The Industrial Revolution has been of vast benefit to humanity, but it came at the cost of a global explosion in anthropogenic emissions of greenhouse gases. The UK was the first country into the Industrial Revolution. Now it is one of the first countries heading out, with annual CO2 emissions per capita back below the levels of the 1860s. This column presents an econometric model of UK emissions over the last 150 years to establish what has driven them down and reveal the impacts of important policies, especially the Climate Change Act of 2008. Even so, large reductions in all the UK’s CO2 sources are still required to meet its 2050 target of an 80% reduction from 1970 levels.
News affects the yield curve, but OLS regressions based on observed news have been able to explain only 40% of the movement, at best. This column proposes a method for estimating unobserved news as well. The results suggest that news explains more or less all of the yield curve changes in event windows, and that more should be done to understand the economics behind this relationship.
Macroprudential tools have been implemented widely following the Global Crisis. Using data from 900,000 firms in 49 countries, this column finds that such policies are associated with lower credit growth during the period 2003-2011. The effects are especially significant for micro, small and medium-sized enterprises and young firms that are more financially constrained and bank dependent. The results imply a trade-off between financial stability and inclusion.
The fear that technological innovation will increase unemployment is not new, and various theories in response suggest technology does not necessarily pose a threat to jobs. This column goes one step further, arguing that because automation requires rising wages and that requires increasing the set of labour tasks, innovation should ultimately reduce unemployment.
Lending-based crowdfunding platforms represent an opportunity for financial intermediation that is less leveraged, less prone to runs, and easier to resolve. This column reviews the regulatory regimes for such platforms in OECD countries and the European Commission’s proposal for the EU-wide passporting regime. Regulation requires a balance to be struck between a flexible approach that allows experimentation and strong supervision to address market failures.
Other Recent Columns:
- The rise of intangible income: A global value chain perspective
- Labour market flexibility during financial crises
- How conflict disrupts the economy
- Leverage-induced fire sales and stock market crashes
- Markets, banks, and shadow banks
- Voter bias and women in politics
- The case for a central fiscal capacity in EMU
- The impact of the EU’s free movement of people principle on migration
- Drivers of commodity price booms and busts in the long run
- Socioeconomic and gender dimensions to inequality in life expectancies across Europe
- Challenges to manufacturing workers in the wake of globalisation
- The macroeconomic benefits of gender diversity
- Going the extra mile: Distant lending and credit cycles
- Inheritance taxation and wealth effects on the labour supply of heirs
- Japan’s age wave: Challenges and solutions
- State-dependent effects of monetary policy
- Per capita income, consumption patterns, and carbon dioxide emissions
- Market liquidity, leverage, and regulation ten years after the crisis
- A more stable EMU does not require a central fiscal capacity
- How multinational banks transmit shocks
Most Read
Vox eBooks
Vox Talks
Events
-
13 - 15 December 2018 / Seoul, South Korea / Asian and Australasian Society of Labour Economics (AASLE)
-
15 - 15 March 2019 / London, Royal Society / UK Network of Environmental Economists (UKNEE)
-
28 - 29 March 2019 / European Central Bank, Frankfurt / European Central Bank and the University of Ohio
-
28 - 29 March 2019 / Paris / SUERF - The European Money and Finance Forum Banque de France (BDF)
-
16 - 17 May 2019 / University of Minho, Guimarães, Portugal / School of Engineering, University of Minho
