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The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
...if Soros rigged the ringgit's collapse so he could profit from it -- as Malaysia's Mahathir alleged -- it is curious that his three funds only broke even during the meltdown. The role that foreign portfolio investors have played in Asia's ongoing financial market crisis has been a topic of much speculation and debate. In many countries, fickle or downright sinister foreigners have been blamed for driving down currencies and stock prices. Meanwhile, the broader...

Research Summaries

Capital controls, as used in Chile and Colombia, have simply changed the composition of capital inflows, and had little effect on overall flows. The recent history of capital flows to Latin America is a tumultuous one: first there was the flood of dollars from newly rich Middle Eastern oil exporters, recycled as loans from U.S. and European banks, that washed over the region starting in the mid-1970s. Then came the Mexican debt default of 1982, which set off an...
In the pre-Volcker years, the Fed allowed real short-term interest rates to drift lower even as anticipated inflation rose. Since the early 1980s, the U.S. economy has enjoyed the desirable combination of low inflation and sustained growth. Yet, in the 1960s and 1970s, the economy was battered by runaway prices and four recessions. What accounts for this striking difference in performance? Monetary policy is an important factor in explaining the economic divide,...
Social Security accounts for nearly two-thirds of the rise in elderly widows living alone. The share of elderly widows living alone rose from 18 percent in 1940 to 62 percent in 1990. But there is no reason for anxiety about the increasing unwillingness of younger generations to care for their parents, or the breakdown of the American family. In Social Security, Economic Growth, and the Rise in Independence of Elderly Widows in the 20th Century (NBER Working Paper...
We are better off having spent our money on heart attack care than we would have been if the money had been spent elsewhere. Moreover, in view of the value of the resulting improved health, the implication is that the cost of living for heart attack victims is actually falling. Medical treatment of cardiovascular disease, and particularly of heart attack patients, continues to grow more expensive every year. Such treatment has yielded measurable success in life...

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