Maddalena Ferranna, JP Sevilla, David Bloom, 02 August 2021

The Covid-19 pandemic has posed governments with many ethical questions regarding lockdowns and vaccine prioritisation. Policies involve difficult health and income trade-offs, and the consequences are heterogeneously distributed across the population. This column analyses the implications of benefit-cost analysis, cost-effectiveness analysis, and social welfare function analysis in the context of Covid-19. It argues that the social welfare function approach is more appealing than traditional methods because it explicitly accounts for societal inequalities and the distribution of policy impacts in the population.

Rasmus Landersø, James Heckman, 12 September 2016

The Scandinavian model of social welfare is often contrasted favourably with the US model in terms of promoting social mobility across generations. This column investigates the accuracy of these claims, focusing on the case of Denmark. Denmark invests heavily in child development, but then undoes the beneficial effects by providing weak labour market incentives for its children to attend school compared to the US. This helps explain why the influence of family background on educational attainment is similar in the two countries.

Refet Gürkaynak, Troy Davig, 25 November 2015

Central banks around the world have been shouldering ever-increasing policy burdens beyond their core mandate of stabilising prices. This column considers the social welfare implications when central banks take on additional mandates that are usually the domain of other policymakers. Additional mandates are shown to worsen trade-offs faced by the central bank, while distorting the incentives of other policymakers. Central bank ‘mandate creep’ may be detrimental to welfare.

David Dollar, Tatjana Kleineberg, Aart Kraay, 19 November 2014

Concerns about inequality are at the forefront of many policy debates. While inequality has increased in many countries over the past few decades, in others it has decreased. This column uses data from 117 countries over the past four decades to investigate the importance of such changes in inequality, as well as of overall economic growth. Whereas inequality changes in most countries have been small, differences in overall growth performance have been large. Policymakers should therefore be careful not to undermine growth in the quest for greater equality. 


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