Showing papers by "National Bureau of Economic Research published in 2022"
TL;DR: In this paper, a dynamic equilibrium asset pricing model was proposed to predict that the safe-haven status of US Treasuries may be eroding during the COVID-19 crisis.
71 citations
TL;DR: In this article , the authors use aggregated data from Facebook to show that COVID-19 is more likely to spread between regions with stronger social network connections, after controlling for geographic distance to the hotspots as well as the population density and demographics of the regions.
44 citations
TL;DR: For example, this article found that each additional day of exposure to any wildfire smoke during pregnancy was associated with an 0.49% (95% CI: 0.41-0.59%) increase in risk of preterm birth.
36 citations
TL;DR: In this paper, the authors show that reaching for yield, a tendency to take more risk when the real interest rate declines while the risk premium remains constant, results from imposing a sustainable spending constraint on an otherwise standard infinitely lived investor with power utility.
30 citations
TL;DR: This article found that during large wildfire smoke events, individuals in wealthy locations increasingly search for information about air quality and health protection, stay at home more and are unhappier, while lower-income neighbourhoods exhibit similar patterns in searches for air quality information but not for health protection.
Abstract: Pollution from wildfires constitutes a growing source of poor air quality globally. To protect health, governments largely rely on citizens to limit their own wildfire smoke exposures, but the effectiveness of this strategy is hard to observe. Using data from private pollution sensors, cell phones, social media posts and internet search activity, we find that during large wildfire smoke events, individuals in wealthy locations increasingly search for information about air quality and health protection, stay at home more and are unhappier. Residents of lower-income neighbourhoods exhibit similar patterns in searches for air quality information but not for health protection, spend less time at home and have more muted sentiment responses. During smoke events, indoor particulate matter (PM2.5) concentrations often remain 3-4× above health-based guidelines and vary by 20× between neighbouring households. Our results suggest that policy reliance on self-protection to mitigate smoke health risks will have modest and unequal benefits.
20 citations
TL;DR: In this paper, the characteristics of the individuals who become entrepreneurs when local opportunities arise are examined, and the authors identify local demand shocks by linking fluctuations in global commodity prices to municipality level agricultural endowments in Brazil.
18 citations
TL;DR: In this article , a simple two-step estimation method (CARE) is proposed to estimate sectoral climate damage functions, which account for long-run adaptation for residential electricity and natural gas demand for the world's fifth largest economy.
13 citations
TL;DR: The authors synthesize what economists have learned about human capital since Becker (1962) into four stylized facts: human capital explains at least one-third of the variation in labor earnings within countries and at least half the variation across countries.
Abstract: This paper synthesizes what economists have learned about human capital since Becker (1962) into four stylized facts. First, human capital explains at least one-third of the variation in labor earnings within countries and at least half of the variation across countries. Second, human capital investments have high economic returns throughout childhood and young adulthood. Third, we know how to build foundational skills such as literacy and numeracy, and resources are often the main constraint. Fourth, higher-order skills such as problem-solving and teamwork are increasingly valuable, and the technology for producing these skills is not well understood. We know that investment in education works and that skills matter for earnings, but we do not always know why.
8 citations
TL;DR: In this article , a structural model of broker choice is proposed to quantitatively decompose the value that institutional investors attach to broker services and find that investors are sensitive to both explicit and implicit trading costs and are willing to pay a premium for access to formal and informal research.
8 citations
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TL;DR: A growing consensus is that firms have some wage-setting power, though many questions remain about the sources of that power as mentioned in this paper , and the recent literature that has led to new interest in the idea of monopsonistic wage setting.
Abstract: I discuss the recent literature that has led to new interest in the idea of monopsonistic wage setting. Building on advances in search theory and in models of differentiated products, researchers have used a number of different strategies to identify the elasticity of firm-specific labor supply. A growing consensus is that firms have some wage-setting power, though many questions remain about the sources of that power. (JEL B21, D21, D24, D43, J22, J31, J42)
8 citations
TL;DR: In this article, the authors explore the rising spatial concentration of patents and identify an underlying stability in their distribution, suggesting that the growing concentration of patenting in tech centers masks an important stability in non-software patenting for most cities.
TL;DR: The authors investigate the effects of private equity firms on product markets using price and sales data for an extensive number of consumer products and find that after a private equity deal, target firms increase retail sales of their products 50% more than matched control firms.
