Global crisis

Masayuki Morikawa, 23 November 2014

The appropriate level of public sector wages is debated frequently in every country, and the debate has intensified in the wake of the Global Crisis. This column presents evidence that regional wage differentials in Japan are greater in the private sector than in the public sector. In regions where public sector wages are relatively high, skilled individuals may self-select into public sector jobs. At the same time, public sector employers in metropolitan regions such as Tokyo may have difficulty in hiring high quality employees.

Iain M. Cockburn, Jean O. Lanjouw, Mark Schankerman, 22 November 2014

Patented pharmaceuticals diffuse across international borders slowly, and sometimes not at all. This column analyses the effect of patent protection and price regulation on the speed of and extent to which drugs enter new markets. There is a fundamental tradeoff between affordability – taking the form of low patent protection and strong price regulation – and rate of entry into a national market.

Viral Acharya, Sascha Steffen, 21 November 2014

The ECB estimated that Eurozone banks would face a capital shortfall of €25 billion in a severe crisis. Earlier work by the authors estimated the shortfall to be 30 times higher. This column argues that this striking divergence can be explained by the ECB’s reliance on static risk-weights. 

Ian Goldin, 21 November 2014

Global hyperconnectivity and increased system integration have led to vast benefits in terms of income, education, innovation and technology. Yet globalisation has also created serious concerns about how local events can so easily cascade over national borders to become crises that affect everyone. This Vox Talk discusses the widening gap between systemic risks and their effective management. Goldin argues that the new dynamics and complexities of globalisation are endemic and will potentially destabilise our societies unless they are addressed immediately and more effectively.

Angus Armstrong, Francesco Caselli, Jagjit Chadha, Wouter den Haan, 21 November 2014

Would the economic benefits of devolving full income tax powers to the Scottish Parliament and Welsh Assembly outweigh the costs? Not according to an overwhelming majority of respondents to the monthly survey of the Centre for Macroeconomics (CFM), summarised in this column. A smaller majority of CFM experts do not accept the economic case for establishing 'English votes for English laws' with the same tax and spending powers as the Scottish Parliament.

Other Recent Articles:

Events