September 2019

French, Jones, Kelly, McCauley, 22 September 2019

Caring for those at the ends of their lives can be expensive for both governments and households. Long-term care may impose additional costs, particularly when decedents are older or suffer from disabling chronic conditions.  This column shows that in most developed countries, including the US, end-of-life expenses only constitute around 10% of aggregate medical spending,and that such expenditures on formal medical services are reasonably well-insured. The extent of insurance for long-term care, on the other hand, varies substantially.

Samans, 22 September 2019

The world’s climate change strategy and the global trading system are both in need of an infusion of fresh momentum. This column argues that the climate and trade diplomatic communities need each other more than they know, and it is time to bring them together. The best way to reinvigorate both climate and trade diplomacy is to think and act outside the box of the Paris Agreement and conventional free trade agreements and push for low-carbon trade agreements.

Graddy, 21 September 2019

The auction market provides important information regarding prices to a host of players, including buyers, sellers, investors, students of art history, and even economists. Already dominating the high-end public auction system in art, Christie’s and Sotheby’s have recently been making a significant push into private sales. This column examines the potential implications of this move for the art market and whether it may decrease competition.

de Soyres, Gaillard, 21 September 2019

The recent increase in business cycle synchronisation is significantly associated with trade in intermediate inputs. This is an important consequence of global value chains, but we cannot understand it if we use a model in which real GDP movements are simply decomposed into changes in technology and factor supply. This column argues that accounting for profits and extensive margin adjustments reconciles theory and data and enriches our understanding of what makes countries interdependent, offering the first quantitative solution to the 'trade co-movement puzzle'.

Ampudia, Beck, Beyer, Colliard, Leonello, Maddaloni, Marques-Ibanez, 20 September 2019

The decade since the Global Crisis has seen notable changes in the architecture of supervision, with separation of responsibility for monetary and financial stability having been reversed in many countries on the one hand, and a move towards more cross-border cooperation between supervisors on the other. This column discusses these two trends in Europe, where responsibility for supervision of the largest banks is housed in the same authority with responsibility for monetary policy, the ECB. It argues that the Single Supervisory Mechanism is a good reflection of the subtle economics of supervisory architecture and the many trade-offs that have to be taken into account.

Bergbauer, Jamet, Schölermann, Stracca, Stubenrauch, 20 September 2019

Recent successes of populist movements in Europe might seem to reflect eroded trust in the EU’s institutions. This column asks what global lessons can be drawn from recent research on Euroscepticism at the ECB and elsewhere. It argues that taking citizens’ concerns seriously and addressing salient issues, building on a sense of togetherness, and caring about public trust should inspire a course of action at the global level. Insufficient progress along these dimensions has played a key role not only in Brexit, but also in the backlash against the multilateral world order underpinning globalisation.

Berg, Furrer, Harmon, Rani, Silberman, 20 September 2019

Cross-border, digital labour platforms permit real-time hiring for a range of jobs, from IT programming to graphic design, copywriting and routine clerical tasks. But little is known about working conditions on these platforms or about their employees. This column begins to fill that gap in the scholarship using an ILO survey of 3,500 workers from 75 countries and five major microtask platforms. It finds that even workers who perform valuable labour for successful companies often do so for low wages and without the protections of a regulated employment relationship.

Owan, 19 September 2019

Many Japanese companies complain about a shortage of qualified workers. This column argues that the difficulty is partly driven by flawed recruitment practices and suggests improvements to the hiring process. For example, customised aptitude tests and team-based structured interviews could help remedy the situation. 

Dragan, Ellen, Glied, 19 September 2019

The pace of gentrification in US cities has accelerated, but little evidence exists on its impact on low-income children. This column uses Medicaid claims data to examine how gentrification affects children’s health and wellbeing in New York City. It finds that low-income children born in areas that gentrify are no more likely to move than those born in areas that don't gentrify, and those that do move tend to end up living in areas of lower poverty. Moreover, gentrification does not appear to dramatically alter the health status or health-system utilisation of children by age 9–11, although children growing up in gentrifying areas show somewhat elevated levels of anxiety and depression.

