Cecile Gaubert, 14 November 2018

In order to encourage economic growth and development, governments often put in place a range of policies aimed at attracting firms to specific areas of a country. Yet relatively little is known about their implications for efficiency.This column argues that such subsidies have costly long-run effects, both on the productive efficiency of the economy and in terms of welfare. Moreover, place-based policies do not necessarily decrease spatial disparities. 

Carlos Vegh, Guillermo Vuletin, Daniel Riera-Crichton, Juan Pablo Medina, Diego Friedheim, Luis Morano, Lucila Venturi Grosso, 14 November 2018

Emerging markets are especially vulnerable to a myriad of domestic and external risks. This column develops a framework to classify these risks based on their predictability and, hence, their insurability. As the probability of relatively large events increases, it becomes more to insure against such risks. In the extreme case in which countries face truly unpredictable and impactful events (or ‘black swans’), they must rely on building broad-based resilience or resorting to ex-post aid. 

Mitali Das, 13 November 2018

Evidence that routinisation lies behind labour market polarisation has been documented for many developed economies, but less is known about its impact in emerging markets. This column draws on national censuses and labour surveys for 160 countries between 1960 and 2015 to argue that although large-scale labour market dislocation is not imminent, emerging markets are becoming increasingly exposed to routinisation – and thus labour market polarisation – from the long-term effects of structural transformation and the onshoring of routine-intensive jobs.

Marco Del Negro, Domenico Giannone, Marc Giannoni, Andrea Tambalotti, 12 November 2018

Interest rates are at their lowest levels of the last 150 years in virtually all advanced economies. This column argues that this unprecedented environment reflects secular global forces that have lowered the trend in the world real interest rate by about two percentage points over the past 30 to 40 years. Whatever forces might lift real interest rates in the future must also be global, such as a sustained pickup in world economic growth, or a better alignment between the global demand and supply for safe and liquid assets.

Damian Clarke, Hanna Mühlrad, 12 November 2018

Women’s health is frequently cited when debating the merits of abortion legislation. However, the arguments are often based on evidence which is correlational or drawn from small or non-representative samples of women. This column explores the impacts of abortion legislation on women’s health using the universe of health records from Mexico, where abortion was legalised in the Federal District of Mexico while sanctions on abortion were increased in other regions of the country. It documents immediate reductions in rates of hospitalisation of women with the legalisation of abortion.

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