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AN NBER PUBLICATION ISSUE: No. 7, July 2007

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
The ideology of the owners doesn't correlate in any significant way with the political slant of their newspapers' coverage. When a single owner owns multiple papers, the authors find that each paper's language is tailored to its own market, rather than toeing a single, corporate line. Diversity of the press has been a goal of American government since Thomas Jefferson - and in this era of newspaper consolidation, it is again an area of concern. Americans need a range...

Research Summaries

Article
The estimated effect of a change in the majority party in the Senate on the S&P 500 was only 0.17 percent, ...much smaller than the corresponding estimate of 2 percent for the Presidency in 2004. The effect of partisan majorities in the Senate on other financial variables was essentially zero. In Party Influence In Congress and the Economy (NBER Working Paper No. 12751), authors Erik Snowberg, Justin Wolfers, and Eric Zitzewitz measure financial market responses...
Article
The attainable diversification from participating in foreign markets is declining, whether the investor holds foreign stocks inside or outside the United States. One of the most enduring puzzles in international macroeconomics and finance is the tendency for investors to disproportionately weight their asset portfolios towards domestic securities and thus to forego the gains possible through international diversification. This tendency causes consumers to be...
Article
Excluding the residential housing sector...the real return to capital in China since 1978 fluctuated between 8 percent and 12 percent and rose to new highs in recent years. China has one of the highest investment rates in the world -- over 40 percent of its GDP in recent years -- prompting researchers to question whether China actually invests too much. On the one hand, China is still a low-income economy, with a capital-labor ratio that is low compared to those of...

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