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.

A principal (such as a centrist political party) can partially influence the allocation of power between two competing parties. The principal is closer to one party, the “Friend”, than to the other, the “Enemy”. The principal’s optimal contract initially seeks to exclude the Enemy. However, once the Enemy gains power, the principal embraces him in exchange for policy moderation.

This paper studies the unemployment of physical capital—defined as idle units searching to be traded—and its macroeconomic implications. I provide evidence documenting that capital unemployment is large, volatile, and increases during economic downturns. I construct a capital-accumulation model that explains these patterns, with trading frictions in capital markets, which give rise to equilibrium capital unemployment, and financial shocks, which lead to large fluctuations in trading probabilities and capital unemployment.

Consider a setting where N players, partitioned into K observable types, form a directed network. Agents’ preferences over the form of the network consist of an arbitrary network benefit function (e.g., agents may have preferences over their network centrality) and a private, or dyadic, component which is additively separable in own links. This latter component allows for unobserved heterogeneity in the costs of sending and receiving links across agents (respectively out- and in- degree heterogeneity) as well as homophily/heterophily across the K types of agents.

This paper investigates the importance of the age composition for pandemic policy design. To do so, it introduces an economic framework with age heterogeneity, individual choice, and incomplete information, emphasizing the value of testing. Calibrating the model to the US Covid-19 pandemic reveals an 80% reduction in the death toll due to voluntary actions and the lockdown implemented in the US.

We document that the source of funds for paying health insurance premiums has a dramatic impact on plan choices. We focus on the MediSave program in Singapore, a medical savings account that is used to pay out-of-pocket medical spending. Residents can also pay their health insurance premiums with cash or MediSave funds, but are subject to limits that vary by age and over time.

We examine the welfare-based opportunity cost of foreign exchange (FX) intervention when both CIP and UIP deviations are present. We consider a small open economy that receives international capital flows through constrained international financial intermediaries. Deviations from CIP come from limited arbitrage or through a convenience yield, while UIP deviations are also affected by global risk.