The big change in the former has been the rise of economics departments around the world in virtually all developed countries (though not Italy). It's now quite easy to encounter a place you have heard of -- yet never really thought of -- and find they have a bunch of young faculty with articles in tier one journals. In essence the standards are now so high in terms of skills and data sets and thoroughness that it is mainly the young and ambitious who publish in tier one journals. Those people are found around the world.
The 44-year-old tenured Princeton economist isn't so much in the AER as in times past. The incentive, relative to the required work, has changed dramatically. Note also that consulting returns, or public intellectual returns, are more lucrative today than they were twenty or thirty years ago.
I completely agree with the first claim. It has been a lot of fun to watch the growth and transformation of economics in places like Germany and Spain just in the time that I have been a professional economist.
In regard to the second point, I would add one more bit. Publication serves different purposes for those with and without tenure. Essentially, the top five journals represent the tenure gatekeepers at the top departments. Once you have tenure, you just want people to read and cite your papers. If you have built up enough of a reputation, they will read them and cite them wherever you put them, as long as they are good, even if where you put them is just in the NBER Working Paper series. I think in the future we will see more journals offering the option of taking papers "as is" in order to attract papers by established scholars who do not want the hassle of going multiple rounds with referees and editors. A desire to avoid hassle explains the placement of some of my own papers in special issues edited by my friends, even when those papers - e.g. Smith and Todd (2005) - could probably have gotten into better journals. I don't think that the citation count for Smith and Todd (2005) has suffered much, if at all, from its placement in the Journal of Econometrics rather than a top five journal but it would have if I was not already known (and, also, if I had not presented it at lots of seminars and conferences the invitations to which, of course, depend on already being known).
A commenter at MR suggests that
The supply of world class candidates far outstrips the number of jobs available at the traditionally top departments. That's good news for all the other schools. The problem is not limited to Econ departments either.This is, I am sorry to say, complete rubbish. Every year I was at UWO, most years I was at Maryland and every year I have been at Michigan we ran out of economists we wanted to hire and thought we had a chance of attracting before we ran out of slots. This is particularly true in high demand fields like theoretical econometrics.
Oh, and I thought all the 44-year old tenured Princeton economists were in DC?