The classic exchange-rate trilemma analysis argues that capital mobility, monetary autonomy and fixed exchange rates are incompatible. This column shows how policy trilemma analysis can be extended to other domains, specifically financial stability, political economy, and international relations. It argues that analysing these trade-offs can help to identify policy options that balance macroeconomic objectives and political realities in the face of globalisation.
Michael Bordo, Harold James, 06 April 2015
Nauro Campos, 13 June 2014
The 2014 FIFA World Cup is upon us. This column argues that there will be plenty of partying, but also plenty of protests fuelled by the gross mismanagement and limited economic benefits from hosting the Cup. Stadia may be ready, but much planned infrastructure has already been abandoned. Indeed, rent-seeking may be one reason nations bid for the Cup. Since the returns to transportation infrastructure are higher in poor countries, the international community should work to stamp out corruption so that poor countries can continue to host mega-events like the World Cup.
Jeffrey Frankel, 29 April 2014
Awareness of inequality is rapidly rising. This column argues that commentators should focus on identifying the policies that are best suited to improving income distributions efficiently, and the politicians that support them. It is not sufficient to sound the alarm about inequality and the political reach of the super-rich.
Jesús Fernández-Villaverde, Luis Garicano, Tano Santos, 24 March 2013
This paper studies the mechanisms through which the adoption of the euro delayed, rather than advanced, economic reforms in the Eurozone periphery and led to the deterioration of important institutions in these countries. The authors show that the abandonment of the reform process and the institutional deterioration, in turn, not only reduced their growth prospects but also fed back into financial conditions, prolonging the credit boom and delaying the response to the bubble when the speculative nature of the cycle was already evident.
Robin Burgess, Peter Potapov, Stefanie Sieber, Matthew Hansen, Benjamin Olken, 22 June 2012
Tropical deforestation accounts for almost one-fifth of greenhouse gas emissions worldwide and threatens the world's most diverse ecosystems. Failure to take into account (and adjust) the extraction incentives of local politicians and bureaucrats is likely to render ineffective efforts to conserve the last great areas of tropical forest in the world.
Ronald Mendoza, 11 March 2012
Inequality in the world’s poorest countries is considered one of the main barriers to development. But this column points out that the inequality is about much more than the über-rich and the destitute – it is about access to political power. This column looks at political dynasties, where leadership is passed down through family ties, to see if these are a cause of the persistent social and economic divides.
Rohini Somanathan, Stefan Dercon, Nzinga Broussard, 27 February 2012
Food aid can prevent starvation – but only if the neediest actually receive it. CEPR DP8861 examines how food aid in Ethiopian villages can be biased away from those who need it most. Households with greater local influence or groups targeted by international agencies often receive more than they need. Knowing more about these biases, the authors conclude, can improve distribution and save lives.
Uwe Sunde, Florian Jung, 30 May 2011
This paper revisits the seminal correlation first noted by SM Lipset in 1959: Almost without exception, stable democracies are economically well-developed. Why? The authors argue that democracy will stick only in fairly balanced economic environments. Distribution appears to matter for the longevity of democracy.
Giovanni Facchini, Max Steinhardt, 21 March 2011
Which legislators are more likely to vote for more liberal immigration policies for unskilled workers? The authors of CEPR DP8299 develop and empirically test a model which correlates the skill composition of constituent voters with their legislator's voting record on migration policy. The DP finds that representatives from districts with more high-skilled workers consistently vote for more expansive unskilled immigration policies.
Jordi Blanes i Vidal, Mirko Draca, Christian Fons-Rosen, 28 October 2011
This updated column, first published in October 2010, takes on new resonance following recent scandals in the UK surrounding allegations that lobby groups may have gained undue influence among senior politicians. The column investigates how much former US government officials cash in on their political connections when working as lobbyists. It finds that once the politician for whom they worked leaves office, lobbyists’ revenue falls 20% – suggesting that lobbyists are paid more for who they know than what they know.
Valentin Zahrnt, 22 July 2009
The 2013 Common Agricultural Policy reform will involve EU members competing with each other for subsidy funds. This column calculates potential CAP payments under three different reform scenarios to identify winners and losers. Several traditional defenders of the CAP are indeed likely to lose from reform, but other countries that defend the status quo would – surprisingly – gain from reform.
Matthew Kahn, Michael Cragg, 10 June 2009
What influences climate change policy? This column shows that a congressional district’s per capita carbon emissions and conservative ideology lower the probability that a representative votes in favour of a pro-environment bill, while county per capita income increases it.
Benjamin Cohen, 13 September 2008
Jeffrey Frankel and others predict that the euro could surpass the dollar as the premier international currency relatively soon. This column argues that predictions borne of economic formalism unrealistically neglect the political forces shaping international currencies. Politics may ensure the dollar’s dominance for some time.
Juan Manuel Puerta, 02 August 2008
Widespread child labour may slow economic development in a number of ways, and legislation reducing child labour might break such a poverty trap. Why is such legislation rare? This column looks at the historical experience of the United States in eradicating child labour and suggests that industries highly dependent on child labourers may be the political stumbling block.
Daron Acemoglu, Davide Ticchi , Andrea Vindigni, 16 June 2008
Encouraging democracy is one goal of most industrialised nations’ foreign economic policies. Formulating such policies requires an understanding of the political-economy logic governing democratic transitions. This column describes an important recent advance in theoretical thinking on the military’s role.
Giovanni Facchini, Anna Maria Mayda, 27 May 2008
Provided that the income gap between poor sending countries and rich destination countries continues to be very pronounced and transport and communication costs have drastically declined compared to one hundred years ago, it appears that restrictive migration policies are key determinants of the limited flows actually observed. The authors of CEPR DP6835 examine the process through which individual attitudes are mapped into these immigration policy outcomes in democratic societies.