Originally posted 17 November 2007, this Vox column is more relevant than ever arguing that adopting the euro is effectively irreversible. Leaving would require lengthy preparations, which, given the anticipated devaluation, would trigger the mother of all financial crises. National households and firms would shift deposits to other Eurozone banks producing a system-wide bank run. Investors, trying to escape, would create a bond-market crisis. Here is what the train wreck would look like.

Official statistics for US high school graduation rates mask a growing educational divide. This column presents research showing that a record number of Americans are going to university – while an increasing number are dropping out of high school. This poses major social challenges for the United States.

Debt is the crux of advanced economies’ current policy debates. Some argue for fiscal expansion to avoid recession and deflation. Others claim that you can’t solve a debt-created problem with more debt. This column explains the core logic of a new model by Eggertsson and Krugman in which debt shocks and policy reactions can be examined. Relying on heterogeneous agents, the model naturally produces the paradox of thrift but also finds new supply-side paradoxes, those of toil and flexibility. The model suggests that most economists have been misthinking the issues and that actual policy in the US and EU is misguided.

The 'Scramble for Africa' – the artificial drawing of African political boundaries among European powers in the end of the 19th century – led to the partitioning of several ethnicities across newly created African states. This columns shows that partitioned ethnic groups have suffered significantly longer and more devastating civil wars. It also uncovers substantial spillovers as ethnic conflict spreads from the historical homeland of groups partitioned to nearby areas where non-split ethnicities reside.

The CEPR Press eBook on secular stagnation has been viewed over 80,000 times since it was published on 15 August 2014. The PDF remains freely downloadable, but as the European debate on secular stagnation is moving into policy circles, we decided to also make it a Kindle book. This is available from Amazon; all proceeds will help defray VoxEU expenses.

Despite the revolutionary technological advance of the printing press in the 15th century, there is precious little economic evidence of its benefits. Using data on 200 European cities between 1450 and 1600, this column finds that economic growth was higher by as much as 60 percentage points in cities that adopted the technology.

The European economy is in its deepest recession since the 1930s. This column says that swift policy response avoided a financial meltdown, but turning the ongoing recovery into sustained growth requires action on five challenges: boosting potential output, enhancing labour market flexibility, preparing fiscal consolidation, facilitating intra-EU adjustment, and unwinding global imbalances. Europe also needs an improved crisis-management framework, lest this happen again.

Societies characterised by a high transmission of socioeconomic status across generations are not only more likely to be perceived as ‘unfair’, they may also be less efficient as they waste the skills of those coming from disadvantaged backgrounds. Existing evidence suggests that the related earnings advantages disappear after several generations. This column challenges this view by comparing tax records for family dynasties (identified by surname) in Florence, Italy in 1427 and 2011. The top earners among the current taxpayers were found to have already been at the top of the socioeconomic ladder six centuries ago. This persistence is identified despite the huge political, demographic, and economic upheavals that occurred between the two dates. 

The effects of of globalisation on income distributions in rich countries have been studied extensively. This column takes a different approach by looking at developments in global incomes from 1988 to 2008. Large real income gains have been made by people around the median of the global income distribution and by those in the global top 1%.  However, there has been an absence of real income growth for people around the 80-85th percentiles of the global distribution, a group consisting of people in ‘old rich’ OECD countries who are in the lower halves of their countries’ income distributions.

Both economics and geopolitics matter for trade agreements. In particular, defence pacts raise the probability of a trade agreement between a pair of countries by as much as 20 percentage points. This column estimates that were the US to alienate its geopolitical allies, the likelihood and benefits of successful bilateral agreements would diminish significantly. Expected trade creation from an agreement between the US and EU countries would decline by 0.6% of total US exports.

The adoption of new information technologies such as AI in more workplaces is influencing not just employment and wages, but worker well-being such as job satisfaction, stress, and health. Surveying approximately 10,000 workers in Japan, this column analyses the impact of new information technologies on the nature of tasks performed by workers, job satisfaction, and work-related stress. It finds that AI adoption contributes to both greater job satisfaction and increased stress, and considers approaches to maximise the positives of new technologies adoption while minimising its negative side effects.