Bielecki, Brzoza-Brzezina, Kolasa, Makarski, 18 September 2019

The boom-bust cycle in the euro area periphery has almost toppled the euro. This column suggests that region-specific macroprudential policy could have substantially smoothed the credit cycle in the periphery and reduced the build-up of external imbalances. In contrast, common monetary policy could have stabilised output in both the periphery and the core slightly better, but it would have been incapable of significantly influencing either housing markets or the periphery’s trade balance. The column also offers policy guidelines in case internal imbalances should arise again in the euro area. 

Johnston, Kuchler, Stroebel, Wong, 18 September 2019

Our consumption decisions are affected by our friends, but how large is the effect? The column uses Facebook data to show that when a person buys a new phone, the peer effects that tempt friends to purchase too are large and long-lasting. The effects are strongest for the young and less educated. Peer effects may also cause friends to switch operating systems when they buy new phones.

Koijen, Koulischer, Nguyen, Yogo, 18 September 2019

Recent economic performance in the euro area has once again raised the possibility of the ECB conducting asset purchases. This column sorts security-level portfolio holdings data by investor type and across countries in the euro area to study portfolio rebalancing during the ECB purchase programme from 2015-17. There was a material difference in the impact on investors by geography – with foreign investors selling more than half of purchases.

Oswald, Stern, 17 September 2019

Action on climate change is arguably the greatest challenge for public policy of our times. But despite economic forces being the major driver of the carbon dioxide problem, this column argues that economists have so far been too silent on the subject. For example, the Quarterly Journal of Economics, the most-cited journal in economics, has never published an article on climate change. Good economics can and should play a fundamental role in guiding the policy framework that will influence investment decisions in the coming years, so it is important that the profession dramatically increases its work now.

Baker, Bloom, Davis, 17 September 2019

Tariff threats, hikes, and retaliations have become a major source of economic uncertainty and stock market volatility. This column draws on three initiatives to demonstrate that recent rise in trade policy uncertainty, driven by the US withdrawal from the Trans-Pacific Partnership, tariff hikes on US steel and aluminium imports, ongoing Brexit uncertainty, and escalating US-China trade tensions, is extraordinary by several metrics. 

Xu, Voth, 16 September 2019

People in power may use their discretion to hire and promote family members and others in their network. While some empirical evidence shows that such patronage is bad, its theoretical effects are ambiguous – discretion over appointments can be used for good or bad. This column examines the battle performance of British Royal Navy officers during the Age of Sail and finds that patronage ‘worked’. On average, officers with connections to the top of the naval hierarchy did better on every possible measure of performance than those without a family connection. Where top administrators have internalised meritocratic values and competition punishes underperformance, patronage may enhance overall performance by selecting better individuals.

Kinzius, Sandkamp, Yalcin, 16 September 2019

Since the inauguration of Donald Trump as the president of the US, the world has observed an unprecedented rise in border tariffs. This column shows that trade protection had in fact started much earlier, in the form of non-tariff barriers. An empirical analysis reveals that the average trade dampening effect of such barriers is comparable to that of trade defence instruments such as anti-dumping duties. However, this negative effect can be mitigated by free trade agreements.

Pérez, 15 September 2019

The US and Argentina were the two most common destinations for Italian migrants in the early 20th century. But their experiences as immigrants in each country differed widely. Italians in Argentina became homeowners and were less likely to be employed as unskilled labourers than they were in the US, where they had uncommonly low family incomes and rates of home ownership. This column examines the source of these differences and seeks to understand why so many Italians chose to settle in a country that offered them limited prospects for upward mobility.

Ager, Eriksson, Hansen, Lønstrup, 15 September 2019

Recent research has demonstrated that the location of economic activity is not uniquely determined by locational fundamentals and multiple steady states do exist. One important question in this context is under what circumstances a large enough historical shock can change the spatial distribution of economic activity. This column uses the example of the 1906 San Francisco earthquake to demonstrate that high geographic mobility is one of the reasons why a temporary but large shock can influence the evolution of relative city sizes even in the longer run. 

Bau, 14 September 2019

Families’ attitudes towards educational investment and lifetime saving are underpinned by longstanding cultural attitudes that must be considered in policy design. This column shows that in Indonesia and Ghana – two culturally distinct societies – families historically invested in the education of those children who would look after parents in old age. The level of this investment declined after the introduction of pensions in both countries.

