Ep. 94: Targeted supply-side enforcement in the controlled substance market
Between 1997 and 2011, opioid dispensing in the United States more than tripled, fueling what would become the deadliest drug epidemic in American history. This surge in the supply of opioids was concentrated among a small subset of doctors: roughly 1 percent of the doctors who prescribed opioids accounted for almost 50 percent of all domestic opioid doses prescribed. In a paper in the American Economic Journal: Economic Policy, author Adam Soliman examined what happened when federal authorities cracked down on "rogue" doctors who overprescribed opioids. He found that removing a single doctor from the opioid supply chain reduced county-level dispensing by 10 percent, with no negating increases in neighboring areas. Yet these interventions came with a trade-off—while overall drug mortality declined, heroin overdoses increased by 50 percent, likely as a result of existing users seeking alternatives. Soliman recently spoke with Tyler Smith about how he untangled these complex enforcement effects and what his findings mean for combating drug epidemics that begin in the legal pharmaceutical market.
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Ep. 93: Technological spillovers
The launch of Sputnik by the Soviet Union in October 1957 led to a geopolitical crisis that reshaped American science policy. Within months, Congress established NASA, and by 1961, President Kennedy committed the nation to landing a man on the moon before the decade's end. The resulting investment was massive, and the program still serves as a model of government spending for advocates of public R&D. In a paper in the American Economic Review, authors Shawn Kantor and Alexander Whalley question whether the space race program succeeded as an economic policy that boosted economic growth and productivity. To estimate the space program's effects on economic growth from 1947 to 1992, the authors used data on NASA contractor spending and a novel identification strategy based on declassified CIA documents that allowed them to determine which US industries in which counties specialized in space-relevant technologies before the space race began. Their findings complicate the conventional narrative about public R&D and provide important context for current proposals to replicate so-called "moonshot" models in other domains. Kantor and Whalley recently spoke with Tyler Smith about the local effects of space race spending and why they didn't translate into long-term productivity gains.
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Ep. 92: Housing supply skepticism
Most Americans agree that housing costs are too high, often blaming developers and landlords. Many feel that the problem can be solved with price controls, development restrictions, and mandates on providing below-market-rate units. But these ideas are at odds with standard economic policy prescriptions, which suggest that the way to bring down costs is by increasing the housing supply. In a paper in the Journal of Economic Perspectives, authors Christopher S. Elmendorf, Clayton Nall, Stan Oklobdzija explore how the public thinks about housing markets through surveys of thousands of urban and suburban residents. They found that while people understand supply and demand in markets like cars and agriculture, they struggle to apply the same logic to housing. The authors' results may help efforts to shape better economic messaging geared toward the general public. Elmendorf recently spoke with Tyler Smith about how he and his coauthors measured public beliefs about housing markets and why these beliefs differ from economic consensus.
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Ep. 91: Reviewing residential segregation
Despite decades of civil rights legislation, many Black and White Americans, as well as other minorities, continue to live in racially homogeneous neighborhoods, with significant implications for access to quality schools, jobs, healthcare, and economic opportunities. In a paper in the Journal of Economic Literature, authors Trevon D. Logan and John M. Parman examine the complexities of measuring residential segregation, what causes segregation to persist, and why it matters so much for economic outcomes. Their work challenges conventional narratives about US segregation and offers a framework for understanding how residential patterns continue to shape American inequality. Logan and Parman recently spoke with Tyler Smith about the patterns of segregation they uncovered, and what the key drivers might be.
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Ep. 90: Understanding the US net foreign asset position
For decades, the United States enjoyed what some called an exorbitant privilege—the ability to spend more than it earned without accumulating much debt to the rest of the world. But that privilege has ended. In a paper in the American Economic Review, authors Andrew Atkeson, Jonathan Heathcote, and Fabrizio Perri found that the United States started accumulating significant liabilities to foreigners after the Great Recession. The researchers say that a surge in the value of US corporations relative to companies in other countries is the driver of this development. Due to large international capital flows in recent decades, foreign investors now own about 40 percent of US corporate equity, while US investors also hold a large amount of foreign companies in their portfolio. When American companies become more profitable and their stock prices soar, much of the gains flow overseas, without a corresponding flow to US investors from foreign companies, and this erodes the net foreign asset position of the United States. Atkeson recently spoke with Tyler Smith about how to interpret the US net foreign asset position and what its recent swings mean for American households.
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