Trade in intermediates (or ‘unbundling of production') and trade in capital have become increasingly important in last 25 years. This column shows that trade in intermediates generates a reallocation of capital across countries that exacerbates world inequality in both income and welfare. Unbundling of production hurts middle-income countries but helps those with high productivity. Trade in intermediates also increases within-country inequality, and this increase is U-shaped in the aggregate productivity level of the country.
Networks are important for transmitting knowledge among farmers, but it is not always easy or appropriate to identify the best farmers which whom to seed a new technology. The column shows that side-by-side demonstration plots for a new variety of rice are successful at inducing learning. This method makes it less important to identify the farmers best positioned to spread information and has the potential to target individuals who are not connected to influential farmers.
Does investment in schools promote higher educational attainment—and do the effects improve students’ later lives and those of the next generation? This column examines the impact of over 61,000 primary schools built by the Indonesian government between 1973 and 1979, almost doubling the number in the country. The evidence shows that the men and women who accessed education provided by the construction programme benefited from significant improvements in their educational and later life outcomes. So too did their children.
One way for a government to reassure investors of its willingness to repay is to give them a priority claim to state assets. It remains to be seen, however, whether such commitments are viewed as credible by market participants. This column investigates how markets responded to two such commitments. A commitment by the government of Spain did not affect yield spreads, while one by the government of Puerto Rico did. This may be because, as a sub sovereign, Puerto Rico faced higher constraints on its ability to renege.
Behind the headline economic growth in the US over the last five decades lie clear patterns of widening wealth inequality. This column shows that white, less-educated Americans born in the 1960s are worse off than the generation born 20 years previously, based on wage changes, increased medical costs, and shorter life expectancy. This disparity could be worth as much as $132,000.
Other Recent Columns:
- Globalisation and state capitalism
- Nature versus nurture in economic outcomes and behaviours
- How the structural transformation triggered the fertility transition
- Pecuniary and non-pecuniary motivations for tax compliance
- Licensing of standard essential patents
- Child penalties across countries: Evidence and explanations
- Speculation and the price of virtual currency
- The sound of many funds rebalancing
- Evolution or revolution: An afterword
- The roots of health inequality and the value of intra-family expertise
- How to design a stimulus package
- The global economy hit by higher uncertainty
- Gendered behaviour under psychological pressure
- Lending cycles and real outcomes: Costs of political misalignment
- Using global demand calibrations to evaluate policy
- How stress tests fail
- No Moore golden era for US monetary policy
- Immigration in the aftermath of the eastern enlargement
- How the Black Death changed Europe's cities
- International competition and national concentration
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20 - 20 May 2019 / Frankfurt am Main / SUERF - The European Money and Finance Forum Deutsche Bundesbank
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