business and finance

Have fun, learn design — The Designer’s Deck for 20% off!

This week’s deal is on a deck of cards that will make you a better designer! 

> The Design Deck: the fun way to learn design!

Flashcards are a proven way to learn new concepts fast, and poker is a proven way to have fun and MAYBE win some money. That’s win/win/win(?)! This high-quality deck of playing cards features 56 cards, each with a succinct summary of a different design concept, philosophy, or idea so that you can up your game while playing a game. 

For a limited time, you can save 20% on this beautiful collectable that will make the perfect gift for the designer/s in your life — .or for yourself! Order now in time for the holidays! 

> Check out the deal here.




business and finance

"While we did send you the text file two days late last Thursday, the rest of the schedule cannot be..."

“While we did send you the text file two days late last Thursday, the rest of the schedule cannot be delayed by two days. Oh, by the way, here is a new version of the text file you will have to use instead.”

- Client, on Monday



  • live to work

business and finance

Me: I’m back from my work trip. Do you still need those modifications to your logo...

Me: I’m back from my work trip. Do you still need those modifications to your logo files? 

Client: Hey! I was actually able to talk with my IT guy and he taught me how to use gimp to do all of that. But I will definitely let you know if I need anything else done.

Me: (WRITHING IN SYMPATHETIC PAIN FOR USING GIMP)




business and finance

I had made a packing design that was approved, but not yet fully paid for. Client: We are really in...

I had made a packing design that was approved, but not yet fully paid for.

Client: We are really in a hurry, so please send fonts and colors you’ve used ASAP. And what software do you use to design things?  This is urgent!

Me: What do you mean? Do you need print files? Sure, but I need to be paid before I send you the finished files.

Client: Why do we have to pay you? This was our idea of design! I even sent you mock-up in Photoshop!




business and finance

I was designing a website for a client. Over time, the client requested lots of little changes to...

I was designing a website for a client. Over time, the client requested lots of little changes to the content. One weird result of this, though, is that any photos that included women were slowly removed.

Client: Could you remove that person in this photo?

Me: Okay, but that means there are now no more women on the website?

Client: That’s fine, we’re not marketing just for women. We’re not sexist!



  • breasts and brains

business and finance

My department manager was looking for an intern:Boss: It doesn’t have to be a graphic designer, just...

My department manager was looking for an intern:

Boss: It doesn’t have to be a graphic designer, just someone that can use Adobe Illustrator efficiently and has an eye for detail and composition.

Me: So… a designer?




business and finance

I’m a photographer and aspiring photo archivist. I was asked to digitize photos that were on display...

I’m a photographer and aspiring photo archivist. I was asked to digitize photos that were on display at a funeral/viewing. There were 65 photos.

Me: Sure, I could have this done pretty soon, no problem!

Client: Great! I didn’t have tape and didn’t want to use glue, so (with pride in their voice) guess what I used?

Me: (with pronounced fear in my voice) Uh… what?

Client: Toothpaste!

What was going to be an hour and a half project turned into two days of scraping and cleaning photos.




business and finance

Just ran into this gem at a Facebook group for entrepreneurs and employment opportunities. Client:...

Just ran into this gem at a Facebook group for entrepreneurs and employment opportunities.

Client: Hello! My business partner and I are seeking a couple of talented writers for a new online magazine we are creating. This would be an unpaid intern position, but you can work remotely and this would also be a great opportunity to gain some exposure and writing experience. Message me if you’re interested for details.

The comment section was breathtaking. I made some popcorn and refreshed it all night.




business and finance

"Can I get these double-sided?"

“Can I get these double-sided?”

- A client asking for fridge magnets.




business and finance

Dear Tumblr

We’ve had a lot of good times. We really have. But lately, we’ve been feeling like… there’s more out there. And it’s not that we don’t love you, it’s just that we feel like we’ve been in a rut. Links haven’t been working, service has been out… things like that.

And there’s no easy way to say this, but we’re leaving you. We’ll still be around (at https://clientsfromhell.net) but we just won’t be with you, Tumblr. We’re sorry, but we really feel that this is for the best. 

We can stay friends. On Facebook. Or you can see what we’re up to on Twitter. And hey - if we run into each other on Instagram or some other platform someday, say hi! We’d love to hear from you, Tumblr. Really we would.

