Macroannual Researcher Says Near-Zero Interest Rate
Blew Three Monetary Policy Theories Out of the Water

John H. Cochrane of Stanford University and the NBER (above) presented evidence and argument at the NBER's 32nd Annual Conference on Macroeconomics that the absence of three phenomena — a deflationary spiral, volatility, and hyperinflation — during the prolonged period in which U.S. interest rates were near the zero lower bound disproved some leading theories about effects of monetary policy. A video of his full presentation is on the conference web page.
New NBER Research

28 April 2017

Regional Heterogeneity and Monetary Policy

Regional differences in housing equity affect refinancing and spending responses to interest rate cuts, research by Martin Beraja, Andreas Fuster, Erik Hurst, and Joseph Vavra indicates, but these effects vary with changes in the regional distribution of house price growth and unemployment. The cross-region distribution of housing equity in 2008 made consumer spending in depressed regions less responsive to interest rate cuts, thus dampening aggregate stimulus and increasing regional consumption inequality.

27 April 2017

Early Effects of the Affordable Care Act

The Affordable Care Act led to sizeable improvements in access to health care in both Medicaid expansion and non-expansion states, with larger gains in expansion states along some dimensions, according to a study by Charles Courtemanche, James Marton, Benjamin Ukert, Aaron Yelowitz, and Daniela Zapata. Their research finds no statistically significant ACA effects on risky behaviors or self-assessed health.

26 April 2017

What is a Patent Worth? Evidence from U.S. 'Lottery'

Using data on first-time applications filed at the U.S. Patent Office since 2001,Joan Farre-Mensa, Deepak Hegde, and Alexander Ljungqvist find that startups that win the patent “lottery” by drawing an examiner with a relatively high propensity to grant patents have, on average, 55 percent higher employment growth and 80 percent higher sales growth five years later.
More Research

New in the NBER Reporter

Research in the Program on Corporate Finance:
Changes in Emphasis and Methods since 2008 Crisis

The defining moment for corporate finance over the past decade has been the financial crisis of 2008. Since then, researchers in the NBER’s Program on Corporate Finance have explored the role of credit cycles, the fragility of financial institutions, the behavior of households, and the macroeconomic consequences of the crisis, sometimes employing new empirical tools. The program director describes the latest developments in The NBER Reporter. Also in the new edition of the quarterly, leading researchers summarize their work in behavioral economics, the dynamics of innovation, the impact of contracting out Medicare and Medicaid, and macroeconomic policy at the zero lower bound.

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Just Out: Tax Policy and the Economy, Vol. 31

Volume 31 of the NBER's Tax Policy and the Economy series, just published by The University of Chicago Press contains papers on long-standing issues, including how transfer programs affect tax rates and behavior. Alan Auerbach, Laurence Kotlikoff, Darryl Koehler, and Manni Yu take a lifetime perspective on the marginal tax rates facing older individuals and families. Gizem Kosar and Robert A. Moffitt provide new estimates of the cumulative marginal rates facing low-income families over 1997-2007. Emmanuel Saez presents evidence on the elasticity of taxable income with respect to tax rates. Conor Clarke and Wojciech Kopczuk survey the treatment of business income taxation in the United States since the 1950s. Louis Kaplow argues that the reduction in statutory tax rates from base-broadening may not reduce effective marginal tax rates on households. Edited by Robert A. Moffitt.

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New in the NBER Digest

Facing State Funding Cuts, Some Public Universities
Admit High-Paying Foreign Students to Balance Books

Well-reputed state research universities are admitting large numbers of foreign nationals — who pay much more for tuition than in-state students — in an effort to cope with declines in state funding, according to research featured in the April edition of The NBER Digest. Other studies summarized in this month's edition of The Digest estimate savings from marketization of the U.S. electricity grid, evaluate impacts of the H-1B visa program, analyze what happened when a program that once brought hundreds of thousands of Mexican seasonal farm laborers to the U.S. was terminated in 1964, gauge the production of patents and innovations by immigrants, and compare the costs and future-earnings potential of various collegiate majors.

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