The Rate of Return on Everything

A new paper purports to have finally unlocked the mystery of the rate of return on capital. Here the authors report on their research on an enormous data set on asset returns for 16 advanced economies from 1870 to 2015 and provide surprising insight into the relationship between long-run growth and capital—a connection that has occupied thinkers from Mill to Marx to Piketty and many others to this day.  

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America’s “Lost Einsteins” Are Dealing a Blow to Innovation

A new paper finds that America is full of “lost Einsteins” among women, minorities, and low-income groups: high performers who never become inventors because they’re not exposed to innovation as children. Fully capitalizing on such children’s innovation potential could quadruple the rate of innovation in America.  

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A Tale of Two Cities: Hamburg and Lübeck

The German cities of Hamburg and Lübeck have an interwoven and eventful history. Whereas Lübeck offers an example of how dominant cities may become unattractive and decline when they end up serving the interests of a privileged few and refuse to change, Hamburg serves as a tale of how cities can reinvent themselves by changing with the times.  

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Perverse Market Incentives Encourage High Prescription Drug Prices

Pharmacy benefit managers (PBMs) are the under-discussed market participants who manage prescription drug insurance for the vast majority of Americans. PBMs claim to be a lone bulwark against the rapacious pricing decisions of pharmaceutical firms, but is recent consolidation in the PBM market also a driver of high prices for prescription drugs?   

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