It’s okay to be sad, but let’s remember the good times. The likes, the reblogs. We’ve had a lot of fun, but not everything lasts forever and that’s okay

 Goodbye, Tumblr. We wish you all the best.




business and finance

See your name in lights: Maddy Osman and building your bylines


Maddy Osman knows how to sell herself and her services. That’s because she started out in sales before becoming a full-time freelance copywriter and SEO specialist! In this week’s episode, she tells Kyle how she built her business by doing (gasp!) free work, and why sometimes it’s worth building that byline. 

Today’s links: 

Want to support the show?

This episode is brought to you by Easel.ly, an infographic design service that transforms raw data into clear, interesting images. You can see their work on Clients From Hell

Think you’d be a great fit for the show? Let me know at twitter.com/KCarCFH

Leave us a review on Apple Podcasts or recommend us to a friend. It helps immensely.


Download here!




business and finance

Clients From Hell: Origins


Today’s episode is with none other than Vernon Southward, the owner and operator of (gasp!) Clients From Hell itself! Kyle tries not to offend his boss as they chat about Vernon’s beginnings as a freelancer and the path that led him to acquiring and building Clients From Hell, as well as directions the site will take in the coming years!

Vernon is a profoundly talented entrepreneur and a font of wisdom - and we’re not just saying that because he owns the place. Check it out! 

Today’s links: 

Want to support the show?

This episode is brought to you by Easel.ly, an infographic design service that transforms raw data into clear, interesting images. You can see their work on Clients From Hell

Think you’d be a great fit for the show? Let me know at twitter.com/KCarCFH

Leave us a review on Apple Podcasts or recommend us to a friend. It helps immensely.


Download here!




business and finance

Make the most of your day at work and play: Josh Hoffman and time management!


It’s 2019 and that means you’ve at least thought about having a New Year’s resolution! How does working more efficiently and freeing up two of your hours a day strike you?

Josh Hoffman is a productivity expert who talks Kyle through his daily routine, offering tips on how to maximize productivity both at work and in play! Learn how to plan vertically, build good habits, and forgive yourself! 

Today’s links: 

Want to support the show?

This episode is brought to you by Easel.ly, an infographic design service that transforms raw data into clear, interesting images. You can see their work on Clients From Hell

Think you’d be a great fit for the show? Let me know at twitter.com/KCarCFH

Leave us a review on Apple Podcasts or recommend us to a friend. It helps immensely.


Download here!




business and finance

Why there are NO clients from Hell: Rachel Gertz and managing people!


At her company Louder Than Ten, Rachel Gertz teaches people how to manage projects; that means getting people on board, on task, and on message in a hurry. She firmly believes that there is no such thing as a client from hell for one very simple and surprising reason she shares in the episode! 

Looking for a lift? Rachel is endlessly upbeat and positive and has some winning strategies that will make you better at dealing with clients AND yourself! 

Today’s links: 

Want to support the show?

This episode is brought to you by Easel.ly, an infographic design service that transforms raw data into clear, interesting images. You can see their work on Clients From Hell

Think you’d be a great fit for the show? Let me know at twitter.com/KCarCFH

Leave us a review on Apple Podcasts or recommend us to a friend. It helps immensely.


Download here!




business and finance

Want to succeed? Look in the mirror: Stephen Warley and life skills as business skills


Stephen Warley of Life Skills That Matter believes that the key to being happy and successful is knowing yourself. Unfortunately, self-reflection is typically the LAST thing on most of our to-do lists! 

On today’s episode, Stephen talks to Kyle about how the best business skills you can develop as an independent worker are life skills, and how to make sure you’re being honest with yourself about who you are and what you want to do. 

Today’s links: 

Want to support the show?

This episode is brought to you by Easel.ly, an infographic design service that transforms raw data into clear, interesting images. You can see their work on Clients From Hell

Think you’d be a great fit for the show? Let me know at twitter.com/KCarCFH

Leave us a review on Apple Podcasts or recommend us to a friend. It helps immensely.


Download here!




business and finance

Don't be Just Another Freelancer. Instead, listen to Kaylee White!


If you want to succeed as a freelancer, you can’t compete for scraps. That’s the message that Kaylee White of Kaylee Writes puts forth in her new book, How Not to Be Just Another Freelancer, but how do you find the GOOD clients that will push you and your business into the next level? 

