Thomas Blanchet, Lucas Chancel, Amory Gethin, 22 April 2019

Despite the growing importance of inequalities in policy debates, it is still difficult to compare inequality levels across European countries and to tell how European growth has been shared across income groups. This column draws on new evidence combining surveys, tax data, and national accounts to document a rise in income inequality in most European countries between 1980 and 2017. It finds that income disparities on the old continent have increased less than in the US and shows that this is essentially due to ‘predistribution’ policies.

David Laborde, William Martin, 18 April 2019

Raj Chetty, John Friedman, 18 April 2019

Using confidential data to publish statistics based on small samples is challenging due to privacy loss. This column introduces a simple method for dealing with this issue which adds noise to each statistic in proportion to its sensitivity to the addition or removal of a single observation from the data. The method generally outperforms widely used methods of disclosure limitation such as count-based cell suppression both in terms of privacy loss and statistical bias. As an illustration, the method is used to release estimates of social mobility by Census tract in the Opportunity Atlas. 

Mónica Correa-López, Beatriz de Blas, 23 April 2019

Since the end of WWII, advanced economies have experienced long-lasting swings in economic activity. This column takes a look at the historical data and finds that, over the medium term, output and investment fluctuations among European countries have been even more volatile and persistent than in the US. It also reveals that, by diffusing embodied technology through trade inintermediates, large US firms appear to drive Europe's output over the medium term. 

Eric Hanushek, Paul Peterson, Laura M. Talpey, Ludger Woessmann, 15 April 2019

For 50 years, anti-poverty government programmes in the US have focused on improving school outcomes for poor children. This column reports new evidence that, contrary to recent thinking that gaps in student achievement by socioeconomic status have increased over the years, the gaps have been essentially flat over the past half-century. New policies and new approaches seem called for if we wish to lessen these gaps.

Elizabeth Caucutt, Nezih Guner, Christopher Rauh, 06 April 2019

In 2006, 67% of white women in the US between the ages of 25 and 54 were married, compared with only 34% of black women. This column examines the link between this and the decline in low-skilled jobs and the era of mass incarceration that have disproportionately affected black communities. It finds that differences in incarceration and employment dynamics between black and white men account for half of the black–white marriage gap.

Alan Auerbach, Yuriy Gorodnichenko, Daniel Murphy, 04 April 2019

The strength of fiscal multipliers and spillovers have been the subject of intense debate in recent years.Using data on US Department of Defense contracts and income and employment outcomes, this column finds evidence of  strong positive spillovers across locations and industries, although the geographical spillovers appear to dissipate fairly quickly with distance. Both backward linkages and general equilibrium effects contribute to the positive spillovers.

Thor Berger, Per Engzell, 28 March 2019

There are striking regional variations in economic opportunity across the US. This column proposes a historical explanation for this, showing that local levels of income equality and intergenerational mobility in the US resemble those of the European countries that current inhabitants trace their origins from. The findings point to the persistence of differences in local culture, norms, and institutions.

Bo Becker, Victoria Ivashina, 28 March 2019

In the past 30 years, defaults on corporate bonds in the US have been substantially above the historical average. Using firm-level data, this column shows that the increase in credit risk can be largely attributed to an increase in the rate at which new and fast-growing firms displace incumbents, a phenomenon defined as ‘disruption’. Incumbent revenue growth suffers when there are many IPOs in an industry, and newly issued bonds in high-disruption industries have higher yields.

Manudeep Bhuller, Gordon Dahl, Katrine V. Løken, Magne Mogstad, 24 March 2019

Incarceration rates have tripled in the US and almost doubled in Western Europe over the past 50 years. This column uses data on the criminal behaviour and labour market outcomes of every Norwegian to show that in contrast to the US, where incarceration appears to encourage reoffending and damages labour prospects, the Norwegian prison system is successful in increasing participation in job training programmes, encouraging employment, and discouraging crime. It argues that Norway’s high rehabilitation expenditures are more than offset by the corresponding benefits to society.