Bekkouche, Cagé, 14 September 2019

There is growing concern that money has corrupted politics. The column uses data from French elections since 1993 to show that an increase in spending per voter has consistently increased a candidate’s vote share. Caps on spending may increase this impact, as marginal effects are large. The price of a vote varies widely, and is most expensive for the extreme right. 

Javorcik, 13 September 2019

Economists argue whether foreign direct investment in developing economies exports pollution or generates green growth. Beata Javorcik talks to Tim Phillips about a surprising conclusion from factory-level research.

Aghion, Bergeaud, Cette, Lecat, Maghin, 13 September 2019

The impact of access to credit on productivity is not as straightforward as it seems.This column introduces a model that emphasises the coexistence of two opposing effects. Tighter access to credit makes it more difficult for entrepreneurs to invest and innovate, with detrimental long-run effects on productivity. But it also drives less efficient incumbent firms out of the market, easing the entry of new and potentially more efficient innovators. Combining these two opposite effects, the overall relationship between credit access and productivity takes the shape of an inverted-U.

Chen, van Ours, 13 September 2019

In January 1998, registered partnerships were introduced in Dutch law for both same-sex and different-sex couples. A few years later, in April 2001, the Netherlands became the first country to legalise same-sex marriage. There is little economic or legal difference between registered partnerships and marriage (regarding taxes, for instance, property or inheritance). Given those practical similarities, this column suggests that the symbolism of marriage (the public commitment and sense of prestige and achievement it confers) encourages long-term relationship stability in ways that registered partnerships do not.

Caruso, Reichlin, Ricco, 13 September 2019

One of the most cited books written in the aftermath of the 2008 financial crisis, which documents the special characteristics of recessions associated with financial crises over time and across countries, is titled “This time is different”. This column argues that the joint behaviour of the public deficit and public debt in the euro area from 2008 to 2013 – characterised by high and persistent public debt despite a severe fiscal consolidation since 2009 – cannot be explained by the unprecedented collapse in output and the historical relationship between macroeconomic, fiscal and financial variables. Rather, it reflects specific characteristics of the crisis years and the size and nature of the public support to the financial sector. 

Decarolis, Rovigatti, 12 September 2019

The concentration in the supply of online advertisement space among a few tech giants has led to their careful scrutiny by competition authorities in both the EU and the US, and some large fines for abuse of dominant position. This column discusses new evidence suggesting that, even without these policy interventions, the market is changing in ways that are reducing the ability of the ad space sellers to gain from their dominant position. Advertisers’ increasing delegation of their ad purchases to demand-side intermediaries has generated a countervailing buyer power capable of leading to marked reductions in online ad prices. 

Cecchetti, Schoenholtz, 12 September 2019

Most financial experts know that LIBOR will likely cease at the end of 2021. Yet, it remains by far the most important global benchmark interest rate, forming the basis for an estimated $400 trillion of contracts. This column examines the US dollar LIBOR transition process, highlighting both the substantial progress and the major obstacles that still lie ahead. Regulators in the US and elsewhere are well aware of the risks of delay and are now pushing hard for LIBOR users – especially financial institutions and markets under their supervision – to prepare for a world without LIBOR.

Bessen, 12 September 2019

Do industries shed or create jobs when they adopt new labour-saving technologies? This column shows that manufacturing employment grew along with productivity for a century or more, and only later decreased. It argues that the changing nature of demand was behind this pattern, which led to market saturation. This implies that the main impact of automation in the near future may be a major reallocation of jobs, not necessarily massive job losses.

Niepelt, 12 September 2019

Plans by Facebook and its partners to launch a global digital currency have the FinTech sphere buzzing with rumours, and regulators, central banks, and ‘old finance’ worried. This column, part of the Vox debate on the future of digital money, argues that while we may be witnessing a seismic shift in the monetary system, Libra’s role in that shift will be an indirect one. By taking the status quo option off the table, Libra or its next best replica will force monetary authorities and regulators to choose between central bank-managed digital currency and riskier private digital tokens.

Ichino, Olsson, Petrongolo, Thoursie, 11 September 2019

Gender identity norms are possible drivers of persistent gender inequalities in the labour market, but the extent to which such norms restrict the behaviour of couples is debated. This column examines how households in Sweden changed their allocation of home production in response to the introduction of a tax credit that altered the marginal tax rates (and the relative take-home pay) in different ways for spouses in couples. It finds that immigrant couples, who tend to come from countries with more traditional gender norms than Sweden, responded more strongly to a reduction in the husband’s tax rate than the wife’s. By not responding to wives’ tax cuts, these couples may forgo as much as £2,000 per year in household disposable income.