Kaylee talks with Kyle about what it means to step away from the pack and run a successful business for yourself, and the very important steps you need to take to do so! 

Today’s links: 

Want to support the show?

This episode is brought to you by Easel.ly, an infographic design service that transforms raw data into clear, interesting images. You can see their work on Clients From Hell

Think you’d be a great fit for the show? Let me know at twitter.com/KCarCFH

Leave us a review on Apple Podcasts or recommend us to a friend. It helps immensely.


Download here!




business and finance

Break the Creative's Curse with Todd Brison!


What’s keeping YOU from being creative? Discipline? Scheduling? Good old fashioned “writer’s block”?

Todd Brison has made a name for himself by tackling these problems head-on and discovering how to make the most of your muse. In his extremely popular posts on Medium and his two amazing books The Unstoppable Creative and The Creative’s Curse, he breaks down strategies for doing creative work whenever you need!

This episode is like one of the best creative coaching sessions you’ll ever get. Tune in!

Today’s links: 

Want to support the show?

Order a custom infographic from Easel.ly! Use this link (https://www.easel.ly/infographicdesign/) for a great price! 

Think you’d be a great fit for the show? Let me know at twitter.com/KCarCFH

Leave us a review on Apple Podcasts or recommend us to a friend. It helps immensely.


Download here!




business and finance

Dare to DREAM: Ami Sanyal and how to pitch value-based pricing.


Value-based pricing is the holy grail of freelancing. It’s how you make a lot of money by showing your clients that you can give them results. It’s also not easy to make the switch to this pricing structure!

Returning guest Ami Sanyal shares his DREAM framework for getting clients on board with paying you more! Ami walks you through:

  • Discovery
  • Repel
  • Establish Packages
  • Address Risk
  • Money

Ami breaks down this approach, and how he was able to transform his agency with this approach! 

Want Ami’s script for this approach? Text EZGROW to 393939 for a step-by-step guide! 

Today’s links: 

Want to support the show?

Order a custom infographic from Easel.ly! Use this link (https://www.easel.ly/infographicdesign/) for a great price! 

Think you’d be a great fit for the show? Let me know at twitter.com/KCarCFH

Leave us a review on Apple Podcasts or recommend us to a friend. It helps immensely.


Download here!




business and finance

How to find your "Helen": Alison Knott and recognizing your ideal client


The key to success in freelancing is realizing how to find the right clients - the people who are not only great to work with, but actually have money to pay you

Alison Knott is a web consultant who mentors creatives, and she knows all the mistakes that freelancers make: targeting the wrong clients, the wrong platforms, the wrong rewards. In this episode, she shares the decisions you have to make right now to start making money! 

Today’s links: 

Want to support the show?

Order a custom infographic from Easel.ly! Use this link (https://www.easel.ly/infographicdesign/) for a great price! 

Think you’d be a great fit for the show? Let me know at twitter.com/KCarCFH

Leave us a review on Apple Podcasts or recommend us to a friend. It helps immensely.


Download here!




business and finance

Don't sell service, sell STRATEGY: Annabelle King's tips for great pitching


When pitching your work, most creative freelancers sell their skills or their services. However, the key to landing big clients is to show that you’re an indispensable part of their team by selling strategy

Anabelle King realized this over years of working at agencies, and now she lands big clients with her boutique branding business I Like Storytelling. She shares her strats for creating a collaborative relationship with her clients in today’s episode! 

Today’s links: 

Want to support the show?

Order a custom infographic from Easel.ly! Use this link (https://www.easel.ly/infographicdesign/) for a great price! 

Think you’d be a great fit for the show? Let me know at twitter.com/KCarCFH

Leave us a review on Apple Podcasts or recommend us to a friend. It helps immensely.


Download here!





business and finance

Should Anyone Ever File Personal Bankruptcy?

Financial planners have a big hate going for bankruptcy. They almost universally nay-say it and point to the many alternatives. CPAs and attorneys, on the other hand, often speak of the advantages to filing bankruptcy and are quick to point out the “fresh start” aspect of the move. But it’s a fact that too many...

Keep Reading




business and finance

Should You Incorporate Your Small Business?

