Stefano Breschi, Francesco Lissoni, Ernest Miguelez, 07 December 2015

We traditionally think of migrants draining their home country of knowledge and skills, and, instead, giving their all to their host country. Based on patent and inventor data, this column looks at knowledge diffusion conveyed by highly skilled migrants both within their host country as well as back to their homelands. China, South Korea and Russia seem to profit from their diaspora’s knowledge generation but the same can’t be said for India.

Nikolaos Papanikolaou, Christian Wolff, 06 December 2015

In the years running up to the global crisis, the banking sector was marked by a high degree of leverage. Using US data, this column shows how, before the onset of the crisis, banks accumulated leverage both on and, especially, off their balance sheets. The latter activities saw an increase in maturity mismatch, raised the probability of bank runs, and increased both individual bank risk and systemic risk. These findings support the imposition of an explicit off-balance sheet leverage ratio in future regulatory frameworks.

Andrew Foote, Michel Grosz, Ann Stevens, 17 November 2015

In light of the Great Recession, we continue to learn new ways in which economic downturns directly affect the labour market. This column suggests that following an adverse demand shock, individuals exit local labour markets primarily through migration, but that has become less prominent in the Great Recession. Faced with declining economic prospects, workers are becoming more likely to stay put, without re-entering the labour market. 

James Feyrer, Erin Mansur, Bruce Sacerdote, 16 November 2015

Fracking has driven an oil and natural gas boom in the US over the past decade. This column examines the impact these mining activities have had on local and regional economies. US counties enjoy significant economic benefits, including increased wages and new job creation. These effects grow as the geographic radius is extended to include neighbouring areas in the region. The results suggest that the fracking boom provided some insulation for these areas during the Great Recession, and lowered national unemployment by as much as 0.5%.

Dominika Langenmayr, 13 November 2015

Voluntary disclosure programmes offer tax evaders the opportunity to come clean with reduced penalties. This column uses data from the US and Germany to examine the merits of such programmes. They are found to increase tax evasion, but also to significantly lower administrative costs, leading to a net increase in tax revenues.

Lisa Cook, Trevon Logan, John Parman, 13 November 2015

Much research has gone into trying to establish a connection in the US between having a distinctively black name and disadvantage over a lifetime. This column highlights a striking difference between the historical effects of having a black name and today’s effects. While modern black names show up in modern empirical studies as an albatross around the neck of those possessing them, either because those with such names come from worse socioeconomic conditions or face discrimination later in life, historical black names conveyed a large advantage accumulating over an individual’s lifetime.

Claudia Olivetti, Daniele Paserman, 12 November 2015

Intergenerational income mobility is currently not very high in the US compared to other developed countries. This column shows that US intergenerational income equality was high in the 19th century but plummeted between 1900 and 1920. The income-mobility ladder was thus pulled up during the so-called Great Gatsby era.

Régis Barnichon, 12 November 2015

Many commentators have noted that the US has ridden out its post-crisis malaise rather skilfully, not least when it comes to reducing unemployment. This column argues that the US unemployment rate - despite being impressive, all things considered - still has substantial room to fall because desire to work among the non-employed is close to a record low.

William Kerr, Martin Mandorff, 31 October 2015

Immigrants are more likely to concentrate around specific industries and entrepreneurship. Market integration and discrimination only go a certain way towards explaining this phenomenon. This column explores how social interactions affect immigrants’ employment decisions in the US. Fifteen ethnic groups are found to cluster around certain industries at a rate 10 times greater than the native population. Immigrants are argued to be drawn to the same industries as their countrymen due to the ease of diffusing skills through social interactions in the group, along with higher earnings due to specialisation.

Matthew Jaremski, David Wheelock, 25 October 2015

The US’s Federal Reserve System was established more than a century ago as a confederation of 12 regional districts. The selection of cities for each region’s Reserve Bank disproportionately favoured the Northeast and the state of Missouri, a fact that remains controversial to this day. This column describes how the existing banking infrastructure and population density at the time, guided the selection of these cities. Modern communication technology has reduced the need for physical proximity between Reserve and commercial banks. Debates about rezoning the Federal districts should therefore focus on the distribution of monetary policymaking authority.

Jan Fredrick Cruz, Ronald Mendoza, 31 August 2015

Clinton. Bush. Kennedy. Political family dynasties have survived the establishment of democracies in the developed and developing world and, in some cases, are strengthening. This column argues that political dynasties are still with us, and that it’s fairly easy to see why. Whoever said that elections are the only time that the vote of the richest citizen is equivalent to that of the poorest needs to start rethinking whether this still holds true.

