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AN NBER PUBLICATION ISSUE: No. 9, September 2023

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest.
This figure is a vertical stacked bar graph titled, Source of Inflation, 2020 Q1 to 2023 Q1. The y-axis represents percent and ranges from negative four to positive ten percent, increasing in increments of 2. The x-axis is time and ranges from 2020 quarter 1 until 2023 quarter 1.  There are 5 categories of bars on the figure: Initial conditions, Energy prices, food prices, vacancy to unemployment ratio, and shortages. Additionally, there are two lines. One is a solid line labeled, Actual price inflation, an
After several decades of relatively low and stable inflation, in 2021 the US experienced a sharp rise in the pace of price increases. The annual inflation rate, as measured by the Consumer Price Index, was 1.7 percent in February 2021 but rose to more than 5 percent in June 2021. It continued rising for another year, peaking at about 9 percent in June 2022. The rise in the inflation rate has been attributed to many factors. The US response to the COVID-19 pandemic...

Also in This Issue

This figure is a line graph titled, Inflation in Food product Groups, 2006 to 2015. The y-axis is labeled, Food price index normalized to 1 in quarter 4 2006. It ranges from 1 to 1.09, increasing in increments of 0.01 The x-axis is time and ranges from 2006 quarter 4 to 2015 quarter 4, increasing in increments of one year. There are two lines on the graph: traditional index and hedonic index. From 2006 quarter 4 to 2008 quarter 4. Both lines are nearly identical before diverging. They follow the same trajec
One of the perennial challenges of constructing price indices like the Consumer Price Index (CPI) is that products change over time. This is often cited as a concern with regard to rapidly evolving products on the technological frontier, such as personal computers, cellphones, and automobiles. One standard approach to adjusting for quality change, the “hedonic method,” involves relating product prices to product characteristics, such as memory size and CPU speed for...
This figure is a two-panel line graph titled, Earnings Trajectories Following Job Losses for Low-Wage Workers.  The following description is for the left-side panel.  The y-axis is labeled, change in probability of having any earnings ($), relative to control group. It ranges from negative 30 to positive 5 percent, increasing in increments of 5.  The x-axis is labeled, quarters since shock, ranging from negative 12 to 24, increasing in increments of 4. There is a vertical dotted line at 0 which is labeled,
The effect of job losses on workers’ subsequent earnings is a subject of long-standing interest in labor economics. For a well-paid worker, losing a job can trigger a fall down the “job ladder” into a lower-paying position, firm, or industry. But what is the experience of low-wage workers, who are already on the bottom rungs of the ladder and have less room to fall? In How Replaceable Is a Low-Wage Job? (NBER Working Paper 31447), Evan Rose and...
TransJakarta, the bus system serving greater Jakarta, Indonesia, undertook a major expansion in the last decade. It tripled its routes and doubled the number of buses in operation between January 2016 and February 2020. In Optimal Public Transportation Networks: Evidence from the World’s Largest Bus Rapid Transit System in Jakarta (NBER Working Paper 31369), Gabriel Kreindler, Arya Gaduh, Tilman Graff, Rema Hanna, and Benjamin A. Olken...
Financial institutions that mention environmental, social, and governance (ESG) criteria in their investment policies had $35 trillion in assets under management in 2020. To assess how these criteria affect portfolio composition, however, it is necessary to compare their actual portfolio holdings with a counterfactual that describes what their portfolio holdings would have been in the absence of any ESG considerations. In Green Tilts (NBER Working Paper 31320...
In a program designed to save energy by promoting home weatherization among low-income households, compensating contractors based on the amount of natural gas saved increased the average benefit by 24 percent. Peter Christensen, Paul Francisco, and Erica Myers report this finding in Incentive Pay and Social Returns to Worker Effort in Public Programs: Evidence from the Weatherization Assistance Program (NBER Working Paper 31322). The...
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