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In my inbox, a few items of interest:

  1. The race of your Teaching Assistant matters for your subsequent class performance. Note that my courses select undergraduate TAs prior to the semester beginning. I wonder where administrators would go with this information – recommending more racial sorting? Yikes?
  2. There has always been a very close relationship between the banking system and the political system. Start not only with the early efforts (successful) by the “Crown” to take over private mints throughout history, but more important the establishment of the Bank of England. In this new paper, we see a neat historical example of how when the early US moved to a chartering/discretionary approval of bank entry, the process wasn’t exactly, “democratic” … though you might say it was “Democratic.” Nothing new under the sun.
  3. Among the formerly uninsured who are newly insured under ObamaCare, we think that there is some individual skin in the game under the standard plans offered. How have they been affected? Results seem to to suggest that the “skin in the game” will increase for everyone, but with the “richest formerly uninsured” seeming to be worse off while the “poorest previously uninsured” better off.
  4. This was a really interesting paper estimating optimal propensities to lend by banks and optimal propensities to borrow by customers when banks have cheaper access to funds and when customers have their credit limits expanded. One of many interesting findings: “We find substantial heterogeneity, with a $1 increase in credit limits raising total unsecured borrowing after 12 months by 59 cents for consumers with the lowest FICO scores (≤ 660) while having no effect on consumers with the highest FICO scores (>740).  We use the same credit limit regression discontinuities toestimate banks’ marginal propensity to lend (MPL) out of a decrease in their cost of funds.” That is, people with good credit do not seem to borrow more when they have more access to credit. This seems consistent with a model of credit constraints on various future investment behaviors (such as attending college).
  5. In this week’s episode of, “We Don’t Know Nuthin'” … “This suggests that one should be cautious in using the results from any particular model to inform policy decisions.”

Have a productive week!

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