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In the most recent study of one of the many credit facilities set up by the Fed during the financial crisis:

 In this paper I use the TAF micro-level loan data and find that about 60 percent of TAF loans went to foreign banks that pledged asset-backed securities as
collateral for these loans.  The data and analysis illustrate the major role that foreign – in particular, European – banks currently play in the U.S. financial system and the resultant currency mismatch in their balance sheets.

Dispassionately, perhaps this was needed to protect interconnected counterparties here in the U.S. Widespread knowledge of this is not likely to be politically popular.

On what I think is a more incredible note, check out this finding on the potential economic impact of open borders:

The estimated gains from removing immigration restrictions are huge. Using a simple static model of migration costs, the estimated net gains from open borders are about the same as the gains from a growth miracle that more than doubles the income level in less-developed countries.

Geez, a stroke-of-the-pen policy that is humane and that could be the equivalent of making the world’s poorest twice as wealthy, all while making the rich nations wealthy too … sounds too good to be true. Extra credit for readers: name one single foreign aid program that could come close. Double credit if you can tell me of an American anti-poverty program that comes close.

And in other findings today, it looks like public health insurance in the form of Medicaid does have a dramatic impact on mortality for young blacks (later in life) but not on whites:

Our analysis shows that black children were more likely to be affected by the Medicaid expansions and gained twice the amount of eligibility as white
children.  We find a substantial effect of public eligibility during childhood on the later life mortality of black children at ages 15-18.  The estimates indicate a 13-18 percent decrease in the internal mortality rate of black teens born after September 30, 1983.  We find no evidence of an improvement in the mortality of white children under the expansions.

The paper is here.

And it turns out that smokers are pretty insensitive to changes in the price of cigarettes:

 Our evidence suggests that increases in cigarette taxes are associated with small decreases in cigarette consumption and that it will take sizable tax increases, on the order of 100%, to decrease adult smoking by as much as 5%.

In economic parlance, that is highly inelastic demand. I find that to be the most interesting of the findings reported on today. Think of the implications.

In other work, an Economics Professor at my dear old alma mater finds the following about lead-reduction interventions in Massachusetts:

The paper finds that elevated levels of blood lead in early childhood adversely impact standardized test performance, even when controlling for community and school
characteristics.  The results imply that public health policy that reduced childhood lead levels in the 1990s was responsible for modest but statistically significant improvements in test performance in the 2000s, lowering the share of children scoring unsatisfactory on standardized tests by 1 to 2 percentage points.  Public health policy targeting lead thus has clear potential to improve academic performance, with particular promise for children in low income communities.

I just printed the paper. But the abstract is disheartening in that while it surely highlights small cognitive benefits it says nothing about “at what cost” these might have come at. I’ll provide an illustration in the future of one such cost.

And in more timely news, given that my new freshmen are coming in this week:

Finally, we exploit rich high school background data to examine heterogeneity in the impact of remedial assignment by predicted academic risk.  We find that remediation does little to develop students’ skills.  But we also find relatively little evidence that it discourages either initial enrollment or persistence, except for a subgroup we identify as potentially mis-assigned to remediation.  Instead, the primary effect of remediation appears to be diversionary:  students simply take remedial courses instead of college-level courses.  These diversionary effects are largest for the lowest-risk students. Implications for remediation policy are discussed.

The paper is here.  I bet a similar trend is happening at the four-year colleges as well.

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