How a Marshall Plan Program Boosted the Performance of Italian Firms for Decades

During the 1950s, as part of the Marshall Plan, the US subsidized loans to help European firms purchase technology and sponsored training trips for managers from abroad to US firms. Here, Michela Giorcelli of UCLA uncovers the significant long-term effects of this so-called Productivity Program for the Italian firms that participated in it—and in doing so illuminates larger questions about the drivers of firm performance.  

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Credit Ratings: What Are They Good For?

The financial crisis of 2008–10 revealed that ratings are imperfect and potentially biased measures of credit risk. Analyzing a large number of mutual fund prospectuses, new research reveals there has been no decrease in the use of credit ratings in investment mandates. The findings point to a lack of better alternatives and suggest that regulation seeking to curb their usage may not be optimal.  

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Do Firms Use Capital and Labor Efficiently? Evidence and Implications of Resource Misallocation

Economists have for a decade or so theorized that moving productive inputs like labor and capital into the firms that make the best use of them is a prime engine of economic growth. But measuring how well this allocation is taking place across economies is a daunting empirical task. Nonetheless, a new Stigler Center working paper by Lenzu and Manaresi tries to do precisely that.  

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