Emanuele Borgonovo, Stefano Caselli, Alessandra Cillo, Donato Masciandaro, Giovanni Rabitti, 28 October 2021

With the development of new forms of money such as cryptocurrencies and central bank digital currencies, the attention paid to their role as a store of privacy is increasing. This column asks whether privacy is relevant in shaping the demand for these currencies. The results of laboratory experiments show that anonymity does indeed matters and increases the overall appeal of a medium of payment. This effect is stronger for risk-prone individuals. 

Jan Eeckhout, Christoph Hedtrich, Roberto Pinheiro, 16 October 2021

The adoption of information technology can cause polarisation in the labour market via the displacement of routine cognitive jobs. This column uses data on over 200,000 firms in the US from 1990 to 2015 to show that the labour savings from IT are largest in big cities and metropolitan areas, where wages are higher, so urban firms have the biggest incentives to invest in these technologies. This in turn leads to the polarisation of occupations across geography and accounts for the rise in wage inequality within cities.

Willem Thorbecke, 15 October 2021

During the COVID-19 pandemic many countries experienced difficulty obtaining the semiconductors that are vital for smartphones, computers, cars, artificial intelligence, cybersecurity, and many other applications. This column looks at how Asia gained comparative advantage in this sector and identifies lessons for countries seeking to promote domestic semiconductor manufacturing.

Sourav Bhattacharya, Pavel Chakraborty, Chirantan Chatterjee, 20 September 2021

It has long been recognised that innovation and technology adoption contribute significantly to rising income inequality. This column uses a change in the patent regime in India as a quasi-natural experiment to estimate the impact on wage inequality between managerial and non-managerial workers in a firm. The authors find that stronger intellectual property protection has a sharper impact on the demand for managerial skill for technologically advanced firms, highlighting both within and between firm inequality.

Ian Goldin, Pantelis Koutroumpis, François Lafond, Julian Winkler, 31 May 2021

Labour productivity is a key determinant in improving living standards. But in recent years, productivity has stagnated, if not declined, in many countries around the world. This column re-evaluates the various reasons as to why this might be, applying three criteria to the existing explanations for the slowdown. It finds that the slowdown in productivity can be attributed to numerous factors, ranging from mismeasurement to changes in trade patterns.

Markus Nagler, Monika Schnitzer, Martin Watzinger, 08 February 2021

The secular decline in productivity growth is blamed by some on the slow diffusion of new general purpose technologies, so it is important to understand what slows down this diffusion and how it can be speeded up. This column presents evidence from the diffusion of the transistor, one of the most important general purpose technologies of our time. It shows that patents on general purpose technologies are likely to cause considerably more harm than patents on other technologies unless a standardised licensing regime is put in place. Not only do they block more follow-on innovation, but in particular they block valuable follow-on innovation arising from cross-technology spillovers. 

Marcela Escobari, Eduardo Levy Yeyati, 07 January 2021

COVID-19’s impact on welfare, as well as its legacy, will likely differ significantly between North and South America because of differences in the labour market structure across the two continents. This column highlights informal labour markets in developing economies of South America as a potential explanation for the larger and more persistent impact of the pandemic in the South as compared to North America. It suggests targeted training and new regulation to mitigate the precariousness of the workforce in these economies.

Jie Bai, Maggie Chen, Jin Liu, Daniel Yi Xu, 15 December 2020

Global e-commerce platforms present new export opportunities for small and medium-sized enterprises in developing countries by significantly lowering the entry barriers of exporting. This column shows, however, that the lack of market selection can lead to severe congestion in consumers' search process and, when firms' intrinsic quality is not perfectly observed, hinder market allocation towards better firms. Policies aimed at alleviating information frictions and reducing the number of firms can help to improve allocative efficiency and raise consumer welfare.

Xavi Cirera, Diego Comin, Marcio Cruz, Kyung Min Lee, 29 November 2020

Understanding how firms use technology in production is key for studying productivity and labour market outcomes. This column introduces a new approach to measure technology adoption at the business function level – the Firm-level Adoption of Technology survey. Using representative data from three countries, it finds a larger variance in technology sophistication within firms compared with across firms, and greater variance across firms than across countries or regions. Furthermore, a development accounting exercise suggests cross-firm technology differences account for one-third of the cross-firm productivity gap. 

Isabela Manelici, Smaranda Pantea, 08 November 2020

Industrial policies can be an effective tool for governments to shape the development of different sectors to achieve productivity growth. But there is little evidence of their effectiveness or efficiency. This column examines the impact of an income tax break for IT workers in Romania. The findings suggest that targeted policies of this kind can boost key sectors. This finding is encouraging in terms of the ability of governments to design and implement effective industrial policies. 

