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AN NBER PUBLICATION ISSUE: No. 1, January 2005

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
Derivatives...make it more likely that risks are borne by those best able to bear them. This makes it possible for individuals and companies to take on more risky projects with higher promised returns and hence create more wealth by hedging those risks that can be hedged. Derivatives are financial instruments whose promised payoffs are not the result of ownership of the cash flows of a particular company, but rather are derived from the value of some financial asset...

Research Summaries

Article
The economic rationale for these returns is the reward that investors in commodity futures receive for providing price insurance to commodity producers. Imagine an asset class whose returns are the same as those on the stock market but less volatile, and which are negatively correlated with stock-and-bond returns and positively correlated with inflation. That asset class is an investment in commodity futures. And, despite being a very old asset class, commodity...
Article
The quality growth for durables has been understated by 3 percent per year for the past 15 years. Much economic growth occurs through growth in quality, as new models of consumer goods replace older, sometimes inferior, models. For 1995, as an example, researchers have estimated that the Bureau of Labor Statistics (BLS) methods of determining economic growth allowed for as much as one percent average quality growth in goods. However, it is often argued that the BLS...
Article
The total cost of World War I to the United States (was) approximately $32 billion, or 52 percent of gross national product at the time. Did World War I produce a major economic break from the past in the United States? Did the U.S. economy change in some fundamental and lasting ways as a result of that war? NBER Research Associate Hugh Rockoff addresses these questions in his recent study Until It's Over, Over There: The U.S. Economy in World War I (NBER Working...
Article
In 1966, U.S.-born white males received 71 percent of science and engineering PhDs... By the year 2000, (it was) just 35 percent. In 1966, U.S.-born white males received 71 percent of science and engineering PhDs, U.S.-born females earned 6 percent of those degrees, and foreign-born students received 23 percent of those doctorates. By the year 2000, U.S.-born white males received just 35 percent of science and engineering PhDs, while 25 percent of those doctorates...
Article
While...antidumping claims are now a more prominent feature of American trade policy, the number of products targeted in complaints has actually fallen since the mid-1980s. Over the last 20 years it has become much easier for American firms to successfully block certain imports from other countries by claiming that they are being sold or "dumped" in the United States at artificially low prices and thus should be subjected to high import duties. But while these so-...

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