National Bureau of Economic Research

Displaying 1-40 of 1579 results

  • White Papers // Aug 2011

    Innovation And Productivity

    What do we know about the relationship between innovation and productivity among firms? The workhorse model of this relationship is presented and the implications of analysis using this model and the usually available data on product and process innovation are derived. The recent empirical evidence on the relationship between innovation...

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  • White Papers // Aug 2011

    Capital Mobility And Asset Pricing

    The authors present a model for the equilibrium movement of capital between asset markets that are distinguished only by the levels of capital invested in each. Investment in that market with the greatest amount of capital earns the lowest risk premium. Intermediaries optimally trade off the costs of intermediation against...

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  • White Papers // Aug 2011

    Information Percolation In Segmented Markets

    The authors calculate equilibria of dynamic double-auction markets in which agents are distinguished by their preferences and information. Over time, agents are privately informed by bids and offers. Investors are segmented into groups that differ with respect to characteristics determining information quality, including initial information precision as well as market...

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  • White Papers // Aug 2011

    Labor Market Flows In The Cross Section And Over Time

    Many theoretical models of labor market search imply a tight link between worker flows (hires and separations) and job gains and losses at the employer level. Partly motivated by these theories, the authors exploit establishment-level data from U.S. sources to study the relationship between worker flows and job flows in...

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  • White Papers // Aug 2011

    Why Do Voters Dismantle Checks And Balances?

    Voters often dismantle constitutional checks and balances on the executive. If such checks and balances limit presidential abuses of power and rents, why do voters support their removal? The authors argue that by reducing politician rents, checks and balances also make it cheaper to bribe or influence politicians through non-electoral...

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  • White Papers // Aug 2011

    Spillover Effects In Mutual Fund Companies

    The authors' paper investigates spillover effects across different business segments of publicly traded mutual fund management companies. They find that the prior stock price performance of the management company has a significant impact on the money flows and the management turnover of the affiliated mutual funds. Mutual funds managed by...

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  • White Papers // Aug 2011

    A Gains From Trade Perspective On Macroeconomic Fluctuations

    Business cycles reflect changes over time in the amount of trade between individuals. In this paper, the authors show that incorporating explicitly intra-temporal gains from trade between individuals into a macroeconomic model can provide new insight into the potential mechanisms driving economic fluctuations as well as modify key policy implications....

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  • White Papers // Aug 2011

    Are Corporate Default Probabilities Consistent With The Static Tradeoff Theory?

    Default probability plays a central role in the static tradeoff theory of capital structure. The authors directly test this theory by regressing the probability of default on proxies for costs and benefits of debt. Contrary to predictions of the theory, firms with higher bankruptcy costs, i.e., smaller firms and firms...

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  • White Papers // Aug 2011

    The Extensive Margin, Sectoral Shares And International Business Cycles

    This paper documents some previously neglected features of sectoral shares at business cycle frequencies in OECD economies. In particular, the authors find that the nontraded sector share of output is as volatile as aggregate GDP, and that for most countries, the nontraded sector is distinctly countercyclical. While the standard international...

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  • White Papers // Aug 2011

    Consumption Risk-sharing And The Real Exchange Rate: Why Does The Nominal Exchange Rate Make Such A Difference?

    A basic prediction of efficient risk-sharing is that relative consumption growth rates across countries or regions should be positively related to real exchange rate growth rates across the same areas. The authors investigate this hypothesis, employing a newly constructed multi-country and multi-regional data set. Within countries, they find significant evidence...

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  • White Papers // Aug 2011

    Would People Behave Differently If They Better Understood Social Security? Evidence From A Field Experiment

    This paper presents the results of a field experiment in which a sample of older workers was randomized between a treatment group that was given information about key Social Security provisions and a control group that was not. The experiment was designed to examine whether it is possible to affect...

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  • White Papers // Aug 2011

    Exam High Schools And Academic Achievement: Evidence From New York City

    Publicly funded exam schools educate many of the world's most talented students. These schools typically contain higher achieving peers, more rigorous instruction, and additional resources compared to regular public schools. This paper uses a sharp discontinuity in the admissions process at three prominent exam schools in New York City to...

