AN NBER PUBLICATION ISSUE: No. 1, January 2014

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
[B]ranch networks allow lenders to mitigate contracting frictions, and play an important role in financial integration. Bank branch networks help integrate U.S. lending markets in segments where arm's - length financing is costly or even infeasible, according to Exporting Liquidity: Branch Banking and Financial Integration (NBER Working Paper No. 19403) by Erik Gilje, Elena Loutskina, and Philip Strahan. By studying deposit windfalls from the purchase of drilling...

Research Summaries

Article
[A] teacher with higher value-added raises the probability of college attendance, reduces the probability of teen pregnancy, and increases earnings at age 28. Concern over the quality of U.S. schools has focused attention on the role that teachers play in school outcomes. Efforts to measure teachers' contributions to student progress generally focus on teacher "value-added," a measure of how much having a class with a particular teacher adds to an individual student'...
Article
[D]iesel taxes are passed through to retail prices to a greater extent in states where the point of collection is at the distributor... rather than at the retail level. One issue in the debate over carbon-emission taxes is whether such taxes should be levied on energy producers or on energy users. The likelihood of tax evasion is a key consideration in this choice. In Do the Laws of Tax Incidence Hold? Point of Collection and the Pass-through of State Diesel Taxes (...
Article
[D]ifferences in uncertainty across countries appear to explain about half of the variation in GDP growth following major shocks. A growing body of evidence suggests that uncertainty rises sharply in recessions and falls in booms. This was evident during the Great Recession. But does uncertainty cause recessions, or is higher uncertainty simply a natural outcome of economic downturns? Unfortunately, identifying the causal direction of the relationship between...
Article
[M]andated post-trade transparency was associated with an overall reduction in trading activity. Corporate bonds are traded in one of the world's largest over-the-counter markets. In July 2002, this market underwent a significant change when the Financial Industry Regulatory Authority (FINRA), then the National Association of Securities Dealers (NASD) required timely public disclosure of information on the prices and volume of completed transactions. This reform was...
Article
[P]rocurement rules for the Medicaid program create incentives that sometimes drive pharmacies to forego purchasing the lowest-cost ... generic drug(s). The growing generic drug market is generally believed to provide lower-cost alternatives to brand-name drugs and to contribute to lower healthcare costs. However, in Perverse Reverse Price Competition: Average Wholesale Prices and Medicaid Pharmaceutical Spending (NBER Working Paper No. 19367), authors Abby Alpert,...

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