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AN NBER PUBLICATION ISSUE: No. 4, April 2019

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
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External sovereign bonds denominated in U.S. dollars or British pounds had average annual real returns of 6.8 percent between 1815 and 2016, even after accounting for defaults, wars, and revolutions. Why do investors lend to national governments with a history of defaulting on external sovereign bonds? New research suggests the answer is that, on average over the last two centuries, sovereign bonds have been a profitable investment. External sovereign bonds are...

Research Summaries

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Article
In Louisiana, students denied promotion because of low English and math test scores were more likely to be convicted of violent crimes by the time they reached 25. Education policies affect the academic and social skills of young adults, thereby influencing not only their earning potential but also their civic engagement, health behaviors, and criminal activity later in life. Measuring the impact of specific policies is challenging. In The Effect of Grade...
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As late as 1920, agricultural investment in Southern counties in the 10-mile-wide path of devastation lagged behind investment in counties that were spared. In the fall of 1864, General William Tecumseh Sherman wrought havoc on the economy of the Confederacy with his march to the sea through Georgia and the Carolinas. Guided by census data, Sherman mapped out a 285-mile-long campaign with an eye toward demolishing the region's richest agricultural territory....
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The effect of a more selective school on wages conditional on working is small compared to the effect on the likelihood of working. There is fierce competition for admission to the country's most selective institutions of higher education. Whether attending one of these institutions substantially increases the future earnings of prospective students is a difficult research question because, on average, the characteristics of the students who attend more selective...
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Even for highways in rural mountainous areas, the estimated economic benefits from adding an additional lane-mile exceed the annual construction and maintenance costs. Federal, state, and local governments spent about $300 billion on construction and maintenance of U.S. transportation infrastructure in 2017. Highway spending alone totaled $177 billion, or about 0.9 percent of GDP. Analyzing economic costs and benefits of highway spending is challenging because...
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Mandatory disclosure of chemicals in fracking fluids allows competitors to catch up to industry leaders but depresses experimentation at high-productivity firms. In many different regulatory contexts — investing, data privacy, and public health, for example — regulators rely on mandatory disclosure rules to protect consumers. These policies are seen as a way of encouraging self-regulation. In Learning by Viewing? Social Learning, Regulatory Disclosure, and Firm...

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