National Bureau of Economic Research

Displaying 1-40 of 1317 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

    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

    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

    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

    Employment, Wages And Voter Turnout

    This paper argues that, since activities that provide political information are complementary with leisure, increased labor market activity should lower turnout, but should do so least in prominent elections where information is ubiquitous. Using official county-level voting data and a variety of OLS and TSLS models, the authors find that...

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  • White Papers // Aug 2011

    Why Did U.S. Banks Invest In Highly-rated Securitization Tranches?

    The authors estimate holdings of highly-rated tranches of mortgage securitizations of American deposit-taking banks ahead of the credit crisis and evaluate hypotheses that have been advanced to explain these holdings. They find that holdings of highly-rated tranches were economically trivial for the typical bank, but banks with greater holdings performed...

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  • White Papers // Aug 2011

    Tax Expenditures, The Size And Efficiency Of Government, And Implications For Budget Reform

    One possible explanation for the difficulty in controlling the budget is that a major component of spending - tax expenditures - receives privileged status. It is treated as tax cuts rather than spending. This paper explores the implications of that misclassification and illustrates how it can lead to higher taxes,...

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  • White Papers // Aug 2011

    The Influence Of Irving Fisher On Milton Friedman's Monetary Economics

    This paper examines the influence of Irving Fisher's writings on Milton Friedman's work in monetary economics. The authors focus first on Fisher's influences in monetary theory (the quantity theory of money, the Fisher effect, Gibson's Paradox, the monetary theory of business cycles, and the Phillips Curve, and empirics, e.g. distributed...

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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

    Cycles Of Wage Discrimination

    Using CPS data from 1979-2009 the authors examine how cyclical downturns and industry-specific demand shocks affect wage differentials between white non-Hispanic males and women, Hispanics and African-Americans. Women's and Hispanics' relative earnings are harmed by negative shocks, while the earnings disadvantage of African-Americans may drop with negative shocks. Negative shocks...

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  • White Papers // Aug 2011

    Health And Mortality Delta: Assessing The Welfare Cost Of Household Insurance Choice

    The authors develop a pair of risk measures for the universe of health and longevity products that includes life insurance, annuities, and supplementary health insurance. Health delta measures the differential payoff that a policy delivers in poor health, while mortality delta measures the differential payoff that a policy delivers at...

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  • White Papers // Aug 2011

    Organ Allocation Policy And The Decision To Donate

    Organ donations from deceased donors provide the majority of transplanted organs in the United States, and one deceased donor can save numerous lives by providing multiple organs. Nevertheless, most Americans are not registered organ donors despite the relative ease of becoming one. The authors study in the laboratory an experimental...

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  • White Papers // Aug 2011

    The Recovery Theorem

    The authors can only estimate the distribution of stock returns but they observe the distribution of risk neutral state prices. Risk neutral state prices are the product of risk aversion - the pricing kernel - and the natural probability distribution. The Recovery Theorem enables them to separate these and to...

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  • White Papers // Aug 2011

    Was What Ail'd Ya' What Kill'd Ya'?

    Making use of those Union Army veterans for whom death certificates are available, the authors compare the conditions with which they were diagnosed by Civil War pension surgeons to the causes of death on the certificates. They divide the data between those veterans who entered the pension system early because...

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  • White Papers // Aug 2011

    Implicit Guarantees And Risk Taking: Evidence From Money Market Funds

    A firm's termination generates bankruptcy costs. This may create incentives for a firm's owner to bail out a firm in bankruptcy and to curb the firm's risk taking outside bankruptcy. The authors analyze the role of such implicit guarantees in the context of financial institutions that sponsor money market mutual...

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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 // Apr 2010

    Real Wage Inequality

    A large literature has documented a significant increase in the difference between the wage of college graduates and high school graduates over the past 30 years. The author shows that from 1980 to 2000, college graduates have experienced relatively larger increases in cost of living, because they have increasingly concentrated...

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  • White Papers // Jul 2010

    A Model Of Capital And Crises

    The authors develop a model in which the capital of the intermediary sector plays a critical role in determining asset prices. The model is cast within a dynamic general equilibrium economy, and the role for intermediation is derived endogenously based on optimal contracting considerations. Low intermediary capital reduces the risk-bearing...

