Almut Balleer, Nikolay Hristov, Dominik Menno, 24 June 2017

Research into the aggregate effects of financial frictions in the economy generally assume that they do not affect whether (and which) firms adjust prices, something this column argues that should be taken into account. In particular, financial frictions change the composition of firms that reset prices and cause the degree of nominal price rigidity to vary over the business cycle, which has important consequences for how inflation and output respond to aggregate shocks.

Claudia Biancotti, Riccardo Cristadoro, Sabina Di Giuliomaria, Antonino Fazio, Giovanna Partipilo, 23 June 2017

Cybersecurity is becoming a vital concern for the functioning of a modern economy. This column argues that the threat of cyber attacks should be tackled economy-wide, with economic policies aimed at overcoming the externalities and information asymmetries that lead to suboptimal protection choices on the part of private agents. There is an urgent need for an improved understanding of microeconomic mechanisms in the cybersecurity market, and for reliable data upon which policy design can be based.

Mark Gradstein, Marc Klemp, 23 June 2017

A large literature has argued that natural resources have a negative effect on economic development. The Brazilian data used in this column fail to confirm these findings. Economic activity, as measured using night-time light data, increases more during periods of rising oil prices in localities with better access to oil.  Oil revenue windfalls accruing to oil-rich locations and spillovers to adjacent locations drive this effect. 

The Editors, 22 June 2017

VoxEU is pleased to announce the launch of its new sister site – VoxDev.org. VoxDEV will focus on development issues, posting research-based analysis and commentary by leading economists. The Editor-in-Chief is Tavneet Suri, Professor of Economics at MIT.

Jean-Charles Bricongne, Alessandro Turrini, 22 June 2017

Since 2011, EU macroeconomic surveillance has aimed at preventing or correcting the type of imbalances that were responsible for the Global Crisis. Surveillance under the Macroeconomic Imbalance Procedure implies regular reports and policy recommendations monitored by the Commission, and the possible activation of economic sanctions. This column shows that, despite the procedure not having been used to its full extent so far and the sanctions stage not having been reached yet, the surveillance and recommendations have had an impact on policies in the first years of implementation. 

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