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New research on policy from Harvard Business School faculty on issues such as how business scholars are using their research to make a difference in government policy.
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Leadership Advice for Biden: Restore a Sense of Calm

by Dina Gerdeman

Harvard Business School faculty members share their expectations for a Biden presidency and offer advice to the commander in chief as he takes on the raging COVID-19 pandemic and a divided nation. Open for comment; Comment(s) posted.

How Countries Use Financial Policy to Fight COVID-19

by Rachel Layne

Developing countries have fewer fiscal tools and policy options to combat COVID-19 damage to their economies, according to research by Alberto Cavallo and colleagues. Open for comment; Comment(s) posted.

It's Time for a Bipartisan Health Plan for Employers and Employees

by Regina E. Herzlinger and Richard J. Boxer

Regina E. Herzlinger and Richard J. Boxer prescribe a seemingly impossible cure for battling health care options: a plan that embraces both Republican and Democratic ideas. Open for comment; Comment(s) posted.

Sticky Capital Controls

by Miguel Acosta-Henao, Laura Alfaro, and Andrés Fernández

One of the legacies of the 2007–2008 global financial crisis has been a reassessment of the potential for restriction of capital flows policies. This paper documents a set of stylized facts on capital controls along their intensive and extensive margins for emerging markets and document them to be “sticky.” We then rationalize them through a model that includes fixed cost of implementing such policies, which lower the welfare gains of implementation.

Making Economics More Useful: How Technological Eclecticism Could Help

by Amar Bhidé

This paper shows how tools, such as simulations used to design new technologies, can facilitate collaborative economic policy judgments. The paper forms part of a broader, ongoing study of knowledge in practical fields such as engineering, medicine, and business.

Social Interactions in Pandemics: Fear, Altruism, and Reciprocity

by Laura Alfaro, Ester Faia, Nora Lamersdorf, and Farzad Saidi

An analysis of 89 cities worldwide shows that mobility responds to infection risk, altruism, and reciprocity. Correcting the SIR model to account for this behavior shows that a balanced approach involving stringency measures, in respect of human dignity, and responsible social preferences mitigates the pandemic health and economic costs.

Government Incentives for Entrepreneurship

by Josh Lerner

Even though many public policy efforts on entrepreneurship are well intentioned, the success rate has been disappointing. This essay explores these policies, focusing on financial incentives to entrepreneurs and the intermediaries who fund them.

Rebates in the Pharmaceutical Industry: Evidence from Medicines Sold in Retail Pharmacies in the U.S.

by Pragya Kakani, Michael Chernew, and Amitabh Chandra

Retail pharmacy data illustrates it can be misleading to use list prices instead of net prices to understand pharmaceutical prices. Analysts and economists working in public policy should be extremely cautious in drawing policy conclusions based on list prices alone.

The Gift of Global Talent: Innovation Policy and the Economy

by William R. Kerr

High-skilled workers in today’s knowledge-based economy are arguably the most important resource to the success of businesses, regions, and industries. This chapter pulls from Kerr’s book The Gift of Global Talent to examine the migration dynamics of high-skilled individuals. He argues that improving our knowledge of high-skilled migration can lead to better policy decisions.

Forgiving Student Loan Debt Leads to Better Jobs, Stronger Consumers

by Dina Gerdeman

Without the burden of student loan debt, people seek higher-paying careers, stabilize their finances, and contribute to the economy, says Marco Di Maggio. Open for comment; Comment(s) posted.

Complex Disclosure

by Ginger Zhe Jin, Michael Luca, and Daniel Martin

This study shows that companies looking to hide unfavorable information might strategically be making contract terms unnecessarily complex, harming consumers and undermining the effectiveness of disclosure. These results highlight a role for regulation that would encourage simpler forms of disclosure.