Ufuk Akcigit, Sina T. Ates, Josh Lerner, Richard Townsend, Yulia Zhestkova, 24 September 2020

The US military community has highlighted the potential security threat posed by foreign venture investments in Silicon Valley, particularly from Chinese stakeholders. This column presents a theoretical and empirical analysis of the relationship between venture capital and national security, focusing on the ability of overseas firms to gain a domestic technological advantage through investing in the US tech sector. The growing importance of this the technology sector, as well as the national security issues at stake, mean that understanding the correlations is a vital avenue of future research.

Ravi Kanbur, 21 September 2020

From the public discourse, it seems clear that we are living in an age of rising inequality. However, common measures of income and consumption inequality disguise a more nuanced pattern of inequality change across the world. This column argues that inequality within countries has not been rising everywhere and that inequality between countries has decreased. At the same time, technological progress is increasingly displacing basic labour in favour of skilled labour and capital, across borders, and widening the wage gap. The overall effect is unclear. National policies to mitigate inequality are needed but, in the absence of international cooperation, are constrained by cross-border spillovers.

Eiichi Tomiura, Banri Ito, Byeongwoo Kang, 12 August 2020

Cross-border data flows are increasingly critical for modern firms, and the regulation of data poses a distinctly novel challenge for policymakers in the 21st century. This column presents survey data from Japan, investigating exactly which type of firm are most likely to be affected by regulations surrounding the international exchange of data. The results of the study suggest that new technologies such as Artificial Intelligence and 3D printers are usually adopted by the most productive and innovative firms, and that hampering these firms with regulation may create harmful effects for the wider economy.

Isaiah Hull, 23 July 2020

The COVID-19 pandemic has placed pressure on central banks and other public institutions to monitor the economy at a higher frequency than usual. However, much of the data and expertise needed to perform such monitoring is concentrated in the private sector and academia. This column describes the effort made by the Swedish Riksbank to alleviate this bottleneck by opening up a collaborative public channel through which academics and the private sector can directly contribute to the research in real time.

Lena Edlund, Cecilia Machado, 27 June 2020

The urban renewal that transformed many US inner cities may have hit its first major speed bump with the outbreak of Covid-19. The ‘space versus commute’ trade-off has been thrown into doubt and confusion by work-from-home orders. This column draws on socioeconomic history, arguing that a mass exodus of skilled professionals to the suburbs could have major implications for inner city areas. Although this could spell the return to the homicidal days of the 1980s, the authors argue that this may not be the case – the reason being: cell phones and how they have impacted illicit drug retailing.

Sylvain Leduc, Zheng Liu, 14 June 2020

The COVID-19 pandemic has raised concerns about the future of work. The pandemic may become recurrent and necessitate repeated adoptions of social distancing measures, creating substantial uncertainty about worker productivity. This column presents a theoretical framework suggesting that such job uncertainty reduces aggregate demand, and dampens business investment in general. However, automation may provide one way for businesses to cope with the uncertainty about worker productivity. It appears that pandemic-induced job uncertainty could stimulate automation investment, despite declines in aggregate demand.

Liudmila Alekseeva, José Azar, Mireia Gine, Sampsa Samila, Bledi Taska, 03 May 2020

Artificial intelligence will transform job tasks and occupations. This column uses data from US online job postings during 2010–2019 to show how absolute and relative demand for AI-related skills has grown across all industry sectors and occupation groups. Jobs requiring AI skills command, on average, an 11% wage premium compared to similar jobs that do not require AI knowledge. However, AI is at least as much a managerial challenge as it is a technological challenge. Real productivity gains will come only when there are managers who can use AI to create and capture value.

Nicola Pierri, Yannick Timmer, 18 April 2020

Technology adoption in lending can enhance financial stability through the production of more resilient loans. Motivated by the recent surge of FinTech lending, this column analyses the implications of lenders' information technology adoption for financial stability. Banks that adopted IT more intensely before the Global Crisis were significantly more resilient when the shock hit. These banks had significantly fewer non-performing loans, and issued more loans during the crisis itself. Loan-level analysis indicates that high IT adoption banks issued mortgages with better performances and did not offload low-quality loans.

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.

Enghin Atalay, Phai Phongthiengtham, Sebastian Sotelo, Daniel Tannenbaum, 23 January 2020

Since the late 20th century, middle-wage occupations have shrunk as a share of total employment, while occupations requiring social and analytic tasks have grown. However, little is known about the degree to which individual occupations or job titles have changed over time and the extent to which these changes have been driven by new technologies. Analysing approximately 8.7 million job ads published in newspapers during 1940–2000, this column finds that non-routine analytic and interactive tasks in jobs increased, while manual tasks declined. The majority of changes have occurred within rather than between occupations. New technologies are linked to increased intensity of non-routine analytic job tasks.

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