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AN NBER PUBLICATION ISSUE: No. 7, July 2016

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
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A run in the asset-backed commercial paper market in 2008 contributed to the collapse of car sales in 2009. U.S. car sales have long depended on the existence of nonbank lenders, particularly the financing arms of car manufacturers. These lenders, who specialize in cars and car buyers, have been much better equipped than banks to gauge the risk of individual car loans and more willing to accept purchased cars as collateral. In 2005, loans from nonbank lenders...

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Article
Regulations allow natural gas distribution companies to pass the cost of leaked gas to retail consumers, with safety and climate consequences. Methane, the primary component of natural gas, is a greenhouse gas with 34 times the global warming potential of carbon dioxide. It is estimated that more than one percent of methane in the U.S. supply chain escapes into the atmosphere, and that 20 percent of this leakage occurs from degraded pipes and loose-fitting...
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Depopulation was due more to falling in-migration than rising out-migration; most of those who left were not farmers, and only a minority went to California. Tragic images of the Dust Bowl's desolate farmlands and destitute migrants were ingrained into the American consciousness by John Steinbeck's classic novel The Grapes of Wrath and by the iconic photos of Dorothea Lange. Huge swaths of the Southern Great Plains were devastated in this human and...
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The prevalence of attention in financial media to adverse market outcomes is correlated with investor crash beliefs. Investors' beliefs about whether a severe market crash is impending can affect the prices and prospective returns on risky assets, such as publicly traded stocks. However, beliefs regarding extreme market events are difficult to measure using typical economic data, precisely because they are low-probability outcomes. Observed asset prices are also...
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Negotiated agreements in patent litigation appear to delay generic entry and raise drug prices. In an effort to promote generic entry and greater competition in the drug market, a section in the 1984 Hatch-Waxman Act—Paragraph IV—encourages makers of generic drugs to challenge pharmaceutical patents. These "Paragraph IV challenges" are on the rise, at least in part because the act and subsequent court rulings entitle a challenging firm to share in the patent...
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By strategically reallocating crops, Indian farmers were able to hedge against increased volatility and increase the total gains from trade by about 15 percent. Trade between countries has steadily increased in recent decades. This has allowed producers to specialize and scale up, increasing average productivity and raising incomes in many places. However, it has also subjected producers to price fluctuations that are unrelated to local conditions, and potentially...

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