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  • White Papers // Aug 2011

    Covariances Versus Characteristics In General Equilibrium

    The authors question a deep-ingrained doctrine in asset pricing: if an empirical characteristic-return relation is consistent with investor "Rationality," the relation must be "Explained" by a risk factor model. The investment approach changes the big picture of asset pricing. Factors formed on characteristics are not necessarily risk factors: characteristics-based factor...

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  • White Papers // Aug 2011

    Equilibrium Wage And Employment Dynamics In A Model Of Wage Posting Without Commitment

    A rich but tractable variant of the Burdett-Mortensen model of wage setting behavior is formulated and a dynamic market equilibrium solution to the model is defined and characterized. In the model, firms cannot commit to wage contracts. Instead, the Markov perfect equilibrium to the wage setting game, characterized by Coles...

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  • White Papers // Aug 2011

    A Simple Nonparametric Approach To Estimating The Distribution Of Random Coefficients In Structural Models

    The authors explore a nonparametric mixtures estimator for recovering the joint distribution of random coefficients in economic models. The estimator is based on linear regression subject to linear inequality constraints and is computationally attractive compared to alternative, nonparametric estimators. They provide conditions under which the estimated distribution function converges to...

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  • White Papers // Aug 2011

    Foreign Firms And Local Communities

    The literature on the effects of Foreign Direct Investment (FDI) and activities of MultiNational Enterprises (MNEs) on host-countries has been almost exclusively focused on issues of productivity, growth and wages. The authors argue that this leaves quite a bit of important unexplored areas of inquiry, particularly those connected with the...

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  • White Papers // Aug 2011

    Systemic Risk Exposures: A 10-by-10-by-10 Approach

    Here, the author presents and discuss a "10-by-10-by-10" network-based approach to monitoring systemic financial risk. Under this approach, a regulator would analyze the exposures of a core group of systemically important financial firms to a list of stressful scenarios, say 10 in number. For each scenario, about 10 such designated...

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  • White Papers // Aug 2011

    The Exact Law Of Large Numbers For Independent Random Matching

    This paper provides a mathematical foundation for independent random matching of a large population, as widely used in the economics literature. The authors consider both static and dynamic systems with random mutation, partial matching arising from search, and type changes induced by matching. Under independence assumptions at each randomization step,...

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  • White Papers // Aug 2011

    The Importance Of The Meaning And Measurement Of "Affordable" In The Affordable Care Act

    This working paper highlights the practical importance of two critical but under-explored assumptions behind existing estimates of the Affordable Care Act (ACA)'s potential impact on the mix of employees and families who may have Employer-Sponsored health Insurance (ESI) in the future or may receive subsidies in the new health insurance...

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  • White Papers // Aug 2011

    Carry Trades And Risk

    Carry trades, in which an investor borrows a low interest rate currency and lends a high interest rate currency, have been profitable historically. The risk exposure of carry traders might explain their high returns, but conventional models of risk do not work because traditional risk factors, used to price the...

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  • White Papers // Aug 2011

    The Continental Dollar: Initial Design, Ideal Performance, And The Credibility Of Congressional Commitment

    An alternative history of the Continental Dollar is constructed from the original resolutions passed by Congress. The Continental Dollar was a zero-interest bearer bond, not a fiat currency. The public could redeem it at face value in specie at fixed future dates. Being a zero-interest bearer bond, discounting must be...

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  • White Papers // Aug 2011

    Substitution Between Individual And Cultural Capital: Pre-migration Labor Supply, Culture And US Labor Market Outcomes Among Immigrant Women

    In this paper, the authors use New Immigrant Survey data to investigate the impact of immigrant women's own labor supply prior to migrating and female labor supply in their source country to provide evidence on the role of human capital and culture in affecting their labor supply and wages in...

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  • White Papers // Aug 2011

    Unemployment In Latin America And The Caribbean

    This paper constructs a new data set on unemployment rates in Latin America and the Caribbean and then explores the determinants of unemployment. The authors compare different countries, finding that unemployment is influenced by the size of the rural population and that the effects of government regulations are generally weak....