Klemann, 11 September 2019

Taken together, the economies of the Nazi-occupied countries were roughly twice the size of the German economy, but Berlin obtained less than 30% of its war expenditures from them. This column, part of a Vox debate on the economics of WWII, argues that in that sense exploitation failed, but the way Germany tried to exploit its empire had important consequences. In Western Europe, where productivity was higher and Berlin took a substantial share of production, mortality was limited and postwar recovery was rapid. In Poland and the USSR, where productivity was lower, continuous warfare and Nazi racism spread destruction and raised mortality, impeding recovery.

Mäkinen, Sarno, Zinna, 11 September 2019

During the recent financial crises, government guarantees helped reduce the funding costs of banks by providing them with insurance, thus curbing panic in banking systems and financial markets. This column argues, however, that these beneficial effects can be attenuated when guarantees are risky in the sense that they offer weaker protection in recessions, when the guarantor is more vulnerable, or the guarantees are less certain. Using a large international panel of banks, a significant risk premium is found to be associated with implicit government guarantees.

Barwick, Kalouptsidi, Zahur, 11 September 2019

Despite the prevalence of industrial policies around the world, few empirical studies directly evaluate their welfare consequences. This column reveals that the scale of China’s industrial policy targeting the shipbuilding industry is massive, with the lion’s share going to entry subsidies. The effectiveness of different policy instruments is mixed, and the efficacy of industrial policy is significantly affected by the presence of boom and bust cycles, and by heterogeneity in firm efficiency. The ‘white list’ of firms chosen for government support did not include the most efficient firms. 

Eugster, Jaumotte, MacDonald, Piazza, 10 September 2019

Bilateral trade balances have come under scrutiny recently, with some policymakers concerned that their large and rising size may reflect asymmetric obstacles to trade. This column argues that macroeconomic factors – rather than bilateral tariffs – have been the key drivers of the evolution of bilateral trade balances. While tariffs have played a modest role in the evolution of bilateral balances, declines in tariffs have lifted productivity by allowing a greater international division of labour, including through participation in global value chains. A sharp increase in tariffs would therefore create significant spillovers, leaving the global economy worse off. 

Felbermayr, Teti, Yalcin, 10 September 2019

Rules of origin exist to avoid trade deflection, but they distort global value chains and are costly to abide by. This column shows empirically that in preferential trade agreements, trade deflection is unlikely to be profitable because tariffs are generally low, that countries in a common free trade agreement tend to have similar external tariff levels, and that when tariff levels differ, deflection is profitable at most for one country in the pair. Moreover, transportation costs create a natural counterforce. It appears that rules of origin are primarily used to limit trade, and hence represent an instrument for trade protection. 

Inoue, Todo, 10 September 2019

Natural disasters can have enormous economic consequences that affect firms both directly and indirectly. Using the example of the Great East Japan Earthquake, this column investigates how the propagation of shocks varies with the characteristics of supply chains. It finds that the indirect effects are far larger than the direct effects. Shocks propagate more widely and are more persistent if supply networks have complex cycles and low input substitutability.

Grosjean, 09 September 2019

How did WWII shape our views about the state, and about each other? This column, part of a Vox debate on the economics of WWII, uses individual-level data from more than 35,000 individuals in 35 countries to shed light on how wartime victimisation has shaped political and social preferences in the long run. Personal or family exposure to war violence has left a negative and enduring imprint on levels of political trust throughout Europe and Central Asia, regardless of the outcome or nature of the conflict.  It also spurred collective action, but of a dark nature – one associated with further erosion of social and political trust.

Stavins, 09 September 2019

Environmental economist Martin Weitzman passed away in August. This short intellectual biography and personal remembrance, by his long-time co-host of the Harvard Seminar on Environmental Economics and Policy, outlines how his contributions have advanced the thinking of environmental economists and policymakers on many fundamental issues, including policy instrument choice, discounting, species diversity, and environmental catastrophes. Across the board, the example of his rigorous and often ingenious work set high standards for theorising in environmental economics and thereby served to elevate the entire field.