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  • White Papers // Nov 2009

    Risk Price Dynamics

    The authors present a novel approach to depicting asset pricing dynamics by characterizing shock exposures and prices for alternative investment horizons. They quantify the shock exposures in terms of elasticity's that measure the impact of a current shock on future cash-flow growth. The elasticity's are designed to accommodate nonlinearities in...

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  • White Papers // Nov 2009

    On Quality Bias And Inflation Targets

    A policy issue central banks are confronted with is whether inflation targets should be adjusted to account for the systematic upward bias in measured inflation due to quality improvements in consumption goods. The authors show that in the context of Ramsey equilibrium the answer to this question depends on what...

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  • White Papers // Nov 2009

    An Empirical Evaluation Of The Long-Run Risks Model For Asset Prices

    The authors provide an empirical evaluation of the forward-looking Long-Run Risks (LRR) model and highlight model differences with the backward-looking habit based asset pricing model. They feature three key results: Consistent with the LRR model, there is considerable evidence in the data of time-varying expected consumption growth and volatility, The...

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  • White Papers // Nov 2009

    Banking Deregulations, Financing Constraints, And Firm Entry Size

    The authors examine the effect of US branch banking deregulations on the entry size of new firms using micro-data from the US Census Bureau. They find that the average entry size for startups did not change following the deregulations. However, among firms that survived at least four years, a greater...

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  • White Papers // Nov 2009

    By How Much Does GDP Rise If The Government Buys More Output?

    During World War II and the Korean War, real GDP grew by about half the amount of the increase in government purchases. With allowance for other factors holding back GDP growth during those wars, the multiplier linking government purchases to GDP may be in the range of 0.7 to 1.0,...

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  • White Papers // Nov 2009

    Foreign Demand For Domestic Currency And The Optimal Rate Of Inflation

    In this paper the authors characterize the Ramsey-optimal rate of inflation in an economy with a foreign demand for its currency. In the absence of such demand, the model implies that the Friedman rule - deflation at the real rate of interest - maximizes the utility of the representative domestic...

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  • White Papers // Nov 2009

    Cross-Country Differences In Productivity: The Role Of Allocation And Selection

    This paper combines different strands of the productivity literature to investigate the effect of idiosyncratic (firm-level) policy distortions on aggregate outcomes. On the one hand, a growing body of empirical research has been relating cross-country differences in key economic outcomes, such as productivity or output per capita, to differences in...

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  • White Papers // Oct 2009

    Investments In Pharmaceuticals Before And After TRIPS

    The authors examine the relationship between patent protection for pharmaceuticals and investment in development of new drugs. Patent protection has increased around the world as a consequence of the TRIPS Agreement, which specifies minimum levels of intellectual property protection for members of the World Trade Organization. It is generally argued...

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  • White Papers // Oct 2009

    Why Are The 2000s So Different From The 1970s? A Structural Interpretation Of Changes In The Macroeconomic Effects Of Oil Prices

    In the 1970s, large increases in the price of oil were associated with sharp decreases in output and large increases in inflation. In the 2000s, and at least until the end of 2007, even larger increases in the price of oil were associated with much milder movements in output and...

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  • White Papers // Oct 2009

    Incentives And Creativity: Evidence From The Academic Life Sciences

    Despite its presumed role as an engine of economic growth, the authors know surprisingly little about the drivers of scientific creativity. In this paper, they exploit key differences across funding streams within the academic life sciences to estimate the impact of incentives on the rate and direction of scientific exploration....

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  • White Papers // Sep 2009

    Level Versus Equivalent Intensity Carbon Mitigation Commitments

    Large population / rapidly growing economies such as China and India have argued that in the upcoming UNFCCC negotiations in Copenhagen, any emission reduction targets they take on should be based on their intensity of emissions (emissions/$GDP) on a target date not the level of emissions. They argue that this...

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  • White Papers // Sep 2009

    The Impact Of Tort Reform On Employer-Sponsored Health Insurance Premiums

    The authors evaluate the effect of tort reform on employer-sponsored health insurance premiums by exploiting state-level variation in the timing of reforms. Using a dataset of health plans representing over 10 million Americans annually between 1998 and 2006, they find that caps on non-economic damages, collateral source reform, and joint...

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  • White Papers // Sep 2009

    Measuring How Risk Tradeoffs Adjust With Income

    Efforts to reconcile inconsistencies between theory and estimates of the Income Elasticity of the Value of a Statistical Life (IEVSL) overlook important restrictions implied by a more complete description of the individual choice problem. They develop a more general model of the IEVSL that reconciles some of the observed discrepancies....