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  • White Papers // Aug 2011

    Healthy, Wealthy And Wise? Revisited: An Analysis Of The Causal Pathways From Socio-Economic Status To Health

    Much has been said about the stylized fact that the economically successful are not only wealthier but also healthier than the less affluent. There is little doubt about the existence of this socio-economic gradient in health, but there remains a vivid debate about its source. In this paper, the authors...

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  • White Papers // Aug 2011

    Country Heterogeneity And The International Evidence On The Effects Of Fiscal Policy

    This paper shows how the richer frequency and variety of fiscal policy shocks available in an international sample can be analyzed recognizing the heterogeneity that exists across different countries. The main conclusion of the authors' empirical analysis is that the question "What is the fiscal policy multiplier" is an ill-posed...

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  • White Papers // Aug 2011

    Long-term Barriers To The International Diffusion Of Innovations

    The authors document an empirical relationship between the cross-country adoption of technologies and the degree of long-term historical relatedness between human populations. Historical relatedness is measured using genetic distance, a measure of the time since two populations' last common ancestors. They find that the measure of human relatedness that is...

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  • White Papers // Aug 2011

    Deregulation, Consolidation, And Efficiency: Evidence From U.S. Nuclear Power

    For the first four decades of its existence the U.S. nuclear power industry was run by regulated utilities, with most companies owning only one or two reactors. Beginning in the late 1990s electricity markets in many states were deregulated and almost half of the nation's 103 reactors were sold to...

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  • White Papers // Aug 2011

    Propose With A Rose? Signaling In Internet Dating Markets

    The large literature on costly signaling and the somewhat scant literature on preference signaling had varying success in showing the effectiveness of signals. The authors use a field experiment to show that even when everyone can send a signal, signals are free and the only costs are opportunity costs, sending...

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  • White Papers // Aug 2011

    Financial Literacy, Retirement Planning, And Household Wealth

    There is sample empirical evidence documenting widespread financial illiteracy and limited pension knowledge. At the same time, the distribution of wealth is widely dispersed and many workers arrive on the verge of retirement with few or no personal assets. In this paper, the authors investigate the relationship between financial literacy...

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  • White Papers // Aug 2011

    A Model Of The Consumption Response To Fiscal Stimulus Payments

    A wide body of empirical evidence, based on randomized experiments, finds that 20-40 percent of fiscal stimulus payments (e.g. tax rebates) are spent on nondurable household consumption in the quarter that they are received. The authors develop a structural economic model to interpret this evidence. Their model integrates the classical...

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  • White Papers // Aug 2011

    Ethnic Innovation And U.S. Multinational Firm Activity

    This paper studies the impact that immigrant innovators have on the global activities of U.S. firms by analyzing detailed data on patent applications and on the operations of the foreign affiliates of U.S. multinational firms. The results indicate that increases in the share of a firm's innovation performed by inventors...

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  • White Papers // Aug 2011

    Country Size, International Trade, And Aggregate Fluctuations In Granular Economies

    This paper proposes a new mechanism by which country size and international trade affect macroeconomic volatility. The authors study a multi-country, multi-sector model with heterogeneous firms that are subject to idiosyncratic firm-specific shocks. When the distribution of firm sizes follows a power law with an exponent close to -1, the...

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  • White Papers // Aug 2011

    Behavioral Corporate Finance: An Updated Survey

    The authors survey the theory and evidence of behavioral corporate finance, which generally takes one of two approaches. The market timing and catering approach views managerial financing and investment decisions as rational managerial responses to securities mispricing. The managerial biases approach studies the direct effects of managers' biases and nonstandard...

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  • White Papers // Aug 2011

    Asset Liquidity And International Portfolio Choice

    The authors study optimal asset portfolio choice in a two-country search-theoretic model of monetary exchange. They allow assets not only to represent claims on future consumption, but also to serve as means of payment. Assuming foreign assets trade at a cost, they characterize equilibria in which different countries' assets arise...

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  • White Papers // Aug 2011

    Information Aggregation, Investment, And Managerial Incentives

    The authors study the interplay of share prices and firm decisions when share prices aggregate and convey noisy information about fundamentals to investors and managers. First, they show that the informational feedback between the firm's share price and its investment decisions leads to a systematic premium in the firm's share...

