Luiz de Mello, Pier Carlo Padoan, 1 August 2010
Global imbalances are firmly back on the policy agenda. This column examines evidence from past imbalances that suggests that the current-account reversals can be sizeable and the resulting disruption to capital flows could pose risks for the global recovery.
Leonardo Iacovone, Beata Javorcik, 1 August 2010
Policymakers care deeply about exports, which have accompanied most successful development stories in the last few decades. This column provides evidence from Mexico suggesting that uncertainty and information asymmetries are significant barriers to entry for exporters and should be the focus of policy interventions.
Gilbert E. Metcalf , Sergey Paltsev, Sebastian Rausch, John Reilly , 31 July 2010
The carbon-pricing implications of cap-and-trade programmes have raised concern that they might be a regressive policy tool. This column documents how allowance allocation schemes similar to those in recently proposed US legislation address distributional concerns and challenges the view that carbon pricing is necessarily regressive.
M. Ataman Aksoy, Francis Ng, 30 July 2010
This column sketches the changing face of global agricultural trade over the last 20 years. It finds that developing countries have not been able to increase their export shares in agriculture in line with their manufacture shares. What little increase there has been is largely the result of expanding exports to other developing countries.
Barry Eichengreen, Peter Temin, 30 July 2010
The world economy is experiencing tensions arising from inflexible exchange rates – particularly the dollar-renminbi peg and the Eurozone. Drawing on lessons from the gold standard, this column points out that an international monetary system is a system – nations’ policies have spillovers. Now, as in the 1930s, surplus nations’ refusals to increase spending force deficit countries to contract. Keynes drew this lesson from the Great Depression, which is why he wanted measures to deal with chronic surplus countries. Sixty-plus years later, we seem to have forgotten his point.
Bernard Hoekman, 30 July 2010
Bernard Hoekman talks to Viv Davies about the recent Vox eBook on rebalancing the global economy. Drawing from the contributions of the authors, Hoekman discusses why imbalances persist, what can be learned from history and the need for a more collective responsibility in responding to the current problem. Hoekman highlights the importance of supply-side factors as well as the implications of imbalances for developing countries. Regarding the current debate on austerity versus stimulus, Hoekman maintains that the real issue is more about timing and coordination.
Ha Nguyen, Luis Servén, 29 July 2010
Global imbalances have taken centre stage in the debate on the global economic outlook. This column surveys the debate over the roots of global imbalances and argues that asymmetries in the supply and demand for assets, rather than goods, are responsible. With this interpretation, global imbalances are unlikely to go away any time soon.
Harry X Wu, 28 July 2010
In this column in memory of Angus Maddison, Harry Wu pays tribute to a mentor, friend, and pioneer who mapped economic performance across the world, and nurtured a passion for Japan and China.
Yongheng Deng , Joseph Gyourko, Jing Wu, 28 July 2010
Reinhart and Rogoff’s recent influential study of financial crises finds a recurring root – the country’s property markets. This column argues that a similar housing bubble may be developing in China. Urgent research is needed to determine the risk of a full blown crisis.
Stefan Gerlach , John Lewis, 27 July 2010
Monetary policy during the global crisis entered unchartered territory. This column suggests that fear of a global recession may have led policymakers to cut rates more aggressively in order to prevent the need for negative interest rates.
Daniel Sgroi, 26 July 2010
Happiness economics typically looks at how macro-level variables such as economic growth affect happiness. This column turns such thinking on its head and asks whether a rise in happiness might change behaviour at the micro-level, looking specifically at productivity. Experiments suggest that happiness raises productivity by increase workers' effort. Economists may need to take the emotional state of economic agents seriously.
Paolo Manasse , 26 July 2010
Are Europe’s budgets cuts too little too late or too much too soon? This column asks how each country’s adjustments compare with the European average. It finds that Germany and the Netherlands are ahead of the pack along with highly indebted nations such as Spain, but Italy is lagging far behind.
