A new study published by the NBER examines the losses suffered by AAA-rated mortgage securities issued in the lead up to the financial crisis. The study finds: “Total cumulated losses [on AAA-rated securities] up to 2013 are under six percent. … The subprime AAA-rated RMBS did particularly well. … [The] returns on AAA RMBS strike us as rather reasonable, and unlikely to have thrown the financial system into the abyss. … Together, these facts call into question the ... Read More
More Evidence Declining Manufacturing Reduced Lower Skilled Employment
The University of Chicago economist Erik Hurst finds: A 10 percentage point decline in the local manufacturing share [no matter the reason] reduced local employment rates by 3.7 percentage points for prime age men and 2.7 percentage points for prime age women. To put the magnitude in perspective, naively extrapolating the local estimates suggests that between one-third and one-half of the decline in employment rates and annual hours for prime age workers during the ... Read More
