AN NBER PUBLICATION
ISSUE: No. 9, September 2018
The Digest
A free monthly publication featuring non-technical summaries of research on topics of broad public interest
The salary premium for union members compared to nonunion workers with comparable skills has remained relatively steady over the last 80 years.
Tapping into eight decades of private and public surveys, a new study finds evidence that unions have historically reduced income inequality.
For Unions and Inequality over the Twentieth Century: New Evidence from Survey Data (NBER Working Paper No. 24587), Henry S. Farber, Daniel Herbst, Ilyana Kuziemko, and Suresh...
Article
Many investors avoid currency risk when buying debt issued by borrowers in foreign countries, but the U.S. dollar's international status makes dollar-denominated debt an easier sell.
Almost all owners of foreign bonds hold that debt in their own currencies, rather than in the currency of the nation where the debt was issued. This home currency bias is so strong that, if one knows the currency in which a bond is issued, it is possible to make a very good guess...
Article
Stock returns are positive for several weeks before "unexpected" expansionary monetary policy announcements.
Studies of the effects on asset prices of U.S. Federal Open Market Committee (FOMC) policy decisions often focus on narrow event windows of 30 to 60 minutes around the time decisions are announced. In Monetary Momentum (NBER Working Paper No. 24748), Andreas Neuhierl and Michael Weber suggest that such a narrow focus may underestimate the effect of monetary...
Article
Collaborations increased by approximately 50 percent among scientists who were newly connected by discount air service. The novelty of their projects rose, too.
As the internet ushered in an era of low-cost, global communication, many predicted geographic distance would diminish in importance when it came to the circulation of ideas, goods, and services. But for scientific collaboration, face-to-face interactions matter, and the cost of travel remains a key...
Article
When prospective buyers have access to longer-term loans with lower monthly payments, the transaction prices for automobiles increase.
The supply of auto loans, and the terms of these loans, play a central role in the auto market. The relationships between the behavior of lenders, auto dealers, and consumers are complex. In The Capitalization of Consumer Financing into Durable Goods Prices (NBER Working Paper No. 24699) Bronson Argyle, Taylor D. Nadauld,...
Article
A 1 percent increase in local productivity leads to nearly twice as much purchasing power gain for local lower-skilled workers than it does for local high-skilled workers.
When a city's manufacturing sector experiences a spurt in productivity, who wins? In Who Benefits from Productivity Growth? Direct and Indirect Effects of Local TFP Growth on Wages, Rents, and Inequality (NBER Working Paper No. 24661), Richard Hornbeck and Enrico Moretti find that national...