Abstract: We investigate the effects of private equity firms on product markets using price and sales data for an extensive number of consumer products. Following a private equity deal, target firms increase retail sales of their products 50% more than matched control firms. Price increases—roughly 1% on existing products—do not drive this growth; the launch of new products and geographic expansion do. Competitors reduce their product offerings and marginally raise prices. Cross-sectional results on target firms, private equity firms, the economic environment, and product categories suggest that private equity generates growth by easing financial constraints and providing managerial expertise. This article is protected by copyright. All rights reserved
TL;DR: The authors showed that the effects of government spending were stronger during the peak of the pandemic recession, but only in cities that were not subject to strong stay-at-home orders.
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TL;DR: In this paper , the authors present a review of the normative and positive aspects of trade policy and provide a theoretical foundation for trade policy analysis, including the shift-share method, and discuss the interpretation of the estimated effects.
Abstract: This chapter reviews a recent body of theoretical and empirical work that studies the normative and positive aspects of trade policy. We start by presenting reduced-form evidence of the effects of trade policy in the presence of supply-chain linkages, on the short-run and persistent effects of trade policy across local labor markets, and on the effects of trade policy uncertainty on employment and firms. We describe the shift-share method for trade policy analysis, discuss the interpretation of the estimated effects, and provide a theoretical foundation. We then describe new quantitative frameworks, methods, and data used to study the aggregate and distributional effects of trade policy in general equilibrium. We discuss how to take into account supply-chain linkages, local labor markets, and different sources of dynamics. As an illustration, we quantify the aggregate and distributional effects of the 2018 trade war between the United States and its trading partners. Finally, we present recent theoretical insights on optimal unilateral trade policy with firm and product heterogeneity in the context of large and small open economies with perfectly and imperfectly competitive product markets. We also discuss how optimal trade policy is shaped by the presence of multiple sectors, intermediate goods, and supply-chain linkages. We close the chapter by discussing the scope of future research.
TL;DR: The role of patents in encouraging innovation and growth in developing economies was surveyed in this paper . But the authors concluded that patents may be relatively unimportant in development, even for middle-income countries.
Abstract: I survey some recent research on the role of patents in encouraging innovation and growth in developing economies, beginning with a brief history of international patent systems and facts about the current use of patents around the world. I discuss research on the implications of patents for international technology transfer and domestic innovation. This is followed by a review of recent work by myself and co-authors on regional patent systems, the impact of patents on firm performance, and the impact on pharmaceutical patenting and domestic innovation. The conclusion suggests that patents may be relatively unimportant in development, even for middle income countries.
04 Aug 2022
TL;DR: In this article , the authors show that specialized ETFs lose about 30% of their value over the first 5 years of their existence, driven by the overvaluation of the underlying stocks at the time of the launch.
Abstract: Abstract The interplay between investors’ demand and providers’ incentives has shaped the evolution of exchange-traded funds (ETFs). While early ETFs invested in broad-based indexes and therefore offered diversification at low cost, more recent products track niche portfolios and charge high fees. Strikingly, over their first 5 years, specialized ETFs lose about 30$\%$ (risk-adjusted). This underperformance cannot be explained by high fees or hedging demand. Rather, it is driven by the overvaluation of the underlying stocks at the time of the launch. Our results are consistent with providers catering to investors’ extrapolative beliefs by issuing specialized ETFs that track attention-grabbing themes.
TL;DR: In this article , the authors investigate the level of portfolio frictions most consistent with the data and the impact of portfolio friction on asset prices and net capital flows and find the portfolio friction accounts for micro evidence of portfolio inertia by households, macro evidence of the price impact of financial shocks and related disconnect of asset prices from fundamentals, and other phenomena relating to excess return dynamics.
TL;DR: The authors developed a dynamic corporate disclosure model, estimating the model using the management earnings forecasts of US public companies, and found that 80% of firms strategically manage information, managers have superior information around half of the time, and firms conceal information about 40% of the times.
TL;DR: In this paper , the cobalt and chromium serum ion concentration of patients treated with two different metal-on-metal (MoM) hinged total knee arthroplasty (TKA) systems, as well as a titanium nitride (TiN)-coated variant, were compared after minimum follow-up of 12 months.
