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The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
While there's no trend toward increased volatility at the market level, there is a significant trend of increasing "idiosyncratic" volatility at the individual firm level. Is the public correct in feeling that stocks are more volatile now than ever? New research by John Campbell, Martin Lettau, Burton Malkiel, and Yexiao Xu shows that while there's no trend toward increased volatility at the market level, there is a significant trend of increasing "idiosyncratic"...

Research Summaries

Global financial markets will provide a political and economic impetus for broad improvements in investor protection. Much evidence links healthy financial markets with the presence of laws, regulations, and courts that protect shareholders and creditors from unscrupulous insiders who otherwise would syphon off profits with impunity. Comprehensive safeguards seem to foster responsible corporate behavior, giving investors the confidence to acquire shares and to extend...
Foreign-Born Teaching Assistants Impair Undergraduate Performance "American students enrolled in classes taught by foreign-born teaching assistants with limited English do tend to receive lower grades than those in classes taught by natives." Ever since American universities began letting foreign-born graduate students teach undergraduate classes, those undergraduates have complained that their teachers' lack of English proficiency has compromised their...
"So, how long did it take the United States to become an optimal currency area? Rockoff concludes that a reasonable minimum may be 150 years." In 1788, Congress was given the exclusive right to "coin money" and "regulate the value thereof." Since then, Americans have spent and invested within the immense area of this country without ever having to worry about different exchange rates. The only exception to the monetary union occurred during the Civil War, when the...

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