Europe's nations and regions

Elisa Gamberoni, Christine Gartner, Claire Giordano, Paloma Lopez-Garcia, 21 October 2016

Economists have argued that corruption in business can potentially grease the wheels of an economy. This column presents evidence from nine Central and Eastern European countries on the effects of bribes on the efficiency with which production factors are allocated across firms. The impact of corruption on capital and labour misallocation is larger the smaller the country, the lower its political stability and the weaker the quality of its regulation. This is evidence against the ‘grease the wheels’ hypothesis.

Jason Lu, Coen Teulings, 21 October 2016

The decline in real interest rates over the past several decades has been the subject of intense policy debate. This column argues that, with the current demographic profile of large older cohorts leading to a population that is disproportionately biased towards saving, we can expect real interest rates to remain low or negative for another 10 to 15 years. The only way for the Eurozone, in particular, to accommodate these excess savings may be to raise its sovereign debt levels.

Nauro Campos, Corrado Macchiarelli, 19 October 2016

Explanations for the Eurozone Crisis rely on the notion of cross-country asymmetries. The core-periphery pattern to the EU was first established by Bayoumi and Eichengreen in 1993, prior to the Eurozone. This column replicates their approach to explore whether the euro has strengthened or weakened this pattern. A new ‘coreness index’ indicates that the core-periphery pattern has weakened, and that a new, smaller periphery has emerged.

Espen Henriksen, Knut Anton Mork, 18 October 2016

The ‘Oil Fund’, Norway’s sovereign wealth fund, is the world’s largest at more than $850 billion. The economic gains from the establishment of the fund have come from applying core insights to improve the risk-return trade-off for the nation’s total wealth. This column presents the recommendations of a government-appointed committee for the strategy of the fund going forward that build on the same core principles.

Christian Dippel, Robert Gold, Stephan Heblich, 07 October 2016

The increasing polarisation of politics in the US in particular has spurred scholarly research on the potential links to increasing globalisation. This column focuses instead on Germany to investigate whether the rise of right-wing populism is associated with increased international trade. Regions most threatened by exposure to imports saw increases in support for far-right parties, while regions that benefited from export opportunities saw decreases. To counter this globalisation backlash, policy should aim to cushion the effects of trade exposure on the losers from globalisation. 

Other Recent Articles: