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AN NBER PUBLICATION ISSUE: No. 10, October 2009

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
Pitchers appear to throw too many fastballs; football teams pass less than they should. In the perfect world of game theory, two players locked in a zero-sum contest always make rational choices. They opt for the "minimax" solution -- the set of plays that minimizes their maximum possible loss -- and their play selection does not follow a predictable pattern that might give their opponent an edge. But minimax predictions typically have not fared well in lab...

Research Summaries

Article
While foreign-born scientists and engineers who remain in the United States contribute to U.S. economic growth, they also reduce the payoff for investing in higher education in science and technology for those born in the United States. In 1970, approximately 29 percent of the world's college students attended school in the United States, even though the United States accounted for only 6 percent of the world's population. Over the last four decades, higher education...
Article
A one dollar increase in federal funding leads to a 33-cent increase in non-federal funding at U.S. universities. Federal spending on R and D spurs funding from the private sector and from state and local governments, according to researchers Margaret Blume-Kohout, Krishna Kumar, and Neeraj Sood. In Federal Life Sciences Funding and University R and D (NBER Working Paper No. 15146), the researchers estimate that a one dollar increase in federal funding leads to a 33-...
Article
One of the most important determinants of the number of VC offices in a region is success rate for all previous VC investments in that region. Relative to the amount of capital invested, venture capital backed companies have disproportionately contributed to the creation of jobs, market value, and revenue to their local economies. As a result, states and municipalities are competing for the establishment of venture capital investors' offices in their communities....
Article
...had more countries been willing to abandon the gold standard and use monetary policy to counter the slump, fewer would have been driven to impose trade restrictions. The Great Depression was a breeding ground for protectionism. Output fell, prices declined, and unemployment rose, pressuring governments to do something to revive their economies, even if that meant limiting imports. But contrary to popular perception, some countries went much further down this...
Article
A 100 percent difference in country-level stock returns between two countries leads to a 17 percent increase in the expected number of acquisitions of the worse performing country's firms by the better performing country's firms. While a significant proportion of mergers involve private firms from different countries, the economic research on the subject had largely focused on domestic deals, or on cross-border mergers involving public firms from the United States....

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