In this article, we quantify the effects of nurses on health care delivery and patient health in the context of an unintended and policy-induced nurse shortage. Our empirical strategy takes advantage of a parental-leave program in Denmark, which offered any parent the opportunity to take up to one year’s absence per child aged 0–8. Combining the policy variation with administrative employer–employee match data, we document substantial program take-up among nurses, who could not be replaced on net despite public education and immigration expansion efforts to mitigate the employment effects. We find that the parental leave program reduced hospital and nursing home nurse employment by 15% and 10%, respectively. Using detailed patient health records, we find detrimental effects on hospital-care delivery as indicated by a large increase in 30-day readmission rates among acute myocardial infarction patients. We find no evidence for an increase in hospital mortality. In nursing homes, we estimate a large increase in mortality.

This article studies how the monetary policy regime affects the relative importance of nominal exchange rates and inflation rates in shaping the response of real exchange rates to shocks. We document two facts about inflation-targeting countries. First, the current real exchange rate predicts future changes in the nominal exchange rate. Second, the real exchange rate is a poor predictor of future inflation rates. We estimate a medium-size, open-economy DSGE model that accounts quantitatively for these facts as well as other empirical properties of real and nominal exchange rates. The key estimated shocks that drive the dynamics of exchange rates and their covariance with inflation are disturbances to the foreign demand for dollar-denominated bonds.