Federico Rossi, 12 May 2022

How does the productivity of different types of workers vary across countries? This column uses micro data from countries at different levels of development to document that highly educated workers are relatively more productive in rich countries. Exploiting variation in the skill premia of foreign-educated migrants, the author concludes that this is mostly due to the technological environment in rich countries being more complementary to high-skill labour.   

Willem Thorbecke, 26 April 2022

The Ukraine war and the Covid-19 pandemic provide windows to study the impact of exogenous shocks on the US semiconductor industry. This column uses high-frequency data to reveal that supply chain disruption did not severely damage the industry in the US. However, the US is less competitive than the East Asian countries in the semiconductor industry because of educational attainment, fiscal discipline, and employment incentives. Policymakers should be aware of these factors before subsidising the industry.

Matteo Pinna, 15 April 2022

At the height of the Covid-19 pandemic, some cable news hosts cast doubt on the effectiveness of vaccines. Matteo Pinna tells Tim Phillips about his research on the impact of Fox News on vaccination rates.

Alex Domash, Lawrence H. Summers, 13 April 2022

As inflation accelerates in the US, the Federal Reserve will raise interest rates in the hope of achieving a soft landing for the economy. This column uses historical data on unemployment and inflation to evaluate the likelihood that the Fed can lower inflation without causing a recession. The authors find that low levels of unemployment and high inflation are both strong predictors of future recessions, and that overheating indicators today suggest a very high probability of recession over the next two years. The likelihood of the Fed achieving a soft landing in the economy appears low. 

Laurent Ferrara, Matteo Mogliani, Jean-Guillaume Sahuc, 07 April 2022

Following the Russian invasion of Ukraine on 24 February 2022, financial stress indicators suddenly increased. Using this high-frequency daily information conveyed by financial markets, this column presents a newly developed mixed-frequency quantile regression model in order to quantify macro risks in the euro area for the first quarter of 2022. The authors show that macro downside risks perceived by financial markets in the euro area are about three times higher than those for the US economy.

Nicola Fuchs-Schündeln, 05 April 2022

On 7 April the 75th EP panel will discuss the long-term economic effects of lost learning due to Covid-19. What do we now know about the impact of closed schools, and what action policymakers can take to help this Covid generation make up for lost time?

For more about the upcoming panel meeting and to register for the online policy session visit: https://www.economic-policy.org/. 

Chad Bown, 29 March 2022

The US ended the WTO dispute management system in 2019. How can we restore some form of binding dispute settlement, and what are the hurdles that stand in the way?

Read more about the research behind this and download the free DPs:

Bown, C. 2022. 'Trump ended WTO dispute settlement. Trade remedies are needed to fix it.'. CEPR
Bown, C and Keynes, S. 2020. 'Why Trump Shot the Sheriffs: The End of WTO Dispute Settlement 1.0'.CEPR

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Economic Policy online panel discussion of a new research report by 
Nicola Fuchs-Schündeln
 

Covid, School Closures And Children’s Futures
Long-term distributional effects of lost learning in Germany and the US

Join us on 7 April at 17:15 (CET) for an Economic Policy panel discussion of a new research report by Nicola Fuchs-Schündeln.

As the Covid-19 pandemic swept across the world in the spring of 2020, schools were closed and millions of children faced major learning losses while their parents struggled to combine work, childcare and home education. A new study of the likely long-term impact of those closures on children’s future livelihoods and wellbeing will be launched at an online panel discussion hosted by Europe’s leading economic policy journal on Thursday 7 April 2022.

Nicola Fuchs-Schündeln of Goethe University Frankfurt and CEPR will present comparative empirical evidence on the considerable heterogeneity of school closures in Germany and the US – related to school type, pupil age and local income levels. She will examine likely variations in long-term effects across the income and wealth distribution. And she will consider policies that may address some of the educational damage to the most disadvantaged children from the missed opportunities caused by the pandemic and lockdowns.

Her presentation will be followed by a discussion with Andreas Schleicher and Monica Costa-Dias, moderated by Andrew Jack, Global Education Editor for the Financial Times.

Email [email protected] for further details and to request access to the press room. 

Moshe Hazan, David Weiss, 11 March 2022

Until the second half of the 19th century, coverture laws granted married men almost unlimited power over the household. Moshe Hazan and David Weiss tell Tim Phillips about how abolition changed the number of children in a family, and how well those children were educated?

Read more about the research behind this Vox Talk and download the free DP:
Hazan, M, Weiss, D and Zoabi, H. 2021. 'Women's Liberation, Household Revolution'. CEPR

Moshe Hazan, David Weiss, Hosny Zoabi, 24 February 2022

In the late 19th century, US states began giving economic rights to married women. Before that, laws of ownership and control over property and income gave the husband virtually unlimited power within the household. This column examines how these changes in women’s economic power affected households and children. The findings suggest that expanding women’s rights increased their power at home, causing a ‘household revolution’ of decreased fertility and more education.

