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AN NBER PUBLICATION ISSUE: No. 7, July 2004

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
Of the $54 billion already spent on asbestos litigation, about $34 billion went to lawyers. If litigation costs eventually reach $200 billion, lawyers could collect an additional $88 billion. Legal claims for injuries from asbestos involve more plaintiffs, more defendants, and higher costs than any other type of personal injury litigation in U.S. history. As the litigation bankrupts more and more firms and continues to enrich tort lawyers, the issue has reached...

Research Summaries

Article
Higher gasoline taxes encourage work, and when this effect is taken into account, the optimal gasoline tax is substantially higher than previous research has suggested. Gasoline taxes are a hotly debated topic in both environmental and economic policy settings. Previous studies have examined the effects of various gasoline taxes on the supply and demand for gasoline. But in Empirical Estimates for Environmental Policy Making in a Second-Best Setting (NBER Working...
Article
Both borrowers and lenders can benefit from debt relief when the borrower suffers from 'debt overhang'... understanding why the Brady Plan produced rising asset prices, increased investment, and accelerated growth is pivotal to understanding the circumstances under which debt restructuring can be expected to yield efficiency gains. In order to determine whether the much-debated debt-relief programs have the intended effect of aiding the economies of less-developed...
Article
Some firms adopt dual-class structures when their original owners are reluctant to cede control... these firms are less likely to tap the capital markets, typically invest less, grow more slowly, and have lower valuations. Aligning the interests of owners and managers has been a problem ever since stock corporations were invented. In principle, owners can shape managerial incentives in a variety of ways. In practice, most managerial incentive schemes are built around...

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