Collyns, Loungani, 09 September 2019

Unconventional monetary policies were used extensively to deal with the Global Crisis. This column presents the results of a study by the IMF’s Independent Evaluation Office which assessed the value provided by the IMF in its advice on unconventional monetary policies over the past decade. While in many ways the IMF’s response to an unprecedented challenge to monetary policymakers was impressive, limited depth of expertise on monetary policy issues and high turnover of country teams were an issue. The IMF could have also done more to explore alternative policy mixes and to support better smaller advanced economics and emerging markets.

Gros, 09 September 2019

Traditional analysis of tariffs in a partial equilibrium setting can tell us much about the welfare consequences of the US-China trade war. The column argues that, as tariffs ratchet up, welfare costs for both sides increase disproportionately. The cost of trade diversion in the US to less-efficient suppliers likely overwhelms any terms-of-trade gain the US might enjoy. In all cases, exporters in the rest of the world benefit.

Adrian, Mancini-Griffoli, 09 September 2019

New entrants are vying to occupy the space once used by paper bills. This column, part of the VoxEU debate on the future of digital money, proposes a simple framework to make sense of who is attempting to pry our wallets open. It argues that the adoption of new digital means of payment could be rapid and bring significant benefits to customers and society, but that the risks must be tackled with innovative approaches and heightened collaboration across borders and sectors. One approach is for central banks to engage in a public–private partnership with fintech firms to provide a safe, liquid, and digital alternative to cash: synthetic central bank digital currency.

Colonnelli, Prem, Teso, 08 September 2019

To protect public sector jobs from becoming instruments of political patronage, employment decisions must be governed by impartial, meritocratic hiring practices. But in many civil service systems, politicians retain broad discretion in personnel decisions. This column looks at hiring practices in Brazil, and finds that not only are public sector careers handed out to the most devoted campaign supporters rather than the most competent applicants, but that political connections aid the least capable applicants most.

Bacchetta, van Wincoop, 08 September 2019

The forward premium puzzle is one of many ways in which exchange rate behaviour can contradict economic theory. This column introduces a model in which delayed portfolio adjustment by investors can address six such puzzles of exchange rate movements. The findings show that slowness in the reactions of investors has the potential to influence asset prices.

Boehm, 07 September 2019

Fiscal stimulus packages typically feature large investment in infrastructure. The column argues that the fiscal multiplier associated with government investment during the Great Recession was near zero. Meanwhile, the government consumption multiplier was around 0.8. Estimates of the multiplier for total government purchases do not distinguish these two effects, which may affect their validity.

Di Maggio, Kalda, Yao, 07 September 2019

Rising student debt is considered one of the creeping threats of our time. This column examines the effect of student-debt relief on individual credit and labour market outcomes. Following debt relief, distressed borrowers reduce their indebtedness by 26% and are 11% less likely to default on other accounts. After the discharge, the borrowers’ geographical mobility and probability of changing jobs increase. Ultimately, their income increases by about $3,000 over a three-year period. 

Harrison, Bollard, Scheidel, Ó Gráda, 06 September 2019

Marking the 80th anniversary of the outbreak of the Second World War, some of the authors involved in VoxEU's series, The Economics of the Second World War: Eighty Years On, talk to Tim Phillips about their research.

Dalton, Pekkala Kerr, Kerr, 06 September 2019

Attempts to discover and describe an entrepreneurial personality – a ‘homo entreprenaurus’ – have run aground on the shoals of heterogeneity. This column makes use of a collaborative US workspace founded in 2001 to survey four groups: entrepreneurs, non-founding CEOs/leaders, inventor employees, and other employees of innovative firms. It finds that entrepreneurs display the greatest tolerance for risk as well as the strongest self-efficacy, internal locus of control, and need for achievement. The findings appear to confirm that entrepreneurs do indeed have distinct personalities.

Cukierman, 06 September 2019

Individuals are never fully certain whether economic developments are persistent or temporary. This column shows that this permanent-transitory confusion has pervasive implications. It argues that the confusion injects the past into even purely forward-looking New-Keynesian frameworks, and shows empirically that inflationary forecasts indeed rely on past inflation.