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  • White Papers // Aug 2011

    Is Leisure A Normal Good? Evidence From The European Parliament

    Prior to July 2009, salaries of the members of the European Parliament were paid by their home country and there were substantial salary differences between parliamentarians representing different EU countries. Starting in July 2009, the salary of each member of the Parliament is pegged to 38.5% of a European Court...

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  • White Papers // Aug 2011

    Rare Macroeconomic Disasters

    The potential for rare macroeconomic disasters may explain an array of asset-pricing puzzles. The authors' empirical studies of these extreme events rely on long-term data now covering 28 countries for consumption and 40 for GDP. A baseline model calibrated with observed peak-to-trough disaster sizes accords with the average equity premium...

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  • White Papers // Aug 2011

    Beauty Is The Promise Of Happiness?

    The authors measure the impact of individuals' looks on life satisfaction/happiness. Using five data sets, from the U.S., Canada, the U.K., and Germany, they construct beauty measures in different ways that allow placing lower bounds on the effects of beauty. Beauty raises happiness: a one standard-deviation change in beauty generates...

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  • White Papers // Aug 2011

    Credit Shocks And Aggregate Fluctuations In An Economy With Production Heterogeneity

    The authors study the cyclical implications of credit market imperfections in a calibrated dynamic, stochastic general equilibrium model wherein firms face persistent shocks to aggregate and individual productivity. In their model economy, optimal capital reallocation is distorted by two frictions: collateralized borrowing and partial capital irreversibility yielding (S,s) firm-level investment...

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  • White Papers // Aug 2011

    Is The Foreclosure Crisis Making Us Sick?

    The authors investigate the relationship between foreclosure activity and the health of residents using zip code level longitudinal data. They focus on Arizona, California, Florida, and New Jersey, four states that have been among the hardest hit by the foreclosure crisis. They combine foreclosure data for 2005 to 2009 from...

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  • White Papers // Dec 2010

    International Macro-Finance

    International macro-finance is a new area of open economy macroeconomics that brings portfolio choice and asset pricing considerations into models of international macroeconomics. The importance of these considerations - typically relegated to Finance and largely overlooked in traditional macroeconomics - for the international macro economy have been underscored by a...

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  • White Papers // Dec 2010

    Unexploited Gains From International Diversification: Patterns Of Portfolio Holdings Around The World

    This paper studies how portfolios with a global investment scope are actually allocated internationally using a unique micro dataset on U.S. equity mutual funds. While mutual funds have great flexibility to invest globally, they invest in a surprisingly limited number of stocks, around 100. The number of holdings in stocks...

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  • White Papers // Dec 2010

    Cursed Resources? Political Conditions And Oil Market Outcomes

    The authors analyze how a country's political institutions affect oil production within its borders. They find a pronounced negative relationship between political openness and volatility in oil production, with democratic regimes exhibiting less volatility than more autocratic regimes. This relationship holds across a number of robustness checks including using different...

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  • White Papers // Dec 2010

    New Cellular Networks In Malawi: Correlates Of Service Rollout And Network Performance

    In this paper the authors use new data to estimate the correlates of cellular phone access and network performance across rural areas of Malawi. They compile a dataset which combines administrative data of the entire cellular network of Malawi with geographic and Census data to describe the rollout and the...

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  • White Papers // Dec 2010

    Retail Trade By Federal Reserve District, 1919 To 1939: A Statistical History

    Soon after beginning operations, the Federal Reserve established a nationwide network for collecting information about the economy. In 1919, the Fed began tabulating data by about retail sales, which it viewed as a fundamental measure of consumption. From 1920 until 1929, the Federal Reserve published data about retail sales each...

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  • White Papers // Dec 2010

    Macroeconomics And Volatility: Data, Models, And Estimation

    In this paper, the authors first review the different mechanisms proposed in the literature to generate changes in volatility similar to the ones observed in the data. Second, they document the quantitative importance of time-varying volatility in aggregate time series. Third, they present a prototype business cycle model with time-varying...

