Europe's nations and regions

Meredith Crowley, Oliver Exton, Lu Han, 21 January 2019

Uncertainty over the future of the world trading system is at its highest since the introduction of GATT in 1947. The US-China trade war and suggestions that President Trump intends to withdraw the US from the WTO have significantly raised uncertainty in the global economy. Meanwhile, uncertainty over the future of the UK-EU trading relationship spiked on 15 January when the UK parliament overwhelmingly rejected the negotiated terms of the UK’s withdrawal from the EU. This column documents that an earlier period of heightened trade policy uncertainty for the UK – the period following the Brexit referendum in June 2016 – depressed the UK’s international trading activity, with some UK businesses choosing to not enter the EU market while others chose to exit. 

Cevat Giray Aksoy, Ralph De Haas, 21 January 2019

Technological innovation can help to shift labour from sectors with low levels of productivity (such as agriculture) to higher-productivity sectors (manufacturing and, increasingly, services), with a profound impact on the nature of work and the types of skills that are in demand in the workplace. This column examines how this transformation is impacting jobs and employment across emerging Europe. The findings suggest that robotisation can explain only 13% of the total decline in the employment rate observed in these countries between 2010 and 2016.

Bernhard Michel, Caroline Hambÿe, Bart Hertveldt, 21 January 2019

Domestic value creation is shaped by how and to what extent economies integrate into global value chains. This column argues that further insights can be gained by distinguishing export-oriented and domestic market firms in standard indicators of global value chain integration and participation. Using data for Belgium, it documents that export-oriented firms differ from domestic market firms in terms of input structure and import patterns. These two types of firms play different roles in determining the nature of a country’s global value chain participation.

Nicholas Crafts, 15 January 2019

Brexit in 2019 and the banking crisis in 2007 to 2009 are usually seen as unrelated events. This column argues that they are in fact closely connected. The austerity policies embarked on in response to the fiscal damage resulting from the banking crisis triggered the protest votes of left-behind voters, which at the margin allowed Leave to win the referendum vote. The implication is that the economic costs of the banking crisis are much larger than is usually supposed.

Tito Boeri, Prachi Mishra, Chris Papageorgiou, Antonio Spilimbergo, 11 January 2019

The claim by populist leaders to have a monopoly on representing ‘the people’ stands in contrast with the concept of liberal democracy, which is based on pluralism where different groups represent different interests and values. Using data from several waves of the European Social Survey, this column demonstrates that individuals who belong to associations are less likely to vote for populist parties. Alexis de Tocqueville appears to have been right when he wrote almost two centuries ago that civil society is a key defence of liberal democracy.

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