Peer-Reviewed Publications

"What's the Natural Rate of Unemployment? Answers from Forecasters." International Review of Applied Economics, forthcoming.

Published version | Data and code

Abstract: For its panel survey of professional macroeconomic forecasters, the US Federal Reserve asks panelists whether they use the "natural rate of unemployment" (NRU) or "nonaccelerating inflation rate of unemployment" (NAIRU) in formulating their forecasts and, also, to estimate the NRU/NAIRU. This paper studies responses and non-responses to those questions in order to interrogate forecasters' views of the NRU/NAIRU. We find that most panelists in most years say they do not use the NRU/NAIRU and they do not provide an estimate of it. Among those who do, their NRU/NAIRU estimates differ but usually do not differ significantly from the average of recent unemployment rates. We fail to find much evidence—in either their inflation and unemployment forecasts, NRU/NAIRU estimates, or revisions to those estimates over time—that panelists who use the NRU/NAIRU treat it as an unemployment rate below which inflation rises and above which inflation falls. Finally, we find that the NRU/NAIRU has no informational value for panelists who say they use it; they are no better at accurately forecasting inflation or unemployment.

"Fine Water: A Blind Taste Test" with Elena Berg. Journal of Wine Economics 13.1 (2018): 20–40.

Published version | Data, code, and other supplementary materials

Abstract: To test whether consumers can distinguish different bottled waters and, if so, whether they prefer some to others, we recruited over 100 subjects to participate in a blind tasting with four brands of bottled water featured in a restaurant’s water menu and a guidebook to fine waters. The tasting involved three successive experiments. First, our subjects tried to distinguish bottled waters in a sensory discrimination test. They were only slightly better than random chance at doing so. Next, they rated bottled waters, as well as tap water, on a 14-point scale used at an international water competition. Some subjects preferred the inexpensive tap water to any of the bottled waters, and there was no association or a weak negative association between a bottled water’s price and its rating. Finally, our subjects tried to distinguish tap from bottled water while matching the bottled waters to expert descriptions. They were no better than random chance at doing either of those things. Similar results have been found in previous taste tests of beer and wine. Overall, our results suggest consumers do not have strong preferences over different bottled waters to the extent they can even tell a difference.

"Pass GO and Collect $610: Modified Monopoly for Teaching Inequality" with Va Nee Van Vleck. Special issue on "Teaching Inequality in an Age of Pluralism," International Journal of Pluralism and Economic Education 9.1/2 (2018): 144–167.

Published version | Data, code, and other supplementary materials

Abstract: Modified versions of the board game Monopoly have been used to teach inequality. This paper reviews modifications suggested in the pedagogical literature and then reports survey-based results on whether playing a modified version of the game affected students' objective perceptions of or subjective attitudes towards inequality. Our survey results suggest that, compared to a group of students who received only a traditional lecture on inequality statistics, students who played the modified Monopoly game saw larger improvements in their objective perceptions of the actual extent of income and wealth inequality and, also, saw bigger changes in their subjective attitudes about the importance of inheritance, luck, and hard work to real-world success. Yet attitudes were not dramatically affected by playing the game and misperceptions about basic inequality statistics remained, so higher impact approaches to teaching inequality are still needed.

"A Nutty Model for Teaching Macroeconomic Models." International Journal of Pluralism and Economics Education 8.3 (2017): 244–253.

Published version | Basic recipe handout | Peanut multiplier theory and associated in-class activity handout | Longer handout

Abstract: This pedagogical paper draws attention to Basil Moore’s peanut multiplier theory of income determination and argues that it is a useful tool for teaching macroeconomic models and for critically understanding them. The peanut multiplier theory can be used to teach the essential elements of any macro model, the manner in which the internal logic of a model can be explored, and the manner in which external critiques of a model can be formulated, all within an ideologically neutral yet still memorable context. A critical understanding of the peanut multiplier theory also lays the foundation for a critical understanding of standard macro models like the simple Keynesian theory of income determination, quantity theory of money, and money multiplier theory. Student feedback provides evidence of the effectiveness of using the peanut multiplier theory to teach macro models.

