Global governance

Giacomo De Luca, Roland Holder, Paul Raschky, Michele Valsecchi, 21 July 2016

Ethnic favouritism is widely regarded as an African phenomenon, or at most a problem of poor and weakly institutionalised countries. This column uses data on night-time light intensity to challenge these preconceptions. Ethnic favouritism is found to be as prevalent outside of Africa as it is within, and not restricted to poor or autocratic nations either. Rather, re-election concerns appear to be an important driver of the practice.

Martin Koppensteiner, Marco Manacorda, 18 April 2016

Stress and violence during the nine months in utero has been widely shown to have important effects on child development. To date this research has largely focused on extreme and relatively rare events. This column uses data from Brazil to explore how exposure to day-to-day violence can affect birth weight. The birth weight of newborns whose mothers are exposed to a homicide during their first trimester is significantly lower. This effect is smaller for mothers who live in more violent neighbourhoods, consistent with the interpretation that violence is more stressful when it is rare. 

Jeffrey Frankel, 09 December 2015

Calls for coordination of macroeconomic policy have made a comeback since the Global Crisis. This column reviews this return of international policy coordination, both in terms of fiscal and monetary policy. It discusses recent developments and considerations in fiscal and monetary policy games, and cautions that most but not all calls for coordination are useful. 

Aida Caldera, Mikkel Hermansen, Oliver Röhn, 19 September 2015

The Global Crisis and its high costs have revived interest in early warning indicators of economic risks. This column presents a new set of indicators to detect vulnerabilities and assess country-specific risks of suffering a crisis. The empirical evidence confirms the usefulness of the vulnerability indicators in warning of severe recessions and crises in OECD countries. But indicators are no silver bullet and should be complemented with other monitoring tools, including expert judgement.

Alan Auerbach, Yuriy Gorodnichenko, 10 May 2015

The impact of fiscal policy on exchange rates is of key interest to policymakers. This column argues that unexpected government spending instantly affects exchange rates. The finding, based on daily data reporting of the US Defence Department, may suggest that unexpected government spending has broader macroeconomic effects as well. The results, however, do not hold is low-frequency data are used instead.

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