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  • White Papers // Sep 2009

    The Economic And Policy Consequences Of Catastrophes

    What is the likelihood that the U.S. will experience a devastating catastrophic event over the next few decades that would substantially reduce the capital stock, GDP and wealth? Can the probability and possible impact of such an event be inferred from economic data? And how much should society be willing...

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  • White Papers // Sep 2009

    Riding The Wave Of Trade: Explaining The Rise Of Labor Regulation In The Golden Age Of Globalization

    The received view pins the adoption of labor regulation before 1914 on domestic forces. Using directed dyad-year event history analysis, the authors find that trade was also a pathway of diffusion. Market access served as an important instrument to encourage a level playing field. The type of trade mattered as...

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  • White Papers // Sep 2009

    The Fundamental Law Of Road Congestion: Evidence From US Cities

    The authors investigate the relationship between interstate highways and highway Vehicle Kilometers Traveled (VKT) in US cities. They find that VKT increases proportionately to highways and identify three important sources for this extra VKT: an increase in driving by current residents; an increase in transportation intensive production activity; and an...

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  • White Papers // Sep 2009

    Financial Crises And Economic Activity

    The authors study the output costs of 40 systemic banking crises since 1980. Most, but not all, crises in the sample coincide with a sharp contraction in output from which it took several years to recover. The main findings are as follows. First, the current financial crisis is unlike any...

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  • White Papers // Sep 2009

    The Welfare Effects Of Medical Malpractice Liability

    Policymakers and the public are concerned about the role of medical malpractice liability in the rising cost of medical care. The authors use variation in the generosity of local juries to identify the causal impact of malpractice liability on medical costs, mortality, and social welfare. The effect of malpractice on...

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  • White Papers // Sep 2009

    Evaluating Monetary Policy

    Evaluating inflation-targeting monetary policy is more complicated than checking whether inflation has been on target, because inflation control is imperfect and flexible inflation targeting means that deviations from target may be deliberate in order to stabilize the real economy. A modified Taylor curve, the forecast Taylor curve, showing the tradeoff...

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  • White Papers // Oct 2009

    U.S. Trade Policy Since 1934: An Uneven Path Toward Greater Trade Liberalization

    This paper presents a comprehensive but relatively brief historical survey of U.S. trade-policy over the last 75 years. It is aimed at individuals who are not already familiar with the concepts and terminology used in discussions of trade policy and the domestic and international institutional framework within which U.S. trade...

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  • White Papers // Oct 2009

    Power Fluctuations And Political Economy

    The authors study the constrained Pareto efficient allocations in a dynamic production economy in which the group that holds political power decides the allocation of resources. They show that Pareto efficient allocations take a quasi-Markovian structure and can be represented recursively as a function of the identity of the group...

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  • White Papers // Oct 2009

    Are Hard Pegs Ever Credible In Emerging Markets? Evidence From The Classical Gold Standard

    Using a new database of weekly sovereign debt prices of paper currency and pound sterling (or gold) denominated debt; the authors identify the currency-risk component of sovereign yield spreads for nine of the largest emerging market borrowers for the period 1870-1913. Five years after a country joined the gold standard,...

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  • White Papers // Oct 2009

    Banking Crises And The Rules Of The Game

    Banking crises properly defined consist either of panics or waves of costly bank failures. These phenomena were rare historically compared to the present. A historical analysis of the two phenomena (panics and waves of failures) reveals that they do not always coincide, are not random events, cannot be seen as...

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  • White Papers // Oct 2009

    Optimal Taxation In The Presence Of Bailouts

    The termination of a representative financial firm due to excessive leverage may lead to substantial bankruptcy costs. A government in the tradition of Ramsey (1927) may be inclined to provide transfers to the firm so as to prevent its liquidation and the associated deadweight costs. It is shown that the...

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  • White Papers // Oct 2009

    Why Are We In A recession? The Financial Crisis Is The Symptom Not The Disease!

    Globalization has brought a sharp increase in the developed world's labor supply. Labor in developing countries - countries with vast pools of underemployed people - can now more easily augment labor in the developed world, without having to relocate, in ways not thought possible only a few decades ago. The...

