13 December 2017

Implications of Medicaid Financing Reform
for State Government Budgets

Medicaid financing formulas can shift hundreds of dollars per capita from losing to “winning” states. Jeffrey Clemens and Benedic Ippolito find that during the Great Recession, the current matching system reduced state budget shortfalls by 2 to 3.5 percent of own-source revenues relative to an acyclical block grant system.

12 December 2017

Mutual Funds as Venture Capitalists?
Evidence from Unicorns

Large mutual funds with comparatively stable funding are more likely than other funds to invest in unicorns — highly valued, privately held start-ups — according to a study by Sergey Chernenko, Josh Lerner, and Yao Zeng. Having to manage their liquidity more carefully than venture capital investors, the mutual funds require stronger redemption rights.

11 December 2017

Exploding Asthma and ADHD Caseloads:
The Role of Medicaid Managed Care

In the U.S., nearly 11 percent of school-age children have been diagnosed with ADHD, and approximately 10 percent of children with asthma — numbers that have risen inexplicably in the last decade. The increase is concentrated in the Medicaid caseload. Anna Chorniy, Janet Currie, and Lyudmyla Sonchak find that the widespread change in Medicaid programs from fee-for-service reimbursement to managed care contributed to the increase.

8 December 2017

Diagnosing the Italian Disease

Italy’s labor productivity stopped growing in the mid-1990s. An analysis by Bruno Pellegrino and Luigi Zingales suggests that this was likely caused by the failure of Italian firms to take full advantage of the revolution in information and communications technology. Lack of meritocracy in the selection and rewarding of managers due to familyism and cronyism may have contributed to this outcome.

7 December 2017

How Offshoring by U.S. Multinationals
Affects Domestic Employment

Offshore activities by multinational U.S. firms have modest positive effects on domestic employment, according to research by Brian K. Kovak, Lindsay Oldenski, and Nicholas Sly. A 10 percent increase in offshore affiliate employment induced by a bilateral tax treaty is associated with a 1.8 percent increase in employment at the U.S. parent firm, with smaller effects at the industry and regional levels.

6 December 2017

Advertising Spending and Media Bias:
Evidence from Coverage of Car Safety Recalls

Newspapers provide less coverage of automobile recalls by their advertisers, especially of more-severe recalls, Graham Beattie, Ruben Durante, Brian Knight, and Ananya Sen find. Competition for readers from other newspapers mitigates bias, while competition for advertising by online platforms exacerbates it. The study suggests that lower coverage increases auto fatalities.

5 December 2017

Reallocation of Resources and the Rise
of Secularization in the Protestant Reformation

Secular authorities acquired enormous amounts of wealth from monasteries closed during the Protestant Reformation. Davide Cantoni, Jeremiah Dittmar, and Noam Yuchtman find that, as a result, graduates of Protestant universities increasingly studied secular subjects and entered secular, especially administrative, occupations. New construction shifted from religious toward secular purposes, especially the building of palaces and administrative buildings that reflected the increased wealth and power of secular lords.

4 December 2017

Macroeconomic Policy after Financial Crises

Christina D. Romer and David H. Romer examine episodes of financial distress in 24 countries to assess the role of macroeconomic policy. They find that output decline following a crisis is less than 1 percent when a country’s pre-crisis policy interest rate is above the zero lower bound and its debt-to-GDP ratio is relatively low, but almost 10 percent when neither of these conditions exists.

1 December 2017

Effects of Episode-Based Payment
on Health Care Spending and Utilization

Studying an Arkansas initiative on perinatal care that rewards physicians for efficient use of their own services and efficient management of other health care inputs, Caitlin Carroll, Michael Chernew, A. Mark Fendrick, Joe Thompson, and Sherri Rose find that spending decreased after the introduction of the program and there was an improvement in quality of care.

30 November 2017

Food vs. Fuel? Impacts
of Petroleum Shipments on Agricultural Prices

Increased crude oil shipments are associated with substantially larger spreads between wheat prices at regional elevators and in Minneapolis, the market hub, research by James B. Bushnell, Jonathan E. Hughes, and Aaron Smith indicates. The effect on corn and soybean spreads is an order of magnitude smaller. Increased oil traffic is associated with small increases in rail rates but large increases in rail car auction prices.
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