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Jeronimo Carballo��

Yongmin Chen

“,” (with X. Hua) Journal of Law, Economics, and Organization, forthcoming.
Abstract: When a multimarket firm's product causes harm to consumers, should the firm bear uniform or variable liability across markets? We analyze a two-market model, in which under the variable rule the firm's liability rises above the standard level in market 1 but falls below it in market 2, while under the uniform rule the standard liability is enforced in both markets. Allowing variation in product liability across markets has broad implications for the firm's incentive to invest in product safety, total output, and output allocation across markets, as well as for the optimal choice of the standard liability in the first place. We show that welfare is higher under uniform liability if demand elasticity is weakly higher and demand curvature is weakly lower in market 2 than in market 1, but welfare can be higher under variable liability otherwise.

"Search and Competition in Expert Markets,” (with C. Cao, Y. Ding, and T. Zhang) RAND Journal of Economics, forthcoming.
Abstract: We develop a model in which consumers sequentially search experts for recom- mendations and prices to treat a problem, and experts simultaneously compete in these two dimensions. Consumers have either zero or a positive search cost. In equilibrium, experts may “cheat” by recommending an unnecessary treatment with positive probabilities, prices follow distributions that depend on a consumer’s problem type and the treatment, and consumers search with Bayesian belief updating about their problem types. Remarkably, as search cost decreases, both expert cheating and prices can increase stochastically. However, if search cost is sufficiently small, competition forces all experts to behave honestly.

Jonathan Hughes

• ",” Journal of Environmental Economics and Management, forthcoming.
  Abstract: Low prices, limited capacity and increased interest in outdoor recreation contribute to intense competition for public campsites in the United States. Yet, users and park managers report high vacancy rates due to unused reservations or “no-shows.” I develop a simple model for the campground reservation, cancellation and no-show decisions. I numerically simulate pricing policies at a hypothetical but representative park. When capacity constraints are binding, the cancellation fees charged by many parks increase no-shows and decrease consumer surplus. In contrast, modestly higher prices and no-show fees dramatically reduce no-shows and increase social surplus by 8 to 15 percent. However, these policies create different distributional effects. Higher prices raise revenue but decrease consumer surplus and discourage reservations from lower income users when income is positively correlated with trip utility. No-show fees increase consumer surplus and do not materially affect the income distribution of users. The optimal no-show fee, equal to the lost consumer surplus from the marginal no-show, maximizes consumer surplus and increases social surplus by 8.5 percent.

Murat Iyigun

"," (with Ali Almelhem, Austin Kennedy and Jared Rubin) Quarterly Journal of Economics, forthcoming.
Abstract: Using textual analysis of 173,031 works printed in England between 1500 and 1900, we test whether British culture evolved to manifest a heightened belief in progress associated with science and industry. Our analysis yields three main findings. First, there was a separation in the language of science and religion beginning in the 17th century. Second, scientific volumes became more progress-oriented during the Enlightenment. Third, industrial works—especially those at the science-political economy nexus—were more progress-oriented beginning in the 17th century. It was therefore the more pragmatic, industrial works which reflected the cultural values cited as important for Britain’s takeoff.

Taylor Jaworski

"," with Alex Hollingsworth, Carl Kitchens, and Ivan Rudik, Journal of Political Economy: Microeconomics, 2026.
Abstract:��We develop a quantitative economic geography model with endogenous emissions, amenities, trade, and labor reallocation to evaluate the spatial impacts of the leading air quality regulation in the United States: the National Ambient Air Quality Standards (NAAQS). We find that the NAAQS generate over $50 billion in annual welfare gains. The gains are spatially concentrated in a small set of cities targeted by the NAAQS, and the improved amenities attract large numbers of nonmanufacturing workers into these areas. Despite the concentration of the benefits in cities, over $10 billion in benefits spill over into counties indirectly affected by the regulation. We use our model to analyze counterfactual policies and find that making the NAAQS more stringent could have increased welfare by another $13 billion annually, and that using emissions pricing could increase welfare by another $70 billion per year.

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Xiaodong Liu

"," (with Chih-Sheng Hsieh and Michael Kӧnig) The RAND Journal of Economics, 2025.
Abstract: We introduce an R&D network formation model where firms choose both R&D efforts and collaboration partners. Neighbors in the network benefit from each other's R&D through technology spillovers, and there exists competition effects reflecting strategic substitutability in R&D. We provide a complete equilibrium characterization, and develop an estimation method that is computationally feasible for large networks. We then conduct an analysis of R&D collaboration subsidies, and find that a subsidy scheme targeting specific R&D collaborations can be more effective than a uniform subsidy, with a welfare gain up to five times larger than the cost of the��subsidy.

