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AN NBER PUBLICATION ISSUE: No. 10, October 2014

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
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Homeowners borrowed $0.19 per $1 of home equity gains from 2002 to 2006. In House Price Gains and U.S. Household Spending from 2002 to 2006 (NBER Working Paper No. 20152), Atif Mian and Amir Sufi find that rising housing values promote spending, especially for low-income households, if refinancing provides "cash on hand." They also find that this spending has a significant impact on GDP. The study finds that between 2002 and 2006, if one zip code experienced a rate...

Research Summaries

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Article
  Legalization increased both marijuana use and marijuana abuse/dependence in people 21 or older. Marijuana use is illegal under federal law. Despite this, an estimated 18 million people were current marijuana users in 2011. As of June 2014, 23 U.S. states had legalized the use of marijuana for medical purposes in response to growing awareness that the active ingredient in the drug may be useful as an analgesic for chronic pain, an antiemetic, and an...
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Article
Analysis suggests that out of the 13 point output shortfall, the largest contributor was the depletion of the stock of plant and equipment, which accounted for 3.9 percentage points. The financial crisis that began in 2008, and the ensuing Great Recession, cost the U.S. a substantial amount of output. In 2013, output was 13 percent below its trend path from 1990 through 2007. In Quantifying the Lasting Harm to the U.S. Economy from the Financial Crisis (NBER...
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  Households apply annual discount rates just under 2.6 percent to payments to be made more than a century into the future. One of the more daunting tasks for policymakers and investors is to identify appropriate discount rates to trade-off the short-term costs and long-term benefits of their actions. In Very Long-Run Discount Rates (NBER Working Paper No. 20133) Stefano Giglio, Matteo Maggiori, and Johannes Stroebel approach this challenge by exploiting...
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  Growth of foreign STEM workers by one percentage point of total employment increases growth in the wages of native college educated workers by 7 to8 percentage points. The effect of immigration on the wages and employment of native workers is a topic of perennial debate. According to Foreign STEM Workers and Native Wages and Employment in U.S. Cities (NBER Working Paper No. 20093), extending visas to more STEM workers increases the wages of native...
Article
Dentists increase the supply of visits they provide and their practices serve a greater number of Medicaid-covered patients. Medicaid is a government health insurance program that has historically enrolled children, pregnant women, and people with serious medical problems from low-income households. Private providers' services are paid for by state and federal governments. Individual states have the option to enroll able-bodied adults at various income levels, and...

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