Roberto Abraham Scaruffi

                      THE LATEST WORKING PAPERS
                   National Bureau of Economic Research
                       Week of December 13, 2010
                                                                     
The following NBER Working Papers that match your selections
were released in electronic format this week. Abbreviations 
in parentheses refer to NBER Research Programs.  (visit 
http://www.nber.org/programs.html for Program information.)

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1.  Capital Taxation During the U.S. Great Depression
by Ellen R. McGrattan #16588 (EFG)
http://papers.nber.org/papers/W16588

2.  The Global Financial Crisis of 2007-08: Is it Unprecedented?
by Michael D. Bordo, John S. Landon-Lane #16589 (DAE ME)
http://papers.nber.org/papers/W16589

3.  Are all Credit Default Swap Databases Equal?
by Sergio Mayordomo, Juan Ignacio Penya, Eduardo S. Schwartz #16590 (AP)
http://papers.nber.org/papers/W16590

4.  Does Stock Ownership Breadth Measure Hidden Negative Information or Sentiment?
by James J. Choi, Li Jin, Hongjun Yan #16591 (AP)
http://papers.nber.org/papers/W16591

5.  The Contribution of Human Capital to China's Economic Growth
by John Whalley, Xiliang Zhao #16592 (EFG)
http://papers.nber.org/papers/W16592

6.  Accounting for Anticipation Effects: An Application to Medical Malpractice Tort Reform
by Anup Malani, Julian Reif #16593 (HC HE)
http://papers.nber.org/papers/W16593

7.  Health Shocks and Natural Resource Management:  Evidence from Western Kenya
by Joshua Graff Zivin, Maria Damon, Harsha Thirumurthy #16594 (EEE HE)
http://papers.nber.org/papers/W16594

8.  Local Versus Aggregate Lending Channels: The Effects Of Securitization On Corporate Credit Supply In Spain
by Gabriel Jimenez, Atif R. Mian, Jose-Luis Peydro, Jesus Saurina #16595 (CF ME)
http://papers.nber.org/papers/W16595

9.  Baby Busts and Baby Booms: The Fertility Response to Shocks in Dynastic Models
by Larry E. Jones, Alice Schoonbroodt #16596 (EFG)
http://papers.nber.org/papers/W16596

10.  African Export Successes: Surprises, Stylized Facts, and Explanations
by William Easterly, Ariell Reshef #16597 (POL)
http://papers.nber.org/papers/W16597

11.  Sustainability and the Measurement of Wealth
by Kenneth J. Arrow, Partha Dasgupta, Lawrence H. Goulder, Kevin J. Mumford, Kirsten Oleson #16599 (EEE EFG)
http://papers.nber.org/papers/W16599

12.  Unilateral Tariff Liberalisation
by Richard Baldwin #16600 (ITI)
http://papers.nber.org/papers/W16600

13.  Betting Against Beta
by Andrea Frazzini, Lasse H. Pedersen #16601 (AP)
http://papers.nber.org/papers/W16601

14.  Patient Knowledge and Antibiotic Abuse: 
Evidence from an Audit Study in China
by Janet Currie, Wanchuan Lin, Wei Zhang #16602 (HC HE PE)
http://papers.nber.org/papers/W16602

15.  Aftershocks: The Impact of Clinic Violence on Abortion Services
by Mireille Jacobson, Heather Royer #16603 (CH HC HE)
http://papers.nber.org/papers/W16603


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1.  Capital Taxation During the U.S. Great Depression
by Ellen R. McGrattan  -  #16588 (EFG)

Abstract:

Previous studies of the U.S. Great Depression find that increased
taxation contributed little to either the dramatic downturn or the
slow recovery. These studies include only one type of capital
taxation:  a business profits tax.  The contribution is much greater
when the analysis includes other types of capital taxes.  A general
equilibrium model extended to include taxes on dividends, property,
capital stock, and excess and undistributed profits predicts patterns
of output, investment, and hours worked more like those in the 1930s
than found in earlier studies. The greatest effects come from the
increased tax on corporate dividends.

http://papers.nber.org/papers/W16588


2.  The Global Financial Crisis of 2007-08: Is it Unprecedented?
by Michael D. Bordo, John S. Landon-Lane  -  #16589 (DAE ME)

Abstract:

This paper compares the recent global crisis and recession to earlier
international financial crises and recessions. Based on existing
chronologies of banking, currency and debt crises we identify
clusters of crises.  We use an identification of extreme events and a
weighting scheme based on real GDP relative to the U.S. to identify
global financial crises since 1880.  For banking crises we identify
five global ones since 1880:  1890-91, 1907-08, 1913-14, 1931-32,
2007-2008.