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  • White Papers // Dec 2010

    Preference Heterogeneity And Optimal Capital Income Taxation

    The authors examine a prominent justification for capital income taxation: goods preferred by those with high ability ought to be taxed. In an environment where commodity taxes are allowed to be nonlinear functions of income and consumption, they derive an analytical expression that reveals the forces determining optimal commodity taxation....

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  • White Papers // Dec 2010

    A Behavioral Model Of Demandable Deposits And Its Implications For Financial Regulation

    A model is developed which rationalizes contracts that give depositors the right to obtain funds on demand even when depositors intend to use these funds for consumption in the future. This is explained by depositor over optimism regarding their own ability to collect funds in a run. Capitalized institutions serving...

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  • White Papers // Dec 2010

    Committing To Exercise: Contract Design For Virtuous Habit Formation

    Sedentary lifestyles, obesity, and obesity-related chronic diseases have become increasingly common among U.S. adults, posing a major health policy challenge. While individuals may be interested in exercising more to reduce these health risks, they often have difficultly forming long-term exercise habits. Behavioral economic devices like commitment contracts aid individuals make...

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  • White Papers // Dec 2010

    Evaluating The Effectiveness Of National Labor Relations Act Remedies: Analysis And Comparison With Other Workplace Penalty Policies

    The goal of this paper is to examine the implied penalty policies underlying the remedies created by the National Labor Relations Act (NLRA) in terms of the policies' impact on employer and union behaviors. The authors present a simple model of deterrence as a means of evaluating workplace penalty policies...

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  • White Papers // Dec 2010

    Trading And Liquidity With Limited Cognition

    The authors focus the reaction of financial markets to aggregate liquidity shocks when traders face cognition limits. While each financial institution recovers from the shock at a random time, the trader representing the institution observes this recovery with a delay reflecting the time it takes to collect and process information...

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  • White Papers // Dec 2010

    The Domestic And International Effects Of Interstate U.S. Banking

    This paper studies the domestic and international effects of the transition to an interstate banking system implemented by the U.S. since the late 1970s in a dynamic, stochastic, general equilibrium model with endogenous producer entry. The authors show that the an economy that implements this form of deregulation experiences increased...

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  • White Papers // Dec 2010

    The Role Of Financial Literacy In Determining Retirement Plans

    Workers nearing retirement face many important, and often irreversible, choices. The authors collected detailed demographic and financial literacy data on over 1,500 workers nearing retirement at three large companies to assess how individuals are planning for retirement. Many respondents display limited knowledge and understanding of public and company-provided retirement benefits....

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  • White Papers // Nov 2010

    A Note On Detecting Learning By Exporting

    Learning by exporting refers to the mechanism whereby firms improve their performance (productivity) after entering export markets. Although this mechanism is often mentioned in policy documents, a significant share of econometric studies has not found evidence for this hypothesis. This paper shows that the methods used to come to the...

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  • White Papers // Nov 2010

    Taxation And International Migration Of Superstars: Evidence From The European Football Market

    This paper analyzes the effects of top earnings tax rates on the international migration of top football players in Europe. The authors construct a panel data set of top earnings tax rates, football player careers, and club performances in the first leagues of 14 European countries since 1980. They identify...

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  • White Papers // Nov 2010

    Workplace Concentration Of Immigrants

    The authors find that immigrants are much more likely to have immigrant coworkers than are natives, and are particularly likely to work with their compatriots. They find much higher levels of concentration for small businesses than for large ones, that concentration varies substantially across industries, and that concentration is particularly...

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  • White Papers // Nov 2010

    Induction And Evolution In The Origin Of Inventions: Evidence From Smoking Cessation Products

    Neoclassical economic theory predicts that policies that discourage the consumption of a particular good will induce innovation in a socially desirable substitute. Evolutionary theory emphasizes the possibility of innovation waves associated with the identification of new dominant designs. The authors incorporate both of these possibilities in a model of the...

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  • White Papers // Nov 2010

    The Effect Of Uncertainty On Investment: Evidence From Texas Oil Drilling

    Despite widespread application of real options theory in the literature, the extent to which firms actually delay irreversible investments following an increase in the uncertainty of their environment is not empirically well-known. This paper estimates firms' responsiveness to changes in uncertainty using detailed data on oil well drilling in Texas...

