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The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
Debt cancellation for borrowers who were in default on their student loans resulted in more rapid repayment of other outstanding debts and subsequent increase in average income.   In the first quarter of 2018, outstanding student debt in the United States reached $1.5 trillion. Student debt is now the second-largest type of consumer debt, ahead of auto loans, credit card debt, and home-equity lines of credit. In recent years, economists and policymakers...

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When a financial crisis hits, countries with a high debt-to-GDP ratio are less likely to pursue expansionary policy. Debt-related limits on market access are only part of the story. Over the last four decades, OECD nations with lower debt-to-GDP ratios have responded to financial crises, on average, with more expansionary fiscal policy than their higher-debt counterparts. Recoveries from the crises were also faster, and the lost economic output was smaller, in the...
Requiring that select patent applications not be published kept inventions out of enemy hands, but lowered the rate of follow-on discovery. Since congressional passage of the Patent Act of 1790, the United States has broadly encouraged inventors to disclose their secrets in the belief that the free flow of scientific information would spur future innovations by competitors and other inventors. In exchange, the government has protected inventors' commercial rights for...
Sharp reductions in assaults and robberies after the installation of intense streetlights suggest a potential low-cost way to deter crime. A small change in a neighborhood environment, like extra nighttime lighting, can have a large effect in reducing crime, new research suggests. When researchers partnered with New York City police and municipal officials to place lighting towers randomly in some of the city's highest-crime public housing complexes, in 2016,...
Companies that invest in cutting-edge technologies can engage labor at lower cost than less-advanced rivals, with added savings for firms that emphasize skills development. Firms compete aggressively for IT workers. In Paying to Program? Engineering Brand and High-Tech Wages (NBER Working Paper 25552), Prasanna Tambe, Xuan Ye, and Peter Cappelli explore how investments in cutting-edge IT systems affect the recruitment and retention of IT workers. Using data from a...
When buyers compare vehicles, a one dollar increase in the present value of future gasoline costs reduces buyer willingness-to-pay by less than 50 cents. After an audit by the U.S. Environmental Protection Agency in 2012, automakers Hyundai and Kia agreed that they had overstated the fuel efficiency of thirteen 2011-13 models by up to six miles per gallon. The restatement affected roughly 1.6 million vehicles sold. Attributing the misreporting to a "procedural...

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