Europe's nations and regions

Luc Laeven, Peter McAdam, Alexander Popov, 10 December 2018

There are good arguments both in favour and against the idea that more labour market flexibility will deliver benefits to an economy during a downturn. This column presents novel evidence on this question, using data from Spain during the 2008–09 credit crunch. The results show that credit-constrained firms grow faster if they are subject to less strict firing and hiring restrictions, as long as they are technologically able to substitute labour for capital. The findings provide an argument in favour of more flexible labour laws.

Patrice Baubeau, Eric Monnet, Angelo Riva, Stefano Ungaro, 29 November 2018

Previous research has downplayed the role of banking panics and financial factors in the French Great Depression. This column uses a newly assembled dataset of balance sheets for more than 400 French banks from the interwar period to challenge this long-held idea. The empirical results show two dramatic waves of panic in 1930 and 1931, and point to a flight-to-safety mechanism. The findings illustrate how minor macroeconomic assumptions and extrapolations on monetary statistics can introduce large, persistent biases in historiography.

Richard Baldwin, 27 November 2018

The 23 June 2016 Brexit vote saw British voters reject membership in the European Union. This column, which was first published in August 2016, introduces a VoxEU eBook containing 19 essays written by leading economists on a wide array of topics and from a broad range of perspectives. 

Maia Güell, Michele Pellizzari, Giovanni Pica, Sevi Rodriguez Mora, 26 November 2018

Measuring intergenerational mobility and understanding its drivers is key to removing the obstacles to equal opportunities and assuring a level playing field in access to jobs and education. This column uses the informational content of Italian surnames to show that social mobility varies greatly across regions in the country, and that it correlates positively with economic activity, education and social capital, and negatively with inequality. The findings suggest that policies and political institutions are unlikely to be the main drivers of geographical differences in social mobility.

Nicholas Bloom, Scarlet Chen, Paul Mizen, 16 November 2018

The majority of businesses in the UK report that Brexit is a source of uncertainty. This column uses survey responses from around 3,000 businesses to evaluate the level and impact of this uncertainty. It finds that Brexit uncertainty has already reduced growth in investment by 6 percentage points and employment by 1.5 percentage points, and is likely to reduce future UK productivity by half of a percentage point.

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