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The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
Young firms that employ high-skilled foreign workers are more likely to attract high-reputation venture capital and win more patents and citations. The opportunity to hire specialized foreign workers gives startups a leg up over their competitors who do not obtain visas for desired employees. High-skilled foreign labor boosts a firm’s chance of obtaining venture capital funding, of successfully going public or being acquired, and of making innovative breakthroughs...

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Between 2017 and early 2019, counties highly exposed to retaliatory tariffs saw consumption growth drop by at least 3.8 percentage points relative to low-impact counties. Agriculturally dependent counties in Iowa, which once sold soybeans and pork to China, have experienced greater impact from the US-China trade war than service dependent counties near New York City. How did retaliatory tariffs affect local economic activity? In The Consumption Response to Trade...
Market leverage has historically predicted one-year-ahead stock returns better than measures of stock market momentum, and almost as well as measures of value. Rapid growth in credit, which has been linked to slower economic growth and even economic downturns, is also a predictor of below-average equity returns. In The Leverage Factor: Credit Cycles and Asset Returns (NBER Working Paper 26435) , Josh Davis and Alan M. Taylor study returns in 14 advanced economies over...
Some billionaires seek low-tax states, but raising state estate taxes is still likely to raise total revenue collections in most states. While death and some taxes may be certain, US state-level estate taxes can be avoided by moving to one of the 36 states that do not collect them. Some very wealthy individuals do just that. In Taxing Billionaires: Estate Taxes and the Geographical Location of the Ultra-Wealthy (NBER Working Paper 26387), Enrico Moretti and Daniel J...
Twenty-six percent of firms first financed in 1994, before a 1996 law that boosted private equity markets, went public through an IPO. Of those first financed in 2000, only 2 to 3 percent did. The National Securities Markets Improvement Act (NSMIA), passed in 1996, has facilitated startups’ access to out-of-state private capital by exempting eligible private issuers from complying with the different state securities regulations — known as blue sky laws — in the...
Veterans assigned to an overseas combat zone are more likely to abuse opioids, regardless of whether they were exposed to combat during their deployment. The opioid epidemic of recent years has hit military veterans especially hard. Almost 70,000 veterans were treated for opioid use disorders in 2016. Opioid-related mortality, abuse, and overdose rates are all significantly higher among veterans. In a new paper, Did the War on Terror Ignite an Opioid Epidemic? (NBER...

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