National Bureau of Economic Research

The US federal budget situation has changed dramatically in the last 25 years. In 2001, projected surpluses totaling $5.6 trillion over the ensuing 10 years were expected to eliminate all public debt by 2006. At the end of the 2024 fiscal year, federal debt held by the public stood at approximately 98 percent of GDP, or $28 trillion. Recent legislative changes have accelerated the accumulation of federal debt, raising questions about the sustainability of current policies and their economic implications.

In Then and Now: A Look Back and Ahead at the Federal Budget (NBER Working Paper 34455), Alan J. Auerbach and William Gale develop...

Research Associate Eric Budish, the Paul G. McDermott Professor of Economics and Entrepreneurship and Centel Foundation/Robert P. Reuss Faculty Scholar at the University of Chicago Booth School of Business, will become co-director of the NBER’s Working Group on Market Design at the start of 2026. He joins Michael Ostrovsky of Stanford Business School, one of the two current co-directors, and succeeds Parag Pathak of MIT, who along with Susan Athey launched...

Discount rates play a key role in firms’ investment decisions. In standard theory and in practice, firms undertake an investment project if the expected return of the project exceeds a required return, which is known as the “discount rate” or “hurdle rate.” A large body of research has studied how firms should set discount rates, but relatively little work has explored how real-world discount rates change over time and whether discount rate dynamics shed light on the behavior of firms and the aggregate economy.

In a recent set of papers, we analyze new hand-collected data on the discount rates used by large corporations. The data confirm that discount rates determine investment. But the real-world behavior of discount rates deviates substantially from standard theory. Discount rate dynamics help us…

Death rates due to drug poisonings began to surge in the US in the mid-1990s, marking the emergence of an epidemic that has persisted for three decades. The health consequences have been stark, with annual deaths exceeding 100,000 since 2021.

In Prescription for Disaster: The SSDI Rate, Pain, and Prescribing Practices (NBER Working Paper 34265), William N. Evans and Ethan M. J. Lieber examine characteristics of counties in 1990—prior to the surge—that predict the county-level severity of opioid deaths after 2000. After considering a wide range of potential determinants, they focus on one factor: the percentage of the working-age population...

Younger entrepreneurs are disadvantaged in small business loan markets because lenders rely heavily on personal credit scores, which favor long histories of repaying debt. In Modernizing Access to Credit for Younger Entrepreneurs: From FICO to Cash Flow (NBER Working Paper 33367), researchers Christopher M. Hair, Sabrina T. Howell, Mark J. Johnson, and Siena Matsumoto document this fact and show that younger entrepreneurs benefit from underwriting that augments personal credit scores (like FICO) with cash flow data. They analyze comprehensive…