Chad Syverson, 25 July 2010
The internet is changing the way people do business. This column looks at how e-commerce has affected market structure among travel agencies, bookstores, and car dealerships. It suggests that low-cost firms will gain market share and may even become more profitable as e-commerce spreads, while higher-cost firms will be hurt, perhaps fatally.
Paolo Manasse , 24 July 2010
Despite the lack of formal mechanisms for fiscal coordination across Europe, this column suggests that the planned exit strategy seems to support convergence among European countries aiming to cut deficits. Yet it argues that the budget cuts do not reflect the unemployment situation of member countries and appear inspired by Germany's fiscal orthodoxy.
Mary Hallward-Driemeier, Lant Pritchett, 23 July 2010
Does government policy make any difference? This column argues that, in many developing countries, firms often make decisions based not on the policy itself, but what it implies in terms of “deals” they may have to make with middle men and corrupt officials. This “policy uncertainty” is a major concern for firms and can help explain some of the puzzles of development.
Richard S. Grossman, 23 July 2010
Richard Grossman of Wesleyan University talks to Romesh Vaitilingam about his new book ‘Unsettled Account: The Evolution of Banking in the Industrialized World since 1800’. Among other things, they discuss the problems of striking a balance between a dynamic banking system and a stable banking system. The interview was recorded at a conference on ‘Lessons from the Great Depression for the Making of Economic Policy’ in London in April 2010.
Francesco Giavazzi, 22 July 2010
The global macroeconomy is at a juncture; some economists argue for continued fiscal stimulus to avoid a double dip recession while others argue for fiscal prudence. In this column, one of the world's leading macroeconomists argues for continued stimulus combined with a plan to ensure long-run sustainability by reforming the funding of pension liabilities.
Alex Bryson, Babatunde Buraimo , Rob Simmons, 22 July 2010
After losing the football world cup final in South Africa, the Dutch press blamed the “chump” of a referee from England for losing control of the game. Yet this column presents evidence that, as one of the few countries where referees are paid a salary, English referees have the incentives to be among the best.
Arnelyn Abdon, Jesus Felipe, Utsav Kumar, 22 July 2010
This column introduces the Index of Opportunities – a ranking of countries by their capacity to undergo structural transformation and develop. It suggests countries at the bottom are in urgent need of implementing policies that lead to higher diversification and sophistication of exports.
Agustín S. Bénétrix, Barry Eichengreen, Kevin H. O’Rourke, 21 July 2010
The world's current economic problems started when housing bubbles burst in several advanced economies. Economic recovery without housing market recovery is unlikely to be sustained. This column presents new research on the probability of housing slumps ending. There is at least a one-in-eight chance of housing slumps in the three big economies (US, Japan and Germany) ending imminently, but there is nothing approaching the same probability elsewhere. If things turn out as projected here, we may be about to have a test of the locomotive theory – whether the big economies can pull along their smaller brethren – both for housing markets and generally.
Barry Eichengreen, Kevin H. O’Rourke, 8 March 2010
This column updates the original Vox columns by Barry Eichengreen and Kevin O’Rourke comparing today’s global crisis to the Great Depression. The three previous columns have shattered all Vox readership records with over 450,000 views. This latest edition covers up to February 2010 showing that, while there is cause for optimism, there is no room for complacency.
Views 545730
James J. Heckman, Paul A. LaFontaine, 13 February 2008
Official statistics for US high school graduation rates mask a growing educational divide. This column presents research showing that a record number of Americans are going to university – while an increasing number are dropping out of high school. This poses major social challenges for the United States.
Views 126772
Barry Eichengreen, 4 May 2010
Originally posted 17 November 2007, this Vox column is more relevant than ever arguing that adopting the euro is effectively irreversible. Leaving would require lengthy preparations, which, given the anticipated devaluation, would trigger the mother of all financial crises. National households and firms would shift deposits to other Eurozone banks producing a system-wide bank run. Investors, trying to escape, would create a bond-market crisis. Here is what the train wreck would look like.
Views 75909
Stephen Cecchetti, 15 August 2007
A revised and updated version of the 13 August column on the basic how's and why's of what the Fed has been doing to calm financial markets.
