Advanced Countries' Unconventional Fiscal Policies
Meet Less-Developed Countries' Debt Problems

Kalemli-Ozcan Sequence.01

Economists have had a lively debate about whether there's a relationship between accumulation of corporate debt in less-developed countries and the widespread use of unconventional monetary policy in advanced countries. Sebnem Kalemli-Ozcan of the University of Maryland, a research associate in the NBER's International Finance and Macroeconomics Program, says the connection now has been clearly identified: Ultra-low interest rates resulting from advanced countries' expansionary monetary policies can lead to a capital inflow problem in other countries, leading to a decline in productivity due to misallocation of the capital. A case in point: the debtor countries of southern Europe. A selection of studies on economic issues in Europe may be found on the Developments in the European Economy page.

A Comparison of Public Policies
between Canada and the United States

Canada and the United States have similar social programs and, as a result, small differences between the two countries offer opportunities for unique insights. In October 2016, 25 years after the NBER produced the book, Small Differences that Matter: Labor Markets and Income Maintenance in Canada and the United States, the NBER hosted a conference revisiting the two labor markets from a comparative perspective. This summary presents findings from researchers on topics such as disability insurance, income mobility, and the returns to human capital.

New NBER Research

17 February 2017

Political Determinants of Competition
in the Mobile Telecommunication Industry

The regulatory rules in the mobile communications sector affect concentration, competition, and prices, Mara Faccio and Luigi Zingales find. U.S. consumers would save $65 billion a year if U.S. mobile service prices were in line with those in Germany, which has a more pro-competitive regulatory structure.

16 February 2017

Arrested Development: Theory and Evidence
of Supply-Side Speculation in the Housing Market

Undeveloped land both facilitates construction and intensifies the speculation that causes booms and busts in house prices, according to a study by Charles G. Nathanson and Eric Zwick. The researchers suggest that this explains why the largest house price booms in the United States between 2000 and 2006 occurred in areas with undeveloped land and associated elastic housing supply.

15 February 2017

Faculty Deployment in Research Universities

Paul N. Courant and Sarah Turner find that within departments at two major public research universities, the highest-paid faculty teach fewer undergraduate courses than their lower-paid colleagues, confirming the hypotheses that salaries are determined principally by research output and associated reputation and that universities respond rationally to relative prices in deploying faculty.
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Underwater Mortgages during 2007-08 Housing Crash
Impeded Job Searches of People Who Couldn't Sell

Underwater mortgages in the distressed housing market of 2007-08 impeded job searches of workers holding the mortgages, reducing their mobility and likely damaging their long-term compensation and career prospects, according to research summarized in the latest edition of The NBER Digest. Also featured in the February Digest are an analysis of the decline of innovation in U.S. industries facing stiff Chinese competition, an exploration of reasons for falling corporate investment rates, an examination of senior bureaucrats' job leaving in new federal administrations, a refinement of income inequality estimates, and an evaluation of creative destruction as a source of economic growth.

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New in the NBER Reporter

Income Risk over the Life Cycle and the Business
Cycle: New Insights from Large Datasets

Study of the uncertainty that individuals face as a result of major labor market events has been changed for the better by the growing availability of large administrative panel datasets, reports Fatih Guvenen of the University of Minnesota, an affiliate of the NBER's Economic Fluctuations and Growth Program, in the latest edition of The NBER Reporter. Also featured in this issue of the quarterly are articles on the effects of housing prices on aggregate economic activity, accountability and measurement of ability among teachers, the NBER Program on Children, and quantification of agglomeration and dispersion forces.

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New in the NBER Bulletin on Aging and Health

Raising the Early Retirement Age
Affects Retirement Decisions

A study summarized in the most recent edition of The NBER Bulletin on Aging and Health finds that an increase in the Austrian early retirement age caused older workers to remain in their jobs longer and to delay claiming their pensions. This month's issue also features research examining how reducing levels of lead in children’s blood improves test scores and how long-term care hospitals discharge patients strategically.

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