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  • White Papers // Nov 2010

    Analyzing Compensation Methods In Manufacturing: Piece Rates, Time Rates, Or Gain-Sharing?

    Economists have often argued that "Pay for performance" is the optimal compensation scheme. However, use of the simplest form of pay for performance, the piece rate, has been in decline in manufacturing in recent decades. The authors show both theoretically and empirically that these changes are due to adoption of...

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  • White Papers // Nov 2010

    How Do Energy Prices, And Labor And Environmental Regulations Affect Local Manufacturing Employment Dynamics? A Regression Discontinuity Approach

    Manufacturing industries differ with respect to their energy intensity, labor-to-capital ratio and their pollution intensity. Across the United States, there is significant variation in electricity prices and labor and environmental regulation. This paper uses a regression discontinuity approach to examine whether the basic logic of comparative advantage can explain the...

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  • White Papers // Nov 2010

    Information Rigidity And The Expectations Formation Process: A Simple Framework And New Facts

    The authors propose a new approach to test of the null of full-information rational expectations which is informative about whether rejections of the null reflect departures from rationality or full-information. This approach can also quantify the economic significance of departures from the null by mapping them into the underlying degree...

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  • White Papers // Nov 2010

    Interstate Migration Has Fallen Less Than You Think: Consequences Of Hot Deck Imputation In The Current Population Survey

    The authors show that the significant drop in the annual interstate migration rate between the 2005 and 2006 Current Population Surveys is a statistical artifact. The Census Bureau's imputation procedure for dealing with missing data before the 2006 survey year inflated the estimated interstate migration rate. An undocumented change in...

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  • White Papers // Nov 2010

    Looking For Local Labor Market Effects Of NAFTA

    Using US Census data for 1990 and 2000, the authors estimate effects of the NAFTA agreement on the US wages. They look for any indication of effects of the agreement on local labor markets dependent on industries vulnerable to import competition from Mexico, and workers employed in industries competing with...

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  • White Papers // Nov 2010

    What Does Equity Sector Orderflow Tell Us About The Economy?

    Investors rebalance their portfolios as their views about expected returns and risk change. The authors use empirical measures of portfolio rebalancing to back out investors' views, specifically their views about the state of the economy. They show that aggregate portfolio rebalancing across equity sectors is consistent with sector rotation, an...

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  • White Papers // Nov 2010

    The Contribution Of The Minimum Wage To U.S. Wage Inequality Over Three Decades: A Reassessment

    The authors reassess the effect of state and federal minimum wages on U.S. earnings inequality, attending to two issues that appear to bias earlier work: violation of the assumed independence of state wage levels and state wage dispersion, and errors-in-variables that inflate impact estimates via an analogue of the well...

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  • White Papers // Nov 2010

    Estimating Turning Points Using Large Data Sets

    Dating business cycles entails ascertaining economy-wide turning points. Broadly speaking, there are two approaches in the literature. The first approach is to identify turning points individually in a large number of series, then to look for a common date that could be called an aggregate turning point. The second approach,...

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  • White Papers // Nov 2010

    Accelerating Energy Innovation: Insights From Multiple Sectors

    Re-orienting current energy systems toward a far greater reliance on technologies with low or no carbon dioxide emissions is an immense challenge. At the broadest level the histories presented here are very much consistent with widely held views within the energy innovation policy literature. In general, this literature has suggested...

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  • White Papers // Nov 2010

    What Hinders Investment In The Aftermath Of Financial Crises: Insolvent Firms Or Illiquid Banks?

    There are two leading views on how financial crises turn into recessions. The first view highlights the importance of a troubled banking sector that cannot provide credit to domestic firms. The second view stresses the relevance of short-term borrowing in foreign currency and the associated decline in net worth through...

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  • White Papers // Nov 2010

    For Better Or For Worse, But How About A Recession?

    In light of the current economic crisis, the authors estimate hazard models of divorce to determine how state and national unemployment rates affect the likelihood of divorce. With 89,340 observations over the 1978-2006 periods for 7633 couples from the 1979 NLSY, they find mixed evidence on whether increases in the...