Millions of small business owners dream of incorporating. They’ve heard or read that incorporation is the “holy grail” of the world of commerce and has the power to bestow wealth the likes of Steph Curry’s net worth, happiness, and sound sleep. For decades, there has been a ton of misinformation floating around about what it...

Keep Reading




business and finance

Five Ways Social Media Marketing Can Help Grow Your Rental Property Business

Believe it or not, social media is a valuable marketing tool for real estate businesses. Many landlords, property managers, and real estate agents use it for marketing their businesses and attracting more customers. If you haven’t been using social media to promote your rental properties, you’re likely missing out on a variety of benefits. Let’s take...

Keep Reading




business and finance

4 Ways To Check Your Investment Advisor’s Reputation

The right investment professional can be a tremendous asset. However, handing control of your money over to someone else can be a risky proposition. With so much on the line, it is vital to ensure you are working with a reputable investment adviser. Fortunately, there are steps you can take to help you select an...

Keep Reading




business and finance

Complex money issues? Make it easy with Iban Wallet

No one is a stranger to financial challenges and problems. They tend to happen with people in different degrees and at separate points in time for that matter. We can unanimously agree that we need money to achieve many of our goals but also for financial independence at the same time.  When we refer to...

Keep Reading




business and finance

Six Tips for Financing Investment Property

Investing in rental properties can be both profitable and worthwhile when done right. In today’s market, a rental property can provide a consistent cash flow now and serve as a valuable long-term investment down the road.  However, deciding to take the leap and buy a rental property is just the beginning. Novice real estate investors...

Keep Reading



  • Investments
  • Best way to finance an investment property
  • How to finance an investment property

business and finance

Investing for Beginners With Little Money

Investing is a smart way of making your money work for you. When starting out, people are clueless as to when and where to invest, and especially how to invest. One false notion that people believe in is that you need a lot of money to start investing properly, at least a substantial amount. But...

Keep Reading



  • Investments
  • How do I start investing money
  • invest with little money

business and finance

Managing Your Money to Enjoy Life Today and Tomorrow

Nearly two-thirds of the workforce is one paycheck away from poverty. If you think about it, those are unbelievable statistics. This number consists of those who make modest amounts of money and those who make exceptional amounts of money. What this reveals is that far too many people don’t understand how to manage money. Listed...

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business and finance

Funding Your Side Hustle Without Going Into Serious Debt

This day and age, most people have more than one income source to afford the lifestyles they want (and to pay for things they need). Working a full-time job and supporting a family can take up a great deal of time and energy, which is why most opt to start a side hustle. From cutting...

Keep Reading




business and finance

Sometimes You Just Need a New Wallet (And Other Life Lessons)

There’s a lot of financial advice out there – and some of it is really, really good. We like to think that we publish some of it. We like to think that some of it finds its way home to readers like you and is found helpful. But today, members of our contributing staff (who...

Keep Reading




business and finance

Be Here Now: 2 Tools To Get Present NOW

Are you truly present with yourself or are you distracted, thinking about what you have to do later, checking your mobile phone, basically not “with” yourself? Is it uncomfortable to be alone, to do nothing, to have space and no immediate thing that’s consuming your focus?




business and finance

76% Of People Think Mentors Are Important, But Only 37% Have One

Mentors provide a wealth of knowledge and experience to us, they guide us through challenges and increase our likelihood of success, they lift us up and take our success personally. They are invaluable. So why do only 37% of professionals have one?




business and finance

The Neuroscience of Motivation: Why We Do What We Do [Infographics]

If only you knew how to make your employees care as much as you do. If only you knew how to motivate them. Then, they'd be more productive, more enthusiastic. Here's the simple and direct great leaders motivate a team member.




business and finance

What Keeping Secrets Does To Your Brain

New research now reveals the truth behind secrets—and it’s not what you’d expect. First, 97% of people have one or more secrets at any given time. But most common is 13 secrets per person… whoa! What does keeping a secret do to your brain? Here are the 2 biggest problems.




business and finance

Health vs. Wealth? Public Health Policies and the Economy During Covid-19 -- by Zhixian Lin, Christopher M. Meissner