Abstract: This study compared the cobalt and chromium serum ion concentration of patients treated with two different metal-on-metal (MoM) hinged total knee arthroplasty (TKA) systems, as well as a titanium nitride (TiN)-coated variant.A total of 63 patients (65 implants) were treated using either a MoM-coated (n = 29) or TiN-coated (n = 7) hinged TKA (GenuX mobile bearing, MUTARS; Implantcast, Germany) versus the BPKS (Brehm, Germany) hinged TKA (n = 27), in which the weight placed on the MoM hinge is diffused through a polyethylene (PE) inlay, reducing the direct load on the MoM hinge. Serum cobalt and chromium ion concentrations were assessed after minimum follow-up of 12 months, as well as functional outcome and quality of life.No differences in mean age (69 years, 40 to 86), mean age adapted Charlson Comorbidity Index (3.1 (SD 1.4)), mean BMI (29.2 kg/m2 (SD 5.8)), or number of other implants were observed between groups. Significant improvements in outcome scores and pain levels were achieved for all groups, and there was no difference in quality of life (12-Item Short-Form Health Survey questionnaire (SF-12)). Mean cobalt and chromium ion levels were significantly higher for the GenuX versus the BPKS hinged TKA (GenuX vs BPKS: cobalt: 16.3 vs 9.4 µg/l; chromium: 9.5 vs 5.2 µg/l). The TiN-coated implants did not appear to confer improvement in the metal ion levels. Metal ion concentrations above 7 µg/l were detected in 81%(29/36) of GenuX patients versus 41% (11/27) in the BPKS group. No GenuX patients had normal levels under 2 µg/l, versus 22% of BPKS patients. No significant reduction in outcome scores was observed regardless of the metal ion levels, whereas higher work-related activity was correlated with higher chromium concentrations.Hinged TKA, using MoM hinges, resulted in critically high cobalt and chromium ion concentrations. The BPKS hinged TKA showed significantly lower metal ion concentrations compared with the GenuX TKA. No benefits were observed using TiN coating. The different weightbearing mechanics might influence the wear of the component materials. Higher workloads and physical activity could influence chromium levels. Cite this article: Bone Joint J 2022;104-B(3):376-385.
TL;DR: In this paper , the authors introduce a portfolio friction in a two-country DSGE model where investors face a constant probability to make new portfolio decisions and the friction leads to a more gradual portfolio adjustment to shocks and a weaker portfolio response to changes in expected excess returns.
Abstract: Abstract We introduce a portfolio friction in a two-country DSGE model where investors face a constant probability to make new portfolio decisions. The friction leads to a more gradual portfolio adjustment to shocks and a weaker portfolio response to changes in expected excess returns. We apply the model to monthly data for the US and the rest of the world for equity portfolios. We show that the model is consistent with a broad set of evidence related to portfolios, equity prices, and excess returns for an intermediate level of friction. The evidence includes portfolio inertia, limited sensitivity to expected excess returns, a significant impact of financial shocks, excess return predictability, and asset price momentum and reversal.
TL;DR: The authors found that IRS letters about free tax preparation modestly increased tax filing, with a large share of the new filers claiming the EITC and the CTC, even when they did not raise awareness of the benefit itself.
TL;DR: In this paper , the authors construct a new measure of deposit insurance generosity for many countries, empirically model the exogenous international influences on the adoption and generosity of FD, and use a novel econometric method to explore the causal chain from the expansion of FD generosity to increased overall lending, increased lending to households, increased banking system leverage, and more severe and frequent banking crises.
TL;DR: This paper found that exposure to welfare reform led to decreases in food insecurity of the next generation of households, with stronger effects for individuals exposed for longer durations during childhood, individuals exposed in early childhood (0-5 years), and women.
Abstract: This study estimates the effects of welfare reform in the 1990s, which permanently restructured and contracted the cash assistance system in the U.S., on food insecurity-a fundamental form of material hardship-of the next generation of households. An implicit goal underlying welfare reform was the disruption of an assumed intergenerational transmission of disadvantage; however, little is known about the effects of welfare reform on the well-being of the next generation of adults. Using intergenerational data from the Panel Study of Income Dynamics and a variation on a difference-in-differences framework, this study exploits 3 sources of variation in childhood exposure to welfare reform: (1) risk of exposure across birth cohorts; (2) variation of exposure within cohorts because different states implemented welfare reform in different years; and (3) variation between individuals with the same exposure who were more likely and less likely to rely on welfare. We found that exposure to welfare reform led to decreases in food insecurity of the next generation of households, by about 10% for a 5-year increase in exposure, with stronger effects for individuals exposed for longer durations during childhood, individuals exposed in early childhood (0-5 years), and women. We also found smaller favorable effects for individuals whose mothers had less than a high school education, indicating that in terms of food insecurity, welfare reform led to relative disadvantages among the most disadvantaged and thus could be exacerbating socioeconomic and health inequalities.