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  • White Papers // Nov 2010

    Worker Absence And Productivity: Evidence From Teaching

    A significant amount of work time is lost each year due to worker absence, but evidence on the productivity losses from absenteeism remains scant due to difficulties with identification. In this paper, the authors use uniquely detailed data on the timing, duration, and cause of absences among teachers to address...

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  • White Papers // Nov 2010

    Does Menstruation Explain Gender Gaps In Work Absenteeism?

    The authors find that menstruation may contribute to gender gaps in absenteeism and earnings, based on evidence that absences of young female Italian bank employees follow a 28-day cycle. They analyze absenteeism of teachers and find no evidence of increased female absenteeism on a 28-day cycle. They also show that...

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  • White Papers // Nov 2010

    Animal Spirits, Persistent Unemployment And The Belief Function

    This paper presents a theory of the monetary transmission mechanism in an old-Keynesian model with multiple equilibrium unemployment rates. The model has two equations in common with the new-Keynesian model; the optimizing IS curve and the policy rule. It differs from the new-Keynesian model by replacing the Phillips curve with...

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  • White Papers // Nov 2010

    The Effects Of Government-Sponsored Venture Capital: International Evidence

    This paper examines the impact of Government-sponsored Venture Capitalists (GVCs) on the success of enterprises. Using international enterprise-level data, the authors identify a surprising non-monotonicity in the effect of GVC on the likelihood of exit via Initial Public Offerings (IPOs) or third party acquisitions. Enterprises that receive funding from both...

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  • White Papers // Nov 2010

    Do Product Market Regulations In Upstream Sectors Curb Productivity Growth? Panel Data Evidence For OECD Countries

    Based on an endogenous growth model, the authors show that intermediate goods markets imperfections can curb incentives to improve productivity downstream. They confirm such prediction by estimating a model of multifactor productivity growth in which the effects of upstream competition vary with distance to frontier on a panel of 15...

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  • White Papers // Nov 2010

    Liquidity Traps: An Interest-Rate-Based Exit Strategy

    This paper analyzes a potential strategy for escaping liquidity traps. The strategy is based on an augmented Taylor-type interest-rate feedback rule and differs from usual specifications in that when inflation falls below a threshold, the central bank temporarily deviates from the traditional Taylor rule by following a deterministic path for...

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  • White Papers // Nov 2010

    The Economics Of Cultural Transmission And Socialization

    Cultural transmission arguably plays an important role in the determination of many fundamental preference traits and most cultural traits, social norms, and ideological tenets. It is, however, the pervasive evidence of the resilience of ethnic and religious traits across generations that motivates a large fraction of the theoretical and empirical...

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  • White Papers // Oct 2010

    Empirical Models Of Consumer Behavior

    Models of consumer behavior play a key role in modern empirical Industrial Organization. In this paper, the author surveys some of the models used in this literature. In particular, the author discusses two commonly used demand systems: multi-stage budgeting approaches and discrete choice models. The author motivates their use and...

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  • White Papers // Oct 2010

    Inflation And The Fiscal Limit

    The authors use a rational expectations framework to assess the implications of rising debt in an environment with a "Fiscal limit." The fiscal limit is defined as the point where the government no longer has the ability to finance higher debt levels by increasing taxes, so either an adjustment to...

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  • White Papers // Dec 2010

    Relocating The Value Chain: Offshoring And Agglomeration In The Global Economy

    Fragmentation of stages of the production process is determined by international cost differences and by the benefits of co-location of related stages. The interaction between these forces depends on the technological relationships between these stages. This paper looks at both cost minimizing and equilibrium off shoring under different technological configurations....

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  • White Papers // Dec 2010

    The Determinants Of Food Aid Provisions To Africa And The Developing World

    The authors examine the supply-side and demand-side determinants of global bilateral food aid shipments between 1971 and 2008. First, they find that domestic food production in developing countries is negatively correlated with subsequent food aid receipts, suggesting that food aid receipt is partly driven by local food shortages. Interestingly, food...

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