We study the impact of non-pharmaceutical policy interventions (NPIs) like “stay-at-home” orders on the spread of infectious disease. NPIs are associated with slower growth of Covid-19 cases. NPIs “spillover” into other jurisdictions. NPIs are not associated with significantly worse economic outcomes measured by job losses. Job losses have been no higher in US states that implemented “stay-at-home” during the Covid-19 pandemic than in states that did not have “stay-at-home”. All of these results demonstrate that the Covid-19 pandemic is a common economic and public health shock. The tradeoff between the economy and public health today depends strongly on what is happening elsewhere. This underscores the importance of coordinated economic and public health responses.




business and finance

Did COVID-19 Improve Air Quality Near Hubei? -- by Douglas Almond, Xinming Du, Shuang Zhang

Ambient pollution is a byproduct of economic activity. It has been widely reported that COVID-19 and associated lockdowns have generated large improvements in air quality worldwide, including to China's notoriously-poor air quality. We analyze China's official pollution monitor data and account for the large, recurrent improvement in air quality following Lunar New Year (LNY), which essentially coincided with lockdowns in 2020. With the important exception of NO2, China's air quality improvements in 2020 are smaller than we should expect near the pandemic's epicenter: Hubei province. Compared with LNY improvements experienced in 2018 and 2019 in Hubei, we see smaller improvements in SO2 while ozone concentrations increased in both relative and absolute terms (roughly doubling). Similar patterns are found for the six provinces neighboring Hubei. We conclude that whether COVID-19 actually decreased pollution in China depends on the pollutant and reference period considered.




business and finance

Global Behaviors and Perceptions at the Onset of the COVID-19 Pandemic -- by Thiemo R. Fetzer, Marc Witte, Lukas Hensel, Jon Jachimowicz, Johannes Haushofer, Andriy Ivchenko, Stefano Caria, Elena Reutskaja, Christopher P. Roth, Stefano Fiorin, Margarita G

We conducted a large-scale survey covering 58 countries and over 100,000 respondents between late March and early April 2020 to study beliefs and attitudes towards citizens’ and governments’ responses to the COVID-19 pandemic. Most respondents reacted strongly to the crisis: they report engaging in social distancing and hygiene behaviors, and believe that strong policy measures, such as shop closures and curfews, are necessary. They also believe that their government and their country’s citizens are not doing enough and underestimate the degree to which others in their country support strong behavioral and policy responses to the pandemic. The perception of a weak government and public response is associated with higher levels of worries and depression. Using both cross-country panel data and an event-study, we additionally show that strong government reactions correct misperceptions, and reduce worries and depression. Our findings highlight that policy-makers not only need to consider how their decisions affect the spread of COVID-19, but also how such choices influence the mental health of their population.




business and finance

Is the Supply of Charitable Donations Fixed? Evidence from Deadly Tornadoes -- by Tatyana Deryugina, Benjamin M. Marx

Do new societal needs increase charitable giving or simply reallocate a fixed supply of donations? We study this question using IRS datasets and the natural experiment of deadly tornadoes. Among ZIP Codes located more than 20 miles away from a tornado's path, donations by households increase by over $1 million per tornado fatality. We find no negative effects on charities located in these ZIP Codes, with a bootstrapped confidence interval that rejects substitution rates above 16 percent. The results imply that giving to one cause need not come at the expense of another.




business and finance

Generosity Across the Income and Wealth Distributions -- by Jonathan Meer, Benjamin A. Priday

Despite widespread interest, there is little systematic evidence on the relationship between income, wealth, and charitable giving. We use the Panel Study of Income Dynamics to provide descriptive statistics on this relationship. We find that, irrespective of specifica­tion, donative behavior increases with greater resources.




business and finance

Inequality and the Safety Net Throughout the Income Distribution, 1929-1940 -- by James J. Feigenbaum, Price V. Fishback, Keoka Grayson

We explored two measures of inequality that described the full income distribution in cities. One measure is an income gini based on family incomes in 1929 for 33 cities and in 1933 for up to 48 cities in 1933 were spread throughout the country. We also estimated gini coefficients that made use of contract rents for renters and implicit rents for home owners for up to 955 cities throughout the country. We were able to expand to all counties when looking at a top-end inequality measure, the number of taxpayers per family. All three measures varied substantially across the country. We show the correlations between the various measures and also estimate the relationship between the measures and various relief programs developed by governments at all levels during the period.




