Does Costly Reversibility Matter for U.S. Public Firms? — by Hang Bai, Erica X.N. Li, Chen Xue, Lu Zhang

Yes, most likely. The firm-level evidence on costly reversibility is even stronger than the prior evidence at the plant level. The firm-level investment rate distribution is highly skewed to the right, with a small fraction of negative investments, 5.79%, a tiny fraction of inactive investments, 1.46%, and a large fraction of positive investments, 92.75%. When … Read moreDoes Costly Reversibility Matter for U.S. Public Firms? — by Hang Bai, Erica X.N. Li, Chen Xue, Lu Zhang

Tax Policy and Lumpy Investment Behavior: Evidence from China’s VAT Reform — by Zhao Chen, Xian Jiang, Zhikuo Liu, Juan Carlos Suárez Serrato, Daniel Xu

A universal fact of firm-level data is that investment is lumpy: firms either replace a considerable fraction of their existing capital (spike) or do not invest at all (inaction). This paper incorporates the lumpy nature of investment into the study of how tax policy affects investment behavior. We show that tax policy can directly impact … Read moreTax Policy and Lumpy Investment Behavior: Evidence from China’s VAT Reform — by Zhao Chen, Xian Jiang, Zhikuo Liu, Juan Carlos Suárez Serrato, Daniel Xu

History Dependence, Cohort Attachment, and Job Referrals in Networks of Close Relationships — by Ayal Y. Chen-Zion, James E. Rauch

We model network formation in a firm. Agents learn about the quality of their working relationships with each other. Their good relationships become their networks. Accumulating relationships becomes increasingly costly, however. Over time agents become less open to forming relationships with others unknown to them, leading their networks to be front-loaded with agents they met … Read moreHistory Dependence, Cohort Attachment, and Job Referrals in Networks of Close Relationships — by Ayal Y. Chen-Zion, James E. Rauch

Exploring The Role of Limited Commitment Constraints in Argentina’s “Missing Capital” — by Marek Kapička, Finn Kydland, Carlos Zarazaga

We study why capital accumulation in Argentina was slow in the 1990s and 2000s, despite high productivity growth and low international interest rates. We show that limited commitment constraints introduce two mechanisms. First, the response of investment to a total factor productivity increase is muted and short-lived, while the response to a decrease is large … Read moreExploring The Role of Limited Commitment Constraints in Argentina’s “Missing Capital” — by Marek Kapička, Finn Kydland, Carlos Zarazaga

Can Diffuse Delivery System Reforms Improve Population Health? A Study of the State Innovation Models Initiative — by Partha Deb, Anjelica Gangaram, Hoda Khajavi

We examine the effects of the State Innovation Models (SIM) on population-level health status. The SIM initiative provided $250 million to six states in 2013 for delivery system reforms. We use data from the Behavioral Risk Factor Surveillance System for the years 2010 — 2016 to compare health of the populations in 6 SIM states … Read moreCan Diffuse Delivery System Reforms Improve Population Health? A Study of the State Innovation Models Initiative — by Partha Deb, Anjelica Gangaram, Hoda Khajavi

Macroeconomics Challenges and Resilience of Emerging Market Economies — by Joshua Aizenman

A Growing share of Emerging Markets (EMs) use hybrid versions of inflation targeting (IT) that differ from the IT regimes of OECD countries. Policy interest rates among commodity countries are impacted by real exchange rate and international reserves (IR) changes, aiming at stabilizing their real exchange rate in the presence of volatile terms of trade … Read moreMacroeconomics Challenges and Resilience of Emerging Market Economies — by Joshua Aizenman

Undue Burden Beyond Texas: An Analysis of Abortion Clinic Closures, Births, And Abortions in Wisconsin — by Joanna Venator, Jason Fletcher

In this paper, we estimate the impacts of abortion clinic closures on access to clinics in terms of distance and congestion, abortion rates, and birth rates. Legislation regulating abortion providers enacted in Wisconsin in 2011-2013 ultimately led to the closure of two of five abortion clinics in Wisconsin, increasing the average distance to the nearest … Read moreUndue Burden Beyond Texas: An Analysis of Abortion Clinic Closures, Births, And Abortions in Wisconsin — by Joanna Venator, Jason Fletcher

What Difference Does a Diagnosis Make? Evidence from Marginal Patients — by Mattan Alalouf, Sarah Miller, Laura R. Wherry

