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.

We show how to use randomized participation incentives to test and account for nonresponse bias in surveys. We first use data from a survey about labor market conditions, linked to full-population administrative data, to provide evidence of large differences in labor market outcomes between survey participants and nonparticipants, differences which would not be observable to an analyst who only has access to the survey data.

Allocative wages—the labor costs considered when deciding to form or dissolve a long-term employment relationship—are more sensitive to cyclical conditions for more educated workers. Specifically, college-educated workers’ allocative wages are highly pro-cyclical, while high school dropouts’ wages exhibit only moderate cyclicality.

We study aggregate capital dynamics in an investment model with idiosyncratic productivity shocks, fixed capital adjustment costs, and irreversibility driven by a wedge between capital purchase and resale prices. We derive sufficient statistics that capture the role of investment frictions in aggregate capital fluctuations, measure these statistics using investment microdata, and exploit them to discipline the capital price wedge.

The information banks produce drives their lending decisions and macroeconomic outcomes, but this information is inherently difficult to analyze because it is private. We construct a novel measure of bank information quality from confidential regulatory data that include banks’ private risk assessments for US corporate loans.

When firms finance using long-term nominal debt issued by financial intermediaries, changes in expected inflation lead to a wealth transfer across sectors. Higher expected inflation decreases firms’ real liabilities and default risk, which helps reduce debt overhang. However, it hurts intermediaries’ real assets, leading to a contraction in credit supply.

We study the aggregate and redistributive effects of currency devaluations in a small open economy model with leverage-constrained banks and heterogeneous households. Our framework captures three stylized facts about financial dollarization in emerging economies: i) a sizable share of domestic deposits is denominated in foreign currency; ii) these deposits represent significant foreign currency liabilities for local banks; and iii) dollar deposits are mainly held by wealthier households.