Frontiers of economic research

Susanne Frick, Andrés Rodríguez-Pose, 20 October 2017

Big cities have historically been seen as an important prerequisite for a country’s economic growth. In recent decades, however, developing countries have rapidly urbanised, and large cities are increasingly found in relatively poor countries. This column uses a new dataset to revisit the relationship between city size and economic growth. It finds that relatively small cities (with populations under three million) have been more conducive to economic growth, while very large cities are only growth-enhancing in countries with a very large urban population.

Hersh Shefrin, 12 October 2017

Richard Thaler of the University of Chicago has been awarded the 2017 Nobel Prize in Economic Sciences “for his contributions to behavioural economics”. This column, written by his first behavioural collaborator, provides a personal perspective on the development of three key areas of research to which the new laureate has been a major contributor: people’s limited rationality, their perceptions about fairness, and their lack of self-control.

David Neumark, 09 October 2017

Studies of the employment effects of minimum wages have been wide-ranging, but a consensus proves elusive. This column summarises the existing literature and proposes some key questions to better inform policy in the context of minimum wages across different states in the US. Future areas for research should include understanding why different approaches yield different answers, as well as a recognition that there is not one minimum wage effect, but several across different contexts.

Eran Yashiv, 08 October 2017

The €222 million transfer of Neymar to PSG calls into question whether football superstars are a good investment. Using the financial details of the transfer, this column argues that, at the price paid, Neymar has a negative net present value. While there are other explanations for PSG's willingness to pay, in purely economic terms his contract seems a bad investment. Policymakers might use this type of calculation to justify intervening in the transfer market through regulation and taxation.

David Galenson, 08 October 2017

The abstract expressionists revolutionised the art world in the late 1940s, only to be displaced by the pop art revolution less than two decades later. This column uses auction price data to explore the life cycles of major painters from the two groups. The abstract expressionists were much older when they produced their peak value works, while the pop artists tended to be most productive in their twenties. The findings provide a systematic basis for dating these revolutions in art markets.

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