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.

25 April 2017

Annuity Options in Public Pension Plans:
The Curious Case of Social Security Leveling

A third of recent North Carolina public sector retirees who retired before they were eligible for Social Security benefits, and who selected a single life annuity, opted for “Social Security Leveling,” research by Robert L. Clark, Robert G. Hammond, Melinda S. Morrill, and David Vanderweide finds. This means that their total monthly income would not change when they began to receive Social Security. This behavior suggests a strong consumption smoothing motive.

24 April 2017

Is the Internet Causing Political Polarization?

The growth in political polarization in recent years is greatest in the demographic groups least likely to use the Internet and social media, Levi Boxell, Matthew Gentzkow, and Jesse M. Shapiro find. Increases in polarization are greater among those older than 75 than among those aged 18 to 39, suggesting that the Internet is not a primary driver of the phenomenon.

21 April 2017

Redistributions from a Carbon Tax and Rebate

Julie Anne Cronin, Don Fullerton, and Steven E. Sexton find that a carbon tax with a rebate is progressive under a variety of rebate schemes. The average family in the poorest decile gets a net tax cut of about 1 percent of consumption — but 44 percent of them get a net tax increase.

20 April 2017

School Lunch Quality and Academic Performance

Michael L. Anderson, Justin Gallagher, and Elizabeth Ramirez Ritchie find that healthy public school meals can improve cognitive function among students. In a study of California public schools over five years, they find that students at schools that contract with healthy lunch vendors score higher on state achievement tests, with larger gains for students eligible for reduced price or free school lunches.

19 April 2017

Financial Frictions and Employment in the Depression

Disruption in credit supply was a key contributor to declining employment during the Great Depression, according to research by Efraim Benmelech, Carola Frydman, and Dimitris Papanikolaou. They find that the lack of access to credit accounted for between 10 and 33 percent of the aggregate decline in employment of large firms between 1928 and 1933.

18 April 2017

Technology and Skill in Early Phases of Industrialization

In contrast to conventional wisdom that early industrialization involved declining demand for skills, a study of regional variations in the adoption of steam engines across France, by Raphaël Franck and Oded Galor, finds that the Industrial Revolution was conducive to human capital formation, generating wide-ranging gains in literacy rates and educational attainment.

17 April 2017

Regulatory Arbitrage and the Rise
of Mortgage Lending by Shadow Banks

The mortgage market share of shadow banks – non-bank lenders that are not funded by deposits – has nearly tripled since 2007. Research by Greg Buchak, Gregor Matvos, Tomasz Piskorski, and Amit Seru finds that shadow banks were significantly more likely to enter markets where traditional banks faced more regulatory constraints. “Fintech” shadow banks, which rely more on technology and data analysis than their traditional counterparts, accounted for almost a third of shadow bank loan originations by 2015. The authors conclude that increasing regulatory burden faced by traditional banks can account for about 55 percent of recent shadow bank growth; emerging financial technology can account for another 35 percent.
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