Ivandic, Kirchmaier, Machin, 06 September 2019

The attacks on mosques in Oslo and Christchurch have again called attention to the rise in anti-Muslim sentiment that is increasingly becoming normalised in media and on social platforms. This column studies the role the media plays in local increases in Islamophobic hate crime following jihadi terror attacks. Data from Greater Manchester Police reveal a spike in Islamophobic hate crime and incidents following ten international jihadi attacks. Other jihadi attacks that were much less prominent in the UK media, but no less lethal, did not generate the same spikes, suggesting that anti-Muslim hate crime is magnified by media coverage. 

Asai, 05 September 2019

One factor exacerbating gender gaps in employment is the cost of affording maternity and parental leave to women as primary caregivers. This column analyses the relationship between the costs of providing parental leave and labour demand for childbearing-age women. As evidenced by a series of reforms in Japan in the last two decades, reducing the burden of parental leave costs from firms to social insurance systems increases both labour demand and starting wages for such workers.

Bollard, 05 September 2019

The World Wars precipitated unprecedented economic problems in all countries. This column, part of a Vox debate on the economics of WWII, describes how economists played a larger role in WWII than in any previous conflict. They advanced the methods of public finance and influenced the directions of the war effort. By the end of the war, economists were widely embedded in government and policymaking.

Aksoy, Poutvaara, 05 September 2019

About 1.4 million refugees and irregular migrants arrived in Europe in 2015 and 2016, but little is known about their socio-demographic characteristics and motivations. This column presents the first large-scale evidence on why those who crossed the Mediterranean in 2015 and 2016 had left their home countries. While the vast majority were escaping conflict, the main motivation for a significant number of migrants from countries such as Algeria, Egypt, Morocco, and Pakistan was a desire to seek out better economic opportunities. People who are educated to secondary or tertiary level are more likely to migrate than people with lower levels of education, particularly when fleeing a major conflict, and these people are more likely to head for countries that have more comprehensive migrant integration policies.

Dellas, Tavlas, 05 September 2019

Milton Friedman shaped key ideas in monetary theory and policy. This column argues that Lloyd Mints – a colleague of Friedman at Chicago during the formative years of Friedman’s monetarist views – made important, original contributions in these areas. Mints interacted extensively with Friedman, and his contributions appear to have influenced the development of Friedman’s monetary framework. 

Eichengreen, 04 September 2019

The repercussions and regulatory impact of Facebook’s proposed Libra currency are still unclear. This column, part of the VoxEU debate on the future of digital money, assesses the information as yet made available about Libra, including the implications for its exchangeability, scalability, privacy, and security. It is clear the design of the currency is yet to be finished, and many questions remain about its governance and structure.

Bloom, Bunn, Chen, Mizen, Smietanka, Thwaites, 04 September 2019

The UK’s decision to leave the EU in the June 2016 referendum was a largely unexpected event that has generated a large, broad, and long-lasting increase in uncertainty. It has also affected some firms more than others depending on the strength of their links to Continental Europe. This column exploits these features and uses a major new survey of UK firms to show that the anticipation of Brexit has already made its mark on the UK economy. It has gradually reduced investment by about 11% and decreased productivity by about 2% to 5% over the three years since the referendum.

Campbell, Grossman, Turner, 04 September 2019

Although long-run stock market data are an important indicator, obtaining them is challenging. This column constructs new long-run broad-based indices of equities traded on British securities markets for the period 1829-1929 and combines them with a more recent index to examine the timing of British business cycles and compare returns on home and foreign UK investment. One finding is that the capital gains index of blue-chip companies appears to be a good bellwether of macroeconomic behaviour.

Beck, Silva-Buston, Wagner, 04 September 2019

Following the Global Crisis, countries have significantly increased their efforts to cooperate on bank supervision, the prime example being the euro area’s Single Supervisory Mechanism. However, little is known about whether such cooperation helps improve the stability of the financial system. Using panel data for a large sample of cross-border banks, this column examines whether a higher incidence of supervisory cooperation is associated with higher bank stability. It finds that supervisory cooperation is effective, working through asset risk, but not for very large banks, which are the ones that pose the highest risk to financial stability.