Esa Jokivuolle, Jussi Keppo, Xuchuan Yuan, 23 July 2015

Bankers’ compensation has been indicted as a contributing factor to the Global Crisis. The EU and the US have responded in different ways – the former legislated bonus caps, while the latter implemented bonus deferrals. This column examines the effectiveness of these measures, using US data from just before the Crisis. Caps are found to be more effective in reducing the risk-taking by bank CEOs.

Melissa Kearney, Phillip Levine, 16 July 2015

Early childhood education has important effects on the academic readiness and ultimate life chances of children. This column examines how the introduction of the educational television show Sesame Street in the US affected primary school outcomes for disadvantaged children. Those from counties that had better access to the broadcast had superior educational outcomes through their early school years. These effects were particularly pronounced for black, non-Hispanic children, and those living in economically disadvantaged areas. The extremely low cost per child of such interventions make them ideal for addressing educational inequality in childhood.

Alexandra L. Cermeño, 12 July 2015

Economic historians tend to explain US geographical development gaps in terms of industrialisation. But by the end of the 20th century, the richest counties had become specialised in services, rather than in manufacturing. This column evaluates how the service economy triggered this evident contrast between the urban and rural US. Market size causes localisation of non-agricultural activity, with the effect being stronger for services, especially knowledge services. Local policymakers can thus foster growth by attracting high-skilled workers to a region, with the multiplier effect eventually increasing the local market.

Dale Jorgenson, Koji Nomura, Jon Samuels, 08 July 2015

The two lost decades in Japan and the Global Crisis of 2007–2009 have created new opportunities for economic growth. This column describes the evolution of productivity across sectors in Japan and the US and suggests that the greatest payoffs for Japan would come from combining the Trans-Pacific Partnership with domestic reforms and encouraging foreign direct investment.  

Áureo De Paula, John Lynham, Timothy Halliday, 22 June 2015

For policy to target air pollution optimally, a thorough understanding of its harms is required. However, disentangling the health effects of specific pollutants has proved challenging, as multiple chemicals tend to co-occur in industrial pollution. This column exploits volcanic emissions in Hawaii to examine the health impact of a specific pollutant – airborne particulates. Short-term exposure to particulate pollution is found to increase pulmonary-related hospitalisations and expenditures, particularly among very young children. 

Paola Conconi, David DeRemer, Georg Kirchsteiger, Lorenzo Trimarchi, Maurizio Zanardi, 16 June 2015

Economic cycles patently influence politics. This column explores an unexplored avenue of political economy research by assessing whether US politicians file international trade disputes to win votes. It turns out they do. This means that disputes might be brought earlier or later than they otherwise would – potentially costing lots more than they should – and that violations in industries that are deemed unimportant by electioneering politicians go unpunished.

Roger Backhouse, Mauro Boianovsky, 19 May 2015

The notion of secular stagnation – a state of negligible or zero economic growth – is back in the headlines. Questions naturally arise about its intellectual antecedents. This column discusses how the concept rose and fell with the economic fortunes of advanced industrialised nations. Political trends and trends in economic theory played a part in its trajectory, with the notion closely connected to the idea that the level of government debt should be allowed to rise.

Peter Debaere, Amanda Kurzendoerfer, 12 May 2015

Water management is a major challenge today. To guide efficient water allocation, it is essential to understand the drivers of water use. This column sheds light on this issue using US data from the 1950s until today. The findings show that US water withdrawal has stabilised, and has even decreased in the past decades. Technological improvements have been crucial towards that end. However, the shifting demand from agriculture and manufacturing to less-water intensive sectors has been just as important.

Fatih Guvenen, Fatih Karahan, Serdar Ozkan, Jae Song, 28 April 2015

Many policy design issues depend crucially on the nature of the idiosyncratic risks to labour income. The earning dynamics literature has typically relied on an implicit or explicit assumption that earnings shocks are log-normally distributed. This column challenges conventional knowledge by bringing in new evidence from a very large administrative dataset on US workers. It presents evidence suggesting income shocks exhibit substantial deviations from log-normality, and that shock persistence depends on income levels as well as the size and sign of the shock.

Pages

Vox eBooks

Events

CEPR Policy Research