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AN NBER PUBLICATION ISSUE: No. 9, September 2003

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
Job applicants with white names needed to send about 10 resumes to get one callback; those with African-American names needed to send around 15 resumes to get one callback. A job applicant with a name that sounds like it might belong to an African-American - say, Lakisha Washington or Jamal Jones - can find it harder to get a job. Despite laws against discrimination, affirmative action, a degree of employer enlightenment, and the desire by some businesses to enhance...

Research Summaries

Article
The federal tax credits had little apparent effect on the probability of attending college for any group. Instead, the tax credits may have given colleges incentives to increase their tuition. The Tax Relief Act of 1997 created the Hope and Lifetime Learning Tax Credit program, which was promoted as a way to increase access to college. By 2000 the program cost $4.9 billion a year, slightly more than half as much as the Pell Grant program. In The Impact of Federal Tax...
Article
Wage gains were largest for more educated workers living close to the United States and were smallest for less-educated workers living in southern Mexico. The elimination of trade barriers under the proposed Free Trade Agreement of the Americas (FTAA) would likely have a profound effect on the distribution of incomes throughout Latin America. To assess the nature of this impact, NBER Research Associate Gordon Hanson uses as a test case the changes in Mexican wage...
Article
Regulatory reforms - in particular those that liberalize entry - are very likely to spur investment; tight regulation of product markets restricts investment. The U.S. economy grew at an annual average rate of 4.3 percent in the second half of the 1990s, while Germany, France, and Italy grew at an average annual rate of 2 percent. A common view is that greater regulation in continental markets has retarded investment and economic growth - and that this was...
Article
Despite the recent growth in capital flows across countries, direct trade linkages are still more important than financial linkages in determining how shocks to the world's largest economies affect a variety of markets around the globe. In the first half of 2002, when accounting scandals, terrorist threats, and disappointing economic growth produced a 17 percent drop in the U.S. stock market, some other economies' markets predictably followed suit. For instance,...
Article
The authors find no evidence that inflation targeting on average improves performance as measured by the behavior of inflation, output, or interest rates. Economists have long sought the ideal framework for monetary policy. Recently, many economists have come to believe that inflation targeting represents that ideal. They cite its many benefits, including solving the dynamic consistency problem that results in high average inflation; reducing inflation variability;...

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