Ruchir Agarwal, Ina Ganguli, Patrick Gaulé, and Geoff Smith
This paper studies the impact of U.S. immigration barriers on global knowledge production. We present four key findings. First, among Nobel Prize winners and Fields Medalists, migrants to the U.S. play a central role in the global knowledge network—representing 20-33% of the frontier knowledge producers. Second, using novel survey data and hand-curated life-histories of International Math Olympiad (IMO) medalists, we show that migrants to the U.S. are up to six times more productive than migrants to other countries—even after accounting for talent during one’s teenage years. Third, financing costs are a key factor preventing foreign talent from migrating abroad to pursue their dream careers, particularly for talent from developing countries. Fourth, certain ‘push’ incentives that reduce immigration barriers—by addressing financing constraints for top foreign talent—could increase the global scientific output of future cohorts by 42 percent. We concludeby discussing policy options for the U.S. and the global scientific community.
Martino Pelli, Jeanne Tschopp, Natalia Bezmaternykh, and Kodjovi M. Eklou
This paper examines the response of firms to capital destruction, using a new measure of firm
exposure to tropical storms as a negative exogenous shock on firms’ capital stock. Drawing on a
panel of Indian manufacturing firms between 1995 and 2006, we establish that, depending on their
strength, storms destroy up to 75.3% of the fixed assets of the median firm (in terms of its
productivity and industry performance). We quantify the response of firm sales within and across
industries and find effects akin to Schumpeterian creative destruction, where surviving firms build
back better. Within an industry, the sales of less productive firms decrease disproportionately
more, while across industries capital destruction leads to a shift in sales towards more performing
industries. This build-back better effect is driven by firms active in multiple industries and, to a
large extent, by shifts in the firm-level production mix within a firm’s active set of industries.
Finally, while there is no evidence that firms adjust by investing in new industry lines, firms tend
to abandon production in industries that exhibit lower comparative advantage.
International Monetary Fund. Middle East and Central Asia Dept.
This Selected Issues paper assesses macroeconomic and structural reforms in Georgia. The government’s reform package includes a fiscal policy within a declining deficit path which intends to incentivize private investment, a scaling up of public investment, improvement in government’s efficiency, and an education reform. Based on modeling analysis, the implementation of this package will provide significant benefits to the economy. Over the long term, real GDP is estimated to be about 5 percent higher than in the baseline and—in the path toward the new equilibrium—annual growth about 0.7 percentage points higher over the medium term. The education reform has sizeable effects, but they only come into effect in the long term.