Joseph Stiglitz, 27 November 2019

Joe Stiglitz offers his thoughts on economic growth in Africa, inequality in China, and the other key economic questions of our time.

Christian Bommer, Axel Dreher, Marcello Pérez-Alvarez, 23 November 2019

International humanitarian aid plays an important role in the response to natural disasters. This column argues that political motives play a role in the allocation of aid. Focusing on the allocation of US humanitarian assistance, it shows that disasters that affect the birth regions of leaders of recipient countries receive substantially more funding than other comparable disasters. This suggests that there is a ‘home bias’ in humanitarian aid.

Stefano Carattini, Simon A. Levin, Alessandro Tavoni, 23 October 2019

Climate change is a global crisis, a fact long seen as an obstacle to fighting it. Contra conventional economic wisdom, this column argues that lessons from managing local commons may also apply to global dilemmas. Evidence ranging from hybrid cars to carbon offsets suggests that for people deciding whether to adopt climate-friendly behaviours, local social norms matter, despite the global nature of the problem. Further, interventions can play a key role in facilitating behavioural change by increasing the visibility of otherwise invisible behaviours such as green energy adoption.

Richard 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.

Beata 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.

Robert 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.

Arlan Brucal, Beata Javorcik, Inessa Love, 16 August 2019

The link between foreign ownership and environmental performance remains a controversial issue. Data from the Indonesian manufacturing census show that plants undergoing foreign acquisitions reduce their energy intensity by about 30% two years after acquisition by multinationals. This column argues that foreign direct investment can serve as a channel for the international transfer of environmentally friendly technologies and practices, thus directly contributing not only to economic growth but also to environmental progress. 

Giovanni Peri, Akira Sasahara, 15 July 2019

Though the economic consequences of climate change will be felt across the globe, not all populations will be affected equally. This column examines the impact of rising temperatures on migrant communities. Using historical data from three decades (1970-2000), it finds that higher temperatures increased the number of rural-to-urban migrations in middle-income countries while decreasing rural-to-urban migrations in poor countries. The prospect of climate change leaving large rural populations trapped in poverty adds urgency to the case for addressing the asymmetric effects of global warming. 

Wolfram Schlenker, Charles Taylor, 02 May 2019

Understanding beliefs about climate change is important, but most of the measures used in the literature are unreliable. Instead, this column uses prices of financial products whose payouts are tied to future weather outcomes in the US. These market expectations correlate well with climate model outputs between 2002 and 2018 and observed weather data across eight US cities, and show significant warming trends. When money is at stake, agents are accurately anticipating warming trends in line with the scientific consensus of climate models.

Dirk Schoenmaker, 17 April 2019

The ECB’s market-neutral approach to monetary policy undermines the general aim of the EU to achieve a low-carbon economy. The column argues that steering the allocation of the Eurosystem’s assets and collateral towards low-carbon sectors would reduce the cost of capital for these sectors relative to high-carbon sectors. A modest titling approach could accelerate a transition to a low-carbon economy, and could be implemented without interfering with the priority of price stability.

Jonathan Dingel, Kyle Meng, 06 March 2019

Climate change is expected to reshape the global distribution of productivities. In theory, shifts in the spatial structure of economic conditions will affect international inequality by altering the pattern of international trade. In practice, it is hard to identify natural experiments to causally validate predictions about global conditions. This column describes research that exploits a global climatic phenomenon to estimate the general equilibrium consequences of changes in the spatial correlation of productivities. 

Simon Wren-Lewis, 25 February 2019

Philipp-Bastian Brutscher, Pauline Ravillard, 14 February 2019

Promoting investment in energy efficiency has become increasingly important over the past decade, but not much is known about effective ways to promote firm-level investments in energy efficiency. Using new experimental data on EU firms’ stated willingness to invest in hypothetical energy-efficiency projects with varying offers of financing and technical assistance, this column demonstrates how a favourable financing offer can increase the likelihood that firms are willing to invest in energy efficiency by as much as 33%. 

Christophe Gouel, David Laborde, 06 February 2019

Given our collective failure to mitigate greenhouse gas emissions, the world will have to adapt to a certain level of climate change. This may mean that as climate change affects crops’ yield potential, new patterns of comparative advantage, and hence new trade flows, will emerge. This column examines the importance of the market adaptations in mediating welfare losses in the agricultural sector. The findings suggest a large role for international trade: when adjustments in trade flows are constrained, global welfare losses from climate change increase by 76%.

Jacques Bughin, Christopher Pissarides, 02 January 2019

Europe’s social contracts to protect their citizens from socioeconomic risks are based on an inclusive growth model characterised by a more egalitarian view of revenue generation and distribution. But this model is under strain, with various global trends placing upward pressure on inequality that could intensify. This column suggests that keeping the essence of Europe’s current inclusive growth model does not preclude it from adapting its current social contracts to protect its citizens, whatever the disruptions that lie ahead.

Paul De Grauwe, 19 December 2018

David Hendry, 12 December 2018

The Industrial Revolution has been of vast benefit to humanity, but it came at the cost of a global explosion in anthropogenic emissions of greenhouse gases. The UK was the first country into the Industrial Revolution. Now it is one of the first countries heading out, with annual CO2 emissions per capita back below the levels of the 1860s. This column presents an econometric model of UK emissions over the last 150 years to establish what has driven them down and reveal the impacts of important policies, especially the Climate Change Act of 2008. Even so, large reductions in all the UK’s CO2 sources are still required to meet its 2050 target of an 80% reduction from 1970 levels.

Stefano Ramelli, Alexander Wagner, Richard Zeckhauser, Alexandre Ziegler, 29 October 2018

President Trump’s election and the nomination of Scott Pruitt to lead the Environmental Protection Agency changed expectations of US climate change policy. This column uses movements in US stock prices to show that firms with high carbon intensity benefited, as expected, but so did firms with ‘responsible’ strategies on climate change. A significant group of investors raise the value of firms taking a long-term perspective. 

Gail Cohen, Prakash Loungani, 23 October 2018

At first glance, emissions and economic activity appear to be positively linked. This column refutes this by re-examining emissions and real GDP data using trend/cycle decompositions. The evidence clearly demonstrates decoupling of emissions and real GDP in many richer nations. Furthermore, although decoupling does not yet appear in emerging markets, data from China show that trend elasticities initially increase with per capita real GDP but then decline, thus holding out the hope that the relationship between emissions and GDP growth will weaken as emerging market countries get richer.

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