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  • White Papers // Nov 2009

    Anchors Away: How Fiscal Policy Can Undermine The Taylor Principle

    Slow moving demographics are aging populations around the world and pushing many countries into an extended period of heightened fiscal stress. In some countries, taxes alone cannot or likely will not fully fund projected pension and health care expenditures. If economic agents place sufficient probability on the economy hitting its...

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  • White Papers // Nov 2009

    Decentralized Trading With Private Information

    The paper studies asset pricing in informationally decentralized markets. These markets have two key frictions: trading is decentralized (bilateral), and some agents have private information. The authors analyze how uninformed agents acquire information over time from their bilateral trades. In particular, they show that uninformed agents can learn all the...

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  • White Papers // Nov 2009

    Credit Booms Gone Bust: Monetary Policy, Leverage Cycles And Financial Crises, 1870-2008

    The crisis of 2008 -2009 has focused attention on money and credit fluctuations, financial crises, and policy responses. In this paper the authors study the behavior of money, credit, and macroeconomic indicators over the long run based on a newly constructed historical dataset for 14 developed countries over the years...

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  • White Papers // Nov 2009

    Heterogeneity In The Effect Of Regulation On Entrepreneurship And Entry Size

    The authors use cross-national harmonized micro data from a broad sample of developed and developing countries and investigate the heterogeneity of the effect of entry, contract enforcement regulation, and financial development on both the decision to become an entrepreneur and the level of employment of newly created businesses. They focus...

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  • White Papers // Nov 2009

    The Level And Distribution Of Global Household Wealth

    The authors estimate the level and distribution of global household wealth. The levels of assets and debts for 39 countries are measured using household balance sheet and survey data centered on the year 2000. The determinants of mean financial assets, non-financial assets, and liabilities are studied empirically, and the results...

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  • White Papers // Nov 2009

    The Effect Of Immigration On Productivity: Evidence From US States

    Using the large variation in the inflow of immigrants across US states the authors analyze the impact of immigration on state employment, average hours worked, physical capital accumulation and, most importantly, total factor productivity and its skill bias. They use the location of a state relative to the Mexican border...

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  • White Papers // Nov 2009

    Mortgage Default, Foreclosure, And Bankruptcy

    In this paper the authors examine the relationship between homeowners' bankruptcy decisions and their mortgage default decisions and the relationship between homeowners' bankruptcy decisions and lenders' decisions to foreclose. In theory, both relationships could be either substitutes or complements. Bankruptcy and default tend to be substitutes because homeowners' budgets are...

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  • White Papers // Nov 2009

    Micro, Macro, And Strategic Forces In International Trade Invoicing

    The use of different currencies in the invoicing of international trade transactions plays a major role in the international transmission of economic fluctuations. Existing studies argue that an exporter's invoicing choice reflects structural aspects of her industry, such as market share and the price-sensitivity of demand, the hedging of marginal...

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  • White Papers // Nov 2009

    Financial Literacy And Financial Sophistication Among Older Americans

    This paper analyzes new data on financial literacy and financial sophistication from the 2008 Health and Retirement Study. The authors show that financial literacy is lacking among older individuals and for the first time explore additional questions on financial sophistication which proves even scarcer. For this sample of older respondents...

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  • White Papers // Oct 2009

    Two Perspectives On Preferences And Structural Transformation

    The authors ask what specification of preferences can account for the changes in the expenditure shares of broad sectors that are associated with the process of structural transformation in the U.S. since 1947. Following the tradition of the expenditure systems literature, they first calibrate utility function parameters using NIPA data...

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  • White Papers // Oct 2009

    Culture, Policies And Labor Market Outcomes

    The authors study whether cultural attitudes towards gender, the young, and leisure are significant determinants of the evolution over time of the employment rates of women and of the young, and of hours worked in OECD countries. Beyond controlling for a larger menu of policies, institutions and structural characteristics of...

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  • White Papers // Oct 2009

    The Economics Of Open Air Markets

    Despite their current prevalence and historical significance, little is known about the economics of open air markets. This paper uses open air markets as a natural laboratory to provide initial insights into the underlying operation of such markets. Using data on thousands of individual transactions gathered from May 2005- August...

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  • White Papers // Nov 2009

    A Formal Test Of Assortative Matching In The Labor Market

    The authors estimate a structural model of job assignment in the presence of coordination frictions due to Shimer (2005). The coordination friction model places restrictions on the joint distribution of worker and firm effects from a linear decomposition of log labor earnings. These restrictions permit estimation of the unobservable ability...

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