Views 75269
Jeffrey Frankel, 18 March 2008
One of the world’s leading international economists explains how the euro could surpass the dollar as the premier international currency and examines the geopolitical implications of such a shift.
Views 68568
Stijn Claessens, M. Ayhan Kose, Marco E. Terrones, 7 October 2008
The house and equity price busts on top of a credit crunch make this an unprecedented crisis for the modern US economy; its real economy effects are thus difficult to assess. This column provides insights based on evidence from 122 recessions in 21 advanced nations since 1960. Findings suggest recessions in such circumstances are much costlier and slightly longer. But the outcome can be affected by policy, and it’s high time that policymakers act swiftly and decisively.
Views 68206
Stephen Cecchetti, 13 August 2007
Here are the basic how's and why's of what the Fed has been doing to calm financial markets.
Views 64979
Carmen M. Reinhart, 15 March 2008
We may just have started to feel the pain. Asset price drops – including housing – are common markers in all the big banking crises over the past 30 years. GDP declines after such crises were both large (-2% on average) and protracted (2 years to return to trend); in the 5 biggest crises, the numbers were -5% and 3 years. This column, based on the author’s testimony to the Congress, picks through the causes and consequences. It argues that when it comes to ‘cures,’ it would be far better to get the job done right than get the job done quickly.
Views 62711
Barry Eichengreen, Richard Baldwin, 9 October 2008
Without rapid and coordinated action by G7/8 leaders, this financial crisis could turn into a jobs crisis, a pension crisis and much more. This column introduces a collection of essays by leading economists on what the G7/8 leaders should do this weekend. The dozen essays present a remarkable consensus on a few points: we need immediate, coordinated global action that includes recapitalisation of the banks.
Views 60891
Nicholas Bloom, Max Floetotto, 12 January 2009
A key source of the today’s economic weakness is uncertainty that led firms to postpone investment and hiring decisions. This column, by the authors whose model forecast the recession as far back as June 2008, report that the key measures of uncertainty have dropped so rapidly that they believe growth will resume by mid-2009. This means any additional economic stimulus has to be enacted quickly. Delaying to the summer may mean the economic medicine is administered just as the patient is leave the hospital.
Views 59297
Paul Krugman, 15 June 2007
It’s no longer safe to assert that trade’s impact on the income distribution in wealthy countries is fairly minor. There’s a good case that it is big, and getting bigger. I’m not endorsing protectionism, but free-traders need better answers to the anxieties of globalisation’s losers.
Views 57837
Richard Baldwin, 2 October 2007
As the dollar has started to slide, the question is: how far, how fast? This column, which is based on Paul Krugman’s recent Economic Policy article suggests the answers are: pretty far and pretty fast.
Views 57814
Daniel Gros, Stefano Micossi, 20 September 2008
The radical moves in the US have direct implications for European banks and indirect implications for European governments. This column discusses the likely channels and notes that several European banks are both too big to fail and may be too big to be saved by their national governments alone.
Views 57632
Jon Danielsson, 12 November 2008
Iceland’s banking system is ruined. GDP is down 65% in euro terms. Many companies face bankruptcy; others think of moving abroad. A third of the population is considering emigration. The British and Dutch governments demand compensation, amounting to over 100% of Icelandic GDP, for their citizens who held high-interest deposits in local branches of Icelandic banks. Europe’s leaders urgently need to take step to prevent similar things from happening to small nations with big banking sectors.
Views 56718
Willem Buiter, Anne Sibert, 30 October 2008
In the first half of 2008, Buiter and Sibert were invited to study Iceland’s financial problems. They identified the “vulnerable quartet” of (1) a small country with (2) a large banking sector, (3) its own currency and (4) limited fiscal capacity – a quartet that meant Iceland’s banking model was not viable. How right they were. This column summarises the report, which is now available as CEPR Policy Insight No. 26 with an October 2008 update.
Views 54049
M Daniele Paserman, 26 June 2007
Female tennis players play more conservatively and commit more unforced errors when playing critical points. Does this explain the upper-echelons wage gap?
