AN NBER PUBLICATION ISSUE: No. 1, January 2016

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
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In 1980, pass-through entities accounted for 20.7 percent of U.S. business income; by 2011, they represented 54.2 percent. The importance of pass-through business entities has soared in the past three decades. Over the same period, the amount of pass-through business income flowing to the top 1 percent of income earners has increased sharply, according to Business in the United States: Who Owns It and How Much Tax Do They Pay? (NBER Working Paper No. 21651). "...

Research Summaries

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The great majority of booms during which market values doubled in a single year were not followed by crashes wiping out those gains. Do market booms inevitably result in busts? History suggests not, according to William N. Goetzmann in Bubble Investing: Learning from History (NBER Working Paper No. 21693). A dramatic market rise followed by an equally spectacular fall, such as a doubling in prices that is followed by a halving in value, is often regarded as a...
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Article
Moving closer to city centers is a time-saver for better-educated, better-paid 'leisure losers;' their preferences seemingly have reversed the long-standing trend toward suburbanization. In the period following World War II, suburbanization dominated the U.S. landscape. However, as the century drew to a close, urban gentrification, a broad-based rehabilitation of the central city as the place to work, live, and play, emerged as an important development. Since the...
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Among parents over 50 who reported having wills, the fraction treating their children unequally rose from 16 percent to 35 percent between 1995 and 2010. Anyone counting on a certain share of an inheritance should be aware that in recent years, parents have become increasingly likely to divide their estates unequally. In Unequal Bequests (NBER Working Paper No. 21692), Marco Francesconi, Robert A. Pollak, and Domenico Tabasso analyze a nationally...
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An analysis of business cycles in 30 mostly advanced economies finds that burgeoning household debt is a strong indicator of an impending economic downturn. An increase in household debt in relation to a countr's GDP is, at least in the short to medium term, a strong predictor of a weakening economy, according to an analysis of data from 30 nations by Atif R. Mian, Amir Sufi, and Emil Verner. The researchers use slowing growth and rising unemployment as key...
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When a large fraction of a country's trade is denominated in foreign currencies, its rate of inflation is more strongly affected by exchange-rate fluctuations. Exchange rates, which give the price of a country's currency relative to foreign currencies, fluctuate based on global market dynamics. These fluctuations can affect domestic inflation rates. For example, if the U.S. dollar depreciates, imported goods generally become more expensive, and the prices of...

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