Competing political parties often declare that their economic policies are best, and try to convince voters that the winner will be able to influence the economy. One should ask, however, do markets really care about election outcomes? Are there differences in market reactions to Presidential versus Congressional elections? Can one say which branch of government is more influential for economic policy-making?
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The Internet has dramatically increased the amount of information available to both job seekers and employers. Economists and labor market experts have predicted that this would change the way people find jobs. It is now time to compare these predictions with people’s actual behavior. Has the matching between workers and employers become easier? And does the Internet facilitate the transition out of unemployment in the same way as it facilitates the move to a new job by the currently employed?
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Harvard University Professor Dani Rodrik answered readers' questions on how globalization affects developing countries' growth prospects, on what policies are most conducive to long-term growth in the global economy, and on why some governments are unable to implement them.

Fluctuations in the labor market are naturally a major concern to policymakers, trade unions, and companies. In particular, in the past fifty years, there has been a trend towards an increase in the total number of hours worked per worker in the United States, resulting in average workweeks that are longer now than in the 1960s. Fluctuations in total work hours also follow closely the business cycles. What determines this cyclical behavior?
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International outsourcing refers to the agreement where a firm contracts another firm in a foreign country to perform parts of its production process. In recent years, outsourcing has become an increasingly important economic phenomenon worldwide. The traditional view is that outsourcing induces growth, but some observers have recently pointed to it as a source of instability and increased volatility. What are the relative merits of these differing views?
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Different pension systems are used around the world. They vary substantially according to how they share macroeconomic risks, how they transfer wealth from one generation to another, and how they link contributions and benefits at the individual level. What is the optimal mixture of these three factors? Can a pension system be designed in such a way as to find an optimal risk-sharing and wealth-transfer arrangement across generations?
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MIT Professor Daron Acemoglu answered readers' questions on the economic origins of political regimes, the relationship between income and democracy, the causes of long-run economic growth, and the role of institutions in the economy.

Achieving an equitable income distribution is a major concern for many governments. Especially in emerging economies, rapid growth often leads to very large income differentials across workers. This may result in social unrest. Which factors have an impact on the sharing of wealth in emerging economies? Are emerging and developed economies different in the extent to which profits are shared between workers and firms?
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In recent years, long-term interest rates on US Treasury bonds have been extremely low by historical standards, even in the face of sharp increases of short-term rates. What is the explanation for this phenomenon? More generally, what are the main driving forces of long-term interest rates? Is there a role for foreign official purchases of US government bonds? And, if so, can the impact of foreign capital flows on long-term rates be precisely quantified?
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Understanding business cycles is of crucial importance to both businesses and policymakers. While much is known, there is one very important feature that had not been analyzed so far: the relative timing of output and employment expansions and contractions. The paper examines the US postwar experience to find out whether the widely held view that business contractions are shorter and more violent than business expansions actually corresponds to facts.
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