Views 53338
Nathan Nunn, 8 December 2007
Slavery, according to historical accounts, played an important role in Africa’s underdevelopment. It fostered ethnic fractionalisation and undermined effective states. The largest numbers of slaves were taken from areas that were the most underdeveloped politically at the end of the 19th century and are the most ethnically fragmented today. Recent research suggests that without the slave trades, 72% of Africa’s income gap with the rest of the world would not exist today.
Views 52641
Alberto Alesina, Richard Baldwin, Tito Boeri, Willem Buiter, Francesco Giavazzi, Daniel Gros, Stefano Micossi, Guido Tabellini, Charles Wyplosz, Klaus F. Zimmermann, 1 October 2008
This is a once-in-a-lifetime crisis. Trust among financial institutions is disappearing; fear may spread. Last week’s US experience showed that saving one bank at a time won’t work. A systemic response is needed and in Europe this means an EU-led initiative to recapitalise the banking sector. Unless European leaders immediately unite to address this crisis before it spirals out of control, they may find themselves fighting over how best to salvage the aftermath.
Views 51901
Francesco Giavazzi, 2 June 2008
There has been a persistent spread between the rate at which banks lend each other money and government-backed securities yields in recent months. This column describes hypotheses explaining the spread – including the possibility that banks aren’t lending in order to bankrupt acquisition targets.
Views 51892
N. Gregory Mankiw , Matthew Weinzierl, 12 June 2009
Should the income tax system include a tax credit for short taxpayers and a tax surcharge for tall ones? This column explains how the standard utilitarian framework for tax policy analysis says that individual attributes correlated with wages, such as height, should determine tax liabilities. Taller individuals should pay higher taxes. If this is objectionable, then something is wrong with the standard framework.
Views 50808
Francesco Giavazzi, 22 July 2010
The global macroeconomy is at a juncture; some economists argue for continued fiscal stimulus to avoid a double dip recession while others argue for fiscal prudence. In this column, one of the world's leading macroeconomists argues for continued stimulus combined with a plan to ensure long-run sustainability by reforming the funding of pension liabilities.
Mario I. Blejer, Eduardo Levy-Yeyati, 21 July 2010
Rumours of Eurozone break-up are mounting. This column argues that exiting a strong currency for a weak one poses almost unthinkable challenges, from the redenomination of contracts and the imposition of bank restrictions to the restructuring of external debt and limiting of capital mobility. Lessons from Argentina illustrate just how radical the changes would need to be.
Agustín S. Bénétrix, Barry Eichengreen, Kevin H. O’Rourke, 21 July 2010
The world's current economic problems started when housing bubbles burst in several advanced economies. Economic recovery without housing market recovery is unlikely to be sustained. This column presents new research on the probability of housing slumps ending. There is at least a one-in-eight chance of housing slumps in the three big economies (US, Japan and Germany) ending imminently, but there is nothing approaching the same probability elsewhere. If things turn out as projected here, we may be about to have a test of the locomotive theory – whether the big economies can pull along their smaller brethren – both for housing markets and generally.
Francesco Giavazzi, Alberto Giovannini, 19 July 2010
Should the crisis spur central banks to change how they conduct monetary policy? This column argues that strict inflation targeting, which ignores financial fragility, can produce interest rates that push the economy into a “low-interest-rate trap” and increase the likelihood of a financial crisis.
Barry Eichengreen, Andrew K. Rose, 21 June 2010
China’s announcement of greater renminbi flexibility was welcomed by US and European leaders. This column discusses new empirical research on what happens to economies when they exit exchange rate pegs that are resisting appreciation. Data from 27 cases suggest that growth slows but only modestly, and there is no evidence of economic and financial damage as a result – certainly nothing like the fears that China's next decade could look like Japan’s lost decade.
