Steve Gibbons, Henry Overman, Teemu Lyytikainen, Rosa Sanchis-Guarner, 27 July 2017

New government policy initiatives aim to reverse the trend of declining investment in Britain’s road network. This column asks whether such investment generates economic benefits, either locally or nationally. Places with improved accessibility from new major roads over 1998-2008 experienced increases in the number of local firms and, consequently, higher local employment. At the same time, businesses already operating in these areas shed workers while maintaining existing levels of output, implying higher labour productivity.

Gino Gancia, Giacomo Ponzetto, Jaume Ventura, 26 July 2017

The number of countries in the world more than halved during the first wave of globalisation, but then rose significantly during the second. Border changes have been much more peaceful during this second wave, and this column asserts that these observations are consistent with a theory in which political structure adapts to expanding trade opportunities. Globalisation makes borders costly. In its early stages, borders are removed by increasing country size, while in later stages, the cost of borders is removed by creating peaceful economic unions, leading to a reduction in country size.

Thomas Baudin, David de la Croix, Paula E. Gobbi, 25 July 2017

The fertility of women in developing countries is higher on average than in developed countries, yet many women in developing countries remain childless. This column argues that understanding the causes of why some women choose childlessness is important if we wish to predict the impact that development policies have on the demographic transition of poor countries.

Howard Smith, Øyvind Thomassen, 24 July 2017

Many consumers buy multiple types of goods from a single location (or firm) to save on shopping costs, turning these goods into pricing complements. Using data from the UK, this column shows that the internalisation of these complementary effects by supermarkets greatly improves the competitiveness of grocery supply. It also argues that one-stop shoppers have a greater pro-competitive impact on supermarket pricing than multi-stop shoppers.

Keisuke Kondo, 23 July 2017

The large literature on agglomeration economies attests to the higher average productivity of firms in larger cities. However, this literature focuses on positive externalities, and a second potential mechanism – selection against less productive firms – has received little empirical attention. This column explores how these two mechanisms contribute to higher productivity in Japanese cities. Consistent with earlier work considering the case of France, no evidence for a selection effect is found.

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