Kym Anderson, 16 February 2020

Global alcoholic beverage markets have changed dramatically in recent years due to globalisation, income growth in emerging economies, changes in individual preferences, policy initiatives to curb socially harmful drinking, and, in particular, the dual trade policy shocks of Brexit and the US’s unilaterally imposed discriminatory tariffs. This column provides an overview of the major trends and projects the possible effects of Brexit and the US tariffs on the global alcohol market. It concludes that both shocks would reduce world trade in wine. Even countries not targeted by US tariffs can be worse off if those tariffs sufficiently reduce global consumption. 

Susan Ariel Aaronson, 05 February 2020

Individuals, citizens and firms have become increasingly dependent on data-driven services such as artificial intelligence and apps, and the same is true of defence and national security officials. This column argues that the US failure to adequately govern how firms use and monetise data affects national security in many ways. It also examines specific examples of the misuse of data and assesses the responses by the US and the EU.

Alessandro Turrini, Stefan Zeugner, 13 December 2019

For net international investment position benchmarks to be effective measures of countries’ external positions, they must be developed beyond a one-size-for-all approach. This column presents two such country-specific benchmarks to identify investment levels that are (1) explained by a country’s demographics and key indicators, and (2) beyond the threshold of presenting significant external stability risk. The authors apply these benchmarks to 65 advanced and emerging economies and present key findings.

Francis Kramarz, Julien Martin, Isabelle Mejean, 11 December 2019

Economists continue to disagree about whether international trade exacerbates or diminishes volatility. This column presents firm-level evidence from French exporters and their European trading partners over 15 years to show that firm-level volatility increases individual-level and aggregate-level volatility. High concentration among buyers as well as suppliers can amplify these shocks.

Michael Mehling, Harro van Asselt, Kasturi Das, Susanne Droege, 10 December 2019

The new European Commission is considering the introduction of a ‘carbon border tax’. This column argues that the current EU legal framework and earlier policy proposals for border carbon adjustments offer a good indication of what such a measure might look like. If certain substantive and procedural guidelines are observed, a ‘carbon border tax’ along these lines can work and pass legal muster, but some important questions remain. Without a concrete mandate in the EU emissions trading system allowance directive to elaborate a border carbon adjustment, new legislation or an amendment will be necessary. 

Riccardo Crescenzi, Mara Giua, 26 November 2019

Despite the European Commission’s claims that its Cohesion Policy has had a positive impact on beneficiary regions, some member states argue that it is not fit for purpose and have called for a renationalisation of the policy. This column suggests that while there have been some positive effects on regional growth and jobs across the EU as a whole, these have been concentrated in the beneficiary regions of Germany and the UK, and structural problems in the South of Europe remain largely untouched. This uneven distribution of regional impacts along national lines suggests that individual member states have significant responsibilities for the local success (or failure) of the policy.

Andrés Rodríguez-Pose, Tobias Ketterer, 18 November 2019

Institutions are an important ingredient for economic growth. Using data from European regions for the period 1999-2013, this column shows that government quality matters for regional growth, and that relative improvements in the quality of government are a powerful driver of development. One-size-fits-all policies for lagging regions are not the solution. Government quality improvements are essential for low-growth regions, and in low-income regions, basic endowment shortages are still the main barrier to development. 

Mario Monti, 13 November 2019

The Anglo-Saxons have been admired for their sense of rationality. However Mario Monti talks about recent political events that completely changed the situation. This video was recorded at the "10 years after the crisis" conference held in London, on 22 September 2017.

Lucio R Pench, Stefan Ciobanu, Marcin Zogala, Cristiana Belu Manescu, 14 October 2019

Much of the debate on fiscal discipline and policy has focused on fiscal rules and their appropriate design. Using recent work by the European Commission on national fiscal frameworks in the EU member states, this column shows that other elements of the fiscal framework are just as important as national fiscal rules for fiscal discipline. Independent monitoring of compliance, more realistic macroeconomic and budgetary forecasts, comprehensive and timely fiscal statistics and medium-term fiscal planning are also key for fiscal discipline in the EU.

