Frontiers of economic research

Alexander Gelber, Adam Isen, Judd B. Kessler, 25 January 2015

Among different youth employment programmes, summer employment programmes have received relatively little attention. This column looks at the effects of the New York City’s summer youth employment programme – the largest programme of this kind in the US – on a number of outcomes. Whereas the programme did not raise later earning or college enrolment, it decreased the probability of incarceration and mortality. This is a new, often neglected, large benefit from a youth employment programme. 

Marco Annunziata, 23 January 2015

The European Central Bank has just launched full-fledged quantitative easing. This column argues that the ECB’s watershed decision highlights both the strengths and the persistent vulnerabilities of the Eurozone. The limited-risk-sharing provision flags the need for greater fiscal union; and governments should use the respite that QE provides to launch much-needed structural reforms.

Valerie Ramey, Sarah Zubairy, 23 January 2015

There is no consensus among economists about the size of the multiplier of government purchases. It is not clear either how multipliers vary with the state of the economy. This column presents new evidence on this issue using large historical data set from the US. The findings suggest that there is no evidence that fiscal multipliers differ by the amount of unemployment or the degree of monetary accommodation. 

Laura Alfaro, Anusha Chari, Fabio Kanczuk, 22 January 2015

Capital controls are back in fashion. This column discusses new firm-level evidence from Brazil showing that capital controls segment international financial markets, reduce external financing, and lower firm-level investment. They disproportionately affect small, non-exporting firms, especially those more dependent on external finance. This suggests that macro-finance models focusing on aggregate variables are missing an important dimension by abstracting from firm-level heterogeneity. 

Emmanuelle Maincent, Andras Rezessy, Mirco Tomasi, 22 January 2015

Shale gas exploitation in the US has changed the competitiveness landscape for energy intensive industries. Prices are only part of the picture. We propose an indicator – ‘Unit Energy Cost’ – reflecting productivity and the evolution of energy prices per unit consumed. The good performance of European industries can be explained by their relatively low energy intensity (high energy productivity). The US and China are catching up – this calls for renewed efforts to limit price growth, and further improvements in intensity performance.

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