In terms of global incidence the recent crisis is fourth in ranking
and comparable to 1907-08.  We also calculate output losses during
the recessions associated with global financial crises and again the
recent crisis is similar in severity to 1907-08 and is fourth in
ranking.  On both dimensions the recent crisis is a pale shadow of
the Great depression.  The relatively mild experience of the recent
crisis may reflect institutional and policy learning.

http://papers.nber.org/papers/W16589


3.  Are all Credit Default Swap Databases Equal?
by Sergio Mayordomo, Juan Ignacio Penya, Eduardo S. Schwartz  -  #16590 (AP)

Abstract:

The presence of different prices in different databases for the same
securities can impair the comparability of research efforts and
seriously damage the management decisions based upon such research. 
In this study we compare the six major sources of corporate Credit
Default Swap prices:  GFI, Fenics, Reuters EOD, CMA, Markit and JP
Morgan, using the most liquid single name 5-year CDS of the
components of the leading market indexes, iTraxx (European firms) and
CDX (US firms) for the period from 2004 to 2010.  We find systematic
differences between the data sets implying that deviations from the
common trend among prices in the different databases are not purely
random but are explained by idiosyncratic factors as well as
liquidity, global risk and other trading factors.  The lower is the
amount of transaction prices available the higher is the deviation
among databases.  Our results suggest that the CMA database quotes
lead the price discovery process in comparison with the quotes
provided by other databases.  Several robustness tests confirm these
results.

http://papers.nber.org/papers/W16590


4.  Does Stock Ownership Breadth Measure Hidden Negative Information
or Sentiment?
by James J. Choi, Li Jin, Hongjun Yan  -  #16591 (AP)

Abstract:

Using holdings data on a representative sample of all Shanghai Stock
Exchange investors, we show that increases in the fraction of market
participants who own a stock predict low returns:  highest change
quintile stocks underperform lowest quintile stocks by 23 percent per
year.  This is consistent with ownership breadth primarily reflecting
popularity among noise traders rather than the amount of negative
information excluded from prices by short-sales constraints.  But
stocks in the top decile of wealth-weighted institutional breadth
change outperform the bottom decile by 8 percent per year, suggesting
that breadth measured among sophisticated institutional investors who
cannot short does reflect missing negative information.  The
profitability of institutional trades against retail investors is
almost entirely explained by their correlations with retail and
institutional breadth changes. In the time series, average breadth
changes negatively predict aggregate stock market returns.

http://papers.nber.org/papers/W16591


5.  The Contribution of Human Capital to China's Economic Growth
by John Whalley, Xiliang Zhao  -  #16592 (EFG)

Abstract:

This paper develops a human capital measure in the sense of Schultz
(1960) and then reevaluates the contribution of human capital to
China's economic growth.  The results indicate that human capital
plays a much more important role in China's economic growth than
available literature suggests, 38.1% of economic growth over
1978-2008, and even higher for 1999-2008.  In addition, because human
capital formation accelerated following the major educational
expansion increases after 1999 (college enrollment in China increased
nearly fivefold between 1997 and 2007) while growth rates of GDP are
little changed over the period after 1999, total factor productivity
increases fall if human capital is used in growth accounting as we
suggest.  TFP, by our calculations, contributes 16.92% of growth
between 1978 and 2008, but this contribution is -7.03% between 1999
and 2008.  Negative TFP growth along with the high contribution of
physical and human capital to economic growth seem to suggest that
there have been decreased in the efficiency of inputs usage in China
or worsened misallocation of physical and human capital in recent
years. These results underscore the importance of efficient use of
human capital, as well as the volume of human capital creation, in
China's growth strategy.

http://papers.nber.org/papers/W16592


6.  Accounting for Anticipation Effects: An Application to Medical
Malpractice Tort Reform
by Anup Malani, Julian Reif  -  #16593 (HC HE)

Abstract:

