Research Briefs·Jul 18, 2024

Bankruptcy Resolution and Credit Cycles

Martin Kornejew, Chen Lian, Yueran Ma, Pablo Ottonello and Diego J. Perez
In countries with poorly functioning business bankruptcy institutions, business credit booms are followed by severe declines in output, investment, and consumption. In countries with well-functioning business bankruptcy institutions, credit booms are followed by only moderate changes in economic activities.
Research Briefs·Jul 18, 2024

Historical Differences in Female-Owned Manufacturing Establishments: The United States, 1850-1880

Ruveyda Gozen, Richard Hornbeck, Anders Humlum and Martin Rotemberg
During the late 1800s, manufacturing establishments owned by females were smaller than those owned by males and had lower capital-to-output ratios. Female-owned establishments employed more women and paid women higher wages, and were concentrated in sub-industries like women’s clothing and...
Topics: Employment & Wages
Research Briefs·Jul 11, 2024

Banking on Trust: Supervisory Transparency and Depositors’ Actions

Abhiman Das, Tanmoy Majilla and Rimmy E. Tomy
Following news of regulatory penalties on some banks, depositors withdraw money from both offending and proximate nonoffending branches, with more withdrawals from nonoffending branches in regions where trust in public institutions is lower.
Research Briefs·Jun 20, 2024

Location Sorting and Endogenous Amenities: Evidence from Amsterdam

Milena Almagro and Tomás Domínguez-Iino
Different demographic groups tend to prefer different types of amenities, and businesses respond by expanding amenities in neighborhoods with greater demand. This pattern reinforces residential sorting, with ambiguous effects on inequality.
Research Briefs·Jun 20, 2024

Access to Credit Reduces the Value of Insurance

Sonia Jaffe, Anup Malani and Julian Reif
Insurance is less valuable when people can also smooth their spending using loans. Access to a five-year loan decreases the average value of insurance by $232–$366, or 58–61%.
Research Briefs·Jun 20, 2024

Early Predictors of Racial Disparities in Criminal Justice Involvement

Andrew Jordan, Ezra Karger and Derek Neal
Detailed measures of early academic achievement and socioeconomic status are powerful predictors of future criminal justice involvement; however, while reforms that improve school quality and neighborhood environments are likely to reduce future racial disparities in criminal justice involvement, such improvements...
Research Briefs·Jun 20, 2024

Homelessness and the Persistence of Deprivation: Income, Employment, and Safety Net Participation

Alexa Grunwaldt, Bruce Meyer, Gillian Meyer, Derek Wu and Angela Wyse
Homelessness occurs in the context of long-term, severe deprivation rather than large and sudden losses of income. Low permanent incomes leave people vulnerable to housing loss when met with even modest disruptions to life circumstances, even if they are connected...
Research Briefs·Jun 20, 2024

Marginal Returns to Public Universities

Jack Mountjoy
The typical marginally admitted university student completes an additional year of four-year education, is 12 percentage points more likely to earn a bachelor’s degree, and eventually earns 5-10 percent more than their marginally rejected but otherwise identical counterpart. Cost-benefit calculations...
Research Briefs·Jun 18, 2024

Financial Statement Analysis with Large Language Models

Alex G. Kim, Maximilian Muhn and Valeri V. Nikolaev
GPT outperforms financial analysts in predicting companies’ earnings changes, especially when analysts struggle, with accuracy comparable to state-of-the-art machine learning models.
Research Briefs·Jun 18, 2024

Bourbon Reforms and State Capacity in the Spanish Empire

Giorgio Chiovelli, Leopoldo Fergusson, Luis Martínez, Juan David Torres and Felipe Valencia Caicedo
The Spanish colonial empire in Latin America offers insights into the effects of state formation on economic development and political institutions, with lessons for today. Spain introduced a system in the late 18th century that relied on appointed governors with...