business and finance

Interest Rate Uncertainty as a Policy Tool -- by Fabio Ghironi, G. Kemal Ozhan

We study a novel policy tool—interest rate uncertainty—that can be used to discourage inefficient capital inflows and to adjust the composition of external accounts between short-term securities and foreign direct investment (FDI). We identify the trade-offs faced in navigating between external balance and price stability. The interest rate uncertainty policy discourages short-term inflows mainly through portfolio risk and precautionary saving channels. A markup channel generates net FDI inflows under imperfect exchange rate pass-through. We further investigate new channels under different assumptions about the irreversibility of FDI, the currency of export invoicing, risk aversion of outside agents, and effective lower bound in the rest of the world. Under every scenario, uncertainty policy is inflationary.




business and finance

The Environmental Bias of Trade Policy -- by Joseph S. Shapiro

This paper documents a new fact, then analyzes its causes and consequences: in most countries, import tariffs and non-tariff barriers are substantially lower on dirty than on clean industries, where an industry’s “dirtiness” is defined as its carbon dioxide (CO2) emissions per dollar of output. This difference in trade policy creates a global implicit subsidy to CO2 emissions in internationally traded goods and so contributes to climate change. This global implicit subsidy to CO2 emissions totals several hundred billion dollars annually. The greater protection of downstream industries, which are relatively clean, substantially accounts for this pattern. The downstream pattern can be explained by theories where industries lobby for low tariffs on their inputs but final consumers are poorly organized. A quantitative general equilibrium model suggests that if countries applied similar trade policies to clean and dirty goods, global CO2 emissions would decrease and global real income would change little.




business and finance

The Value of Time: Evidence From Auctioned Cab Rides -- by Nicholas Buchholz, Laura Doval, Jakub Kastl, Filip Matějka, Tobias Salz

We estimate valuations of time using detailed consumer choice data from a large European ride hail platform, where drivers bid on trips and consumers choose between a set of potential rides with different prices and waiting times. We estimate consumer demand as a function of prices and waiting times. While demand is responsive to both, price elasticities are on average four times higher than waiting-time elasticities. We show how these estimates can be mapped into values of time that vary by place, person, and time of day. Regarding variation within a day, the value of time during non-work hours is 16% lower than during work hours. Regarding the spatial dimension, our value of time measures are highly correlated both with real estate prices and urban GPS travel flows. A variance decomposition reveals that most of the substantial heterogeneity in the value of time is explained by individual differences as opposed to place or time of day. In contrast with other studies that focus on long run choices we do not find evidence of spatial sorting. We apply our measures to quantify the opportunity cost of traffic congestion in Prague, which we estimate at $483,000 per day.




business and finance

Steering Incentives of Platforms: Evidence from the Telecommunications Industry -- by Brian McManus, Aviv Nevo, Zachary Nolan, Jonathan W. Williams

We study the trade-offs faced by Internet Service Providers (ISPs) that serve as platforms through which consumers access both television and internet services. As online streaming video improves, these providers may respond by attempting to steer consumers away from streaming video toward their own TV services, or by attempting to capture surplus from this improved internet content. We augment the standard mixed bundling model to demonstrate the trade-offs the ISP faces when dealing with streaming video, and we show how these trade-offs change with the pricing options available to the ISP. Next, we use unique household-level panel data and the introduction of usage-based pricing (UBP) in a subset of markets to measure consumers' responses and to evaluate quantitatively the ISP's trade-offs. We find that the introduction of UBP led consumers to upgrade their internet service plans and lower overall internet usage. Our findings suggest that while steering consumers towards TV services is possible, it is likely costly for the ISP and therefore unlikely to be profitable. This is especially true if the ISP can offer rich pricing menus that allow it to capture some of the surplus generated by a better internet service. The results suggest that policies like UBP can increase ISPs' incentive to maintain open access to new internet content.




business and finance

Optimal Bailouts and the Doom Loop with a Financial Network -- by Agostino Capponi, Felix C. Corell, Joseph E. Stiglitz

Banks usually hold large amounts of domestic public debt which makes them vulnerable to their own sovereign’s default risk. At the same time, governments often resort to costly public bailouts when their domestic banking sector is in trouble. We investigate how the interbank network structure and the distribution of sovereign debt holdings jointly affect the optimal bailout policy in the presence of this "doom loop". Rescuing banks with high domestic sovereign exposure is optimal if these banks are sufficiently central in the network, even though that requires larger bailout expenditures than rescuing low-exposure banks. Our findings imply that highly central banks can use exposure to their own government as a strategic tool to increase the likelihood of being bailed out. Our model thus illustrates how the "doom loop" exacerbates the "too interconnected to fail" problem in banking.




