Christian Ebeke, Kodjovi Eklou, 19 January 2018

The economics profession has generally explained large movements in macroeconomic aggregates such as GDP or employment by shocks to other aggregates. This is in part due to the difficulty of translating micro or localised shocks into macro-relevant ‘news’. This column argues that idiosyncratic shocks at the biggest European firms are behind 40% percent of aggregate GDP fluctuations in Europe. These results have implications for the effectiveness of traditional demand-side policies in the fine-tuning of granular economies.

Eugenio Proto, Aldo Rustichini, Andis Sofianos, 19 January 2018

Three attributes are often suggested to generate cooperative behaviour – a good heart, good norms, and intelligence. This column reports the results of a laboratory experiment in which groups of players benefited from learning to cooperate. It finds overwhelming support for the idea that intelligence is the primary condition for a socially cohesive, cooperative society. Warm feelings towards others and good norms have only a small and transitory effect.

Robert Feenstra, Hong Ma, Akira Sasahara, Yuan Xu, 18 January 2018

International trade has become a focus of political debates in the US and around the world, but while previous studies focus on the job-reducing effect of the surging imports from China or other low-wage countries on the US employment, the job-creating effect of exports has receive much less attention. This column employs two approaches – an instrumental variable regression analysis and a global input-output approach – to argue that the negative effects of import competition on US employment are largely balanced out once the country’s job-creating export expansion is taken into account.  

Colin Mayer, Stefano Micossi, Marco Onado, Marco Pagano, Andrea Polo, 18 January 2018

This column draws on a new book presenting the results of a two-year research programme that brought together leading economists from around the world to examine whether finance and public policy contributed to the deep and prolonged decline in European investment after the financial crisis. The findings point consistently to the importance of debt overhang as a contributory factor and the role of both tax and regulatory policy in exacerbating the problems.

Emek Basker, Timothy S. Simcoe, 18 January 2018

ICT fuelled rapid growth in US retail during the 1990s and 2000s. This column maps the adoption of universal product codes and scanners to show that the barcode was one of the main drivers of this growth. Companies adopting barcodes employed 10% more employees, delivered a wider range of products, and were more likely to procure from abroad.

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