ERC Consolidator Grant · 2021
Applied economists routinely evaluate the effect of economic policies. For instance, what is the effect of raising the minimum wage on employment? Angrist & Pischke (2010) argue that applied economics has recently experienced a "credibility revolution'': by switching to transparent methods to evaluate policies, applied economists have increased the credibility of their findings, and the impact of their work. In the first part of this proposal, I show that the credibility revolution is not complete. Two-way fixed effects regression, a policy-evaluation method used in as many as 26% of the most-highly cited papers recently published in the American Economic Review, relies on the assumption…
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