business and finance

Expected Profits and The Scientific Novelty of Innovation -- by David Dranove, Craig Garthwaite, Manuel I. Hermosilla

Innovation policy involves trading off monopoly output and pricing in the short run in exchange for incentives for firms to develop new products in the future. While existing research demonstrates that expected profits fuel R&D investments, little is known about the novelty of the projects funded by these investments. Relying on data that describe the scientific approaches used by a large sample of experimental drug projects, we expand on this literature by examining the scientific novelty of pharmaceutical R&D investments following the creation of the Medicare Part D program. We find little evidence that the positive demand shock implied by this program prompted firms to undertake scientifically novel R&D activity, as measured by whether the specific scientific approach had been used before. However, we find some evidence that firms invested in products involving novel combinations of scientific approaches. These estimates can inform economists and policymakers assessing the tradeoffs associated with marginal changes in commercial returns from newly developed pharmaceutical products.




business and finance

Changes in Black-White Inequality: Evidence from the Boll Weevil -- by Karen Clay, Ethan J. Schmick, Werner Troesken

This paper investigates the effect of a large negative agricultural shock, the boll weevil, on black-white inequality in the first half of the twentieth century. To do this we use complete count census data to generate a linked sample of fathers and their sons. We find that the boll weevil induced enormous labor market and social disruption as more than half of black and white fathers moved to other counties following the arrival of the weevil. The shock impacted black and white sons differently. We compare sons whose fathers initially resided in the same county and find that white sons born after the boll weevil had similar wages and schooling outcomes to white sons born prior to its arrival. In contrast, black sons born after the boll weevil had significantly higher wages and years of schooling, narrowing the black-white wage and schooling gaps. This decrease appears to have been driven by relative improvements in early life conditions and access to schooling both for sons of black fathers that migrated out of the South and sons of black fathers that stayed in the South.




business and finance

Employer Policies and the Immigrant-Native Earnings Gap -- by Benoit Dostie, Jiang Li, David Card, Daniel Parent

We use longitudinal data from the income tax system to study the impacts of firms’ employment and wage-setting policies on the level and change in immigrant-native wage differences in Canada. We focus on immigrants who arrived in the early 2000s, distinguishing between those with and without a college degree from two broad groups of countries – the U.S., the U.K. and Northern Europe, and the rest of the world. Consistent with a growing literature based on the two-way fixed effects model of Abowd, Kramarz, and Margolis (1999), we find that firm-specific wage premiums explain a significant share of earnings inequality in Canada and contribute to the average earnings gap between immigrants and natives. In the decade after receiving permanent status, earnings of immigrants rise relative to those of natives. Compositional effects due to selective outmigration and changing participation play no role in this gain. About one-sixth is attributable to movements up the job ladder to employers that offer higher pay premiums for all groups, with particularly large gains for immigrants from the “rest of the world” countries.




business and finance

A New Method for Estimating Teacher Value-Added -- by Michael Gilraine, Jiaying Gu, Robert McMillan

This paper proposes a new methodology for estimating teacher value-added. Rather than imposing a normality assumption on unobserved teacher quality (as in the standard empirical Bayes approach), our nonparametric estimator permits the underlying distribution to be estimated directly and in a computationally feasible way. The resulting estimates fit the unobserved distribution very well regardless of the form it takes, as we show in Monte Carlo simulations. Implementing the nonparametric approach in practice using two separate large-scale administrative data sets, we find the estimated teacher value-added distributions depart from normality and differ from each other. To draw out the policy implications of our method, we first consider a widely-discussed policy to release teachers at the bottom of the value-added distribution, comparing predicted test score gains under our nonparametric approach with those using parametric empirical Bayes. Here the parametric method predicts similar policy gains in one data set while overestimating those in the other by a substantial margin. We also show the predicted gains from teacher retention policies can be underestimated significantly based on the parametric method. In general, the results highlight the benefit of our nonparametric empirical Bayes approach, given that the unobserved distribution of value-added is likely to be context-specific.