The payment landscape is changing. This column goes back to late 19th century France to explore the implications of this more decentralised and less banked landscape for the design of central banks’ interventions when fighting financial crises. The Banque de France operated a very wide discount window and used a variety of risk management techniques to effectively subdue risk-taking behaviours and to protect its balance sheet from taking any loss. This helped it to stabilise the economy and to overcome the consequences of negative income shocks.
In the early days of his administration, Brazilian President Jair Bolsonaro announced plans to privatise several of the country's largest state-owned enterprises and airports. Fearing such a move would lower both wages and employment, labour unions organised in opposition to Bolsonaro’s plans. This column looks anew at evidence testing whether privatisation offers more than merely an immediate infusion of revenue, and finds that while increases in efficiency might contribute to Brazil’s overall economic growth, privatisation could also expose the country’s most vulnerable workers to significant risk of decreased wages.
Is the rise of ‘atypical’ work arrangements – such as self-employment, freelancing, gig work and zero-hour contracts – a result of workers wanting such jobs or because they have no other choice? This column reports evidence from the UK and the US that while atypical workers may like flexibility, they would prefer a steady job. Indeed, workers would agree to earn less in order to increase their employment security.
Food security is a concern even in industrialised countries, with 14.5% of US households lacking food security during at least some of the year 2012. This column examines the impact of Walmart Supercenters’ entry into the local market and finds that it improves food security, especially among low-income households and households with children. It suggests that the unintended consequences of policies aimed at thwarting Walmart’s market entry may reduce food security for the most vulnerable segments of society.
Modern monetary theory (MMT) has recently gained prominence in light of doubts about the effectiveness of monetary policy in addressing economic shortfalls. This column assesses the implications of implementing the theory’s policy prescriptions, and the challenges it presents in the case of Japan – an economy that some have argued has already been subject to such policy. Japan’s labour shortages and low inflation mean modern monetary theory’s fiscal stimulus suggestions may be harder to implement than they initially seem.
Other Recent Columns:
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- A stronger EU legal framework is not enough to foster national compliance
- The paradox of global thrift
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- Adoption of automation technologies
- The effects of global warming on rural–urban migrations
- Taking Malthus seriously
- Intergenerational mobility in Italy
- Welfare effects of the Belt and Road Initiative
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- The effect of fake news on populist voting
- How tariff hikes may trigger re-routing circumvention
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