We use variation in state corporate income tax rates to re-examine the relation between taxes and corporate leverage. Contrary to prior research, corporate leverage rises after tax cuts for small private firms. An estimated dynamic equilibrium model shows that tax cuts make capital more productive and spur the use of leverage. Tax cuts also produce more distant default thresholds and lower credit spreads.

This article examines the emergence of coercive labor institutions using the case of serfdom in early modern Russia. We argue that serfdom consolidated under the pressure of landholding military elites who gained political influence due to the prolonged struggle with steppe nomads. To contain nomadic raids, the Russian state erected defense lines on the southern frontier, and granted land in the area to soldiers in charge of its defense. The soldiers could not farm while on defense duty, nor could they compete in the market for peasant labor, as the land had been selected for its defensive rather than agricultural value.

Consumer choices are constrained in many markets due to either supply-side rationing or information frictions. Examples include matching markets for schools and colleges; entry-level labor markets; limited brand awareness and inattention in consumer markets; and selective admissions to healthcare services. We analyze a general random utility model for consumer preferences that allows for endogenous characteristics and a reduced-form choice-set formation rule that can be derived from models of the examples described above.

How do cities grow in the process of structural transformation? To answer this question, we develop a multi-sector spatial equilibrium model with endogenous land use: land is used either for agriculture or housing. Urban land, densely populated due to commuting frictions, expands out of agricultural land. With low productivity and high subsistence needs, farmland is expensive, households cannot afford large homes and cities are very dense.