While conducting empirical work, researchers sometimes observe
changes in behavior before the adoption of a new treatment program or
policy.  The conventional diagnosis researchers make is that the
treatment is endogenous.  Observing behavioral changes prior to
treatment is also consistent, however, with anticipation effects.  In
this paper we provide a framework for comparing the different methods
for estimating anticipation effects and propose a new set of
instrumental variables that can address the problem that subjects'
expectations are unobservable. We use our framework to analyze the
effect of tort reform on physician supply.  We find that accounting
for anticipation effects doubles the estimated effect of tort reform.

http://papers.nber.org/papers/W16593


7.  Health Shocks and Natural Resource Management:  Evidence from
Western Kenya
by Joshua Graff Zivin, Maria Damon, Harsha Thirumurthy  -  #16594 (EEE HE)

Abstract:

Poverty and altered planning horizons brought on by the HIV/AIDS
epidemic can change individual discount rates, altering incentives to
conserve natural resources.  Using longitudinal data from household
surveys in western Kenya, we estimate impacts of health status on
labor productivity and discount rates. We find that household size
and composition are predictors of whether the effect on productivity
dominates the discount rate effect, or vice-versa.  Since households
with more and younger members are better able to reallocate labor to
cope with productivity shocks, the discount rate impact dominates for
these households and health improvements lead to greater levels of
conservation.  In smaller families with less substitutable labor, the
productivity impact dominates and health improvements lead to greater
environmental degradation.

http://papers.nber.org/papers/W16594


8.  Local Versus Aggregate Lending Channels: The Effects Of
Securitization On Corporate Credit Supply In Spain
by Gabriel Jimenez, Atif R. Mian, Jose-Luis Peydro, Jesus Saurina  -  #16595 (CF ME)

Abstract:

While banks may change their supply of credit due to bank balance
sheet shocks (the local lending channel), firms can react by
adjusting their sources of financing in equilibrium (the aggregate
lending channel).  We formalize a methodology for separately
estimating these effects.  We estimate the local and aggregate
lending channel effects of the banks' ability to securitize real
estate assets on non-real estate firms in Spain.  We show that
equilibrium dynamics nullify the strong local lending channel effect
on credit quantity for firms with multiple banking relationships. 
However, credit terms for these firms become significantly more
favorable due to securitization.  Securitization also leads to an
expansion in credit on the extensive margin towards first-time bank
clients, and these borrowers are significantly more likely to end up
in default.  Finally, the 2008 collapse in securitization leads to a
reversal in local lending channel.

http://papers.nber.org/papers/W16595


9.  Baby Busts and Baby Booms: The Fertility Response to Shocks in
Dynastic Models
by Larry E. Jones, Alice Schoonbroodt  -  #16596 (EFG)

Abstract:

Economic demographers have long analyzed fertility cycles.  This
paper builds a foundation for these cycles in a model of fertility
choice with dynastic altruism and aggregate shocks.  It is shown that
under reasonable parameter values, fertility is pro-cyclical and
that, following a shock, fertility continues to cycle endogenously as
subsequent cohorts enter retirement.  Quantitatively, in the model,
the Great Depression generates a large baby bust -- between 38% and
63% of that seen in the U.S. in the 1930s -- which is subsequently
followed by a baby boom -- between 53% and 92% of that seen in the
U.S. in the 1950s.

http://papers.nber.org/papers/W16596


10.  African Export Successes: Surprises, Stylized Facts, and
Explanations
by William Easterly, Ariell Reshef  -  #16597 (POL)

Abstract:

We establish the following stylized facts:  (1) Exports are
characterized by Big Hits, (2) the Big Hits change from one period to
the next, and (3) these changes are not explained by global factors
like global commodity prices.  These conclusions are robust to
excluding extractable products (oil and minerals) and other
commodities.  Moreover, African Big Hits exhibit similar patterns as
Big Hits in non-African countries.  We also discuss some concerns
about data quality.  These stylized facts are inconsistent with the
traditional view that sees African exports as a passive commodity
endowment, where changes are driven mostly by global commodity
prices.  In order to better understand the determinants of export
success in Africa we interviewed several exporting entrepreneurs,
government officials and NGOs. Some of the determinants that we
document are conventional:  moving up the quality ladder, utilizing
strong comparative advantage, trade liberalization, investment in
technological upgrades, foreign ownership, ethnic networks, and
personal foreign experience of the entrepreneur.  Other successes are
triggered by idiosyncratic factors like entrepreneurial persistence,
luck, and cost shocks, and some of the successes occur in areas that
usually fail.

