AN NBER PUBLICATION
ISSUE: No. 2, February 2018
The Digest
A free monthly publication featuring non-technical summaries of research on topics of broad public interest
Many consumers split their credit card payments across multiple cards in proportion to outstanding balances, ignoring interest rate differences and paying more than necessary.
Credit card borrowers typically do not repay their debts in the optimal way, if one assumes that their goal is to minimize their total interest costs. Instead of first tackling the loan with the highest interest rate, they split repayments to match the ratio of their card payments to the...
Article
Two-year bond yields declined by 400 basis points for Italy and Spain, by 500 basis points for Ireland and Portugal, and by 1,000 basis points for Greece.
During the European debt crisis, several countries experienced large increases in government borrowing costs. The yields on government bonds for Ireland, Italy, Portugal, and Spain rose from around 2 percent in 2009 to between 7 and 20 percent in 2011, and Greek two-year bond yields rose to 200 percent...
Article
College students who were induced to borrow after receiving information on loan availability earned 3.7 more credits in an academic year and raised their grade point averages by 0.6 points.
Since 2000, undergraduate enrollment in the United States has risen by more than 30 percent, largely in two-year institutions such as community colleges. Student loan debt has also increased, reaching $1.4 trillion in 2017. In Student Loan Nudges: Experimental Evidence on...
Article
From 1995 to 2007, average real house prices in the United States rose 95 percent. Because property tax revenues are often linked to home values, expenditure per pupil in public schools also rose, by about 17 percent.
House prices and local spending on public education are intertwined. Higher spending on local schools may increase the demand for homes in a community, thereby boosting house prices. But rising house prices may also expand the property tax base in a...
Article
Exposing low-income households to the same food-buying opportunities available to higher-income households would reduce nutritional inequality by only 9 percent.
Low-income households consume less nutritious diets than their high-income counterparts. Of the many potential explanations, one that has attracted recent attention among policy advocates argues that a substantial fraction of the poor live in "food deserts," neighborhoods lacking full-service supermarkets...
Article
Recognizing that many goods are priced in dollars affects estimates of exchange rate pass-through and the elasticity of trade with respect to the exchange rate.
Fluctuations in the dollar reverberate through global trade, and even affect transactions that do not involve the United States.
Because of the prevalence of invoice pricing in dollars, changes in the value of the dollar can have a larger impact on the trade flows between two non-U.S. nations involved...