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North America

Backlash: The Unintended Effects of Language Prohibition in U.S. Schools after World War I

Can forced assimilation policies successfully integrate immigrant groups? This paper examines how a specific assimilation policy – language restrictions in elementary school – affects integration and identification with the host country later in life. After World War I, several U.S. states barred the German language from their schools. I find that affected individuals were less likely to volunteer in WWII and more likely to marry within their ethnic group and to choose decidedly German names for their offspring.

Multilateral Trade Bargaining: A First Look at the GATT Bargaining Records

This paper empirically examines recently declassi…ed data from the GATT/WTO on tariff bargaining. Focusing on the Torquay Round (1950-51), we document six stylized facts about these interconnected high-stakes international negotiations. Several of these stylized facts lend support to two features that are seen by GATT practitioners and legal scholars as hallmarks of the tari¤ bargaining that occurred in the early GATT rounds, namely, a surprising lack of strategic behavior among the participating governments and an important multilateral element to the bilateral bargains.

How Destructive is Innovation?

Entering and incumbent plants can create new products and displace existing products. Incumbents can also improve their existing products. How much of aggregate growth occurs through each of these channels? Using U.S. Census data on manufacturing plants from 1992, 1997 and 2002, we arrive at three main conclusions: First, most growth appears to come from incumbents. We infer this from the modest employment share of entering plants. Second, most growth seems occur through improvements of existing varieties rather than creation of brand new varieties.

Do Government Guaranteed Small Business Loans Promote Economic Growth and Entrepreneurship?

This paper examines the impact of government guaranteed small business loans on urban economic growth, and compares the growth impacts of government versus market financed entrepreneurship. OLS estimates indicate a significant and positive relation between the Small Business Administration’s guaranteed loans and metropolitan growth between 1993 and 2002. However, first-difference and instrumental variable regressions show no growth impact from government guaranteed loans. In contrast, market entrepreneurship significantly and positively contributes to local economic growth.

Watersheds in Infant Mortality: The Role of Effective Water and Sewerage Infrastructure, 1880 to 1915

We explore the first period of sustained decline in child mortality in the U.S. and provide estimates of the independent and combined effects of clean water and effective sewerage systems on under-five mortality. Our case is Massachusetts, 1880 to 1920, when authorities developed a sewerage and water district in the Boston area. We find the two interventions were complementary and together account for approximately one-third of the decline in log child mortality during the 41 years.

The Impact of State Tax Subsidies for Private Long-Term Care Insurance on Coverage and Medicaid Expenditures

In spite of the large expected costs of needing long-term care, only 10-12 percent of the elderly population has private insurance coverage. Medicaid, which provides means-tested public assistance and pays for almost half of long-term care costs, spends more than $100 billion annually on long-term care. In this paper, I exploit variation in the adoption and generosity of state tax subsidies for private long-term care insurance to determine whether tax subsidies increase private coverage and reduce Medicaid's costs for long-term care.

Patents, Competition, and Innovation – Evidence from Compulsory Licensing During WWI

This paper examines whether the US decision during World War I to violate enemy owned patents - through compulsory licensing - discouraged invention. Estimates from a new data set of German patents indicate a 28 percent increase in invention. Controls for patent quality suggest that only a small share of the increase was due to lower quality, strategic patents. Firm-level data suggest that compulsory licensing facilitated competitive entry into fields with licensing. Firms whose patents had been licensed began to patent more in research fields with licensing.

Do Patent Pools Encourage Innovation? Evidence from 20 U.S. Industries Under the New Deal

Patent pools, which allow competing firms to combine their patents, have emerged as a prominent mechanism to resolve litigation when multiple firms own patents for the same technology. This paper takes advantage of a window of regulatory tolerance under the New Deal to investigate the effects of pools on innovation within 20 industries. Difference-in-differences regressions imply a 16 percent decline in patenting in response to the creation of a pool.

Host-Country Financial Development and Multinational Activity

We establish that host-country financial development affects the global operations of multinational firms. Using detailed U.S. data, we provide robust evidence that host-country financial development attracts more entry by multinational affiliates, while also influencing affiliates’ incentives to sell in the local market, versus to their parent country and third-country destinations.

The Institutional Environment for U.S. Economic Innovation

The institutional environment allows innovators and entrepreneurs to take calculated economic risks. In the U.S, innovation originates from education and research, while competition is made possible by a cluster of laws and financial regulatory institutions. Creative education, innovative research, legal institutions and financial regulations function together to enable a highly dynamic and innovative economy. We first give a brief introduction of the relationship between innovation, entrepreneurship and institutions.

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