13 March 2019

Downward Rigidity in Nominal Wages

Analyzing Washington State data over 2005-2015, Ekaterina S. Jardim, Gary Solon, and Jacob L. Vigdor find that at least 20 percent of job stayers experienced nominal wage reductions — a challenge to the assumption in many macroeconomic analyses that workers’ nominal wages cannot be cut.

12 March 2019

Age-Based Property Tax Exemptions

A program of age-based property tax exemptions in Georgia affected both location decisions of elderly households and their decision to rent or buy, thereby contributing to a significant increase in the number of older homeowners in the period 1970-2010, research by H. Spencer Banzhaf, Ryan Mickey, and Carlianne E. Patrick suggests.

11 March 2019

The Housing Bust, Credit Conditions, and Firm Growth

The housing bust after 2006 largely drove the cyclical collapse of young-firm growth and hiring during the Great Recession and was reinforced by a contraction in bank loan supply, Steven J. Davis and John C. Haltiwanger show.

8 March 2019

Debt, Firm Size and Fragility in Emerging Markets

Large firms in emerging markets are often both systematically important and highly levered. Favorable shocks to their sales growth are positively and significantly correlated with GDP growth in the emerging markets sample analyzed by Laura Alfaro, Gonzalo Asis, Anusha Chari, and Ugo Panizza.

7 March 2019

Returns and Distributions of Nonprofit Endowment Funds

Over the period 2009-2016, the portfolio returns on the more than 28,000 nonprofit endowment funds in the U.S. underperformed the returns on a 60-40 mix of U.S. equities and Treasury bonds, new research by Sandeep Dahiya and David Yermack shows. The median annual return was more than 5 percentage points below the 60-40 benchmark; smaller endowments performed better than larger ones.

6 March 2019

Lower Prices for Licenses Reduce Copyright Infringement

Making infringers of copyrights on expensive digital images aware of cheaper options for legal licensing leads to a 14-fold increase in the licensing rate, according to Hong Luo and Julie Holland Mortimer.

5 March 2019

Labor Income at the Top of the Income Distribution

A primary source of top income is private business profit that accrues to working-age owners of closely held, mid-market firms in skill-intensive industries, Matthew Smith, Danny Yagan, Owen M. Zidar, and Eric Zwick find. Private business profit falls by three-quarters after owner retirement or premature death.

4 March 2019

Consumer Spending During Unemployment

Household spending, on average, drops sharply at the large and predictable decrease in income arising from the exhaustion of unemployment insurance (UI) benefits, according to Peter Ganong and Pascal J. Noel. This pattern is inconsistent with some rational models of forward-looking household behavior.

1 March 2019

Negative Nominal Interest Rates and Bank Lending

When several central banks experimented with negative rates following the 2008 financial crisis, deposit rates stopped responding to policy rates, Gauti B. Eggertsson, Ragnar E. Juelsrud, Lawrence H. Summers, and Ella Getz Wold report. Bank lending rates in some cases increased in response to policy rate cuts, contrary to usual patterns when rates are higher.

28 February 2019

Social Security and Retirement Timing of Teachers

Melinda S. Morrill and John Westall find that teachers covered by Social Security have higher rates of retirement at benefits eligibility age than the approximately 40 percent of teachers who are not covered, suggesting that a federal mandate to include all public sector workers would likely change retirement timing patterns.
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