Countries such as England, the US, Canada, and Australia granted property rights to married women in the 19th century. The column uses US census and economic data from the time to show that the impact was financial as well as social. Women kept more of their assets as cash in US states that granted these rights. This reduced interest rates and accelerated industrialisation in these regions.

The house and equity price busts on top of a credit crunch make this an unprecedented crisis for the modern US economy; its real economy effects are thus difficult to assess. This column provides insights based on evidence from 122 recessions in 21 advanced nations since 1960. Findings suggest recessions in such circumstances are much costlier and slightly longer. But the outcome can be affected by policy, and it’s high time that policymakers act swiftly and decisively.

Labour markets in US cities today are vastly more educated and skill-intensive than they were 50 years ago, but urban non-college workers now perform much less skilled work than they did. This column shows that automation and international trade have eliminated many of the mid-skilled non-college jobs that were disproportionately based in cities. This has contributed to a secular fall in real non-college wages.

Previous research has shown that changes to the size of the ECB’s balance sheet were followed by meaningful changes in macroeconomic aggregates. This column argues that the econometric technique these studies employed does not provide reliable estimates. Impulse responses to purported balance sheet shocks are statistically indistinguishable from those from nonsensical identification schemes. The effectiveness of the ECB’s balance sheet policies is therefore still unproven.

More than one billion adults across the globe are overweight, and at least 300 million are clinically obese. This column argues that the obesity epidemic in the US has been creeping up throughout the twentieth century, much earlier than the official account acknowledges. Current US standards thereby mislead many overweight and obese youth into believing that their weight is normal when it is not.

EU and the UK production networks are highly integrated, and Brexit poses a threat to supply and demand linkages between the two economies. This column describes how the effect of tariffs will be magnified due to back-and-forth trade across the Channel. This will increase production costs in the UK and, to a lesser extent, in the EU.

The problem of tax compliance is as old as the levying of taxes. Innovations in tax administration that induce high compliance rates at reasonable cost are extremely important to governments. This column demonstrates how the taille, a tax collection mechanism from medieval Paris, raised compliance by turning the social cost of tax evasion into a private one. It offers a tax collection model that is still relevant to governments today.

We may just have started to feel the pain. Asset price drops – including housing – are common markers in all the big banking crises over the past 30 years. GDP declines after such crises were both large (-2% on average) and protracted (2 years to return to trend); in the 5 biggest crises, the numbers were -5% and 3 years. This column, based on the author’s testimony to the Congress, picks through the causes and consequences. It argues that when it comes to ‘cures,’ it would be far better to get the job done right than get the job done quickly.

What do we know about the spread of protectionism during the Great Depression and what are the implications for today’s crisis? This column says the lesson is that countries should coordinate their fiscal and monetary measures. If some do and some don’t, the trade policy consequences could once again be most unfortunate.

Britain eschewed EU membership in the late 1950s but changed its mind in the early 1960s, only to be rebuffed by Charles de Gaulle. Membership came only in the early 1970s. This column argues that, among others, Britain joined the EU as a way to avoid its economic decline. The UK’s per capita GDP relative to the EU founding members’ declined steadily from 1945 to 1972. However, it was relatively stable between 1973 and 2010. This suggests substantial benefits from EU membership especially considering that, by sponsoring an overpowered integration model, Britain joined too late, at a bad moment in time, and at an avoidably larger cost.

Bitcoin and related cryptocurrencies are exchanged via simple technical protocols for communication between participants, as well as a publicly shared ledger of transactions known as a blockchain. This column discusses research on how cryptocurrencies verify that payments are final, that is, that they are irreversible once written into the blockchain. It points to the high costs of achieving such finality via ‘proof-of-work’ and to a crucial externality in the transaction market, and argues that with the current technology, the liquidity of cryptocurrencies is set to shrink dramatically in the years to come.

One of the world’s leading international economists explains how the euro could surpass the dollar as the premier international currency and examines the geopolitical implications of such a shift.

Global growth is slowing – especially in advanced-technology economies. This column argues that regardless of cyclical trends, long-term economic growth may grind to a halt. Two and a half centuries of rising per-capita incomes could well turn out to be a unique episode in human history.