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The AER has been going for a hundred years.  (Some scholars who sent in papers at AER’s inception are still going through the “revise and resubmit” process.)

To mark the anniversary, a distinguished panel has picked the Top 20 articles published in the last 100 years.  Peter Diamond has three articles on the list and Joseph Stiglitz has two. We can now start the debate of what should be on the list. To fully account for the value added, if an article is proposed, the proposer should also identify which article should be knocked off the current list.  To get the ball rolling, I propose Shapiro-Stiglitz to replace the Cobb-Douglas production function.  A functional form does not deserve a place on this list, even if the form is canonical.  Shapiro-Stiglitz actually have an idea, a theory of involuntary unemployment.  More broadly, they provide a simple model of the principal agent model under moral hazard with limited liability, a fundamental model.

But to drop the science and get to the nub of the matter: What is a publication in AER actually worth in terms of salary?  Bob Margo estimates the impact of AER articles in his contribution to the anniversary volume.  In passing, Bob mentions an article which estimates the salary impact of an AER publication. The author Raymond Sauer finds:

“The full return to a 10-AEQ-page article in the top journal is thus estimated to be a 3.8 percent increase in salary.” (AEQ means the article is adjusted for page size to correspond to AER page length.)

Sauer’s article would not survive the “structural estimation” or “instrumental variation” schools of thought.  But he does give us an idea of the payoff to learning the magic taught by the wizards and witches at these schools.

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