

Is Regulation Causing the Decline in American Dynamism? - lisa_henderson
http://marginalrevolution.com/marginalrevolution/2015/02/is-regulation-to-blame-for-the-decline-in-dynamism.html

======
lisa_henderson
Interesting bit about their technique:

"Could regulation be increasing barriers to entry, raising the costs of
reallocation, and slowing the diffusion of productivity innovations? To test
the hypothesis that regulation is reducing dynamism Nathan Goldschlag and I
combined data on dynamism with an industry level measure of regulation. Our
measure of regulation is produced by an innovative technique that combs the
Code of Federal Regulations (CFR) for restrictive terms or phrases such as
“shall,” “must,” “may not,” “prohibited,” and “required”. The count of
restrictive words in each section is then associated to industries via a
machine learning algorithm that recognizes similarities between the language
in that CFR section and industry language (e.g. a section of the text with
words such as “pipeline” would be associated with the oil and gas industry).
In this way, we can associate each industry with an index of regulation
derived from the entire CFR."

