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AN NBER PUBLICATION ISSUE: No. 6, June 2004

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
A good skill base allows cities that have been hit by negative shocks to reinvent themselves. Possessing or attracting a large population of skilled, educated workers appears to be the key factor in determining whether declining urban areas -- such as the infamous "Rustbelt" manufacturing centers of the 1980s -- chart a path back to prosperity or remain relatively stagnant. In the Rise of the Skilled City (NBER Working Paper No. 10191), NBER researchers Edward Glaeser...

Research Summaries

Article
If [investors] evaluate illiquid assets based on their average risk..., failing to note that they can become considerably riskier during volatile times, then investment strategies could appear better than they actually are. One of the principal tenets of today's professional fund managers is that their portfolio of holdings should adhere to a strategy dictated by the Capital Asset Price Model (CAPM). The CAPM is an analytical tool -- a formula of sorts -- widely...
Article
Financial opening has helped make Latin American markets more stable and more similar to markets in rich nations. During the late twentieth and early twenty-first century, many emerging markets experienced severe financial crises. These episodes led some economists to argue that financial markets in poor nations are poorly developed and differ in fundamental ways from those in advanced economies. As a result, they maintained, emerging nations should not fully open...
Article
The recent tax legislation (JGTRRA) ultimately will increase dividends by almost 20 percent. The Job Growth and Taxpayer Relief Reconciliation Act of 2003 (JGTRRA) substantially reduced the individual income tax on dividends. It also reduced tax rates on capital gains from the sale of corporate stock. Before JGTRRA, an individual investor in the top federal income tax bracket received after-tax dividends equal to 61.5 percent of his pre-tax dividends. After-tax...

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