http://papers.nber.org/papers/W16597


11.  Sustainability and the Measurement of Wealth
by Kenneth J. Arrow, Partha Dasgupta, Lawrence H. Goulder, Kevin J. Mumford, Kirsten Oleson  -  #16599 (EEE EFG)

Abstract:

We develop a consistent and comprehensive theoretical framework for
assessing whether economic growth is compatible with sustaining
well-being over time.  The framework focuses on whether a
comprehensive measure of wealth - one that accounts for natural
capital and human capital as well as reproducible capital - is
maintained through time.  Our framework also integrates population
growth, technological change, and changes in health.  We apply the
framework to five countries that differ significantly in stages of
development and resource bases:  the United States, China, Brazil,
India, and Venezuela.  With the exception of Venezuela, significant
increases in human capital enable comprehensive wealth to be
maintained (and sustainability to be achieved) despite significant
reductions in the natural resource base.  We find that the value of
"health capital" is very large relative to other forms of capital. 
As a result, its growth rate critically influences the growth rate of
per-capita comprehensive wealth.

http://papers.nber.org/papers/W16599


12.  Unilateral Tariff Liberalisation
by Richard Baldwin  -  #16600 (ITI)

Abstract:

Unilateral tariff liberalisation by developing nations is pervasive
but our understanding of it is shallow.  This paper strives to partly
redress this lacuna on the theory side by introducing three novel
political economy mechanisms with particular emphasis is on the role
of production unbundling.  One mechanism studies how lowering
frictional barriers to imported parts can destroy the correlation of
interests between parts producers and their downstream customers.  A
second mechanism studies how Kojima's pro-trade FDI raises the
political economy cost of maintaining high upstream barriers.  The
third works via a general equilibrium channel whereby developing
country's participation in the supply chains of advanced-nation
industries undermines their own competitiveness in final goods, thus
making final good protection more politically costly.  In essence,
developing nations' pursuit of the export-processing
industrialisation undermines their infant-industry industrialisation
strategies.

http://papers.nber.org/papers/W16600


13.  Betting Against Beta
by Andrea Frazzini, Lasse H. Pedersen  -  #16601 (AP)

Abstract:

We present a model in which some investors are prohibited from using
leverage and other investors' leverage is limited by margin
requirements.  The former investors bid up high-beta assets while the
latter agents trade to profit from this, but must de-lever when they
hit their margin constraints.  We test the model's predictions within
U.S. equities, across 20 global equity markets, for Treasury bonds,
corporate bonds, and futures.  Consistent with the model, we find in
each asset class that a betting-against-beta (BAB) factor which is
long a leveraged portfolio of low-beta assets and short a portfolio
of high-beta assets produces significant risk-adjusted returns.  When
funding constraints tighten, betas are compressed towards one, and
the return of the BAB factor is low.

http://papers.nber.org/papers/W16601


14.  Patient Knowledge and Antibiotic Abuse: 
Evidence from an Audit Study in China
by Janet Currie, Wanchuan Lin, Wei Zhang  -  #16602 (HC HE PE)

Abstract:

We ask how patient knowledge of appropriate antibiotic usage affects
both physicians prescribing behavior and the physician-patient
relationship.  We conduct an audit study in which a pair of simulated
patients with identical flu-like complaints visits the same
physician.  Simulated patient A is instructed to ask a question that
showcases his/her knowledge of appropriate antibiotic use, whereas
patient B is instructed to say nothing beyond describing his/her
symptoms.  We find that a patient's knowledge of appropriate
antibiotics use reduces both antibiotic prescription rates and drug
expenditures.  Such knowledge also increases physicians' information
provision about possible side effects, but has a negative impact on
the quality of the physician-patient interactions.

http://papers.nber.org/papers/W16602


15.  Aftershocks: The Impact of Clinic Violence on Abortion Services
by Mireille Jacobson, Heather Royer  -  #16603 (CH HC HE)

Abstract:

Between 1973 and 2003, abortion providers in the United States were
the targets of over 300 acts of extreme violence.  Using unique data
on attacks and on abortions, abortion providers, and births, we
examine how anti-abortion violence has affected providers' decisions
to perform abortions and women's decisions about whether and where to
terminate a pregnancy. We find that clinic violence reduces abortion
services in targeted areas.  Once travel is taken into account,
however, the overall effect of the violence is much smaller.

http://papers.nber.org/papers/W16603