AN NBER PUBLICATION ISSUE: No. 8, August 2018

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
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Falling prices for mortgage-backed securities contributed to the 2008–9 financial market turmoil, but the AAA-rated subprime segment performed better than other market segments. New evidence on the performance of non-agency residential mortgage-backed securities (RMBS) during the 2007–13 period casts doubt on the ubiquitous claim that the 2008 financial crisis was triggered by over-extension of mortgage credit and a failure of rating agencies to recognize the...

Research Summaries

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Article
For high-productivity firms, export shocks that provide access to an expanded market lead to greater innovation, even though such shocks may also bring new competitors. Economic theory identifies two effects of a positive export shock that increases access to new international markets. On the one hand, access to a larger market could increase a firm's incentive to innovate because larger markets promise larger innovation rents. On the other hand, the larger market...
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Productivity rises at Chinese firms in the same industry as a new joint venture, especially when the international partner is from the United States. When foreign firms set up joint ventures in China, there are spillover effects on many Chinese firms, not just those involved in the new joint ventures. The other firms often gain new technology and become more productive. These benefits typically outweigh the negative effect of increased competition that the joint...
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Lowering of the minimum claiming age in 1961 reduced average monthly income and increased the poverty rate in old age for male-headed households. Policy debates about how to reduce the projected divergence between currently promised Social Security benefits and the revenues that the system is expected to receive often include discussion of raising the minimum retirement age. In recent years, Australia, Austria, Germany, the United Kingdom, and other developed...
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Among Poles, the descendants of post-WWII forced migrants today have higher average education and incomes than those whose ancestors were not displaced. It has long been theorized that people who are forced to migrate invest heavily in education, a portable asset that will not be lost if a second expulsion occurs, and that this pattern persists for generations. But this hypothesis has been difficult to test because there are often confounding factors that affect...
Article
Cumulative heat exposure over the course of a school year is associated with a lower level of student learning, and the presence of classroom air conditioning systems nearly wipes out that negative effect, Joshua Goodman, Michael Hurwitz, Jisung Park, and Jonathan Smith show in Heat and Learning (NBER Working Paper No. 24639). In school districts without air conditioning, a 1℉ increase in average school year temperature is associated with a 1 percent decline in...

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