Pezzoni, Veugelers, Visentin, 03 September 2019

The diffusion of novel technologies plays a crucial role in stimulating economic growth, but when a novel technology appears it is difficult to predict its later diffusion trajectory in terms of follow-on inventions. This column shows how the antecedents of a novel technology characterise its diffusion pattern by identifying the diffusion trajectories for a large sample of novel technologies using large-scale patent information. Riskier types of novel technologies, while having a larger technological impact, are taken up more slowly.

Levy Yeyati, Montané, Sartorio, 03 September 2019

Governments around the world spend a large portion of their budgets on active labour market policies aimed at improving access to new jobs and higher wages. This column presents the first systematic review of 102 experimental interventions comprising a total of 652 estimated impacts. It finds that programmes are more likely to yield positive results when GDP growth is higher and unemployment lower, and that programmes aimed at building human capital show significant positive impact. 

O’Brien, 03 September 2019

Allied victory in WWII is usually viewed through the lens of large land battles, from Stalingrad to Kursk to D-Day. However, battlefield losses of equipment in these ‘great’ land battles were relatively small and easily replaceable. This column demonstrates that the real effort of the major powers was put into the construction of air and sea weapons. The Allies used their air and sea power to destroy the Axis’s in a multi-layered campaign. This was the true battlefield of WWII: a massive air-sea super battlefield that stretched for thousands of miles. Victory in this super-battlefield led to victory in the war.

Scheidel, 02 September 2019

World War II sharply reduced income and wealth inequality in many countries. This column, part of a Vox debate on the economics of WWII, describes how various factors converged to produce this outcome. Mass mobilisation raised demand for labour and reduced skill premiums, extremely high marginal tax rates cut into elite incomes and fortunes, aggressive government intervention curtailed corporate and investment profits and sought to protect workers, consumers, and renters. Returns of capital fell as international markets suffered interruptions and physical assets risked confiscation or destruction. Communist regimes expanded their reach. In market economies, the war experience promoted reforms regarding social welfare, unionisation and taxation that sustained several decades of greater equality.

Ó Gráda, 02 September 2019

Of WWII’s warring powers only the Soviet Union suffered mass starvation, but as this column, part of a Vox debate on the economics of WWII, describes, it is a measure of the war’s global reach that 20 to 25 million civilians died of hunger or hunger-related diseases outside Europe. In Britain effective rationing ensured a ‘fair’ distribution of food supplies throughout the war and in Germany the famine conditions experienced in 1918-19 were not replicated, but Japan was facing semi-starvation at war’s end. In Europe, apart from Greece and the Soviet Union, famine mortality was modest, but 3-5% of the populations of faraway Bengal, Henan, and Java perished. 

Cordella, Powell, 02 September 2019

Countries almost always repay loans from the IMF and the World Bank before others, even though this preferred treatment rarely appears in legal contracts. This column presents a framework to investigate this puzzle. It argues that the ability to restrict lending allows international financial institutions to lend at the risk-free rate and creates incentives for repayment. IMF and World Bank loans are thus complementary to commercial lending.

Hartmann, Schepens, 02 September 2019

On the occasion of the 20th anniversary of the euro, the experiences with EMU so far and crucial factors for its success going forward were at the core of ECB’s 2019 Sintra Forum on Central Banking. In this column two of the organisers highlight some of the main points from the discussions, including the diverse progress with economic convergence and how it may relate to the geographic agglomeration of industries, the role of fiscal policies relative to monetary policy for macroeconomic stabilisation in the still incomplete monetary union, and selected key determinants of future growth in the euro area. 

Boberg-Fazlic, Sharp, 01 September 2019

Can immigration point systems identify desirable immigrants? This column investigates the lessons of 19th-century migration from then-poor Denmark to the US. By 1890, Denmark had developed into a world-leading dairy producer. It finds that areas in the US with many Danes before the transformation of Danish agriculture benefited from significant knowledge transfers thereafter, and specialised in high-tech dairying. This provides a cautionary tale for those arguing that desirable migrants can be identified ex ante.

Persson, Rossin-Slater, 01 September 2019

Workplace flexibility is believed to be a key factor for improving labour market outcomes among mothers and further reducing the gender pay gap, but less is known about other aspects of flexibility, such as whether fathers value it or whether other household members benefit from it. This column uses a Swedish social insurance reform to show that when more workplace flexibility is available, fathers use it, and that flexibility for fathers has positive spillover effects on maternal health.

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