Global economy

Julian Kozlowski, Laura Veldkamp, Venky Venkateswaran, 11 September 2016

The Great Recession has had long-lasting effects on credit markets, employment, and output. This column combines a model with macroeconomic data to measure how the recession has changed beliefs about the possibility of future crises. According to the model, the estimated change in sentiment correlates with economic activity. A short-lived financial crisis can trigger long-lived shifts in expectations, which in turn can trigger secular stagnation.

Mario Crucini, Gregor Smith, 05 September 2016

Commodity price convergence is often seen as the best way to measure the integration of markets that defines globalisation. This column reviews research on historical prices and also presents intranational evidence from Sweden from 1732 to 1914. Price convergence appears to date to the 18th century, well before the adoption of the telegraph or the railway. For emerging economies today, intranational price convergence arising from declining internal distance effects may be a precursor to globalisation.

Rabah Arezki, 18 August 2016

The dramatic and largely unexpected collapse in oil prices has sparked intense debate over the causes and consequences. This column argues that a broader energy perspective is now needed to comprehend oil’s long-term outlook, and provides answers to several questions about the oil market in the global economy.

Roberto F. Aguilera, Marian Radetzki, 17 August 2016

After decades of oil price rises, new extraction techniques for shale and conventional deposits mean that recent dramatic price falls will be here to stay. This column argues that, even with oil at $50 a barrel, global producers will invest to catch up with US-led technological innovation and so add 40 million barrels a day to production by 2035. This will revolutionise domestic energy policymaking, environmental commitments and global geopolitics.

Kevin O'Rourke, 07 August 2016

After the Brexit vote, it is obvious to many that globalisation in general, and European integration in particular, can leave people behind – and that ignoring this for long enough can have severe political consequences. This column argues that this fact has long been obvious. As the historical record demonstrates plainly and repeatedly, too much market and too little state invites a backlash. Markets and states are political complements, not substitutes

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