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The Digest

Who Ultimately Pays Credit Card Interchange Fees?
Article
Every time a consumer swipes a credit card, the merchant pays an interchange fee—typically around 1.9 percent of the transaction value—most of which funds the rewards that cardholders receive. Because merchants generally charge the same prices regardless of how customers pay, consumers who use cash or debit cards effectively help finance the rewards enjoyed by credit card users. In Who Pays for Payments? (NBER Working Paper 35067), Mark L. Egan, Gregor Matvos, Amit...

Regulatory Limits on the Concentration of Mutual Fund Portfolios
Article
The US stock market has become more concentrated in recent years. Between 2015 and 2024, the share of the 10 largest stocks in total market capitalization rose from 13 to 31 percent, with the “Magnificent 7” companies alone accounting for roughly one-third of the S&P 500 by the end of 2024. This concentration poses a practical challenge for the thousands of investment funds that must comply with long-standing diversification rules designed for a far less top-heavy market...

The Reporter

Program Report: Development Economics
Article
Author(s): Seema Jayachandran & Benjamin A. Olken
The Development Economics (DEV) program was launched in 2012 and has 190 affiliated researchers. The success the program is enjoying today is in very large part thanks to Duncan Thomas, who led the program for its first six years. A unique aspect of the program is its close connections with BREAD, the Bureau for Research and Economic Analysis of Development, which is an independent group with worldwide membership. Our fall program meeting is held jointly with BREAD...

Understanding the Macroeconomic Implications of Heterogeneity
Article
Author(s): Adrien Auclert, Matthew Rognlie & Ludwig Straub
In the past decade, the widespread availability of large household- and firm-level datasets has sparked a “micro data” revolution in macroeconomics. Our research tries to understand the macroeconomic implications of this microeconomic heterogeneity by answering two key questions. First, what features of the micro data are most informative about macroeconomic outcomes? In particular, when can we find micro-sufficient statistics for these macro effects? Second, how can we make...

The Bulletin on Health

Immunotherapy Increases the Cost of Cancer Care but Reduces Mortality
Article
 Immune checkpoint inhibitors (ICIs) are immunotherapy drugs that mobilize the patient’s immune system to detect and attack cancer cells. They are considered a breakthrough development in cancer care, but are very expensive, with a full course of treatment costing more than $150,000 per patient. In The Impact of Immunotherapy on Reductions in Cancer Mortality: Evidence from Medicare (NBER Working Paper 34317), Danea Horn, Abby E. Alpert, Mark Duggan, and Mireille...

Nursing Home Roommate Assignments, Cognitive Health, and Mortality
Article
 In 2025, nearly 1.2 million Americans lived in nursing homes. Medicaid and Medicare expenditures of $91 billion represented two-thirds of total revenues for nursing care facilities. With the prevalence of Alzheimer’s disease and Alzheimer's disease-related dementias (AD/ADRD) projected to rise as the US population ages, the need for nursing home care is expected to increase. Nearly 80 percent of nursing home patients are assigned shared rooms, which raises the question...

The Bulletin on Entrepreneurship

Capital Gains Taxation and Startup Founders
Article
 The US capital gains tax is realization based, which means that taxes are due when appreciated assets are sold. Critics of this approach argue that it allows asset holders, such as corporate founders, to defer their tax obligations, sometimes indefinitely. An alternative approach, taxing gains on accrual, would require asset holders to value their assets periodically and to pay tax on the gain since the last valuation. Critics of this approach argue that it could force...

The Geographic Expansion of Innovative Firms
Article
 Most US innovation stems from firms that operate R&D facilities in many local markets. IBM and Google are two prominent examples, with R&D activities—measured by patenting—in approximately 70 and 20 distinct locations, respectively. When a technology company opens an R&D facility in a new location, it may generate knowledge spillovers that benefit nearby firms and inventors. In The Geography of Innovative Firms (NBER Working Paper 34010), Craig A. Chikis,...

The Bulletin on the Economics of Alzheimer's Disease and Related Dementias

The Financial Impact of Cognitive Decline Before Dementia Diagnosis
Article
Dementia imposes substantial costs on individuals and society through healthcare expenses and caregiving needs. However, the economic consequences may begin years before clinical diagnosis, as cognitive decline can impair financial decision-making, compromise portfolio management, and increase susceptibility to fraud. In Dementia and Long-Run Trajectories in Household Finances (NBER Working Paper 34659), Jing Li, Kathleen M. McGarry, Lauren Hersch Nicholas, and...

Parental Dementia and the Wellbeing of Adult Children
Article
Alzheimer's disease and related dementias (ADRD) currently affect nearly 50 million people worldwide. This number is expected to grow substantially in coming decades. While direct medical expenses of ADRD are well documented, the full societal burden includes a variety of impacts on family members. Standard cost estimates typically capture only foregone wages from hands-on caregiving, overlooking broader effects on relatives' wellbeing, including mental health consequences,...