Over the past 30 years, the criteria used to diagnose many illnesses have been relaxed, resulting in millions more relatively healthy individuals receiving treatment. This paper explores the impact of receiving a diagnosis of a common disease among such “marginally ill” patients. We apply a regression discontinuity design to the cutoff in blood sugar levels … Read moreWhat Difference Does a Diagnosis Make? Evidence from Marginal Patients — by Mattan Alalouf, Sarah Miller, Laura R. Wherry

Job Loss, Credit and Crime in Colombia — by Gaurav Khanna, Carlos Medina, Anant Nyshadham, Christian Posso, Jorge A. Tamayo

We investigate the effects of job displacement, as a result of mass-layoffs, on criminal arrests using a novel matched employer-employee-crime dataset in Medellín, Colombia. Job displacement leads to immediate earnings losses, and an increased likelihood of being arrested for both the displaced worker and for other youth in the family. We leverage variation in opportunities … Read moreJob Loss, Credit and Crime in Colombia — by Gaurav Khanna, Carlos Medina, Anant Nyshadham, Christian Posso, Jorge A. Tamayo

Marriage Equality Laws and Youth Suicidal Behaviors — by D. Mark Anderson, Kyutaro Matsuzawa, Joseph J. Sabia

Since the landmark ruling in Goodridge v. Department of Public Health in 2004, the legalization of same-sex marriage (SSM) has proliferated throughout the United States via either legislative action or court order. Advocates of SSM laws argue that marriage equality will generate important health benefits not only for adult same-sex couples, but also for LGBQ-identifying … Read moreMarriage Equality Laws and Youth Suicidal Behaviors — by D. Mark Anderson, Kyutaro Matsuzawa, Joseph J. Sabia

Rule of Law and Female Entrepreneurship — by Nava Ashraf, Alexia Delfino, Edward L. Glaeser

Commerce requires trust, but trust is difficult when one group consistently fears expropriation by another. If men have a comparative advantage at violence and there is little rule-of-law, then unequal bargaining power can lead women to segregate into low-return industries and avoid entrepreneurship altogether. In this paper, we present a model of female entrepreneurship and … Read moreRule of Law and Female Entrepreneurship — by Nava Ashraf, Alexia Delfino, Edward L. Glaeser

Subsidy Targeting with Market Power — by Maria Polyakova, Stephen P. Ryan

In-kind public transfers are commonly targeted based on observable characteristics of potential recipients. This paper argues that when the subsidized good is provided by imperfectly-competitive firms, targeting can give rise to a “demographic externality,” creating unintended redistribution of surplus and distorting efficiency. We illustrate this mechanism empirically in the context of means-tested subsidies for privately-provided … Read moreSubsidy Targeting with Market Power — by Maria Polyakova, Stephen P. Ryan

Educational, Labor-market and Intergenerational Consequences of Poor Childhood Health — by Krzysztof Karbownik, Anthony Wray

We study whether childhood health capital affects school attendance, long-run occupational outcomes, and intergenerational mobility. We address this question in the context of London, England during the late-nineteenth century using the inpatient admission records of three large hospitals linked to population census records, from which we identify household characteristics and the patients’ siblings. Sibling fixed … Read moreEducational, Labor-market and Intergenerational Consequences of Poor Childhood Health — by Krzysztof Karbownik, Anthony Wray

The Banking View of Bond Risk Premia — by Valentin Haddad, David A. Sraer

Banks’ balance-sheet exposure to fluctuations in interest rates strongly forecasts excess Treasury bond returns. This result is consistent with optimal risk management, a banking counterpart to the household Euler equation. In equilibrium, the bond risk premium compensates banks for bearing fluctuations in interest rates. When banks’ exposure to interest rate risk increases, the price of … Read moreThe Banking View of Bond Risk Premia — by Valentin Haddad, David A. Sraer

A Note to “Do ETFs Increase Volatility?”: An Improved Method to Predict Assignment of Stocks into Russell Indexes — by Itzhak Ben-David, Francesco Franzoni, Rabih Moussawi