Structural Transformation: A Competitiveness-based View

by Christian Ketels

A critical challenge for many economies is how to accelerate structural change when market forces alone seem insufficient. This paper explores the relationship between two approaches. The Structural Transformation framework argues for identifying and supporting target sectors in line with ‘latent’ competitive advantages. The competitiveness framework emphasizes the need to systematically strengthen competitive advantages, with new sectors the outcome rather than the driver of competitiveness upgrading.

Op-Ed: Can the Proposed American Health Care Act Improve on 'Obamacare'?

by John Quelch, Dr. Gordon Moore, and Emily Boudreau

Politics aside, the primary question to be asked about the newly proposed American Health Care Act is this: Will it improve choice, cost, and outcomes for health care consumers? Open for comment; Comment(s) posted.

Government and Financial Tech Can Fix Cash Woes for Small Businesses

by Karen Mills

Cash flow is a major concern for small businesses, which, on average, hold only 27 days’ reserve. Karen Mills looks at how "fintech" and government policies can pull companies off the cash flow edge. Open for comment; Comment(s) posted.

Can Obamacare Be Saved?

by John A. Quelch and Emily Boudreau

Is Obamacare in trouble? With premiums rising and some health providers pulling back, The Affordable Care Act might seem wobbly. John A. Quelch and Emily Boudreau argue for remedies that include more education for consumers, innovation from insurers, and flexibility on behalf of regulators. Open for comment; Comment(s) posted.

The Unintended Consequences of the Zero Lower Bound Policy

by Marco Di Maggio and Marcin Kacperczyk

In the aftermath of the financial crisis of 2007-2008, the United States Federal Reserve took an unprecedented decision to lower short-term nominal interest rates to zero, a policy commonly known as zero lower bound policy. This study shows that the policy adversely affected an important part of the shadow banking system, money market funds, whose returns are linked to the Fed funds rate. During times of unusually low interest rates, fund managers tended to increase their portfolios’ risk. The policy also triggered a reduction in capital supply to financial firms and large corporations and increased the financial markets’ exposure to costly runs and defaults.

The Impact of the Entry of Biosimilars: Evidence from Europe

by Fiona Scott Morton, Ariel Dora Stern, and Scott Stern

Biosimilars are large-molecule drugs that, while not an exact copy of already-approved large-molecule drugs, have been shown to be therapeutically equivalent. Much like generic drugs, which become available when a small-molecule drug goes off patent, biosimilars are lower in cost than their reference products and present an opportunity for savings when large-molecule drugs’ patents expire. Biosimilars have been available in the United States only since 2015 but have been regulated, approved, and sold in Europe for over a decade. This paper examines the European experience to help inform policy design and institutional choices for the United States. Topics covered include the entry of distributors and unique products; predictors of average product prices following biosimilar competition; and penetration of biosimilars as a share of total sales.

How Consumers and Businesses are Reshaping Public Health

by John A. Quelch

Through a collection of case studies, John A. Quelch and co-authors explore the intersection of health care and business in the new book, Consumers, Corporations, and Public Health. Read an excerpt. Open for comment; Comment(s) posted.

The Impact of Mass Shootings on Gun Policy

by Michael Luca, Deepak Malhotra, and Christopher Poliquin

The authors constructed and analyzed a dataset of all United States gun legislation and mass shootings between 1989 and 2014, finding that mass shootings do lead to significant policy responses: Lawmakers introduce 15 percent more bills the year after a shooting, an effect that is 66 times larger than the impact of non-mass shooting gun homicides. When it comes to enacting laws, Republican-controlled legislatures loosen restrictions on guns. Overall, the results suggest that random and infrequent events can be crucial levers for policy consideration. In the context of gun policy, the results highlight the need for a broader approach to solve gun violence.

Net Neutrality: A Fast Lane to Understanding the Trade-offs

by Shane Greenstein, Martin Peitz, and Tommaso Valletti

Shane Greenstein and colleagues identify the economic dimensions involved with net neutrality and show that many questions can be informed by simple economic models of the market for internet services.