"Toward an Improved Definition of the Wealthy." Forum for Social Economics 46.4 (2017): 337–349.

Published version | Data and code

Abstract: A definition of the wealthy was proposed in this journal [Eisenhauer, Joseph G. (2008) "An Economic Definition of the Middle Class." Forum for Social Economics 37.2: 103–13]. According to the definition, “the wealthy” are people who could live poorly for a year while living off the interest on their wealth. This paper suggests a more general definition of the wealthy, which encompasses that definition as well as ones based on the ability to live at higher standards of living than the poverty level over longer periods of time than one year while living off interest income alone. Previous empirical work is revisited to show new insights offered by the new definition. The evidence points to the reemergence of a rentier class.

"Inequality and Top Income Cyclicality." Economics Letters 157 (2017): 152–154.

Published version | AudioSlides

Abstract: Previous studies have shown that, as top incomes became more concentrated over recent decades, they also became more cyclical. This paper derives an exact expression for top-income cyclicality to show that it rises whenever average income growth tends to be captured by those at the top, as it has over recent decades. The increased cyclicality of top incomes may therefore be a reflection of their increased concentration rather than a distinct phenomenon in need of its own explanation.

"Fine Water: A Hedonic Pricing Approach." Lead article in Journal of Wine Economics 10.2 (2015): 129–150.

Published version | Data and code | Unpublished appendix | Press coverage can be found here

Abstract: Bottles of water vary in price with some priced as if they were bottles of fine wine. This article attempts to explain price differences between over 100 bottled waters included in a guidebook to fine waters by drawing on the hedonic pricing approach, which has been used to try to explain price differences among bottles of wine. As part of that approach, the price of each bottled water is regressed against various characteristics, including those related to its water. Water-related characteristics explain only a small part of the price differences between the bottled waters. Thus, to a large extent, the premium that consumers pay for a more expensive bottled water does not seem to be a premium for its water.

"Hyman Minsky's Interpretation of Donald Trump." Journal of Post Keynesian Economics 38.3 (2015): 477–92.

Published version | Handout on Minsky's talk | Full text of Minsky's talk | Press coverage can be found here | Blogosphere coverage can be found here

Abstract: Hyman Minsky’s interpretation of The General Theory by John Maynard Keynes has received renewed attention in recent years. This article draws attention to Minsky’s interpretation of another book by another author: The Art of the Deal by Donald Trump. The article begins by summarizing Trump's interpretation of himself in his book. In Trump's interpretation, he was an artist when it came to making deals, and appreciation in the value of his assets was proof of his deal-making artistry. Next, the article summarizes Minsky’s interpretation of Trump. In Minsky’s interpretation, Trump’s deal-making artistry was predicated on appreciation in the value of his assets because of the fragility of his financing. To conclude, the article argues that Minsky’s interpretation of The Art of the Deal is a point of entry into his body of work.

"The Shape of the Oprah Supply Curve." The American Economist 60.1 (2015): 63–73.

Published version | Data and code | Video

Abstract: The Oprah Supply Curve shows the relationship between the quantity of Oprah Winfrey supplied and her income. Although even a Nobel laureate has speculated on the shape of that curve, its shape has not been estimated. We estimate its shape by using variation in the number of new episodes per season of Oprah's television show, The Oprah Winfrey Show. The curve appears to be backward bending. Thus, while Oprah may not be an obvious target for taxation, a higher tax rate might expand the quantity of services she supplies while also increasing tax revenues.

"Thinking About a Hairy Situation." Journal of Post Keynesian Economics 36.4 (2014): 635–52.

Published version | Krugman's model of a liquidity trap

Abstract: To satirize the theory that increases in the quantity of money cause increases in the price level, Richard Kahn theorized that increases in the quantity of hairpins cause increases in the percentage of women with long hair. If Kahn's satirical theory is taken seriously, then the situation in Japan in the 1990s requires some thought. In Japan in the 1990s, the percentage of long-haired women did not increase, despite an increase in the quantity of hairpins. This article considers such a situation by following Paul Krugman's thinking about a liquidity trap. The failure of an increase in the quantity of hairpins to increase the percentage of long-haired women is thought of as a failure of policymakers to credibly commit to a permanent increase in the quantity of hairpins.