"," (with Hyunseok Jung) Journal of Econometrics, accepted.
Abstract: This paper proposes an Anderson-Rubin (AR) test for the presence of peer effectsin panel data without the need to specify the network structure. The unrestrictedmodel of our test is a linear panel data model of social interactions with dyad-specificpeer effect coefficients for all potential peers. The proposed AR test evaluates if thesepeer effect coefficients are all zero. As the number of peer effect coefficients increaseswith the sample size, so does the number of instrumental variables (IVs) employedto test the restrictions under the null, rendering a many-IV environment ofBekker(1994). By extending existing many-IV asymptotic results to panel data, we establishthe asymptotic validity of the proposed AR test. Our Monte Carlo simulations showthe robustness and improved performance of the proposed test compared to some ex-isting tests with misspecified networks. We provide two applications to demonstrateits empirical relevance.

","��(with��Chih-Sheng Hsieh and Michael Kӧnig)��The RAND Journal of Economics,��accepted.
Abstract:��We introduce a stochastic R&D network formation model where firms choose both R&D efforts and collaboration partners. Neighbors in the network benefit from each other’s R&D efforts through local technology spillovers, and there exists a global competition effect reflecting strategic substitutability in R&D efforts. We provide a complete equilibrium characterization of the network formation model and show that the model is consistent with empirically observed R&D networks. Based on the equilibrium characterization, we propose an estimation method that is computationally feasible even for large networks. With the estimated model we then conduct an analysis of R&D collaboration subsidies to demonstrate the policy relevance of this model. We find that a subsidy scheme targeting specific R&D collaborations in the network can be much more effective than a uniform subsidy, with a welfare gain up to five times larger than the cost of the subsidy.

“” (with Ingmar R. Prucha) Journal of Econometrics 247, 105925, 2025.
Abstract: The paper introduces robust generalized Moran tests for network-generated cross-sectional dependence in a panel data setting where unit-specific effects can be random or fixed. Network dependence may originate from endogenous variables, exogenous variables, and/or disturbances, and the network dependence is allowed to vary over time. The formulation of the test statistics also aims at accommodating situations where the researcher is unsure about the exact nature of the network. Unit-specific effects are eliminated using the Helmert transformation, which is well known to yield time-orthogonality for linear forms of transformed disturbances. Given the specification of our test statistics, these orthogonality properties also extend to the quadratic forms that underlie our test statistics. This greatly simplifies the expressions for the asymptotic variances of our test statistics and their estimation. Monte Carlo simulations suggest that the generalized Moran tests introduced in this paper have the proper size and can provide substantial improvement in robustness when the researcher faces uncertainty about the specification of the network topology.

Richard Mansfield

"," (with Zachary Szlendak) Journal of Human Resources, accepted.
Abstract: Most U.S. high school courses separate classrooms into standard and honors tracks. This paper characterizes the efficiency and distributional impact of changing the share of students enrolling in honors classrooms. Using a sorting model where students choose tracks by course but schools influence the share choosing honors, we show that administrators' optimal choices of honors track size require knowledge of treatment effect functions capturing the impact of alternative honors enrollment shares on different parts of the student predicted performance distribution. Using administrative data from North Carolina public high schools, we estimate these treatment effect functions by predicted performance quintile. Across various specifications, we find that smaller honors tracks (20%-30% of students) yield moderate performance gains for the top quintile (~.05-.07 test score SDs relative to no tracking) that decline monotonically across quintiles toward zero for the bottom quintile. However, expanding the honors share beyond 30-35% generates further (small) achievement increases only for the middle quintile, while reducing top quintile gains and causing substantial bottom quintile losses. Since many courses feature honors shares above 35% or do not track, we predict that enrolling ~25% of students in honors in each high school course would improve all quintiles’ statewide performance.

