AN NBER PUBLICATION
ISSUE: No. 8, August 2013
The Digest
A free monthly publication featuring non-technical summaries of research on topics of broad public interest
The positive labor market effects of the temporary housing boom 'masked' the negative effect of the decline in manufacturing that otherwise would have been more evident in the mid-2000s.
In Manufacturing Decline, Housing Booms, and Non-Employment (NBER Working Paper No. 18949), co-authors Kerwin Kofi Charles, Erik Hurst, and Matthew Notowidigdo study how two large changes in the national economy during the 2000s affected aggregate non-employment: the continuing...
Article
Marginal costs within plant-product categories drop by approximately 15-25 percent during the first three years after export entry.
Trade competition has led to aggregate productivity gains, but some research suggests that those gains come only from selection of the most productive plants into exporting, rather than from efficiency gains within plants. That finding is rather surprising, because exporters can learn from international buyers, and by exporting will have...
Article
Tightened standards for new vehicles lead to reduced scrappage for used vehicles. [T]his effect offsets 13-23 percent of expected gasoline savings.
In Vehicle Scrappage and Gasoline Policy (NBER Working Paper No. 19055), authors Mark Jacobsen and Arthur van Benthem examine the timing of decisions to scrap used cars and the relationships between scrap rates, used car resale values, and policies designed to reduce gasoline use. They conclude that changes in the relative...
Article
Banks ... with a smaller disparity between the interest rate sensitivity of their assets and liabilities will not curtail their lending as much as those with larger disparities.
The income streams of most commercial banks are sensitive to interest rate risk: commercial banks fund their long-term, fixed-rate lending with short-term loans, so any hike in rates by the Federal Reserve System raises their cost of securing deposits, reduces their cash flow, and increases...
Article
The increase in start-ups and small-business hiring was more pronounced in areas with high run-ups in home values.
Collateral lending, especially mortgage lending, has long been recognized as an important financial catalyst that can drive overall demand for products and services within an economy. In House Prices, Collateral and Self-Employment (NBER Working Paper No. 18868), Manuel Adelino, Antoinette Schoar, and Felipe Severino determine that in areas of the United...
Article
A $1,000 rise in import exposure per worker lowers the employment rate of non-college workers by an estimated 1.21 percentage points.
Trade and technology have quite different effects on U.S. businesses, according to new research by David Autor, David Dorn, and Gordon Hanson. In Untangling Trade and Technology: Evidence from Local Labor Markets (NBER Working Paper No. 18938), they find that local labor markets exposed to rising Chinese import competition see...