Declining Productivity Growth in the Developed World
Related to Reduced Ability of R&D to Unearth New Ideas

Growth in the developed world — where growth depends primarily on new ideas — has been in slow, steady decline since the end of World War II, while so-called catch up growth in China and India has been accelerating, keeping global growth relatively stable, Nick Bloom of Stanford University and the NBER observes. The problem for the United States, Europe, and Japan is that "ideas are simply becoming harder to find…. What we’re seeing is R&D expenditures ever increasing but productivity growth slowing down.” His working paper on the subject and other papers by NBER researchers on related topics are featured on the Bureau's new page on Productivity and Growth.

New NBER Research

21 November 2017

Squaring Venture Capital Valuations with Reality

Unicorns are private companies with reported valuations above $1 billion. William Gornall and Ilya A. Strebulaev develop a valuation model for venture capital-backed companies and apply it to 135 U.S. unicorns. When instead of using the most recent share price to value all outstanding shares, they adjust for differences in the attributes of different share classes, nearly half of the135 firms lose their unicorn status.

20 November 2017

The Effect of the H-1B Quota on Employment
and Selection of Foreign-Born Labor

The annual quota on new H-1B visas, which allow skilled foreign-born individuals to work in the United States, was reduced from 195,000 to 65,000 in fiscal 2004. Anna Maria Mayda, Francesc Ortega, Giovanni Peri, Kevin Shih, and Chad Sparber find that while this significantly reduced the employment of new H-1B workers in for-profit firms, employment of similar native workers did not change.

17 November 2017

Differing Characteristics of Top Managers

Candidates for top executive positions who have comparatively greater interpersonal skills are more likely to be hired than candidates whose strengths are in execution or a variety of other characteristics, a study by Steven N. Kaplan and Morten Sorensen shows.
More Research

Illustration of North-South tensions in Congress in 1856

Clashing over Commerce: A History of U.S. Trade Policy

Should the United States be open to commerce with other countries, or should it protect domestic industries from foreign competition? The question has been the source of bitter political conflict throughout American history. Such conflict was inevitable, James Madison argued in The Federalist Papers, because trade policy involves clashing economic interests. The struggle between the winners and losers from trade has always been fierce because dollars and jobs are at stake: depending on what policy is chosen, some industries, farmers, and workers will prosper, while others will suffer.

Douglas A. Irwin's Clashing over Commerce is a comprehensive history of U.S. trade policy and the economic and political forces that have shaped it. As the Trump administration considers making major changes to US trade policy, Irwin’s sweeping historical perspective helps illuminate the current debate. Irwin, the John French Professor of Economics at Dartmouth College and an NBER research associate, shows how economic interests tend to be grouped geographically, meaning that every proposed policy change found ready champions and opponents in Congress.

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Under-Reporting of Deaths among Non-Whites
May Be Cause of Inaccurate Mortality Calculations

Contrary to social scientists’ expectations, traditional mortality rate models have shown blacks and Hispanics having significantly lower mortality rates than non-Hispanic whites at the oldest ages. A study summarized in the current edition of the NBER's Bulletin on Aging and Health finds that these anomalies can be explained by varying degrees of unreported deaths among races. The researchers find that an error-corrected model that accounts for unreported deaths produces mortality rates that are in line with socioeconomic expectations.

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The NBER Digest

Indebtedness of Americans Nearing Retirement
Has Risen Sharply, Increasing Risk of Bankruptcies

In the top quartile of Americans aged 56-61, debt doubled between 1992 and 2004, and almost tripled by 2010, according to research featured in the latest edition of The NBER Digest. Seniors seem to be paying off their debt in retirement, but they are more vulnerable to economic shocks than earlier generations. Other research featured in this month’s edition of the Digest includes a report on wealth stashed in offshore tax havens, an explanation why Chinese children born in a Year of the Dragon have good fortune, an examination of declining U.S. research productivity, a look at the dynamics of the job ladder, and an analysis of competition in the generic drugs market.

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Work Connecting 200-year-old Idea to the Real World
Leads to a Ricardian Revival in Analysis of World Trade

A simple thought experiment conceived two centuries ago by David Ricardo changed the way economists thought about international trade, but until recently it has had little impact on the way data was used to address questions in trade policy because of difficulties of extending Ricardo’s theory to realistic economies. In the latest edition of The NBER Reporter, Arnaud Costinot and Dave Donaldson report on work that is changing that. Also in the quarterly, NBER affiliates write about their work creating models for integrated assessment of climate change impacts, identifying barriers to postsecondary educational achievement in the United States, and exploring gender discrimination in the developing world. The issue includes text and video of the annual Martin Feldstein Lecture.

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