"Is the Wealth of the World's Billionaires Not Paretian?" Econophysics section of Physica A: Statistical Mechanics and Its Applications 395.1 (2014): 255–60.

Published version with data and code

Abstract: According to previous studies that applied a popular goodness-of-fit test, the wealth of the world’s billionaires does not follow a Pareto distribution. The test applied by those studies assumes that wealth is measured without error, yet, if different sources of data on the wealthiest people in the world are compared, then wealth appears to be measured with error. This paper shows that the conclusions drawn from the goodness-of-fit test can change when the test is modified to account for measurement errors.

"What's So Funny About Making Monetary Policy?" Miscellany section of Economic Inquiry 51.4 (2013): 2125–130.

Published version | Working-paper version | Data, code, and "jokes" | Included in the virtual special issue on economic humor | Press coverage of this paper can be found on Bloomberg, the Harvard Business Review's blog, and the PBS NewsHour's blog

Abstract: During their meetings, the members of the Federal Open Market Committee (FOMC) make monetary policy, but they also make each other laugh. This article studies the amount of laughter elicited by members of the FOMC during their meetings. The study finds that a member elicits more laughter if he or she expects higher inflation, other things being equal. This finding suggests that members may use humor to cope with the threat of inflation.

Update (March 4, 2015): According to Bloomberg, the total incidence of laughter during FOMC meetings dipped amid the recent economic crisis in the United States. A dip in joking and laughter amid disinflation is consistent with my paper's main finding of a positive relationship between a member's expectations of inflation and the number of laughs they elicit, after controlling for other factors. The dip in joking and laughter would be more difficult to reconcile with the paper's other, admittedly weaker finding of a slight positive relationship between a member's expectations of slow growth or high unemployment and the number of laughs they elicit. A way in which it might be reconciled is as follows. Any relationship between a member's expectations of stagnation and the number of jokes they tell could be non-linear. Whereas the threat of somewhat slower growth or higher unemployment may lead to more joking and laughing among central bankers, the threat of "it" happening again may not. Another way to reconcile my paper's findings with the dip in the total incidence of laughter is to attribute it to the sort of factors that would be incorporated into member- or meeting-specific fixed effects. The members of the FOMC including the person who chairs the meetings change over time, for example, and that may do more to explain the change in the total incidence of laughter than the change in macroeconomic circumstances. A panel-data analysis like the one presented in my paper could prove prudent once more-recent data becomes available. The psychology of central bankers is therefore an area that is still ripe for further analysis.

"Creative Destruction, Economic Insecurity, Stress, and Epidemic Obesity" with Jon D. Wisman. American Journal of Economics and Sociology 69.3 (2010): 936–82. Reprinted in Insecurity, Inequality, and Obesity in Affluent Societies, edited by Avner Offer, Rachel Pechey, and Stanley Ulijaszek, ch. 2. Oxford, UK: Oxford University Press, 2012.

Published version | Reprinted version | Working-paper version

Other Publications

"The Forbes 400." Entry in The American Middle Class: An Economic Encyclopedia of Progress and Poverty, edited by Robert Rycroft. Santa Barbara, CA: Greenwood, 2017.

Working-paper version

Essays on the Wealthiest Americans. Ph.D. dissertation, American University, Washington, DC, 2014.

Published version with data and code

Abstract: In every year since 1982, the popular magazine Forbes Magazine has published a list of the 400 wealthiest Americans. That list has attracted attention from the press and public, but it has been largely ignored by economists, at least in their professional capacities. Although a list published by a popular magazine may seem like a dubious source of data, the magazine's list is arguably the best source of data on the very top of the wealth distribution in the United States. This dissertation is a series of essays that use the magazine's list to study the wealthiest Americans. The essays study inequality between the wealthiest Americans and everyone else, inequality among the wealthiest Americans themselves, and mobility among the wealthiest Americans over time. Taken together, the essays offer insight into some basic empirical facts about a much noticed but little studied group.