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AN NBER PUBLICATION ISSUE: No. 2, February 2017

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
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Incumbent firms' improvements on their own products appear to be more important than creative destruction by innovative startups as sources of growth. Creative destruction is often seen as the primary engine of growth in the modern economy. Upstart businesses generate profits and jobs, the theory suggests, by introducing new goods that displace existing products or by devising innovative ways to improve on the products of competing firms. That view of progress...

Research Summaries

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Article
Owning homes in distressed housing markets reduced job seekers' mobility, damaging their long-term career prospects. The housing crash of 2007-08 devastated many homeowners who suddenly found themselves facing an array of woes, from owning homes no longer worth the purchase prices to keeping up with mortgage payments amidst one of the worst recessions in generations. In Locked in by Leverage: Job Search During the Housing Crisis (NBER Working Paper No. 22929),...
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Competition from China Reduced Domestic Innovation Corporations in U.S. industries in which the Chinese made their greatest inroads reduced R&D spending and produced fewer patents. While much attention has been paid to the impact of Chinese imports on U.S. factory employment, relatively little has been focused on other affected areas, such as innovation by American manufacturers. In Foreign Competition and Domestic Innovation: Evidence from U.S....
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Declining product market competition and rising stock ownership by institutions can help explain falling corporate investment rates. Private investment has been weak in recent decades, in contrast with past relationships between measures of profitability, company valuation, and investment spending. In Investment-Less Growth: An Empirical Investigation (NBER Working Paper No. 22897), Germán Gutiérrez and Thomas Philippon examine the determinants of investment at...
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Turnover rates for career federal employees are higher in the first few years of a new administration than at other times, particularly among senior executives. When a new administration comes to town, it's not just the old President and his political appointees who leave—many senior career federal employees go too. That's especially true for those who work in agencies whose existing policies clash with those expected of the new President, according to Elections,...
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In 1980, the bottom half of the income distribution received about 20 percent of national income; by 2014, that share had declined to 12 percent. Income inequality in the United States, measured using the cash income sources that are reported on income tax returns and analogous data from household surveys, has surged since 1980. But the total flow of income reported by households in survey or tax data adds up to barely 60 percent of the U.S. national income. In...

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