Richard Baldwin, 7 June 2010
The WTO is in a funk – unable to conclude the Doha Round even as its members liberalise unilaterally and regionally. This column introduces a Policy Insight arguing that the tactics used to conclude the last round pushed the organisation into decision-making’s “impossible trinity” (consensus, uniform rules, and strict enforcement). The Doha Round may succeed – defeating the triangle with the 'big package' tactic – but this tactic does not work fast enough to allow the WTO to confront 21st century challenges in a timely manner. At least one of the impossible triangle’s corners will have to be modified.
Daniel Cooper, 30 May 2010
In this column, Federal Reserve Bank of Boston economist Daniel Cooper presents new evidence suggesting that the spending impact of equity extraction during the recent US housing boom was relatively small compared with the household balance sheet changes and residential investment. This finding contrasts with recent findings claiming that households consumed the vast majority of the money they extracted.
Alberto Alesina, Dorian Carloni, Giampaolo Lecce, 29 May 2010
The market turmoil in recent weeks pose a key question: can European governments credibly commit to cutting their deficits? This column presents evidence that fiscal adjustments do not increase the likelihood of electoral defeat for incumbent governments. Europe’s fiscal problems can be solved – it is now up to today’s leaders to step up.
Simon J Evenett, 28 May 2010
Despite the return of economic growth, the threat of protectionism still lingers. This column presents the fifth report from the Global Trade Alert with a focus on sub-Saharan Africa. The report is the busiest yet – the number of identified protectionist measures has risen by 40%. No four-digit product line, no economic sector, and no jurisdiction have emerged unscathed by crisis-era protectionism.
Ross Levine, 25 May 2010
Many policymakers stress that the global crisis was caused by a series of unforeseen events and “suicidal” behaviour by market players. This column argues that this is a self-serving narrative. Policymakers designed, implemented, and maintained policies that destabilised the financial system in the decade leading up to 2006 – and were fully aware they were doing so. It is a case of “negligent homicide”.
Robert Barro, Jong-Wha Lee, 18 May 2010
Empirical investigations of the role of human capital require accurate measures across countries and over time. This column describes a new dataset on educational attainment for 146 countries at 5-year intervals from 1950 to 2010. The new data, freely available online, use more information and better methodology than existing datasets. Among the many new results is that the rate of return to an additional year of schooling on output is quite high – ranging from 5% to 12%.
Avinash Persaud, 18 May 2010
The Eurozone crisis is not over. This column argues that solving it requires a voluntary debt swap. Creditors should be invited to swap old Greek bonds for new bonds backed by the European and IMF package. Par values would be the same but the coupons would be lower and the maturities doubled. The exact parameters should be set so the value of the greater certainty of payout was offset by the lower coupons. This would strengthen the euro, facilitate recovery of the $145 billion pledged, and yet force private creditors to realise that Eurozone support is not a one-way bet.
Marco Pagano, 15 May 2010
The Eurozone has been swept up in turmoil that has ranged from stock and bond markets to exchange rates, government spending, and tax rates. Marco Pagano, Professor at the University of Naples Federico II and CEPR Research Fellow, explains events, how they hang together, and what needs to be done. This challenge facing Europe could be a historical turning point.
Richard Baldwin, 13 May 2010
As early as 2008, Vox columnists provided research-based warnings that the global crisis could lead to a Eurozone crisis. This column provides a recap of the contributions on this site where leading economists used economic logic and a firm grasp of the facts to think ahead about Europe. The main outline of today’s crisis was plain months ago; EU leaders’ dilatory response made things worse.
Charles Wyplosz, 12 May 2010
Markets liked the European Stabilisation Mechanism but a closer look shows that the money is announced but not available. When markets realise this, they may do to Portugal and Spain what they did to Greece. Worse still, crucial principles have been sacrificed for the sake of unconvincing announcements. The debt crisis is unlikely to go away and the monetary union will have to be reconstructed to re-establish the principle of collective fiscal discipline.
Paul De Grauwe, 11 May 2010
This column, first published 15 December 2009, shows the main outlines of the crisis were clear months ago and suggests actions that – had they been taken early – would have mitigated problems facing the Eurozone today. The column concludes: "All this leads to the conclusion that the Eurozone governments should make clear where they stand on this issue. Not doing so implies that each time one member country gets into financial problems the future of the system is put into doubt." If only those words had been heeded months ago.
