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

24 February 2017

Acting Wife': Marriage Market
Incentives and Labor Market Investments

Single women avoid expressing professional ambition and tendencies for leadership in situations where they feel such expressions might make them undesirable in the marriage market, Leonardo Bursztyn, Thomas Fujiwara, and Amanda Pallais find. In a survey, almost three-quarters of single female students reported avoiding activities they thought would help their career because they did not want to appear ambitious.

23 February 2017

Imperfect Markets versus Imperfect Regulation

Between 1999 and 2012, many areas introduced market mechanisms to determine output decisions in electricity service areas that were previously using command-and-control-type regulation. These changes reduced production costs by $3 billion per year, by reallocating output among existing power plants, according to calculations by Steve Cicala.

22 February 2017

Medicaid Expansion and Prescription Drug Use

In the first 15 months of the Affordable Care Act, Medicaid-paid prescriptions increased by 19 percent in states that expanded Medicaid relative to states that did not, an analysis by Ausmita Ghosh, Kosali Simon, and Benjamin D. Sommers finds. The greatest increases occurred among diabetes medications, contraceptives, and cardiovascular drugs.
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Possible Explanations Suggested for Steep Decline
in Corporate Investment in Recent Years

While investment averaged about 20 percent of corporate operating revenues between 1959 and 2001, it has averaged only 10 percent in the period 2002 to 2015. Findings of a study summarized in the February issue of The NBER Digest suggest firm age, ownership structure, and competitive situation may explain why. Also featured in this month's Digest are an examination of senior bureaucrats' job leaving in new federal administrations, a refinement of income inequality estimates, an evaluation of creative destruction as a source of economic growth, a study of how the distressed housing market during the 2007-08 crash affected job seekers, and an analysis of innovation decline in industries most impacted by Chinese competition.

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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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