National Bureau of Economic Research

About: National Bureau of Economic Research is a nonprofit organization based out in Cambridge, Massachusetts, United States. It is known for research contribution in the topics: Monetary policy & Population. The organization has 2626 authors who have published 34177 publications receiving 2818124 citations. The organization is also known as: NBER & The National Bureau of Economic Research.

Skills, education, and the rise of earnings inequality among the “other 99 percent”

Abstract: The singular focus of public debate on the “top 1 percent” of households overlooks the component of earnings inequality that is arguably most consequential for the “other 99 percent” of citizens: the dramatic growth in the wage premium associated with higher education and cognitive ability. This Review documents the central role of both the supply and demand for skills in shaping inequality, discusses why skill demands have persistently risen in industrialized countries, and considers the economic value of inequality alongside its potential social costs. I conclude by highlighting the constructive role for public policy in fostering skills formation and preserving economic mobility.

Foreign Investment and Technology Transfer: a Simple Model

Abstract: This paper develops a model in which international technology transfer through foreign direct investment emerges as an endogenized equilibrium phenomenon, resulting from the strategic interaction between subsidiaries of multinational corporations and host country firms. The model explicitly recognizes two types of costs -- the costs to the multinational of transferring technology to its subsidiaries and the learning costs of domestic firms -- and treats technology transfer in a game theoretic context. The model points to the importance of the learning efforts of host-country firms in increasing the rate at which MNCs transfer technology. The paper also explores some of the reasons why learning investment in host country firms may be suboptimal.

Anatomy of Financial Distress: An Examination of Junk-Bond Issuers

Abstract: This paper examines the events following the onset of financial distress for 102 public junk bond issuers. We find that out-of-court debt relief mainly comes from junk bond - holders; banks almost never forgive principal, though they do defer payments and waive debt covenants. Asset sales are an important means of avoiding Chapter 11 reorganization; however, they may be limited by industry factors. If a company simply restructures its bank debt, but either does not restructure its public debt or does not sell major assets or merge, the company goes bankrupt. The structure of a company's liabilities affects the likelihood that it goes bankrupt; companies whose bank and private debt are secured as well as companies with complex public debt structures are more prone to go bankrupt. Finally, there is no evidence that more profitable distressed companies are more successful in dealing with financial distress; they are not less likely to go bankrupt, sell assets, or reduce capital expenditures.

Parental Education and Parental Time with Children

Abstract: Parents invest both their material resources and their time into raising their children Time investment in children is thought to be critical to the development of "quality" children who will become productive adults This paper has three goals related to the examination of parental time allocated to the care of their children First, using data from the recent American Time Use Surveys (ATUS), we highlight what we think are the most interesting, and perhaps surprising, cross sectional patterns in time spent with children by parents within the United States Second, we interpret our results in a Beckerian framework of time allocation with a view toward establishing whether parental childcare appears to be more akin to leisure or home production Third, we examine data from a sample of 14 countries to establish whether the patterns we observe in the United States hold across countries and within other countries We show that both within countries and across countries there is a strong positive relationship between parental education, or earnings, and time spent with children We then show that time spent with children does not follow patterns typical of leisure or home production, suggesting an important difference We speculate that one reason for this positive education gradient relates to the investment aspect of time spent with children

Balance Sheets and Exchange Rate Policy

Abstract: We study the relation among exchange rates, balance sheets, and macroeconomic outcomes in a small open economy. Because liabilities are dollarized,' a real devaluation has detrimental effects on entreprenurial net worth, which in turn constrains investment due to financial frictions. But there is an offsetting effect, int hat devaluation expands home output and the return to domestic investment, which are also components of net worth. We show that the impact of an adverse foreign shock can be strongly magnified by the balance sheet effect of the associated real devaluation. But the fall in output employment, and investment is stronger under fixed exchange rates than under flexible rates. Hence the conventional wisdom, that flexible exchange rates are better absorbers of real foreign shocks than are fixed rates, holds in spite of potentially large balance sheet effects.