Adam McCloskey

","��(with Pascal Michaillat)��Review of Economics and Statistics, forthcoming.
Abstract:��P-hacking is prevalent in reality but absent from classical hypothesis testing theory. As a consequence, significant results are much more common than they are supposed to be when the null hypothesis is in fact true. In this paper, we build a model of hypothesis testing with p-hacking. From the model, we construct critical values such that, if the values are used to determine significance, and if scientists’ p-hacking behavior adjusts to the new significance standards, significant results occur with the desired frequency. Such robust critical values allow for p-hacking so they are larger than classical critical values. To illustrate the amount of correction that p-hacking might require, we calibrate the model using evidence from the medical sciences. In the calibrated model the robust critical value for any test statistic is the classical critical value for the same test statistic with one fifth of the significance level.

","��(with Philipp Ketz)��Review of Economics and Statistics,��forthcoming.
Abstract:�� We introduce adaptive confidence intervals on a parameter of interest in the presence of nuisance parameters, such as coefficients on control variables, with known signs. Our confidence intervals are trivial to compute and can provide significant length reductions relative to standard ones when the nuisance parameters are small. At the same time, they entail minimal length increases at any parameter values. We apply our confidence intervals to the linear regression model, prove their uniform validity and illustrate their length properties in an empirical application to a factorial design field experiment and a Monte Carlo study calibrated to the empirical application.

Sergey Nigai

Alessandro Peri

”,” (Fabrizio Colella and Keith E. Maskus) Economic Journal, conditionally accepted, 2025.
Abstract: Tighter money-laundering regulations in offshore financial havens may inadvertently spur incentives to launder money domestically. Our study exploits regulations targeting financially based money laundering in Caribbean jurisdictions to uncover the creation of front companies in the United States. We find that counties exposed via offshore financial links to these jurisdictions experienced an increase in business activities after the tightening of anti-money-laundering regulations. The effect is more pronounced among small firms, in sectors at high risk of money laundering, and in regions with high intensities of drug trafficking. Our work provides the first empirical evidence of the real effects of policy-induced money-laundering leakage.

“,"��(with Cheela, Bhagath, et al.) Quantitative Economics, vol. 16, .no 1, Econometric Society, 2025, pp. 49-87.
Abstract: We show how to use field‐programmable gate arrays (FPGAs) and their associated high‐level synthesis (HLS) compilers to solve heterogeneous agent models with incomplete markets and aggregate uncertainty (Krusell and Smith (1998)). We document that the acceleration delivered by one single FPGA is comparable to that provided by using 69 CPU cores in a conventional cluster. The time to solve 1200 versions of the model drops from 8 hours to 7 minutes, illustrating a great potential for structural estimation. We describe how to achieve multiple acceleration opportunities—pipeline, data‐level parallelism, and data precision—with minimal modification of the C/C++ code written for a traditional sequential processor, which we then deploy on FPGAs easily available at Amazon Web Services. We quantify the speedup and cost of these accelerations. Our paper is the first step toward a new field, electrical engineering economics, focused on designing computational accelerators for economics to tackle challenging quantitative models. Replication code is available on Github.

","��(with Omar Rachedi and Iacopo Varotto)��The Review of Economics and Statistics, forthcoming.
Abstract:��Aggregate and sectoral effects of public investment crucially depend on the inter- action between the output elasticity to public capital and intermediate inputs. We uncover this fact through the lens of a New Keynesian production network. This setting doubles the socially optimal amount of public capital relative to the one-sector model without intermediate inputs, leading to a substantial am- plification of the public-investment multiplier. We also document novel sectoral implications of public investment. Although public investment is concentrated in far fewer sectors than public consumption, its effects are relatively more evenly distributed across industries. We validate this model implication in the data.

Carol Shiue

","��Journal of Economic History, June 2025, 85(2), pp. 370-410.
Abstract: This paper studies intergenerational mobility with a population of families in central China over twenty generations. Employing genealogical data on individual lifetime achievements, I first find that while mobility was low initially there was a striking increase in mobility starting in the late 17th century. Through the lens of a Becker-Tomes (1979) model I explain this through a falling human capital earnings elasticity because the return to passing the civil service examinations, China's most important pathway to office and income at the time, declined over time. Second, as predicted by the model times of high human capital earnings elasticity are times of high cross-sectional inequality. Third, parent human capital affects child income for any given nonhuman parental investment and is estimated to have 2/3 of the effect of nonhuman investments on child income. Moreover, educational inequality is even more strongly correlated with social persistence than income inequality. Finally, much of the observed increase in mobility is accounted for by lower differences in average clan income, consistent with the hypothesis that part of the earnings elasticity of human capital is group-specific.

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