Daniel Gros, Thomas Mayer, 11 May 2010
The European Stabilisation Mechanism is a major initiative, but is it enough? This column argues that more is needed. All EU bank supervisors should conduct stress tests to gauge their banks’ exposure to risky sovereign debt; those who fail should be re-capitalised or closed to ring-fence the problem. The ‘Mechanism’ should also be transformed into an institution that manages the Eurozone’s rescue contributions, supervises conditionality, and sets up mechanisms for orderly debt rescheduling should austerity programmes fail.
Michael Burda, Stefan Gerlach , 11 May 2010
This weekend’s plan has been received positively by the markets, but it is too early to call it a success. Future monetary historians may judge it either a brilliant move or the first step on a slippery slope to ruin. The EU needs to set up an independent institution to vet fiscal plans of Eurozone governments and apply a sliding scale of sanctions. If the euro is to survive the current decade, Greece cannot happen again.
Carmen M. Reinhart, Vincent Reinhart, 9 May 2010
First posted 17 November 2008, this column's analysis is more relevant than ever. It asks why investors rush to government securities when the US was at the epicentre of the financial crisis? This column attributes the paradox to key emerging market economies’ exchange practices, which require reserves most often invested in US government securities. America’s exorbitant privilege comes with a cost and a responsibility that US policy makers should bear in mind as they address financial reform.
Giancarlo Corsetti, 9 May 2010
Eurozone membership seemed to shield economies with structural problems from the “original sin” – the obligation to borrow in foreign currency while the ability to pay is in domestic currency. This column argues that the sin is still with Greece and other Eurozone nations with weak institutions. Reforms that boost the nation’s competitiveness or the government’s fiscal positions reduce short-term government revenue directly or via a recession. Solving the problem will require coordinated Eurozone intervention to correct internal imbalances
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VoxEU.org is partnering with the UK government to collect the views of economists from around the world on what the G20 should do to fix the global economy.
Read more. There are five themes:
Moderator: Francesco Giavazzi
Moderator: Luigi Zingales
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Moderator: Jon Danielsson
Moderator: Richard Baldwin
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Policy Insights and Reports
Stijn Claessens, Richard J. Herring, Dirk Schoenmaker
Financial reform is finally emerging in the major economies but these reforms come up short on one crucial aspect – the resolution of systematically important, i.e., ‘too complex to fail’, cross-border financial institutions. The latest Geneva Report on the World Economy advocates a two-tier solution to this problem – a universal approach for closely integrated countries such as EU members, and a modified universal approach for other countries.
Stijn Claessens, Simon J Evenett, Bernard Hoekman
This new eBook aims to provide policymakers and their advisers with up-to-date, comprehensive analyses of the central facets of global economic imbalances and to identify and evaluate potential national and systemic responses to this challenge.
Richard Baldwin, Daniel Gros, Luc Laeven
The euro’s crisis is not over. Measures taken in May were critical but they were palliatives not a cure. The Eurozone rescue needs to be completed. A new Vox eBook that gathers the thinking of a dozen leading economists on what more needs to be done.
Richard Baldwin
The WTO is said to be in a funk – unable to conclude the Doha Round even as its members liberalise unilaterally and regionally. CEPR's newest Policy Insight argues that tactics used to get consensus at the last Round pushed the organisation into decision-making’s “impossible trinity” (consensus, uniform rules, and strict enforcement). A Doha package with something for everyone may be found, thus defeating the impossible triangle. The big-package tactic, however, won’t help the WTO confront 21st century challenges in a timely manner; for that, at least one of the triangle’s corners must be modified.
Simon J Evenett
With the return to economic growth of many industrialised economies in either late 2009 or the first half of 2010, combined with sustained expansions in the emerging market economies, came the hope that protectionist pressures would ease in the world economy through 2010.…
Jacques Melitz
CEPR Policy Insight No. 48 attributes the Greek-linked difficulty largely to the claim by the ECB and government officials in Eurozone member countries that the Eurozone is founded on fiscal discipline and the Stability and Growth Pact.