A growing literature uses the Russell 1000/2000 reconstitution event as an identification strategy to investigate corporate finance and asset pricing questions. To implement this identification strategy, researchers need to approximate the ranking variable used to assign stocks to indexes. We develop a procedure that predicts assignment to the Russell 1000/2000 with significant improvements relative to … Read moreA Note to “Do ETFs Increase Volatility?”: An Improved Method to Predict Assignment of Stocks into Russell Indexes — by Itzhak Ben-David, Francesco Franzoni, Rabih Moussawi

The Economic Effects of Private Equity Buyouts — by Steven J. Davis, John C. Haltiwanger, Kyle Handley, Ben Lipsius, Josh Lerner, Javier Miranda

We examine thousands of U.S. private equity (PE) buyouts from 1980 to 2013, a period that saw huge swings in credit market tightness and GDP growth. Our results show striking, systematic differences in the real-side effects of PE buyouts, depending on buyout type and external conditions. Employment at target firms shrinks 13% over two years … Read moreThe Economic Effects of Private Equity Buyouts — by Steven J. Davis, John C. Haltiwanger, Kyle Handley, Ben Lipsius, Josh Lerner, Javier Miranda

Macroeconomic Frameworks — by Alan J. Auerbach, Yuriy Gorodnichenko, Daniel Murphy

We link detailed data on defense spending, wages, hours, employment, establishments, and GDP across U.S. cities to study the effects of fiscal stimulus. Our small-open-economy empirical setting permits us to estimate key macroeconomic outcomes and elasticities, including the responses of the labor share and the labor wedge to demand shocks and the elasticity of output … Read moreMacroeconomic Frameworks — by Alan J. Auerbach, Yuriy Gorodnichenko, Daniel Murphy

All Medicaid Expansions Are Not Created Equal: The Geography and Targeting of the Affordable Care Act — by Craig Garthwaite, John A. Graves, Tal Gross, Zeynal Karaca, Victoria R. Marone, Matthew J. Notowidigdo

We use comprehensive patient-level discharge data to study the effect of Medicaid on the use of hospital services. Our analysis relies on cross-state variation in the Affordable Care Act’s Medicaid expansion, along with within-state variation across ZIP Codes in exposure to the expansion. We find that the Medicaid expansion increased Medicaid visits and decreased uninsured … Read moreAll Medicaid Expansions Are Not Created Equal: The Geography and Targeting of the Affordable Care Act — by Craig Garthwaite, John A. Graves, Tal Gross, Zeynal Karaca, Victoria R. Marone, Matthew J. Notowidigdo

‘India investing $60bn on gas grid terminals by 2024’

India, one of the world’s largest consumers of oil and coal, is investing $60 billion to build a national gas grid and import terminals by 2024 in a bid to cut its carbon emissions. Companies were investing $60 billion in the network and building new gas import facilities to link all states by mid-2024, when … Read more‘India investing $60bn on gas grid terminals by 2024’

RCEP: India seeks checks on 50% Chinese imports

India’s insistence on providing a safety valve to cover at least 50% of Chinese imports under Regional Comprehensive Partnership (RCEP) has held up conclusion of talks for the mega trade agreement. At the heart of the friction is the govt’s concern over a possible surge in Chinese imports once the deal is signed as India … Read moreRCEP: India seeks checks on 50% Chinese imports

Mexico halts caravan of 2,000 migrants bound for US; critics call roundup a ‘human hunt’

published 2019-10-13 19:40:09 by Bradford Betz A caravan of roughly 2,000 migrants bound for the United States early Saturday was halted by Mexican authorities only a few hours into their journey, according to officials. The caravan, which consisted of migrants from Africa, the Caribbean, and Central America, left before dawn from Tapachula, a town in … Read moreMexico halts caravan of 2,000 migrants bound for US; critics call roundup a ‘human hunt’

ACCC Tasked (Again) To Look At Mortgage Pricing

Yet another inquiry has been announced into mortgage pricing as the ACCC is tasked to examine the banks failure to pass on in full official interest rate cuts engineered by the central bank. The ACCC’s preliminary report is due by 30 March next year, six months before the final report. Beyond the crocodile tears, there … Read moreACCC Tasked (Again) To Look At Mortgage Pricing

Should We Compete with China? Can We?, by Godfree Roberts

In 2003 I published a book charting America’s decline in thirty-six social and economic indicators. I mailed copies to the Administration, Congress and department heads and received one reply, from the Director General of the Central Intelligence Agency, saying that the Agency had been providing almost identical information to the government for decades. Since then…