Antonio Fatás, 14 March 2019

Sanjiv Das, Kris Mitchener, Angela Vossmeyer, 11 March 2019

The Global Crisis brought attention to how connections among financial institutions may make systems more prone to crises. Turning to a major financial crisis from the past, this column uses data from the Great Depression to study risk in the commercial banking network leading up to the crisis and how the network structure influenced the outcomes. It demonstrates that when the distribution of risk is more concentrated at the top of the system, as it was in 1929, fragility and the propensity for risk to spread increases.

Natasha Kalara, Lu Zhang, Karen van der Wiel, 09 March 2019

The Global Crisis has profoundly changed the financial landscape, including firm financing. This column examines the development of various channels of firm financing before and after the crisis among four groups of EU countries, the US, and Japan. While bank finance and, to some extent, equity finance are under pressure, alternative finance, although small, seems to be on the rise.

Olivier Dessaint, Thierry Foucault, Laurent Frésard, Adrien Matray, 05 March 2019

Stock prices respond to fundamental shocks (i.e. news) and non-fundamental shocks (noise). Using US data from 1996 to 2011, this column argues that stock prices are a ‘faulty informant’ for corporate managers because managers have limited ability to separate information from noise when using prices as signals about their prospects. The ensuing losses of capital investment and shareholders’ wealth are large and even affect firms that are not facing severe financing constraints or agency problems.

Harald Hau, Difei Ouyang, Weidi Yuan, 01 March 2019

Trade between the US and China is widely thought to have contributed significantly to the decline in US manufacturing employment between 1999 and 2007. Flipping the point of view, this column examines the impact on China of the growth in trade and finds that for every US manufacturing job lost, almost six new Chinese manufacturing jobs were created. International trade did not contribute to faster wage rises for Chinese industrial workers but instead channelled agricultural and non-participating workers into the industrial labour market. 

Gaston Gelos, Federico Grinberg, Shujaat Khan, Tommaso Mancini-Griffoli, Machiko Narita, Umang Rawat, 28 February 2019

There is little evidence on whether deteriorating household balance sheets in advanced economies have made monetary policy less effective since the Global Crisis. Using US household-level data, this column shows that the responsiveness of household consumption to monetary policy has in fact diminished since the crisis, and that households with the highest indebtedness responded the most to monetary policy shocks. Since the distribution of debt did not change after the crisis, this suggests that household debt did not contribute to lessening the effects of monetary policy over time. 

James J Feigenbaum, Christopher Muller, Elizabeth Wrigley-Field, 18 February 2019

The mortality rate of non-Hispanic white Americans in midlife has been rising since the beginning of the 21st century, in contrast to the national decline in deaths from infectious disease witnessed during the previous century. This column reviews the fall in infectious mortality in US cities across regions and racial groups. It finds that southern cities had the highest rate of death from infectious disease in every year from 1900 to 1948, primarily because southern cities were populated by greater proportions of black residents, who suffered extreme risks from infectious disease in cities in all regions. 

Javier Miranda, Nikolas Zolas, 18 February 2019

Private households have often been disregarded as sources of invention and innovation, but evidence has begun to emerge of this sector’s importance. This column examines data from the US Patent and Trademark Office and the US Census Bureau to describe patented household innovations and characteristics of US household inventors, who are predominantly male, white, and US-born. It estimates that in between 2000 and 2011, patented household innovations generated a revenue flow of $1.7 billion, and calls for further efforts to understand the economic role of household innovations.

Gaetano Basso, Francesco D'Amuri, Giovanni Peri, 13 February 2019

The response of labour supply to negative shocks is different across regions due to varying levels of labour mobility. This column shows that the elasticity of labour supply in response to economic shocks is lower in the euro area than in the US, suggesting that a lack of labour mobility may be an obstacle to labour market adjustments in the euro area. Policies aimed at reducing the complexities of migrating for jobs could help ease this mobility gap.

Maryaline Catillon, David M. Cutler, Thomas E. Getzen, 09 February 2019

Growth in life expectancy during the last two centuries has been attributed to environmental change, productivity growth, improved nutrition, and better hygiene, rather than to advances in medical care. This column traces the development of medical care and the extension of longevity in the US from 1800 forward to provide a long-term look at health and health care in the US. It demonstrates that the contribution of medical care to life-expectancy gains changed over time. 

Pages

Events

CEPR Policy Research