AN NBER PUBLICATION ISSUE: No. 9, September 2016

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
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Small and medium-sized firms in the U.K. doubled R&D spending and increased patenting by 60 percent in response to tax incentives. Beginning in the early 1980s, business R&D spending as a share of GDP began to decline in the United Kingdom, while it was rising in most other OECD countries. Concerned about falling behind in innovation and growth, the U.K. government in 2000 launched a tax incentive program to encourage R&D. It was largely targeted at...

Research Summaries

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Article
Banks offer less-sophisticated customers cards with more back-loaded and hidden features. There are substantial differences in the credit card offers that banks extend to different potential customers. Less-sophisticated borrowers receive offers with more back-loaded and hidden features, as well as more upfront rewards, visual distractions, and fine print at the end of the offer letter, according to Hong Ru and Antoinette Schoar in their new study, Do Credit Card...
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Article
Among call center workers in two Chinese cities, each 10-unit increase in the pollution index reduced worker productivity—measured by number of calls handled—by 0.35 percent. Even in a job where employees only physical exertion involves answering the phone, air pollution takes its toll on productivity. That is the finding of The Effect of Pollution on Worker Productivity: Evidence from Call-Center Workers in China (NBER Working Paper No. 22328) by Tom Chang,...
Article
After the experimental 2008 sale, there was a discontinuous jump in the proportion of wild elephants poached and in seizures of contraband ivory leaving Africa. Advocates of legalizing the purchase of goods sold in black markets argue that allowing legal trade will displace illegal buying and selling, reduce criminal activity, and permit greater control of the previously illegal goods. New research indicates that this is not always the case. In Does...
Article
In the United Kingdom between the 1950s and 1980s, macroprudential tools modulated credit creation but were less reliable than conventional monetary policy for controlling inflation. If post-war British history is a guide, credit controls are less effective than traditional monetary policy in controlling inflation, but they are better suited to influencing bank lending and other variables emerging as financial stability objectives. That's the conclusion of...
Article
A host of factors, from the choice of income- or wealth-testing to how to treat single versus married households, makes the effect of "means testing" sensitive to details of implementation. In 2015, the annual cost of Social Security retirement benefits equaled 14.1 percent of workers' taxable income. By 2038, it is projected that the cost will amount to 16.6 percent. Future Social Security tax revenues are projected to fall short of future benefit commitments...

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