Francesco Paolo Mongelli
CEPR Policy Insight No. 47 argues that the benefits of a monetary union develop gradually over time and require policymakers to seize opportunities and perseverance in the face of adversity.
Simon J Evenett
Thanks to deft diplomatic footwork, a US-China confrontation over the renminbi has been avoided. But the US Treasury has merely postponed the publication of its report on foreign currency manipulators, and the dispute may overshadow the G20 meetings in June and November. The 28 short essays in this eBook provide the best available economic, legal, political, and geopolitical thinking on the causes and likely consequences of the dispute.
Francesco Paolo Mongelli
This new Policy Insight asks why countries would share a single currency, and addresses some aspects missing from the current debate on the benefits of the euro area.
Simon J Evenett
The latest GTA report examines whether macroeconomic stabilisation has altered governments' resort to protectionism, with a focus on the Gulf Region.
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Discussion Papers
Salvador Barrios, Harry Huizinga, Luc Laeven, Gaëtan Nicodème
Increased globalization and decreased trade barriers worldwide have led an increasing number of corporations to expand their activities internationally. The authors of CEPR DP7047 examine the effects of host and parent country taxation on the location decisions of these multinational corporations using a range of data from 33 European countries.
Enrico Moretti
The increase in the return to education is typically measured using nominal wages. The author of CEPR DP6997 looks at housing costs for high school and college graduates and discovers that, when looking at real as opposed to nominal wages, the return to education and the increase in inequality may be smaller than previously thought.
Barry Eichengreen, Katharina Steiner
Assuming that Poland does adopt the euro, will it be able to avoid the boom-bust cycle that has afflicted other economies around the time of euro adoption? The authors of CEPR DP7027 look at the causes of these cycles and ask whether Poland's situation is any different to those of its predecessors. Their conclusions are mixed.
Francesco C. Billari, Vincenzo Galasso
Why are couples in industrialized societies having fewer children than they used to? Indeed, why are they deciding to have children at all? The authors of CEPR DP7014 seek to address these issues, focusing on the two main motives for childbearing often cited: children as a 'consumption' vs. an 'investment' good.
Andrew Ellul, Marco Pagano, Fausto Panunzi
The authors of DP6977 investigate the effect of inheritance law on investment in family firms in 32 countries.
Kathleen Cleeren, Marnik G. Dekimpe, Katrijn Gielens, Frank Verboven
Discounters, such as Lidl, operate to offer 40-60% lower prices than conventional retailers, but how much of a competetitive threat to they pose to supermarket giants? In addition to analysing "inter-format" competition between traditional supermarkets and discounters, Verboven et al. examine the competitive effect between retailers of a similar kind and the effects that local conditions can have upon the success the the two formats.
Alberto Galasso, Mark Schankerman
The 'market for innovation' - the licensing and sale of patents - is one of the principal incentives for firms to invest in R&D. In CEPR DP 6946, Galasso and Schankerman set out to examine the impact that US developments have had on market efficiency, by studying the length of patent infringement disputes and find that the US system has performed surprisingly well in recent decades.
Antoni Estevadeordal, Alan Taylor
The link between greater openness to trade and higher growth, once held sacred by economists, has come under contestation in recent years. The authors of DP6942 develop a growth model with a basis for trade in order to uncover the impressive impact trade has had upon growth of GDP, using data from before and after the Uruguay Round.
Natalie Chen, Liam Graham, Andrew J Oswald
Higher energy prices are likely to reduce profitability of industry and thus could bring about an economic downturn. The authors of DP 6937 experiment with terrorist acts as an instrumental variable, in order to examine the relationship between the price of oil, terrorist incidents and the resultant effects on profitability and margins.
Betsey Stevenson, Justin Wolfers
Surveys that have attempted to measure the level of happiness in US citizens by means of a subjective response have unveiled decreases in happiness inequality. The authors of CEPR DP6929 have used these responses to analyse the level and dispersion of happiness within and between demographic groups over the period of 1972-2006.
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