Marco Buti, Nicolas Carnot, Atanas Hristov, Kieran Mc Morrow , Werner Roeger, Valerie Vandermeulen, 23 September 2019

Criticisms have recently been raised on the usefulness of the EU’s commonly agreed methodology for estimating potential output and output gaps. Whilst mindful of the uncertainty which inevitably surrounds an unobservable variable such as potential output, this column argues that much of the criticism is both conceptually and empirically inaccurate, as well as being neglectful of the plausibility of the EU’s potential output estimates compared to other business cycle indicators. In addition, many of the criticisms focus to an excessive degree on the role of potential output in EU fiscal surveillance, with the practice of surveillance being much more flexible and less rigid than many commentators tend to suggest.

Stephanie Bergbauer, Jean-Francois Jamet, Hanni Schölermann, Livio Stracca, Carina 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.

Robert J. Gordon, Hassan Sayed, 29 August 2019

Since 2005, productivity growth in the US and Europe has dipped below 1%. Using new industry-level from the US and ten EU countries, this column shows that that the industrial composition of the slowdown was similar in Europe and the US. Falling multifactor productivity growth explains both the magnitude and composition of falling productivity growth on both sides of the Atlantic. Decelerating technical change, rather than slowing investment, was the primary driving force in the transatlantic slowdown. 

Holger Breinlich, Dennis Novy, 16 August 2019

As Brexit nears (again), are British firms choosing to invest in the UK or in other European markets? Are European firms investing in the UK to preserve access to its markets? And has "global Britain" got off the drawing board yet? Holger Breinlich and Dennis Novy lead Tim Phillips through the numbers.

Gianmarco Ottaviano, 03 July 2019

Economic geography strikes back. After a couple of decades of easy talk about the ‘death of distance’ in the age of globalisation, the promise of a world of rising living standards for all is increasingly challenged by the resilience of regional disparities within countries. As long as many people and firms are not geographically mobile – and those who are tend to be the most skilled and productive – easier distant interactions can actually strengthen rather than weaken agglomeration economies. Recent electoral trends in Europe can be understood to a surprisingly large extent from this angle. 

Sébastien Jean, Anne Perrot, Thomas Philippon, 18 June 2019

Some policymakers believe that EU competition policy prevents the emergence of industrial champions. The column argues that Europe’s competition policy has successfully contained the rise in concentration and excess profits, and the EU should not follow the US in weakening its approach. Instead, the EU needs to strengthen its trade policy to be more assertive on reciprocity in market access and control of industrial subsidies. 

Pascal Lamy, 14 June 2019

Bernt Bratsberg, Andreas Moxnes, Oddbjørn Raaum, Karen-Helene Ulltveit-Moe, 09 May 2019

In the aftermath of the eastern enlargement of the EU, Norway experienced one of the largest immigration shocks of the 21st century. This column uses data from the episode to examine the general equilibrium response of wages, labour costs, and industry employment to such shocks. One finding is that although real wages in some occupations decline, the aggregate welfare effects on natives are close to zero as natives switch to higher-wage occupations. The welfare effect on the existing population of immigrants, on the other hand, is negative as they have a comparative advantage in low-wage occupations.

Matěj Bělín, Jan Hanousek, 29 April 2019

The annexation of the Crimean peninsula by the Russian Federation in 2014 led to sanctions by the US and the EU, among others, and counter-sanctions by Russia. This column estimates that the value of trade lost due to Western sanctions over 2014-2016 amounts to $1.3 billion, while trade lost due to the Russian counter-sanctions amounts to $10.5 billion. There appears to be no evidence that Russian importers switched between suppliers from sanctioning countries to competitors from non-sanctioning countries.

Thomas Blanchet, Lucas Chancel, Amory Gethin, 22 April 2019

Despite the growing importance of inequalities in policy debates, it is still difficult to compare inequality levels across European countries and to tell how European growth has been shared across income groups. This column draws on new evidence combining surveys, tax data, and national accounts to document a rise in income inequality in most European countries between 1980 and 2017. It finds that income disparities on the old continent have increased less than in the US and shows that this is essentially due to ‘predistribution’ policies.

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