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.

The real effects of debt

Abstract: At moderate levels, debt improves welfare and enhances growth. But high levels can be damaging. When does debt go from good to bad? We address this question using a new dataset that includes the level of government, non-financial corporate and household debt in 18 OECD countries from 1980 to 2010. Our results support the view that, beyond a certain level, debt is a drag on growth. For government debt, the threshold is around 85% of GDP. The immediate implication is that countries with high debt must act quickly and decisively to address their fiscal problems. The longer-term lesson is that, to build the fiscal buffer required to address extraordinary events, governments should keep debt well below the estimated thresholds. Our examination of other types of debt yields similar conclusions. When corporate debt goes beyond 90% of GDP, it becomes a drag on growth. And for household debt, we report a threshold around 85% of GDP, although the impact is very imprecisely estimated.

Using Maimonides' Rule to Estimate the Effect of Class Size on Student Achievement

Abstract: The effect of class size on student achievement has long been of concern to educators, parents, and scholars. In Israeli public schools today, class size is partly determined using a rule proposed by Maimonides in the 12th century. This rule induces a nonlinear and non-monotonic relationship between enroll- ment size and class size. We use this relationship to construct instrumental variables estimates of the effect of class size on the test scores of Israeli 4th and 5th graders in 1991 and 3rd graders in 1992. Because the up-and-down pattern in class size induced by Maimonides' rule matches a similar pattern in test scores, the rule provides a credible source of exogenous variation for investigation of the causal effect of class size on student achievement. Our use of Maimonides' rule can be viewed as an application of Campbell's (1969) regression-discontinuity design to the class size question. The results of this application show that reductions in class size induce a significant increase in reading and math scores for 5th graders and a smaller increase in reading scores for 4th graders. In contrast, there is little evidence of any association between class size and the test scores of 3rd graders, although this finding may result from problems with the 1992 wave of the testing program. The estimates also suggest that the gains from small classes are largest for students from disadvantaged backgrounds. Besides being of metho- dological interest and providing new evidence on the class size question, these findings are of immediate policy interest in Israel where legislation to reduce the maximum class size is pending.

Post-War U.S. Business Cycles: An Empirical Investigation

Abstract: We propose a procedure for representing a time series as the sum of a smoothly varying trend component and a cyclical component. We document the nature of the co-movements of the cyclical components of a variety of macroeconomic time series. We find that these co-movements are very different than the corresponding co-movements of the slowly varying trend components.

Benchmarking Financial Systems around the World

Abstract: This paper introduces the Global Financial Development Database, an extensive dataset of financial system characteristics for 205 economies from 1960 to 2010. The database includes measures of (a) size of financial institutions and markets (financial depth), (b) degree to which individuals can and do use financial services (access), (c) efficiency of financial intermediaries and markets in intermediating resources and facilitating financial transactions (efficiency), and (d) stability of financial institutions and markets (stability). The authors document cross-country differences and time series trends.