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Journal Article
News Sentiment in the Time of COVID-19
The COVID-19 pandemic is causing severe disruptions to daily life and economic activity. Reliable assessments of the economic fallout in this rapidly evolving situation require timely data. Existing sentiment indexes are useful indicators of current and future spending but are only available with a lag or have a short history. A new Daily News Sentiment Index provides a way to measure sentiment in real time from 1980 to today. Compared with survey-based measures of consumer sentiment, this index shows an earlier and more pronounced drop in sentiment in recent weeks.
Working Paper
The Costs of Payment Uncertainty in Healthcare Markets
What does it cost healthcare providers to collect payment in the complex U.S. health insurance system? We study this question using rich data on repeated interactions between a large sample of physicians and many different payers, and investigate the consequences when these costs are high. Payment uncertainty is high and variable, with 19% of Medicaid visits not reimbursed after the first claim submission. In such cases, physicians either forgo substantial revenue or incur costs to collect payment. Using physician movers and practices that span state boundaries, we find that providers respond ...
Journal Article
Can the News Drive Inflation Expectations?
How households expect inflation to evolve plays an important role in explaining overall inflation dynamics. Household expectations rose dramatically over the past year or so, much faster than professional forecasters’ inflation expectations. News coverage can explain part of this growing gap. Analyzing the volume and sentiment of daily news articles on inflation suggests that one-fourth of the increased gap between household and professional expectations can be attributed to heightened negative media coverage. These results highlight the important impact of the content and tone of economic ...
Working Paper
Monetary Tightening, Inflation Drivers and Financial Stress
The paper explores the state–dependent effects of a monetary tightening on financial stress, focusing on a novel dimension: the nature of supply versus demand inflation at the time of policy rate hikes. We use local projections to estimate the effect of high frequency identified monetary policy surprises on a variety of financial stress measures, differentiating the effects based on whether inflation is supply–driven (e.g. due to adverse supply or cost–push shocks) or demand–driven (e.g. due to positive demand factors). We find that financial stress flares up after a policy rate hike ...
Journal Article
What’s driving medical-care spending growth?
Medical-care expenditures have been rising rapidly and now represent almost one-fifth of all U.S. economic activity. An analysis of the privately insured health-care market from 2003 to 2007 indicates that higher prices for medical services contributed largely to nominal spending growth, but did not greatly exceed general overall inflation. In addition, the quantity of services consumed per episode of treatment did not grow during this period. Instead, most of the rise in inflation-adjusted medical-care spending reflected a higher percentage of insurance enrollees receiving treatment.
Working Paper
News Selection and Household Inflation Expectations
We examine the impact of systematic media reporting on household inflation expectations, focusing on how selective news coverage influences household responses to inflation news. In a model where monitoring all economic developments is costly, households will account for news selection when forming inflation expectations. The model implies an asymmetry: news about high inflation influences inflation expectations more than news about low inflation. Using micro panel data, we find support for this hypothesis. Exposure to news about higher prices increases household inflation expectations by ...
Working Paper
A Denial a Day Keeps the Doctor Away
Who bears the consequences of administrative problems in healthcare? We use data on repeated interactions between a large sample of U.S. physicians and many different insurers to document the complexity of healthcare billing, and estimate its economic costs for doctors and consequences for patients. Observing the back-and-forth sequences of claim denials and resubmissions for past visits, we can estimate physicians’ costs of haggling with insurers to collect payments. Combining these costs with the revenue never collected, we estimate that physicians lose 18% of Medicaid revenue to billing ...
Working Paper
Using Brexit to Identify the Nature of Price Rigidities
Using price quote data that underpin the official U.K. consumer price index (CPI), we analyze the effects of the unexpected passing of the Brexit referendum to the dynamics of price adjustments. The sizable depreciation of the British pound that immediately followed Brexit works as a quasi-experiment, enabling us to study the transmission of a large common marginal cost shock to inflation as well as the distribution of prices within granular product categories. A large portion of the inflationary effect is attributable to the size of price adjustments, implying that a time-dependent ...
Working Paper
Does Medicare Part D save lives?
This paper studies the impact of Medicare Part D on mortality for the population over the age of 65. We identify the effects of the reform using variation in drug coverage across counties before the reform was implemented. Studying mortality rates immediately before and after the reform, we find that cardiovascular-related mortality drops significantly in those counties most affected by Part D, while mortality rates for noncardiovascular diseases remain statistically unchanged. Estimates suggest that between 19,000 and 27,000 more individuals were alive in mid-2007 because of the Part D ...