Shinsuke Tanaka, Kensuke Teshima, Eric Verhoogen, 21 February 2022

Press accounts of dirty activities springing up in developing countries, in part to evade stricter environmental regulations in developed ones, are all too common. But previous academic research has found little systematic evidence of such pollution-haven effects between the global North and South. This column looks at the recycling of lead-acid batteries in the US and Mexico, and finds that tightened US regulations around lead increased exports of batteries to Mexico for recycling, worsening health outcomes for locals, especially the poor.

Jacob Greenspon, Anna Stansbury, Lawrence H. Summers, 15 February 2022

The real pay of typical workers has grown much more slowly than productivity over recent decades in several developed economies. This column uses data from the US and Canada to examine whether productivity growth actually benefits typical workers by raising their pay. The authors find strong evidence of linkage between productivity and pay in the US but more mixed evidence for Canada, possibly due to it being a smaller, more internationally open economy. Overall, the findings suggest that measures to boost productivity growth are important for raising pay for the average and typical worker.

Peter Andre, Ingar Haaland, Chris Roth, Johannes Wohlfart, 23 December 2021

Inflation has recently surged in both the US and the EU. This column uses responses from surveys of a representative sample of the US population as well as academic economists and US firm managers to show that households and managers are more likely than experts to think that the current surge in inflation will be persistent. Since the narratives individuals use to explain movements in inflation appear central to whether inflation expectations remain anchored, communication strategies by policymakers could put emphasis on specific narratives that highlight that inflationary pressures are unlikely to persist.

Davin Chor, Bingjing Li, 25 November 2021

Tariffs initiated by the Trump administration in 2018 raised duties on China’s exports to the US, sparking a ‘tariff war’. This column uses satellite readings of night-time luminosity to show that that locations within China that were more exposed to the US tariffs experienced a larger decrease in night light intensity, pointing to a contraction in local economic activity. By contrast, exposure to China’s retaliatory tariffs appeared to have no significant effect on grid-level night lights. 

Philip Bunn, David E. Altig, Lena Anayi, Jose Maria Barrero, Nicholas Bloom, Steven Davis, Brent Meyer, Emil Mihaylov, Paul Mizen, Gregory Thwaites, 16 November 2021

The onset of the COVID-19 pandemic triggered a massive spike in uncertainty. This column uses data from panel surveys of US and UK business executives to document how uncertainty over own-firm sales growth rates over the year ahead roughly doubled in reaction to the shock. Firm-level uncertainty receded after spring 2020 but remains much higher than pre-COVID levels. The nature of this uncertainty has shifted greatly since the pandemic struck, from an enormous widening in perceived downside risk to a sharp increase in upside risk. Economic uncertainty associated with the pandemic has morphed from a tale of the lower tail into a tale about the upper tail.

Cameron LaPoint, Shogo Sakabe, 08 November 2021

Growing spatial inequality has led policymakers to offer firms tax breaks to attract investment and jobs to economically peripheral regions. This column examines a place-based bonus depreciation scheme in Japan which granted high-tech manufacturers immediate cost deductions from their corporate income tax bill. The policy generated big gains in employment and investment in building construction and in machines at pre-existing production sites. This response was driven by firms which rely on costly but long-lived capital inputs like industrial machines. How firms react to spatially targeted tax incentives ultimately depends on their internal network and their composition of intermediate capital inputs. 

Alex Bryson, David Blanchflower, 21 October 2021

Economic downturns are not as unpredictable as we once thought. There is mounting evidence that the expectations of consumers, workers and employers predict economic downturns, sometimes 12 to 18 months ahead. But we live in exceptional times. The COVID-19 pandemic and its aftermath have sown doubt and uncertainty among consumers and producers and may do so for some time to come. So what’s the economic prognosis? this column argues that expectations data for the US suggest the country is entering recession about now.

Peter Robertson, 09 October 2021

US military spending is said to be greater than the next 11 countries combined. However, the conventional use of market exchange rates to compare across countries dramatically overstates US spending relative to other countries. This column introduces a military purchasing power parity exchange rate for 59 countries based on the relative unit cost ratio across counties. This ‘military PPP’ shows that the US military budget in 2019 was smaller than that of the next three largest military spenders – China, India, and Russia – combined.

Andrea Asoni, Andrea Gilli, Mauro Gilli, Tino Sanandaji, 19 September 2021

There is a common perception that the US military predominantly recruits individuals from the most disadvantaged socioeconomic backgrounds with limited other career options. This column argues that this is no longer the case. Skill-biased technological change has led the US military to recruit more higher-skilled personnel since the 1990s, and while in 1979 the probability of joining the military was clearly higher for those with lower-than-average family income, for the 1997 cohort the probability was much more evenly distributed.

Kathryn Judge, Anil Kashyap, 17 September 2021

In March 2020 we all assumed there would be some reaction to Covid-19 on Wall Street but, when markets did the opposite of what most people expected, the Fed had to step in to stabilise the economy. Anil Kashyap and Kathryn Judge tell Tim Phillips what happened, why, and how to stop it happening again.

Read more about the research behind this: VoxColumn: Reforming the macroprudential regulatory architecture in the US, Kathryn Judge, Anil Kashyap

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