TL;DR: In this article , the authors demonstrate how advancements in satellite imagery and machine learning (ML) can help ameliorate the data and inference challenges in the context of an expansion of the electrical grid across Uganda.
Abstract: In many regions of the world, sparse data on key economic outcomes inhibit the development, targeting and evaluation of public policy1,2. We demonstrate how advancements in satellite imagery and machine learning (ML) can help ameliorate these data and inference challenges. In the context of an expansion of the electrical grid across Uganda, we show how a combination of satellite imagery and computer vision can be used to develop local-level livelihood measurements appropriate for inferring the causal impact of electricity access on livelihoods. We then show how ML-based inference techniques deliver more reliable estimates of the causal impact of electrification than traditional alternatives when applied to these data. We estimate that grid access improves village-level asset wealth in rural Uganda by up to 0.15 standard deviations, more than doubling the growth rate during our study period relative to untreated areas. Our results provide country-scale evidence on the impact of grid-based infrastructure investment and our methods provide a low-cost, generalizable approach to future policy evaluation in data-sparse environments.
TL;DR: In this article , a detailed study of emerging market corporate borrowing in international markets after 2008 is presented, showing that firms significantly increased their large bond issuances, mostly above US$500 million, which became cheaper to issue.
TL;DR: In this article , the authors examined the association between oral health during the first 5 y of life and subsequent academic achievement for low-income children and found that children who received a minor dental treatment had higher reading and math scores.
Abstract: Low-income children have higher rates of unmet oral health needs. Prior research suggests that poor oral health is associated with lower academic performance but uses cross-sectional and mostly parent-reported measures. This study examined the association between oral health during the first 5 y of life and subsequent academic achievement for low-income children. Birth certificates of children born in Iowa in 1999–2009 were linked to Medicaid enrollment and dental claims data in 1999–2014 and reading and math standardized school test scores for grades 2 through 11. The following oral health measures were examined: having minor dental treatments (mostly surface fillings), major dental treatments (mostly crowns and pulpotomy) or extractions, and comprehensive dental exams during the first 5 y of life. Regression models were estimated adjusting for sociodemographic factors, early infant health, and school district effects. The sample included 28,859 children and 127,464 child-grade observations. In total, 21%, 12%, and 62% of children had at least 1 minor dental treatment, 1 major treatment or extraction, and 1 comprehensive dental exam in the first 5 y of life, respectively. Children who received a minor dental treatment had higher reading and math scores by 1 percentile (95% CI, 0.09–1.9) and 0.9 percentiles (95% CI, 0.02–1.8), respectively. Children who had a major dental treatment or extraction had lower reading and math scores by 2.4 (95% CI, −3.5 to −1.4) and 1.8 (95% CI, −2.8 to −0.8) percentiles. Children who had a comprehensive oral exam had higher reading and math scores by 0.7 (95% CI, 0.06–1.4) and 1.2 (95% CI, 0.6–1.9) percentiles. The findings suggest that children’s oral health before school age is associated with academic achievement later during school years.
23 Mar 2022
TL;DR: This article examined three rationales for the syndication of venture capital investments, using a sample of 271 private biotechnology firms, and argued that the results are consistent with the proposed explanations.
Abstract: This paper examines three rationales for the syndication of venture capital investments, using a sample of 271 private biotechnology firms. Syndication is commonplace, even in the first-round investments. Experienced venture capitalists primarily syndicate first-round investments to venture investors with similar levels of experience. In later rounds, established venture capitalists syndicate investments to both their peers and to less experienced capital providers. When experienced venture capitalists invest for the first time in later rounds, the firm is usually doing well. Syndication also often insures that the ownership stake of the venture capitalist stays constant in later venture rounds. I argue that the results are consistent with the proposed explanations.
TL;DR: This article found that banks were less responsive to network liquidity risk in their management of cash and capital buffers after the Federal Reserve was established, suggesting that banks expected the Fed to reduce that risk.